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Opium and the Indonesian Revolution

Article  in  Modern Asian Studies · October 1988

DOI: 10.1017/S0026749X00015717

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Modern Asian Studies 22, 4 (I988), pp. 701-722. Printed in Great Britain.

OpiumandtheIndonesian
Revolution
ROBERT CRIBB

GriffithUniversity

The Indonesian revolution was a costly affair. Not only was it

accompanied by the extensive destruction of life and property, but the
actual logistics of fighting a protracted revolution placed enormous
financial demands on the new Indonesian Republic, founded on 17
August 1945, three days after theJapanese surrendered, at a time when
the revolutionary government was decidedly ill-equipped to meet
them. The Republic was unable to take over immediately all the
revenue sources of the colonial government and faced major difficulties
in rapidly building up an alternative taxation structure. Needing a
'soft' form of taxation which was easily collected and which did not fall
too obtrusively on the shoulders of its citizens, it turned to opium. The
sale of opium to addicts had been used by colonial governments in
Southeast Asia as a source of revenue, although its importance had
greatly declined in the twentieth century..The Republic, however, not
only maintained the colonial distribution and sales network but
expanded its use of opium to make the drug an important source of
government revenue and, for a time, a major source of foreign
exchange.
Opium has a long history of use in the Indonesian archipelago. It
was subject to a Dutch East India Company monopoly as early ag 1676
and until I894 it was administered, like gambling, by the system of
farming, better known today as franchising. Under this system, the
right to sell opium in a particular region was put out to tender and the
highest bidder was given a monopoly for his region along with the right
to enforce that monopoly with an establishment of spies and hitmen
(Rush 1983, OpiumPolicy 1923: 3-4; ENI III: 158-9). Towards the end
Although this paper is based largely on archival research, much of the information
has been backed or supplemented by interviews in Indonesia and the Netherlands.
Since a number of those interviewed have requested anonymity I have not cited
interview material in the notes which follow. I should like to thank Twang Peck Yang,
Dan Doeppers, Hayden Lesbirel and Greg Weichard for their helpful comments on
early drafts of this paper. Later versions were presented in research seminars at Griffith
University and the Australian National University and the paper has benefited
considerably from the discussion which followed those presentations.
oo26-749X/88/$5.oo + .oo ? I988 Cambridge University Press

701

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702 ROBERT CRIBB

of the nineteenth century, knowledge of the harmful effects of opium led

to a broad international campaign for the abolition of the opium trade
which was portrayed as morally equivalent to slavery. Within the
Netherlands, an Anti-Opium Bond (Anti-Opium Association) cam-
paigned vigorously against opium, and this pressure, together with a
general rise in the so-called 'Ethical' concern for the welfare of colonial
subjects and an increase in the government's administrative capacity,
led it to limit the farm system in I894 by establishing an Opium-Regie,or
government opium agency, to handle the distribution and sale of
opium. The Regie gradually took over the opium trade from the farm
and by I904 the last of the farms on Java had been abolished, though
they persisted in parts of eastern Indonesia until at least the 1920S
(Rush 1977: 234-300; Elout van Soeterwoude 1890).
Outside these few small areas, the Opium-Regie possessed a full
monopoly of the opium trade in the Netherlands Indies. The cultiva-
tion of opium in the colony was strictly forbidden and the Regie
purchased raw opium from the major producing countries such as
British India, Iran and Turkey, processing it at a factory in the Batavia
suburb of Salemba. Long-time residents of Jakarta can still recall the
scent of opium which met them as they cycled past the factory site (now
occupied by the University of Indonesia) and it is said that swallows
perching under the eaves of the building sometimes fell to the ground
stupefied by the fumes. Refined opium, or tjandoe,was distributed to
addicts through a network of government shops, of which there were
over eight hundred in the I930s and which operated in conjunction
with privately-owned opium dens where addicts could smoke or
consume their purchases. In the nineteenth century, the vast majority
of addicts were Javanese, but by the 1930S their numbers had fallen off
dramatically in response to Indonesian nationalist and Dutch
campaigns against the drug and in response to the rival charms of
tobacco. By the close of Dutch rule, opium consumption had become a
predominantly Chinese vice (Rush I985: 557-9; League of Nations
I942: 31, 6o; Scott I969: I36-7). The Opium-Regie sought energeti-
cally to portray itself as socially progressive by attempting to limit the
spread of the opium habit to previously unaffected areas and by placing
restrictions on its use (Opium policy I923: 5-14; Fowler 1923: 390;
Vanvugt 1985: 361-75). Although the Netherlands Indies government
showed some of the ambivalence of modern governments attempting to
restrict the use of fiscally remunerative drugs such as tobacco and
alcohol-the taxation of addictive drugs is itself somewhat addictive-
it was able to do so because opium was in fact of relatively little

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 OPIUM AND THE INDONESIAN REVOLUTION 703
significance in the overall revenue of the Netherlands Indies. It
provided only I.44% of total revenue in 1938, compared with 6. I 3% in
1930. These figures were amongst the lowest for any territory in
Southeast Asia. Opium sales accounted for a full 23% of government
revenue in the Straits Settlements in 1930 and the figure in 1938 was
still 6.22% (League of Nations 1942: 63).1 The colonial government's
financial reluctance to abolish opium out of hand was supplemented by
tactical considerations. The government argued that opium sales could
not be summarily ended without causing great distress to existing
addicts and thereby introducing the risk that they would provide a
market for illicit opium or for alternative illegal drugs such as cocaine.
The coca bush grew in a semi-cultivated state in several parts ofJava
and its use was held to be much more difficult to control than that of
imported opium. The Salemba factory, therefore, remained in opera-
tion and held significant stocks of raw opium when it fell, along with the
rest ofJava, into the hands of the Japanese in March 1942.
The Opium-Regie appears to have continued its operations under
the Japanese occupation ofJava, though little detailed information on
its activities has come to light. It would be surprising if so useful a
source of revenue had been neglected by the Japanese, for they used it
in Korea and in Manchuria and other parts of China during the Second
World War as a major source of revenue (McCoy 1972: 374; Scott 1969:
I51-I, 174-9). The Opium-Regie's distribution network on Java
therefore appears to have survived the war largely intact, and there
remained some twenty-two tonnes of raw opium and three tonnes of
refined opium in the factory at Salemba, as well as unspecified
quantities of refined opium in Central Java, when the Japanese
surrendered in August 1945. Since this amount represents a little under
the average annual consumption of opium in the immediate pre-war
period, and since the Regie appears to have kept no more than about
two years' supply of raw opium in stock, it can be inferred that
production and consumption of refined opium declined during the
three and a half years of occupation.2 This is probably due to the
occupation government's policy of regional economic autarchy, which
prohibited trade between occupied regions and presumably deprived
the Regie of its former lucrative markets in Sumatra and on the islands

