Part 1 of a two-part story. Here's part 2.

On the second day of 1826, an elegant gentleman with a full head of white hair sits down behind a desk -- perhaps at his stately Boston townhouse, or maybe at his Brookline estate.

Thomas Handasyd Perkins, one of Boston's leading merchants, has been taking risks with shipments to China for nearly 40 years. But now, he may have gone too far.

Perkins drafts a letter to his nephew and business partner in the Chinese port city of Canton, now known as Guangzhou. The message is an apology and a warning: More than 150,000 pounds of Turkish opium is on its way.

"As respects Opium I must take all the blame in going as far as we have," writes Perkins, 65, to 39-year-old John Perkins Cushing. "I thought it best to extend ourselves, to prevent intruders; ... I am mortified that the quantity that will go out in the spring so far surpasses y'r wishes."

Thomas Perkins portrait, by Thomas Sully (Courtesy Boston Athenæum)

But the savvy older businessman and the group of relatives who form Perkins and Co. just might be able to handle his overly enthusiastic opium order. The firm has spent more than a decade building an elaborate smuggling operation to protect what's become its most valuable commodity in China.

Perkins and Co. was among the first -- if not the first -- American companies to establish a permanent trading office in Canton. With employees on the scene year-round, the firm can optimize profits on the drug — which is still legal in the United States, but illegal in China.

Company agents store chests filled with squash-size balls of opium in ships anchored offshore, to have some control over supply and price. They develop relationships with smugglers and corrupt top government officials. And they use boats manned by dozens of rowers to speed past inspectors, sneak up the coast, and deliver opium beyond the official port.

The business plan pays off again and again. On Jan. 11, 1827, one year after the apology, Perkins is back at his desk, writing another letter to his nephew. This time the tone is almost giddy.

"I have written and thought so much of opium that it gives me an opiate to enter upon the subject," Perkins tells Cushing.

Perkins may have been high on the money coming in. 1826 turned into a good year. Perkins' wealth is reported to have grown to more than $1 million -- the equivalent of about $25 million today.

In the early 1800s, the Brits controlled 90 percent of the Chinese opium trade. But within the 10 percent of business handled by Americans, Perkins and his brother James had the largest share. They owned at least seven ships, and held interest in others. The ships sailed from Massachusetts shores to Turkey, where they bought opium; from Turkey to China, where they sold the drug; and from China to Boston, loaded with tea, porcelain and silk.

Perkins and Co. alone created fortunes for a network of in-laws, nephews and cousins, says John Rogers Haddad, a professor of American Studies at Penn State University.

"That company generated a tremendous amount of revenue and profit," Haddad says. "Multiple people, not just Thomas Perkins himself, were made millionaires by the trade."

An 1837 plan of the city of Boston by Charles Stimpson (Courtesy of the Cape Ann Museum Library & Archive)

Of course, not everyone struck it rich trading in opium. It was a competitive, highly volatile market. But those who worked for Perkins and a few other firms became the city's elite — otherwise known as Boston Brahmins. The Cabots, Cushings, Welds, Delanos (the grandfather of Franklin Delano Roosevelt) and Forbes all built fortunes on opium.

"That money changes the face of Boston and makes it possible for Boston to develop a reputation as one of the world's true civic cities," said Salem State University historian Dane Morrison.

In a city steeped in history, very few residents understand the powerful legacy of opium money.

Hospitals, Railroads, Schools: What Opium Profits Funded

Thomas Perkins invested in mills in Newton, an iron manufacturing plant in Vermont and what some historians say was the country's first railroad. It ran from the Quincy Quarry into Boston. Another Perkins' nephew, John Murray Forbes, invested his opium profits in steamships, mines and railroads that would eventually cross the country.

Haddad is among a handful of historians exploring the connection between America’s industrial revolution and the profitable opium trade, dominated by merchants from Boston.

"China had a really strong economy in the early part of the 19th century and the Americans were able to tap into that by exchanging tea for opium," he says. "Opium was really a way that America was able to transfer China’s economic power to America’s industrial revolution."

Perkins' ships deposited tremendous wealth in Boston too. Chests of tea, bolts of silk, crates of porcelain and cakes of opium -- which was legal in the U.S. -- were hauled off ships onto giant scales outside Boston’s Custom House. The goods were tallied and taxed in basements and warehouses around Faneuil Hall and Quincy Market. Tax revenue from the trade funded Massachusetts police and fire departments, roads, bridges, courthouses and schools.

Historian Dane Morrison stands in front of Boston's Custom House, where in the 1800s goods from China that had been hauled off ships were weighed on giant scales. (Jesse Costa/WBUR)

Opium profits funded many leading Boston institutions. The Perkins brothers helped found Massachusetts General Hospital, McLean Hospital and the Boston Athenæum. The names of other opium barons are engraved on university buildings, high schools and public libraries.

Fred Delano Grant, the great-great-grandson of opium trader Warren Delano, says there's a connection between these merchants' industrial age investments and their charitable giving: They were building a knowledge-based economy.

"They knew that knowledge was how you win" in life and in trade, says Grant, a lawyer and scholar of Chinese trade. And these traders, many of whom came from modest families, "knew that you need an educated group of people to bring an economy forward."

Thomas Perkins had a hand in many civic projects as well. He championed construction of the Bunker Hill Monument, was a major contributor to an orphanage, and he donated one of his homes for a new school that would be called Perkins School for the Blind.

'An Unwitting Dependency'

"There was an unwitting dependency in Boston on profits from the opium trade," says Towson University associate history professor Elizabeth Kelly Gray.

But today, that history is largely buried. Most institutions contacted for this story did not know their benefactors got rich selling an illegal drug in China.

Perkins School research librarian Jennifer Arnott did some digging into Thomas Perkins’ business history. He behaved like many merchants, she reasons, and followed demand.

"It really was a sort of awareness that you did the trade that was there and that you looked for the opportunities that made sense for your business at that point," Arnott says.

The Boston Athenæum said, in part, in a statement:

Our own legacy, like that of many historic institutions, reveals inherent contradictions. We acknowledge that the Perkins brothers built their fortune at the expense of the lives of others ... while supporting a great number of educational, medical, and cultural causes through their generous philanthropy. ... We encourage our members, researchers, and visitors to engage critically with our rare materials by asking important and sometimes difficult questions.

Many Chinese opium traders became pillars of the Boston community. In his eulogy, Perkins is remembered as "one of the noblest specimens of humanity to which our city has ever given birth."

Arnott says the fact that Perkins was trading in opium was probably not a secret in Boston, but the question, “'Is this trade good for the people we’re trading with?' is a more recent philosophical concept.”

There are signs opinion shifted as Perkins aged, which may help explain why opium is not mentioned even once in a memoir compiled by his son-in-law and published in 1856, two years after Perkins' death.

Debating The Morality Of The Opium Trade

But among merchants, there was a robust debate about the morality of selling opium in China, where at least 2 million residents -- and 10 million by some estimates -- were addicted to the drug by the mid-1800s. New York merchant David Olyphant refused to trade opium, calling it "an evil of the deepest dye." Partners at Perkins and Co. made fun of Olyphant.

"God protect me from all the hallowing influence of holy Joe," wrote Murray Forbes, Perkins' nephew, in a memo. "His ships are all commanded by JC - officered by angels and manned by saints."