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The ginseng 'trade war'
Part III from "A Brief History of the US-Korea Relations Prior to 1945"
Kim Young-Sik, Ph.D.
7/9/2003



Ginseng

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[This is the third excerpt from Kim Young-Sik's paper entitled "A Brief History of the US-Korea Relations Prior to 1945."]

The ginseng 'trade war' that began in the 1730s was the first recorded contact between Korea and the people of North America. (The United States of America came into being much later in 1776.) Ginseng roots from Canada and the American colonies began to flood the Chinese markets and put an end to the centuries-old Korean monopoly of ginseng in China. It is estimated that Korean ginseng used to earn as much as "3 tons of silver" a year from China before the Canadian and American ginseng arrived in China.

For over 10,000 years, Ginseng has been popular among Asians and the Native Americans for its medicinal effects. Oriental medical doctors and Indian medicine-men have been using ginseng roots to cure many illnesses. Some historians believe that the Native Americans brought the ginseng know-how from Asia during the last Ice Age. It is likely that the plant was initially used for food because of its meaty root that keeps on growing year after year. The ginseng root is unusually large in comparison to the plant. It has been established that ginseng roots contain chemicals that affect body functions in positive ways. Although ginseng plants grow in Manchuria, Siberia and elsewhere, the Korean ginseng is the most valued for its extraordinary medicinal effects. (Korean Ginseng, 2003)

By the third century AD, ginseng became one of the main export products of Korea. By the 1600s, wild ginseng was all but wiped out in Korea due to over-harvesting, and Korea could no longer meet the ever-growing demand for Korean ginseng in China. The Koreans successfully developed ways to cultivate ginseng, and soon, cultivated Korean ginseng flooded the Chinese markets. Ginseng cultivation was centered at Kaesung and the government had monopoly of ginseng exports.

Unfortunately for Korea, it turns out that ginseng plants grow naturally in North America and almost every Indian tribe of North America has been using ginseng in the same manner as the Asians have been using. For example, it is well known that the Cherokees, who call ginseng roots "the little man", use them for colic, convulsions, dysentery, and headaches. Other tribes use American ginseng roots for easing digestion, increasing appetite and easing female menstrual problems. Other Indian curative uses are for exhaustion, breathlessness, croup, and preventing the wounded from dying of shock. (Waters, 2003)

Although ginseng has been popular in Asia for over 5,000 years, the Westerners did not learn about it until about 1670 when Hendrick Hammel published a book about his years of captivity in 'Coree'. Hammel wrote of ginseng:
"In those areas the people live from barley and millet, because rice can't grow there. Cotton grows there neither, so it had to be supplied from the south. The ordinary man in these areas is most of the time shabbily dressed in hemp, linen or hides. But in these areas one can also find the ginseng plant. The root of this plant is being used to pay the tribute to the Tartarians. This stuff is furthermore much exported to China and Japan." (As cited in Lee Hae Gang, 2000)

In 1709, French Jesuit priest, Father Petrus Jartoux, in China read about the lucrative ginseng trade and wrote a letter to his colleague Father Lafitau in St Louise, Canada, suggesting that ginseng plants might be found in America. After receiving the letter in 1714, Father Lafitau began looking for ginseng. The good Father knew that the Native Americans used the plant and hired some Iroquois Indians to assist in his search. Sure enough, Father Lafitau discovered ginseng in Canada in 1716. (Talk-Koo Yun; Trade and Environmental Database). It turns out that the North American ginseng (Panax quinquefolius L.) is one of three true ginseng plants from the Araliaceae family, and that Ontario, Quebec, and Wisconsin are natural habitants of the plant. Father Lafitau's discovery led to a boom in ginseng trade in Montreal, Canada.