1 Even these Straits Settlements

figures are a far cry from those of the nineteenth
century, when the opium monopoly provided the British government in Singapore with
never less than sixty percent of its total revenue. See Trocki I979: 214.
2
Department van Financien in Nederlandsch-Indie, Opiumfabriek,Jaarverslag over
1938, p. 5 andJaarverslag over 1939, p. 5; League of Nations 1942: 6o.

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7o04 ROBERT CRIBB

of Bangka and Belitung with their large Chinese populations.

The opium factory in Jakarta was of no immediate strategic or
political importance in the immediate aftermath of the surrender and
was probably taken over from the Japanese in September or October
1945, along with the majority of other government offices.3 The
Republic later claimed that it had originally planned to abolish all use
of opium within its territory immediately. Like the pre-war Opium-
Regie, however, it found the financial rewards of dealing with opium in
a controlled way too attractive to ignore. The Republic argued, as the
Dutch had done previously, that opium use could not be abolished
summarily without causing great distress to existing addicts, and
added that the Republic had inherited from its predecessors business
obligations to the Chinese traders involved in servicing the Opium-
Regie and its customers. Since the Republic's claim to independence
rested partly on the argument that it was the legitimate successor to the
Netherlands Indies, its commercial interest in the opium was rein-
forced by a political motive (Nasution I978: 465).
Accordingly, an official Republican Djawatan Tjandoe dan Garam
(Opium and Salt Agency) was established under the authority of the
Ministry of Finance and headed by R. Mukarto Notowidagdo, a former
employee of the agency under the Dutch and Japanese. The Republi-
cans adopted a policy of systematically limiting the sale and use of
opium, but decided, like the Dutch before them, that the best way to
limit opium use was to keep the price high. Thus refined opium seized
from theJapanese in CentralJava was sold, as before the war, through
the network of government-owned shops. WithinJakarta, the Republic
sold refined opium from the Salemba factory both to predominantly
Chinese addicts and to pharmaceutical firms. These sales were
apparently quite open and price rises were recorded in the local
Indonesian press.4
In its personnel, organization and equipment, the Republic's
Djawatan Tjandoe was a direct continuation of the colonial Opium-
Regie. Its place in Republican finances, however, was rather more
3 Dienst der
Algemene Recherche, 'Verantwoordelijkheid van Republikeinse
regeringspersonen voor het in de smokkelhandel brengen van opium' [hereafter
'Verantwoordelijkheidvan regeringspersonen'], 22 February 1949, ARA, Alg. Sec. II,
file I033 (new series); Code telegramme to The Hague, IoJanuary 1949, Alg. Sec. II,
432; Korps Algemene Politie Batavia, Hoofdcommissariat, Proces-verbaal: Raden
Moekarto Notowidagdo, to, I2 August 1948 [hereafter 'Proces-verbaal Moekarto'],
Alf. Sec. II, 432.
Antara (Yogyakarta), 21 February 1946; Nieuwsgier (Jakarta), 8 April I946; Rajat
(Jakarta), 6 February I947.

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 OPIUM AND THE INDONESIAN REVOLUTION 705

important. In the six months to 31 March I946, despite the loss of its
important markets in Sumatra, Bangka and Belitung, the Djawatan
Tjandoe contributed f.8. I million to the Republic treasury, represent-
ing 6.83% of state revenue, more than four times its proportion of
Netherlands Indies government revenue in I938.5
The primary reason for this importance was the Republic's loss of
other sources of income enjoyed by its Dutch and Japanese pre-
decessors. It had no access to the resources, financial or otherwise,
of a metropolitan power, nor, without international recognition, to
international credit facilities. Its administrative structure and the
bureaucratic records necessary for an effective taxation system had
suffered the vicissitudes of the occupation and had received a major
blow early in the war of independence with the outbreak of social
revolutions in many parts of the country. These social revolutions were
frequently accompanied by the wholesale removal of local officials
familiar with and responsible for a range of local taxation. In some
cases their removal was a direct consequence of their tax-collecting
activities on behalf of the Dutch and Japanese (Lucas 1977: 87-122).
The occupation of major ports and administrative centres onJava and
Sumatra by Allied troops in late 1945 created further difficulties. There
was, moreover, a widespread public aversion to all forms of taxation.
The Republic was widely accepted as the legitimate government, but

5
To my knowledge, the only detailed statement of Republican income and
expenditure during the early revolution is that provided in the Dutch document, 'De
financieele crisis van de T.R.I.', i8 May 1946, ARA, AVMK, Verbaal nr. M30, I8
June I946. This document records Republican expenditure in the period from I
October 1945 to 31 March 1946 as follows:
Civil expenditure f. 104. I million
TRI 246.0
Departments and services 49.6
Support funds 18.0
Pensions and relief 3.0
Total f. 420.7 million

Republican revenue in the same period is reported as follows:

Taxes f. 70.0 million
Opium sales 8. I
Salt sales 8.4
Forest product sales 12.0
Petrol and oil sales 15.0
Other 5.0
Total f.I i8.5 million
Note: All figures are in Japanese occupation currency.

