General Ma had his chance as mediator in early 1967 when Generals Tuan and Ly began receiving disturbing information about Chan Shee-fu's activities in the Shan States. The KMT's radio network was sending back reports that the Shan warlord's brokers were buying up unprecedented quantities of opium in the northern Shan and Wa states.
In February, Chan Shee-fu (Khun Sa) had delivered a de facto declaration of warwhen he demanded that KMT caravans trading in the Wa States pay him the same transit tax that his caravans had to pay the KMT whenever they crossed into Thailand or Laos. When Chan Shee-fu's caravan of three hundred mules assembled in June 1967 it was carrying sixteen tons of raw opium worth $500,000 wholesale in Chiangmai.
With his share of the profits, Chan Shee-fu could purchase at least one thousand new carbines and expand his army from two thousand to three thousand men, a force almost equal in size to the combined thirty-two hundred troops of the KMT Third and Fifth armies. If Chan Shee-fu's caravan reached Laos, the fifteen-year dominance of the KMT would be in jeopardy.
Shan Opium Warlord Chan Shee-fu (a) Khun Sa.
The point was not lost on the KMT generals, and through General Ma's mediation, the two feuding generals agreed to resolve their differences and form a combined army to destroy Chan Shee-fu.
In June the main body of Chan Shee-fu's convoy left Ving Ngun and set out on a two-hundred-mile trek toward Ban Khwan, a small Laotian lumber town on the Mekong River which Gen. Ouane Rattikone had designated the delivery point when he placed an advance order for this enormous shipment with Chan Shee-fu's broker, a Chinese merchant from Mae Sai, Thailand.
The caravan was to deliver the opium to the general's refinery at Ban Khwan. As the heavily loaded mules plodded south through the monsoon downpours, the convoy was joined by smaller caravans from market towns like Tang Yang, so that by the time it reached Kengtung City its single-file column of five hundred men and three hundred mules stretched along the ridgelines for over a mile.
From the moment the caravan left Ving Ngun, it was kept under surveillance by the KMT's intelligence network, and the radio receivers at Mae Salong hummed with frequent reports from the mountains overlooking the convoy's line of march. After merging their crack units into a thousand-man expeditionary corps, Generals Tuan and Ly sent their forces into the Shan States with orders to intercept the convoy and destroy it.
Several days later the KMT expeditionary force ambushed Chan Shee-fu's main column east of Kengtung City near the Mekong River, but his rearguard counterattacked and the opium caravan escaped. After crossing the Mekong into Laos on July 14 and 15, Chan Shee-fu's troops hiked down the old caravan trail from Muong Mounge and reached Ban Khwan two days later.
KMT General Tuan
Shortly after they arrived, the Shan troops warned the Laotian villagers that the KMT were not far behind and that there would probably be fighting. As soon as he heard this news, the principal of BanKhwan's elementary school raced downriver to Ton Peung, where a company of Royal Laotian Army troops had its field headquarters.
The company commander radioed news of the upcoming battle to Ban Houei Sai and urged the principal to evacuate his village. During the next ten days, while Ban Khwan's twenty families moved all their worldly possessions across the Mekong into Thailand, Chan Shee-fu's troops prepared for a confrontation.
Shan and KMT troops approaching Ban Khwan in Gilden Triangle.
Ban Khwan is hardly a likely battlefield: the village consists of small clearings hacked out of a dense forest, fragile stilted houses and narrow winding lanes, which were then mired in knee-deep, monsoon-season mud. A lumber mill belonging to General Ouane sat in the only large clearing in the village, and it was here that the Shans decided to make their stand.
KMT General Ly.
In many ways it was an ideal defensive position: the mill is built on a long sand embankment extending a hundred feet into the Mekong and is separated from the surrounding forest by a lumberyard, which had become a moat like sea of mud. The Shans parked their mules along the embankment, scoured the nearby towns for boats, and used cut logs lying in the lumberyard to form a great semicircular barricade in front of the mill.
The KMT expeditionary force finally reached Ban Khwan on July 26 and fought a brief skirmish with the Shans in a small hamlet just outside the village. That same day the Laotian army's provincial commander flew up from Ban Houei Sai in an air force helicopter to deliver a personal message from General Ouane: he ordered them all to get out of Laos.
The KMT scornfully demanded $250,000 to do so, and Chan Shee-fu radioed his men from Burma, ordering them to stay put. After several hundred reinforcements arrived from Mae Salong, the KMT troops attacked the Shan barricades on July 29. Since both sides were armed with an impressive array of .50 caliber machine guns, 60 mm. mortars, and 57 mm. recoilless rifles, the firefight was intense, and the noise from it could be heard for miles.
However, at 12:00 noon on July 30 the staccato chatter of automatic weapons was suddenly interrupted by the droning roar of six T-28 prop fighters flying low up the Mekong River and then the deafening thunder of the five hundred pound bombs that came crashing down indiscriminately on Shans and KMT alike.
General Ouane, apparently somewhat disconcerted by the unforeseen outcome of his dealings with Chan Shee-fu, had decided to play the part of an outraged commander in chief defending his nation's territorial integrity. With Prime Minister Souvanna Phourna's full consent he had dispatched a squadron of T-28 fighters from Luang Prabang and airlifted the crack Second Paratroop Battalion (Capt. Kong Le's old unit) up to Ban Houei Sai.
