The growth of opium-related problems in nineteenth-century China is an instructive example of what can happen when a persistent supply and an insistent demand are coupled with ineffective suppression. Up to the 1830s, the problem was created largely by foreign suppliers. After 1860 it was the Chinese themselves who played the major part in the production and distribution of opium, the most appropriate cash crop for many peasants. All over China, the production and distribution of opium became taxable activities. By 1906, nearly a third of some provincial budgets came from opium taxes. The impact of the opium trade on the Chinese population was the subject of much adverse comment at the time, giving rise to the modern assumption that the nineteenth-century Chinese were uniquely drug-addicted. However, opium was used in a variety of ceremonial and social situations: sealing business arrangements, gentry hospitality, and folk medicine. 7 notes.