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706 ROBERT CRIBB

that legitimacy did not confer on it the automatic authority even to

collect fares from passengers on Jakarta's tram system. And it could
not, of course, even contemplate resuming the repressive forms of
taxation which had made the Japanese occupation so unpopular, such
as the forced acquisition of produce or the forced recruitment of labour.
Under these circumstances, a number of characteristics of the opium
trade made it a particularly reliable source of income for the Republi-
can government. First, the opium was already in the possession of the
government; it required no complicated or politically damaging pro-
cess of collection. Second, it was relatively easy for the government to
maintain its monopoly over opium as a commodity. The stocks held by
the government were sufficiently compact to allow relatively close
monitoring, while the difficulties of trade and the general economic
depression within the Republic made it unlikely that there would be
large-scale smuggling of opium into Indonesia. Third, opium was a
particularly lucrative good since the government controlled all stages of
production and distribution and, of course, having inherited the opium
from its colonial predecessors, did not even have initial costs to pay.
And fourth, the sale of opium had no internal political consequences,
since opium houses were still a feature of the social landscape and since,
in popular perception at least, most of the addicts were Chinese.
These same characteristics, however, made the Djawatan Tjandoe a
relatively inflexible source of government revenue. Opium was a finite
resource; the government's stocks, although considerable, could not be
replenished. Nor was it possible to engineer a dramatic increase in
consumption. The process of becoming addicted is a fairly long one,
and the vast majority of people now smoked no opium at all. The
government, consequently, could not increase sales without flooding
the market. While the government could and did increase the price of
opium substantially,6 this measure was primarily a response to infla-
tion and was limited by the risk of reduced consumption, substitution
with other narcotics and possibly theft or smuggling. There were,
moreover, political risks involved in being seen to promote opium. The
maintenance of an official opium monopoly was easily defensible
domestically and internationally on the grounds that the public regula-
tion of vice was preferable to uncontrolled illegal operations. The
Dutch themselves only abolished their Opium-Regie in December
I944, while still exiled from the Netherlands Indies, and were thus
hardly in a position to criticise if the Republic did no more than

6
See Ra)jat, 26 July 1946.

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 OPIUM AND THE INDONESIAN REVOLUTION 707
maintain the Regie. To promote opium sales actively, however, was
another thing, for the dangerous effects of opium consumption were by
now almost universally recognised. If the Republic did so, it risked
seriously damaging the responsible reputation it was painstakingly
attempting to build as a prerequisite for international recognition.
That the Republic took the path of expanding opium sales in the face
of these difficulties and risks is a measure of the acute financial pressure
which it faced as the revolution proceeded. This pressure came
principally from the military needs of the revolution. The Republic's
existence was challenged by the Dutch and questioned by the other
Allies, and from late I945, it had adopted a policy of building an
effective army which would guarantee its security while it negotiated
with the Dutch over a formula for recognition and independence. The
task of creating this army (Tentara RepublikIndonesia, TRI) was in the
hands of the defence minister and deputy prime minister Amir Syari-
fuddin and a group of Dutch-trained general staff officers such as Oerip
Soemohardjo and T. B. Sirnatupang. The challenge they faced was not
one of putting men into the field, for the declaration of independence
and the establishment of the Republic had unleashed a wave of
nationalist fervour throughout the Republic and much of the rest of
Indonesia. Tens of thousands of people had joined irregular armed
units which sprang up all over the country to defend independence
against the Dutch. These irregulars made no financial call upon the
Republic; they were locally based and obtained supplies, equipment
and other needs from within their own regions. The problem, from the
point of view of the general staff and the defence ministry, was that
these irregular units were often untrained and poorly armed and, even
more important, that they were difficult to subordinate to Republican
government strategy. The conduct of negotiations and the appeal for
international support by the Republic required truces and ceasefires
from time to time, and irregular units with a strategic view different
from that of the government, or with no strategic view at all, were an
embarrassment. The government wanted an army which could fight
effectively but which could also be relied upon to refrain from fighting
when that was necessary (Sundhaussen 1982).
The creation of such an army was expensive and demanded new
sources of finance. For, although there were army units and some
irregulars which readily accepted the authority of the general staff,
many would not do so without the added incentive of the logistic
support which military organizations are usually expected to provide to
their lower echelons. Thus during the six months from October I945,

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708 ROBERT CRIBB

covering approximately the first six months of the army's formal

existence, the Republic spent f246.o million in Japanese occupation
guilders, 58% of its total government expenditure, on the TRI. By
contrast the budget for the Netherlands Indies department of war in
1936 was a mere 13.85% of the total budget.7 The money, it appears,
was not closely controlled by the general staffor the ministry of defence,
but rather was issued to reliable senior officers in the regions who had
the discretion to use it either to establish their own authority as regional
commander or, more often, to strengthen army units already regarded
as disciplined and loyal. The West Java Siliwangi Division of Colonel
A. H. Nasution was one of the main beneficiaries of this kind of grant.
Expenditure on this scale put enormous financial strain on the
Republic. During the six months when the TRI budget was f.246.o
million, total central government revenue was no more than f. I I8.5; the
balance was made up by spending stocks of occupation currency and
pre-war Netherlands Indies currency inherited from the Japanese.
This source was clearly limited, was politically unedifying and had
undesirable economic effects such as encouraging inflation. As already
described, however, the Republic faced major difficulties in generating
regular income through taxation. The Republic was able to collect a
certain amount of money through highly publicized national loans, and
after the issue of Republican currency (ORI) in October I946 it could
print its own finance (Cribb I981: 127, I33). Both these techniques,
however, had severe practical limitations and the Republic needed
increasingly desperately to obtain a new source of revenue.
The financial crisis created by the need to give priority to military
expenditure was felt with particular acuity in the city ofJakarta and it
was here that the Republic first moved into the imaginative use of
opium as a source of finance. Although Jakarta had effectively been
occupied by the Dutch and British from early I946, the Republic
retained not only a number of central government offices in the city but
also a full municipal government as a demonstration of its claim to the
nation's capital. The financing of this establishment was always a
problem for the Republic. The independent income of the municipal
administration was based largely on a few market taxes and on sales
from municipal fishponds (Cribb I984: 107). The other offices had no
source of finance and were dependent on boxes of money dispatched by
the Republican government in Central Java. The Republican general
hospital in Jakarta, on the other hand, which happened to stand next
7 'De financieele crisis van de T.R.I.', loc. cit.; Pocket Edition of the Statistical Abstract of
the NetherlandsIndies i940, 132.