General Ouane took personal command of the operation and displayed all of the tactical brilliance one would expect from a general who had just received his nation's highest state decoration, "The Grand Cross of the Million Elephants and the White Parasol".
Once the Second Paratroop Battalion had gone upriver to Ban Khwan and taken up a blocking position just south of the battlefield, the T-28s began two solid days of bombing and strafing at the rate of four or five squadron sorties daily.
To ensure against a possible retaliatory attack on Ban Houei Sai, General Ouane ordered two marine launches to patrol the upper reaches of the Mekong near Ban Khwan. Finally, two regular Laotian infantry battalions began moving down the old caravan trail from Muong Mounge to cut off the only remaining escape route.
General Ouane, apparently somewhat disconcerted by the unforeseen outcome of his dealings with Chan Shee-fu, had decided to play the part of an outraged commander in chief defending his nation's territorial integrity. With Prime Minister Souvanna Phourna's full consent he had dispatched a squadron of T-28 fighters from Luang Prabang and airlifted the crack Second Paratroop Battalion (Capt. Kong Le's old unit) up to Ban Houei Sai.
General Ouane took personal command of the operation and displayed all of the tactical brilliance one would expect from a general who had just received his nation's highest state decoration, "The Grand Cross of the Million Elephants and the White Parasol".
Once the Second Paratroop Battalion had gone upriver to Ban Khwan and taken up a blocking position just south of the battlefield, the T-28s began two solid days of bombing and strafing at the rate of four or five squadron sorties daily.
To ensure against a possible retaliatory attack on Ban Houei Sai, General Ouane ordered two marine launches to patrol the upper reaches of the Mekong near Ban Khwan. Finally, two regular Laotian infantry battalions began moving down the old caravan trail from Muong Mounge to cut off the only remaining escape route.
Battle of Ban Khwan.
Under the pressure of the repeated bombing attacks, the four hundred surviving Shans piled into the boats tied up along the embankment and retreated across the Mekong into Burma, leaving behind eighty-two dead, fifteen mules, and most of the opium.
Lacking boats and unwilling to abandon their heavy equipment, the KMT troops fled north along the Mekong, but only got six miles before their retreat was cut off by the two Laotian infantry battalions moving south from Muong Mounge.
When the Shans and KMT had abandoned Ban Khwan, the Second Paratroop Battalion swept the battlefield, gathered up the opium and sent it downriver to Ban Houei Sai. Reinforcements were flown up from Vientiane, and superior numbers of Laotian army troops surrounded the KMT.
Following two weeks of tense negotiations, the KMT finally agreed to pay General Ouane an indemnity of $7,500 for the right to return to Thailand. According to Thai police reports, some seven hundred KMT troops crossed the Mekong into Thailand on August 19, leaving behind seventy dead, twenty-four machine guns, and a number of dead mules.
Although the Thai police made a pro forma attempt at disarming the KMT, the troops clambered aboard eighteen chartered buses and drove off to Mae Salong with three hundred carbines, seventy machine guns, and two recoilless rifles.
General Quane Rattikone Being Decorated.
Gen. Ouane Rattikone was clearly the winner of this historic battle. His troops had captured most of the sixteen tons of raw opium, and only suffered a handful of casualties. Admittedly, his lumber mill was damaged and his opium refinery had been burned to the ground, but this loss was really insignificant, since General Ouane reportedly operated another five refineries between Ban Khwan and Ban Houei Sai.
His profits from the confiscated opium were substantial, and displaying the generosity for which he is so justly famous, he shared the spoils with the men of the Second Paratroop Battalion. Each man reportedly received enough money to build a simple house on the outskirts of Vientiane.
The village of Ban Khwan itself emerged from the conflagration relatively unscathed; when the people started moving back across the Mekong River three days after the battle, they found six burned-out houses, but other than that suffered no appreciable Loss.
At the time it was fought, the 1967 Opium War struck most observers, even the most sober, as a curious historical anachronism that conjured up romantic memories of China's warlords in the 1920s and bandit desperadoes of bygone eras.
However, looking back on it in light of events in the Golden Triangle over the last five years-particularly the development of large-scale production of no. 4 heroin-the 1967 Opium War appears to have been a significant turning point in the growth of Southeast Asia's drug traffic.
Each group's share of Burma's opium exports and its subsequent role in the growth of the Golden Triangle's heroin industry were largely determined by the historic battle and its aftermath.
KMT caravans still carry the overwhelming percentage of Burma's opium exports, and Shan caravans have continued to pay the KMT duty when they enter Thailand. Chan Shee-fu, of course, was the big loser; he left $500,000 worth of raw opium, thousands of dollars in arms and mules, and much of his prestige lying in the mud at Ban Khwan.
Moreover, Chan Shee-fu represented the first and last challenge to KMT control over the Shan States opium trade and that challenge was decisively defeated. Since the destruction of Chan Shee-fu's convoy, Shan military leaders have played an increasingly unimportant role in their own opium trade; Shan caravans usually have less than a hundred mules, and their opium refineries are processing only a small percentage of the opium grown in the Shan States.
However, General Ouane's troops won the right to tax Burmese opium entering Laos, a prerogative formerly enjoyed by the KMT, and the Ban Houei Sai region later emerged as the major processing center for Burmese opium.
