The Plantation Rubber Industry in Malaya up to 1922.1 by J. H. Drapate The phenomenon of the emergence of an extensive rubber-producing industry in Malaya, based upon plantation principles, took place within the relatively short space of the first decade of the present century. The basic facts concerning this enterprise in terms of acreage, outputs, prices and the principal events, are already well-known, having received attention in publications from many and various sources over the years; but a detailed and more analytical examination of the industry's financial struc ture, commercial organisation and reponse to the changing political and economic Circumstances of the initial period of its existence, has yet to be made. This is now becoming possible because of the recent availability for research purposes of the Colonial Office records up to 1922, papers of the local British governments in Malaya, and also the records of one of the main Associations in the industry, to which the author received access? The object of this paper is to indicate in outline the proces of development, the principal problems which arose and the implications of these for the subsequent econo mic progress of the Malayan Peninsula. The variety of aspects to be covered, together with the increasing complexity of events, makes a certain degrce of over-simplification in the narrative un-avoidable, especially where the factors leading up to the Stevenson Restriction Scheme in 1922 are concerned. The extent of the analysis undertaken here will, therefore, be correspondingly limited. Among the statistics presented at the end of this paper, those in Tables I and IIT have been selected from the various sources available, e.g. official returns in the count- ties of production and consumption, reports by commercial organisations and publi- cations by private individuals, inter alia, which do not always agree with each other. In the case of British Malaya the political and administrative divisions of the country, together with a shortage of Government officers, made the centralised collection of 1. The author is engaged in research on this subject for the degree of Ph.D. at the School of Oriental and African Studies, London University. This monograph was originally given as a paper to the Staff/Postgraduate Seminar of the Dept. of History, University of Malaya, on 29th Novem ber 1966 during a period of research there made possible by financial support from the Camegie Corporation of New York and the Nuffield Foundation through the London-Corell Project. 2. Grateful acknowledgement is due to the Public Record Office, London; the National Archives ‘of Malaysia and the Rubber Grower's Association (Incorporated), London. 52Part 1, 1967. Plantation Rubber Industry in Malaya statistics very tardy, for instance the first overall census of the rubber acreage there was not carried out until 1921 Specimens of various strains of uber yielding trees from South America first arrived in Malaya in 1876-77, not in response to any specific local demand for a new economic crop, but on more of a trial basis, the aim of the India Office where the idea originated, being to establish these in the East for eventual large-scale propagation on the Indian sub-continent. The Botanic Gardens at Singapore and in Ceylon were to serve as distributing centres. For the next twenty years in Malaya, no attempts were made by commercial interests to cultivate rubber trees with a view to eventual tapping. Local planters, Asian and European, were already engaged in the exploitation of other crops, principally tapioca, gambicr, pepper, sugar and coffee.* Such rubber trees as had been propagated from the original shipments remained as largely unknown quantities in the Gardens at Singapore, Penang, anda few other isolated places, including Kuala Kangsar in Perak. Study and evaluation were left to individual Government officers of whom the most notable was H.N. Ridley, who started this work at Singapore in 1889-90. ‘The major achievement of Ridley and his co-workers during the 1890's was to devise an alternative method of tapping the trees without subjecting them to the maltreat- ment for which the South American and Aftican wild rubber industries were noted. ‘They showed that by making a limited number of cuts on the trees, and subsequently widening these by the daily excision of thin slivers of bark, progressively larger amounts of latex could be obtained without apparently causing the permanent damage which greatly shortened the productive life of the trees in the wild rubber industry. Thus these early experiments provided the initial basis upon which planters could proceed to create a viable industry. But it should also be noted that these tapings were only cartied out for a few weeks in each year on the limited numbers of trees then available and the results assessed purely on what could be observed outwardly. They did not provide a final answer to such questions as the yield and productive life of very large areas of trees under commercial conditions of exploitation which were to require conti- rnuous tapping throughout the year. The work of the first investigators, both in Malaya and Ceylon, was just the commencement of an increasingly complex chain of enquiry into all aspects of the production of rubber which is proceeding unabated at the pre- sent day. By 1900 it was clear that the plants were very adaptable to the Malayan environ ment, and of the three types brought from South America, Hevea Brasiliensis had 3. These enterprises have been examined by J.C. Jackson, Chinese and European Agricultural Enter~ prise in Malaya 1786-1921, (Ph.D. Thesis, Dept. of Geography, University of Malaya, 1963) 33JH. Drabble JMBRAS, Vol. 40 proved the best in terms of general growth and yield, though some pioneer planters also utilised a local strain, the Ficus Elastica or ‘rambong’ rubber plant. The market- ability of the product had been tested favourably by the despatch of samples for valu- ation by London produce-brokers. The final impetus to the establishment of a planta~ tion rubber industry was given by the failure of the coffee estates due to falling prices and uncontrollable disease, so that from 1897-8 planters began to show sustaine rest in the possibilities of the new crop. ‘After 1900 the position began to change with increasing rapidity. Previously, Buro- pean estates had been mainly of the proprietary type, financed and operated by a single planter or small syndicate, whilst the Chinese agriculturalists tended to concentrate on crops with a short maturation period, such as tapioca, and quick returns, Rubber, however, required a waiting period of at least five years before economic returns could be obtained, and the capital needed to establish even a relatively small area was sub- stantial. In the first Government brochure to be issued with a view to attracting further investment, the cost of planting up and maintaining 500 acres for five years until tapping commenced, was estimated at M$87,500 (approximately £10,200). Capital of this magnitude was as yet scarce in Malaya, especially since coffee had proved so un-remu- nerative, and had development remained on the basis of the self-financed planter or syndicate, progress would undoubtedly have been much slower. The Government of the Federated Malay States (F.M.S) was anxious to promote agriculture as an alter~ native to mining, but still appeared to think in the terms just indicated. The “...young ‘man possessed of moderate capital” was advised to follow the established pattern of one ‘or two year’s apprenticeship with an experienced planter and then to choose his own land and crop, conserving his funds to last through the waiting period 5 But in 1904, the F.M.S. Government moved towards more active assistance to planters, It was felt that the development of potentially valuable properties was being held back due to unwillingness on the part of the Banks to give overdrafts for this purpose, and the exorbitant rates of interest charged by private moneylenders.® Govern ‘ment allotted a sum not to exceed $500,000 for loans, at 6% interest, to planters whose estates could provide adequate security. This initial sum was exhausted by 1907, by which time development was quickening, and the maximum was raised to $1,500,000. Later still it was increased to $4,000,000, Whilst the primary need for such loans was in general offset by the subsequent course of events, they remained a useful resort where an estate needed limited funds on a short term basis, for maintenance ete. 4 “Federated Malay States—General Information for Intending Settlers p. 55-7. The dollar has been converted at 2/4d. 5. Ibid, pp. 27-8, 6. Despatch No. 333 of 17.8.1905. High Commissioner FMS to Sec. of State. (CO273/312) "(HMSO London, 1900.) 54