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 OPIUM AND THE INDONESIAN REVOLUTION 709
door to the opium factory in Salemba, was apparently able to support
itself with relatively little financial call on the Republican government.
This was partly because it was able, unlike other Republican govern-
ment bodies, to charge a fee for service, but it also appears to have
obtained cash by selling opium both to addicts and to pharmaceutical
firms in Jakarta. Small amounts of opium also made their way to the
Lasjkar Rakjat Djakarta Raya (People's Militia of Greater Jakarta), the
main non-government resistance group in the countryside east of
Jakarta, but it is not possible to tell whether this was intended for
medical or for financial purposes.
It appears that the opium sold came from the existing refined stock,
and that the opium factory was not in operation during this period, for
it was amongst a number of buildings which the Dutch requested from
the Republic in October I946 on the grounds that they did not appear
to be being used. The transfer in fact was not made, but the request
prompted a group of medical students from the hospital to take steps to
ensure that the opium would not fall into Dutch hands. In late
November or early December I946, they arranged for the machinery,
personnel and stocks of the opium factory to be transported by train
from Jakarta to Central Java. The opium was put under armed guard
and was probably carried aboard the special diplomatic trains which
travelled regularly between Jakarta and Yogyakarta and which were
relatively free from inspection by Dutch and Republican border
guards. The arrival of the machinery in Central Java enabled the
Djawatan Tjandoe to commence refining opium for its own trade.8
Stocks of refined opium remained in Jakarta for sale to addicts, but
these sales appear to have been under the control of the Republican
health department, rather than the Djawatan Tjandoe, for it was the
health department which announced on 30 July I947 that sales would
be wound down and eventually stopped. Sales in fact continued until at
least September I947, well after the Dutch had taken over all Republi-
can establishments inJakarta except for the hospital and its associated
buildings.9
The transfer of opium stocks to Central Java allowed the central
government to use it notjust for local purposes but as part of its export
drive. Since early 1946, the Republic had made a determined effort to
revive the export trade which was the mainstay of the Netherlands
Indies economy and which had been one of the principal attractions for
8
Berita Indonesia (Jakarta), 5 October 1946; Ra'at (Jakarta), 26 July 1946, Sejarah
kesehatannasional Indonesia vol. I 1978: 93, 99.
9 Berita
Indonesia, 8, 30July 1947; Star Weekly (Jakarta), 21 September 1947.

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7IO ROBERT CRIBB

the invadingJapanese. One of its first ventures along those lines was a
proposal in April I946 by the republican prime minister Sutan Syahrir
to supply India with halfa million tons of rice in exchange for a variety
of goods, especially Indian cotton cloth, which was then in very short
supply onJava (Cribb I984: I55-7). This was followed in the course of
I946 by an expansion in the export of plantation products from Java.
Rubber and sugar appear to have been the main crops exported, but
other products such as tobacco, kapok, quinine and vanilla were also
included. Vessels, often owned by Chinese businessmen from
Singapore, typically collected cargoes in Cirebon, Tegal or Pro-
bolinggo and sailed via Palembang in Sumatra to Singapore (Overdij-
kink 1948: 51-3).
This export trade gave the Republic access to goods such as
weapons, bicycles, tyres, medicines and cloth which were invaluable,
both in its conduct of the war and in enabling it to maintain a basic level
of public welfare. The trade also gave the Republic an important means
of reinforcing its authority, though its importance was somewhat
diminished by the fact that the Republic by no means controlled the
machinery of import and export. There were many organisations other
than the Republic engaged in the trade. Of Indonesian goods entering
Singapore, the largest percentage by far came from Sumatra where it
was controlled by regional strongmen such as Dr A. K. Gani of
Palembang who, while they recognised the formal authority of the
Republic, were free to do as they wished within their own fiefs. Of the
goods from Java, many were exported not by the central government
but by local army commanders who, operating in association with
Chinese businessmen, were attempting through trade to make up for
the shortage of funds from official sources.
The suspected presence of weapons in the cargo of ships trading to
the Republic, and the fact that the trade clearly helped to consolidate
the power of the Republic led the Dutch to attempt to stop the trade. In
January 1947, the Netherlands Indies government announced a ban on
the import of military and semi-military goods and on the export of
products from plantations formerly owned by Dutch or other foreign
investors. Although bans were imposed primarily for strategic reasons,
the basis of the ban on export of plantation products was the Dutch
refusal to recognise the expropriation of their plantations by the
Japanese and the Republicans. To enforce the ban, the Dutch
instituted extensive naval patrols in the Straits of Malacca and theJava
Sea (Overdijkink I948: I52). The Republic responded to this restric-
tion by beginning to do business with an American firm, Isbrandtsen &

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 OPIUM AND THE INDONESIAN REVOLUTION 7II

Co. The Republic and the company later signed a contract under which
the company would act as the Republic's agent .. the transport and
sale of Republican goods and the use of the proceeds to buy American
goods. Both parties appear to have expected that the involvement of an
American firm would lead the United States State Department to
intercede with the Dutch in order to have the ban lifted. This proved a
forlorn hope, and when the Dutch seized an Isbrandtsen ship, the
Martin Behrmann, in February I947 on charges of illegally exporting
rubber, the State Department failed to give effective support to the
company (Homan 1979; Homan I983: 126).
Although it was possible for the export trade to continue on a
reduced and clandestine scale, using a multitude of small fishing boats
and the like, the Dutch blockade faced the Republic with a financial
crisis. Without that trade, the Republic could not maintain its govern-
ment and army in the face of the Dutch; nor could the government
easily maintain its effective authority over its own people, especially the
independent-minded regional military commanders. The financial
crisis was all the more severe because the Republic now had desperate
need of foreign exchange. During 1946 Republican leaders, especially
Syahrir, had made sustained efforts to reach a political compromise
with the Dutch, involving a few constitutional changes and a short
postponement of full independence on the part of the Republic in
exchange for Dutch recognition. It was the presence of the British
which had originally brought both sides to the negotiating table, and
the continued presence of British troops in Java until November 1946
helped to keep negotiations going through a number of serious dif-
ferences of opinion, but both Syahrir and the Netherlands Indies
Lieutenant Governor-General H. J. van Mook appear to have
genuinely been aiming for a settlement acceptable to both sides. The
resulting Linggajati Agreement was initialed in November 1946, but
soon became a dead letter in the face of persistent breaches of the spirit,
if not the letter, of the agreement, such as the Dutch blockade and
Republican skirmishes across the ceasefire line.
As relations worsened in the early months of 1947, the Republican
government realised the urgent need to marshal international support
which might restrain the Dutch from attempting a military solution to
their problems. The Republic accordingly established quasi-diplo-
matic offices in London, Washington, New Delhi, Bangkok and
Singapore from which to coordinate the international campaign.
Neither Japanese occupation currency nor the newly issued Republi-
can currency had any value abroad. To maintain its quasi-diplomatic

