In the mid 1930s, the U.S. Government launched the Federal Writers' Project to support writers during the Great Depression.
As part of a project documenting American folklores, a guy named William Zimmerman told the story about "mysterious Chinese tunnels" (or "Shanghai tunnels") beneath cities in the Pacific Northwest, where kidnapped city dwellers would be smuggled to the docks and sold into slavery in Shanghai (hence the name).
The tunnels are clearly there - so it's interesting to see how whatever their original purpose was - in this classic urban myth, it has been nefariously subverted to be a malicious one:
Zimmerman claims that "mysterious" tunnels honeycombed the ground beneath the city of Tacoma, Washington. These would soon become known as "Shanghai tunnels," because city dwellers were allegedly kidnapped via these underground routes – which always led west to the docks – only to be shipped off to Shanghai, an impossibly other world across the ocean. There, they'd be sold into slavery.
In any case, because "construction of the Northern Pacific Railroad required large numbers of railroad laborers," Zimmerman's tale begins, "many Chinese coolies" had to be smuggled into the "rapidly growing city of Tacoma." They "arrive[d] mysteriously," he says, "smuggled in on ships, and even Indian canoes, from British Columbia."
At that point:
Several opium joints were known to be operating in Tacoma. And there was no question in the minds of many people that the narcotic was smuggled in through tunnels from their dens to cleverly hidden exits near the waterfront. They were also convinced that the tunnels were dug by Chinese, either as a personal enterprise or at the behest of white men of the underworld, as no white workmen would burrow the devious mole-like passageways and keep their labors secret.
Zimmerman adds that the Chinese "were forcibly expelled from Tacoma in 1885, but ever [sic] so often the story of the Chinese tunnels bobs up whenever workmen come across them in excavation work."