In October 1891 Captain Tozier, commander of the Revenue Cutter the U.S. Grant, was in search of smugglers in the San Juan Islands. A canny and experienced officer, Tozier set up a sting operation near a suspected smuggler's cabin. Several of his men posed as shipwrecked crew members who were in need of a place to stay. The smugglers allowed the “sailors” to stay with them. After two days, the “sailors” sent word to Tozier that they had gathered sufficient evidence. Tozier then arrested the thirteen smugglers. Their crime: the smuggling of opium and Chinese immigrants.
The Chinese Exclusion Act of 1882 made it illegal for new Chinese workers to enter the US legally. Yet a demand for cheap labor persisted, as did the dreams of some Chinese of making money on "Gold Mountain," as they called the United States. A brisk smuggling trade soon arose, trafficking not only in Chinese workers but also opium and sometimes sex slaves.
The San Juan Islands, being sparsely populated, wooded, and near major cities like Seattle and Port Townsend as well as the Canadian border, was a prime location for smugglers. From the 1800s to the early 1900s local newspapers are replete with tales of their adventures.
In 1905 the San Juan Islander newspaper described the modern smuggler as, “a common ruffian.” It denounced the mystique around the smuggler, “the smuggler has been a creature around whom no end of romance has been woven…Smuggling today is a sordid occupation.”
“Jim” Kelly was one such smuggler. Yet when he died in 1908 the same newspaper ran a long, admiring obituary when Jim passed, noting years ago he had been “captured at Kanaka bay with five Chinese.” Kelly Served one year in a federal prison on McNeil’s island for his crime. Yet he remained on good terms with Thomas R. Delaney, the police officer who arrested him. Kelly even borrowed a dollar from Delaney after Delany’s promotion of Seattle Chief of Police. “If the story of Kelly’s exploits could be graphically and truthfully told in print it would make a most exciting tale. He was regarded as one of the four most daring, resourceful and successful smugglers…”