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7I 2 ROBERT CRIBB

establishments, therefore, the Republic needed hard currency, and to

obtain that it had, like all governments, to sell its goods on the
international market.
Unable, because of the blockade, to sell its previous staples such as
rubber and sugar, the Republic turned to opium and began to sell its
stocks actively and extensively outside the distribution apparatus of the
Djawatan Tjandoe. Two characteristics of opium made it a particu-
larly attractive proposition for the beleaguered Republican govern-
ment. It was light and it was valuable; by weight opium is one of the
most valuable of substances, and it was thus eminently suited to the
clandestine trade which the Republic had to adopt to circumvent the
Dutch blockade. There were other goods in this class-vanilla,
quinine, gold and jewels-and these were all traded by the Republic.
Their quantities, however, were limited, none was subject to an official
government monopoly, and all posed some problem of collection. Small
quantities of opium had been distributed outside the Djawatan
Tjandoe since early in the revolution. Republican leaders used it as a
means of payment for services rendered when for some reason or other
it was thought desirable to keep the payment out of official records.
Until the second quarter of I947, however, the amounts involved in
these transactions seem to have been small and their purposes
peripheral to the Republic's programmes. The primary value of opium
to the Republic continued to be the revenue it generated through the
official sales network.10
The first sign of a major alteration to this policy came with the
allocation of eighty kilos of raw opium to an official of the B.T.C.
(Banking and Trading Corporation), a Republican government-spon-
sored agency, in May 1947.11 The size of the allocation was significant,
as was the fact that it was recorded at all. As long as the quantities of
opium being distributed outside the auspices of the Djawatan Tjandoe
were small, there was no pressing need to record them. This was all the
more the case if grants of opium were being used as a way to avoid
recording a cash transaction. The grant to the B.T.C., on the other
hand, was large and was not delivered for services rendered but rather
as a contribution to the organisation's budget.
The Republic exercised no further control over opium distributed in
10
'Verantwoordelijkheid van regeringspersonen', loc. cit; 'Proces-verbaal Moe-
karto', loc. cit.; Nieuwsgier,13 May 1946. See alsoJ. G. Reyers, 'Rapport omtrent mijn
ervaringen als veroordeelde in het Huis van Bewaring Struiswijkgedurende de periode
3 Februari I948-3 Mei I948', 7 May 1948, ARA, Proc.Gen., file 793.
11 'Verantwoordelijkheid van regeringspersonen', loc. cit.; on the B.T.C., see Sutter
I959: 443-5.

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 OPIUM AND THE INDONESIAN REVOLUTION 713
this fashion, though it is highly likely that most found its way to
Singapore along with other cargoes handled by the B.T.C. The
government would have had no wish to see the profitable monopoly of
the Djawatan Tjandoe within the Republic breached, and may even
have required that the opium be exported. It was, however, not until
the government of Amir Syarifuddin came to power on 3July I947 that
the Republic formally decided to sell opium abroad. The immediate
reason for this decision appears to have been the impending departure
of the recently displaced prime minister Syahrir for the United
States, where he was to plead the Republic's case in the United
Nations. This mission was bound to put further strain on the foreign
exchange position of the Republic. The fact, however, that Syahrir was
flying out under quasi-diplomatic immunity accompanied by the
Australian representative Tom Critchley meant that the party could
afford to take along a quantity of opium and quinine to fund the
mission; Syahrir nonetheless took the precaution of bringing along a
medical doctor, Dr Abdul Halim, later a prime minister of the
Republic, who could claim if necessary that the goods were for medical
purposes only.'2 The opium was apparently to be delivered to the
Republic's representative in Singapore, who would sell it and provide
Syahrir with the necessary funds to continue his journey.
The circumstances which had brought the Republic to use opium for
internal budgetary purposes and to finance its foreign establishments
were exacerbated within a few days ofSyahrir's departure by a massive
Dutch military attack on the Republic, known as the First Police
Action. In this attack the Dutch seized large areas ofJava, including
the most important plantation areas of West and East Java. Not only
did the Republican government now have to operate on a considerably
more slender economic base, but the clandestine trade in products such
as tobacco which Republican territory still produced became more
difficult because the Republic controlled only a relatively short stretch
of the northern coast ofJava. There was widespread speculation, too,
on the possibility of another Dutch attack, and the Republic thus faced
an even more urgent need to consolidate and strengthen its army and to
present as effective as possible an international campaign in its own
favour.
Opium was used in the first place as a direct source of finance. This
was a direct extension of the existing role of the Djawatan Tjandoe,
although other senior officials of the finance ministry were also