Some bright French-Canadian fur traders saw the enormous potential for profits in exporting Canadian ginseng to China. According to Waters (2003), the traders paid the ginseng collectors 25 cents per pound and then sold the roots for $5 per pound in China, and by 1752, the traders were making as much as $100,000 per shipment of ginseng - it should be noted that one US$ in 1750 was worth about US$25 today. (Sahr, 2003) But the ginseng windfall did not last long, for, in their haste to cash in on this newly found "woodland nuggets of gold", the plant was over-harvested and soon became rare. Some greedy traders gathered poorer and poorer roots and then dried them in ovens, instead of drying them slowly in natural sunlight. Soon the Chinese patrons stopped buying Canadian ginseng roots, and the Canadian ginseng trade fell to less $6,500 by 1754. (Waters, 2003)

With the collapse of the Canadian ginseng trade, ginseng traders turned to the American colonies, and the colonies were more than eager to take over the lucrative ginseng trade with China. Soon brisk ginseng harvesting and exports began in America. One of the early American ginseng traders was John Jacob Astor, who made a profit of $55,000 in his first shipment. It is believed that George Washington himself was in the ginseng business and that the American Revolutionary War of 1775-1783 was largely financed with ginseng money.

Colonel Daniel Boone jumped on the ginseng bonanza, too. Colonel Boone hired Native Americans to collect wild ginseng roots in the Appalachian Mountains of Kentucky. In 1788, his first shipment of 12 tons of ginseng roots was lost when the barge carrying it capsized in the Ohio Rover. Undaunted, Colonel Boon was able to harvest more roots and shipped them safely to China in the following year. Contrary to the common belief, the Boone family fortune was made from ginseng, not from selling animal skins. (Waters, 2003).

On February 22, 1784, the Empress of China left New York Harbor bound for China loaded with American ginseng roots. She returned loaded with Chinese tealeaves. Her investors made as much as 30% profits. It was a win-win two-way trade. Philadelphia soon became the primary port of export for ginseng roots to the Orient. (Harrison et al.) Fontenoyan (1997) writes:

"The sole previous American venture, by the Empress of China, had taken out a mixed cargo including thirty tons of Appalachian ginseng, fifty tons of cordage, and thirty tons of lead, plus planks, cloth, and assorted wines and spirits. This had sold for just over $270,000; the ginseng alone accounted for $240,000. In addition, $20,000 in silver dollars had been shipped in casks to be used for further purchases."

Ginseng was one of the earliest marketable herbs to be harvested in America and one of Minnesota's first major exports. In 1860, more than 120 tons of dried ginseng roots were shipped from Minnesota to China. The ginseng trade continued to flourish until the late 1800's. By 1862, ginseng exports exceeded 300 tons per year. Dried wild ginseng roots fetched as much as $300 per pound in today's dollars and some aged ginseng roots went for as much as $550 per pound. (Agri-Food Trade Service)
The sudden influx of ginseng roots from Canada and the American colonies came as a complete shock to the Korean ginseng growers and traders. Korea's 1,000-year ginseng monopoly in China came to an abrupt end, and American ginseng dealers became dominant in the ginseng markets of Beijing and Canton in China. The American ginseng traders brought back Chinese tea to America for handsome profits.
By mid-1860, wild ginseng plants in America became almost extinct and could not support the thriving ginseng trade with China, whereupon, the American ginseng traders "stole" the art of cultivating ginseng from Korea.

A number of Korean ginseng growers were brought to the United States for the first Korea-America technology transfer, and it is believed that the Korean ginseng growers were the first Koreans to set foot on America.
The first attempts at cultivation were met with failure, however, in a few years, cultivated ginseng roots from America began to flood the Chinese markets. (Scott Harris)

It has been alleged that some unscrupulous Korean ginseng growers had imported cultivated ginseng roots from America and then sold them labeled 'Made in Chosun’ to the Chinese. Today, there exists a large market for ginseng in America. Ginseng is popular not only with Asian-Americans, but also with a growing number of non-Asian Americans as well. The irony is that some of the 'Korean ginseng roots' sold in America are in fact Chinese or Siberian ginseng roots, which are not as medicinal as the Korean ginseng roots are.

Thanks to the ginseng trade war, Korea became aware of America and America began to cast hungry glances at the untapped markets of Korea. Ginseng brought Korea and America together. The ginseng competition became an important factor for the US-Chosun armed conflicts of 1866 and of 1871, which led to the 1882 US-Chosun Chemulpo Treaty of Amity and Trade. (Griffis, 1894). In addition to the ginseng growers and merchants, among the early Koreans in America were a handful of Korean Catholics who managed to escape the mass execution of the Catholics in Korea.

* Kim Young-Sik is editor of Korea WebWeekly.

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