12 Code
telegram to The Hague, Io January I949, loc. cit.; Halim I98I: 58-60.

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714 ROBERT CRIBB

involved. The Djawatan now not only supplied refined opium to

consumers through its shops but also supplied specific quantities of raw
opium from its warehouses in Yogyakarta to opium traders inJepara,
one of the few ports on the northern coast of Java still in Republican
hands. The traders, mostly Chinese, paid for the opium at a rate of one
kilogramme of 20 carat gold for 6? kilos raw opium, and then shipped it
by fishing boat to the Dutch-occupied city of Semarang. If a Dutch
naval patrol approached, the opium, packed in small tins and wrapped
in rubber sheets, was suspended overboard at the end of a piece of rope
until the danger had passed. Other traders transported the opium on
horseback through the mountains down to Semarang, packed in tins of
tobacco in order to mask the smell of the opium. In EastJava coffee was
used for the same purpose. According to a Dutch report based on
Republican documents, some 597.85kg of raw opium and 62,500 tubes
of refined opium (each tube approximately o.8g) were disbursed by the
Djawatan Tjandoe in Yogyakarta in the period from July 1947 to
January I948. The volume was sufficient to cause the sale price in
Semarang, Cirebon andJakarta to drop from f.8,ooo to f.4,ooo (Nether-
lands Indies currency) per kilo.13 Some of this opium was presumably
consumed onJava, but much of it was sent on to Singapore, concealed
in an ingenious variety of hiding places, ranging from coffins to false-
bottomed kerosene drums.
During the second half of 1947, increasingly large amounts of opium,
both raw and refined, were supplied to senior government officials not
on the staff of the Djawatan Tjandoe. They included the minister of
finance, A. A. Maramis, who increasingly took an active role in
supervising the opium trade. It was apparently intended that these
men should use their personal contacts and the special opportunities
they enjoyed by virtue of their positions to sell a larger volume of opium
than could be handled by the Djawatan. Their probity was said to be
guaranteed, if necessary, by the fact that they all owned property in the
Republic which could be confiscated if they absconded.14 Early in 1948,
however, Maramis recruited the services of a dashing young Chinese
Indonesian footballer called Tony Wen. Wen was associated with the
Indonesian Nationalist Party (P.N.I.) and he was a leader of the so-
called International Brigade, a multinational irregular unit founded in
Yogyakarta during the revolution. It was modelled vaguely on the
13
Dienst der Algemene Recherche, 'Opiumsmokkel van Republikeins naar Neder-
lands gecontroleerd gebied', 30 July 1948, Proc.Gen. 375; 'Verantwoordelijkheid van
regeringspersonen', loc. cit.; 'Proces-verbaal Moekarto', loc. cit.
4 'Proces-verbaal
Moekarto', loc. cit.

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 OPIUM AND THE INDONESIAN REVOLUTION 715
International Brigades which fought in the Spanish Civil War and was
composed of Indians, Arabs, Chinese and other foreigners sympathetic
to the Revolution. Wen's principal credentials, however, appear to
have been his contacts with Chinese businessmen in Singapore, for this
opened to the Republic the possibility of trading directly to Singapore,
bypassing the middlemen and glutted markets of Jakarta and
Semarang.15 In early March 1948, accompanied by an official of the
Djawatan, Wen took five hundred kilos of raw opium from Tuban in
East Java by speedboat to Singapore, sold it, and presented the
Republic's representatives with $225,000 in Straits currency. Part of
the money was returned to the Republic through Jakarta and part was
used to finance nationalist operations overseas.16
Maramis had reportedly stipulated that the Republic should receive
$450 per kilo, which left Wen's payment short by some $900,000. The
money, nevertheless, was vastly more than anything the Republic had
previously received from its opium transactions, and it emboldened
Maramis to use Wen on an even more daring venture. Part of the
proceeds were used to purchase the services of a group of Australian
and British adventurers who were commissioned to fly a Catalina
loaded with two and a half tonnes of opium from Lake Campurdarat
near Kediri in East Java to Singapore. Wen met the plane where it
landed on the sea of Singapore and oversaw the deal at the Singapore
end. In May, June and July 1948 three such flights were made and
some eight tonnes of raw opium was transported to Singapore, some of
it being sold through agents other than Wen. The Australians also flew
to Thailand, where they picked up cargo for the Republic, especially
tyres, which they brought with them on flights into Indonesia. They
apparently made flights to Bukit Tinggi in West Sumatra as well, to
transport opium for the government there.17 The purpose of these
shipments to Sumatra was probably not primarily to bolster the
authority of the central government there, for even the five tonnes of
opium sent would count for little against the economic power of the
15
Suryadinata 1978: 188; File: Tonny (sic) Wen, Proc.Gen., 820; 'Verantwoordelijk-
heid van regeringspersonen', loc.cit.;C.M.I. Document no. 5419, MvD/CAD, HKGS-
NOI, Inv.nr. GG56, 1948, bundel 6323D.
16 'Proces-verbaal
Moekarto', loc.cit.; 'Verantwoordelijkheid',loc.cit.;C.M.I. Docu-
ment no. 5746. MvD/CAD, HKGS-NOI, Inv.nr. GG55, I948, bundel 6323B, p. I.
17 'Proces-verbaal Moekarto', loc. cit.; codetelegram aan Den Haag, IoJanuary 1949,
loc. cit.; Consulate-General of the Netherlands, Singapore, to Director, Malayan
Security Service, 3 August 1948, Alg. Sec. II, 107; 'Relaas van de ervaringen,
opgedaan tijdens de vluchten met de Catalina PBY5-RI-oo5 gedurende een periode
van 21 maand', n.d. [December, 1948], C.M.I. Document no. 5685, MvD/CAD,
HKGS-NOI, Inv.nr. GG58, 1948, bundel 6323H.

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7I6 ROBERT CRIBB

strongmen who controlled the rubber trade across the Straits of

Malacca. Rather it was probably a precautionary measure intended to
guarantee that the Republican central government would have a
reliable source of finance if it were suddenly forced by another Dutch
military action to evacuate to Sumatra. It was apparently the
Australians, too, who piloted the aircraft which brought the communist
leaders Musso and Suripno back to Indonesia in August I948.18
Despite Tony Wen's initial brilliant success with the trade to
Singapore, by the end ofJuly 1948, severe problems had begun to arise.
Large quantities of opium had been delivered but very little of the
payment had been received. Tony Wen received another two and a half
tonnes of opium in June which he apparently never paid for; from the
other opium traders with whom the Republic dealt came no more than
$132,000 in payment for opium valued at $1,575,000. Sales in Jakarta
were a good deal more reliable, and those proceeds went a considerable
way towards defraying the heavy costs of maintaining a large Republi-
can establishment in Jakarta for continued negotiations with the
Dutch. Even there, however, there was a major gap between what was
owing and what had been received.19
It was to ensure that this kind of abuse of the system was limited that
the Republic had appointed Mukarto, as head of the Djawatan
Tjandoe, to be its financial coordinator for Australia and Southeast
Asia, excluding Indonesia itself. Since such a designation, however,
would have made Mukarto at least as suspect from the Dutch point of
view as his position in the Djawatan, he was accredited to the
Republican delegation in Jakarta as a journalist. This delegation
enjoyed a quasi-diplomatic status in Jakarta while it undertook nego-
tiations with the Dutch over the implementation of the Renville
Agreement, signed between the Republic and the Dutch in January
1948. This accreditation not only gave Mukarto a clear reason for
frequent travel between Yogyakarta, Jakarta and Singapore but gave
him a degree of quasi-diplomatic immunity from customs and security
inspection.20
18
'Relaas van de ervaringen', loc. cit.; Soerjono I980: 78. According toJohn Coast,
another pilot working for the Republic, and probably also for British intelligence, it was
not the Australians but yet another pilot who carried Musso and Suripno. See Coast
1992: 157.
'Proces-verbaal Moekarto', loc. cit.; Code telegram to The Hague, o January
1949, loc. cit.; Soebeno (official, ministry of finance), to minister of finance, 15
September 1948, C.M.I. Document no. 5350, MvD/CAD, HKGS-NOI, Inv.nr.
GG56, I948, bundel 6323C.
20
'Verantwoordelijkheidvan regeringspersonen', loc.cit.; N.E.I. Government Press
Release, I6 August 1948, Alg. Sec. II, 432.

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 OPIUM AND THE INDONESIAN REVOLUTION 717

For some time, however, the Dutch authorities had been concerned
by the abundance of illicit opium circulating in their territory and they
were engaged in energetic efforts to track down those responsible. On
30 July I948, Dutch police in Jakarta arrested one of the Djawatan
Tjandoe's Chinese agents and discovered in his possession documents
suggesting strongly that Mukarto was involved in the trade. He was
subsequently arrested inJakarta on Io August as he was about to board
an official aircraft for Yogyakarta. With this the network of Republican
opium sales began to unravel as the Dutch arrested more Djawatan
agents. Maramis, himself a member of the Republican delegation, left
somewhat rapidly for the Unitd States on a diplomatic mission. The
Dutch announced new restrictions on the activities and freedom of
movement of the delegation and took the opportunity to announce the
expulsion of a large number of Republican representatives. Few, if any,
of these had any involvement in the opium trade but most were engaged
in some kind of activity which the Dutch considered undesirable or
subversive, and the order expelling them was merely an attempt to
exploit the blow to the Republic's international prestige which the
exposure was expected to produce.21 The evidence which the Dutch
had collected, however, fell a good way short of incontrovertible proof
of the Republic's dealings in opium, and the Republic was able to
weather the storm which followed to a considerable degree simply by
vociferous denial of complicity and demands for proof. It admitted to
having continued the activities of the Opium-Regie, but it claimed to
have done so on a vastly reduced scale and to have announced that all
trade in opium would be forbidden from 31 December I948 (Coast
1952: I77-84; Nasution I978: 465-7). The fact that the Republic's
opium stocks lasted so long despite the Republic's overseas sales
initiative indicates that the Djawatan Tjandoe was selling far less
opium through conventional channels than had the pre-war Opium-
Regie. This is probably due largely, however, to its inability to reach
the Dutch-controlled regions which had been the Regie's most lucra-
tive markets.
Mukarto's arrest and the publicity which followed it effectively
ended the Republic's venture into the international opium trade. Its
chances of even recovering some of the money owed to it by its business
partners in Singapore disappeared when Tony Wen was arrested by
the British in September 1948 on suspicion of involvement in weapons
smuggling in Malaya. He was released before the Dutch could set in
21 N.E.I. Government Press Release, i6 August I948, loc. cit.; code telegram to The
Hague, io January 1949, loc. cit.

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7I8 ROBERT CRIBB

train extradition procedures against him, but decided to depart while

he could and disappeared to China. In nearly every sense, the
Singapore venture was a disaster. Apart from the non-payment of
money due, it cost the Djawatan Tjandoe around one-quarter of its
original stock, assuming that the consignment from Salemba had
formed the bulk of the Republic's opium supply; Mukarto's statement
to Dutch police in August 1948, after his arrest, that only 5.4 tonnes was
left over is likely to be more or less accurate.22 By selling in bulk and by
selling raw rather than refined opium the Republic had foregone the
price advantages enjoyed by the Djawatan Tjandoe sales. Since
Singapore, moreover, was the ultimate destination for much of the
opium smuggled by land and sea into Dutch-occupied regions ofJava,
it contributed indirectly to flooding that more reliable market. And it
was only by good fortune and fast talking that the Republic escaped a
major diplomatic setback when its activities were discovered. Only the
fact that the Republic had needed a large amount of money rapidly in
order to finance its international campaign made the venture worth-
while. Thereafter it was able to make do with the proceeds of the less
spectacular smuggling trade into Dutch territory. It also appears that it
had somewhat greater access to proceeds from the smuggling of rubber
from Sumatra to Singapore.
To an increasing extent as I948 wore on, the Republic made direct
disbursements of opium to the armed forces, which once more faced a
heightened risk of a Dutch attack. The earliest recorded provision of
opium to the armed forces was a consignment of ninety kilos of raw
opium to the airforce in May 1948, which was to be flown to the
Philippines and sold there. Therefore, between June and October,
some I58,900 tubes of refined opium were provided to the ministry of
defence and were distributed to a wide variety of military salesmen who
were instructed to exchange it for money or equipment. The chief
recipient of the opium, however, was the Siliwangi Division, which had
been evacuated to Republican territory from West Java after the
Renville Agreement of January I948 under which the Republic had
recognized Dutch authority in territories conquered during the First
Police Action. The division had been reconstituted as a mobile strike
22
'Proces-verbaal Moekarto', loc.cit.; File: Tonny Wen, loc.cit.;Dagelijks Overzicht
Belangrijkste Inlichtingen no. 786, 17 November 1948, Proc.Gen., 44; R.I. Ministry of
Defence, 'Verantwoording van ontvangen en afgeleverde opium', 23 October 1948,
C.M.I. Document no. 5641, MvD/CAD, HKGS-NOI, Inv.nr. GG57, 1948, bundel
6323F; Mr G. P. Kies (ministerie van overzeese gebiedsdelen), Ontwerp-publicatie
[hereafter 'Ontwerp-Kies'], 15 March 1949, MvD/CAD, Kabinet van de Legercom-
mandant Indonesie, doos 5, bundel 43.

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 OPIUM AND THE INDONESIAN REVOLUTION 7I9

force, and one of its principal tasks was to reinfiltrate Dutch-occupied

West Java as part of a broad campaign to prevent the Dutch from
maintaining security and order. For this the Siliwangi needed re-
supply and re-equipment beyond the financial capacity of the govern-
ment. The Hatta government also had a political motive in directing
support to the Siliwangi Division, since it was one of the government's
strongest supporters within the army against units allied to the deposed
left-wing prime minister Amir Syarifuddin. It was said that sixty tubes
of opium would buy forty yards of Chinese cotton cloth, twenty-five
tubes a rifle and two hundred a bren gun. So important was the supply
of opium to the army that the ministry of defence made available one of
its weapons factories for the manufacture of the tubes in which refined
opium was packed.23
The distribution of opium tubes within the Republic carried no
significant political risk and restored to the Republic the commercial
advantages of dealing in refined opium. The scale of opium distribution
within the Republic, however, and the need for even official operators
to act clandestinely made it almost inevitable that quantities of opium
would go astray. The ministry of finance issued formal licences to those
who had received opium legitimately, but it was a continual source of
frustration for the Republican police that their efforts to track down the
source of apparently illicit opium frequently ended with the discovery
that the suspected dealer held a finance ministry licence or was an
agent of Republican military intelligence. The police also discovered a
good deal of laxity in the way in which opium was distributed and
concluded that corruption was rife in the Djawatan Tjandoe. Most of
the stories which still circulate of army officers in CentralJava engaged
in small-scale opium dealing are probably the result of transactions
between those officers and their local Djawatan Tjandoe opium house,
rather than the larger dealings of the agency. Maramis promised to
tighten the licensing process, but there is little evidence to suggest that
anything practical was done to limit the volume of opium in circula-
tion.24 Although no figures exist to confirm it, it is likely that the extent

23
'Ontwerp-Kies', loc. cit.; 'Verantwoordelijkheid van regeringspersonen', loc. cit.;
Lt.-Col. Suprajogi (Head of Intendance, TNI) to head, Central Weapons Bureau, 13
July 1948, C.M.I. Document no. 5644, MvD/CAD, HKGS-NOI, Inv.nr. GG57, 1948,
bundel 6323F; Suprajogi to Hatta, 15 September 1948, C.M.I. Document no. 5518,
MvD/CAD, HKGS-NOI, Inv.nr. GG57, 1948, bundel 6323E; C.M.I. Document no.
5299, MvD/CAD, HKGS-NOI, Inv.nr. GG56, 1948, 6323C.
4 Maramis to Soekanto (Head of
Republican State Police), 2 March 1948, C.M.I.
Document no. 5746, p. 1; MvD/CAD, HKGS-NOI, Inv.nr. GG55, 1948, bundel
6323B; Soekanto to Maramis, 12 March 1948, ibid., pp. I8-I9; Mohamad

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720 ROBERT CRIBB

of private trading in opium had a significant effect on Djawatan

Tjandoe sales.
These problems and transactions were recorded in considerable
detail in files and archives in the Republican capital of Yogyakarta and
this information was amongst the mass of material which fell into
Dutch hands in their Second Police Action in December 1948. Cap-
tured Republican documents, translated by the C.M.I. (CentraleMili-
taire Inlichtingendienst,Central Military Intelligence Service), form the
basis for much of our knowledge of the opium trade, particularly from
I947. The documents appeared to be a propaganda windfall for the
Dutch, for they were now in possession of documents of indisputable
authenticity which proved not only the Republic's involvement in
opium trading but indicated that knowledge of the trade went up at
least as far as the prime minister and vice-president, Mohammad
Hatta, whose signature appeared on a number of incriminating docu-
ments. An official of the Dutch ministry of overseas territories immedi-
ately began to digest the documents in order to produce a report for
publication in English and Dutch. The report was ready by March
1949 but was never published or released, not because it was insubstan-
tial but because it was too damning. The Dutch government, under
intense pressure from the United States to reach an agreement with the
Republic, wanted to deal with what it saw as the more moderate
elements in the Republic, yet it was precisely these elements, exempli-
fied by Hatta, who had responsibility for the trade. The report was
quietly shelved and disappeared from sight.25
The Dutch attack and the subsequent guerrilla war ended for a time
the Republic's central control over what remained of its opium supply.
Local stocks were probably used by local military commanders, though
there is no documentary evidence of this. Opium stocks amounting to
perhaps four tonnes were captured by the Dutch in the attack on
Yogyakarta and in subsequent mopping-up operations. According to a
Dutch report, some Indonesian Chinese associates of Mukarto
approached the Republican government in August 1949 with the
suggestion that stocks of opium held in various parts of Java should
once again be shipped to Singapore to bolster the Republic's finances

Soerjopranoto (Police Chief, Yogyakarta) to Maramis, 20 March 1948, ibid., pp. 20-3;
Maramis to Soekanto, 29 May 1948, ibid., p. 26; Dienst van de Staatspolitie, afd.
P.A.M. teJogjakarta, Report, 27 May I948, ibid., pp. 42-3.
25
Maj.-Gen. D. C. Buurman van Vreeden (Chief of Staff, KNIL) to Lieut.-Gen.
S. H. Spoor (Commander, KNIL), 2I March I949, MvD/CAD, HKGS-NOI, Inv.nr.
GG57, 1948, 6323F; Spoor to Buurman van Vreeden, 22 March 1949, ibid.

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 OPIUM AND THE INDONESIAN REVOLUTION 721

abroad.26 There is also a report that a consignment of 1,500 kilos was

sent to Singapore by ship in July I949 under the auspices of the
ministry of finance. In the absence of any corroboration, it is difficult to
rely upon these reports. The first is particularly questionable, since the
Chinese involved included one of the dealers who still owed the
Republic $573,000 from his previous transaction. Nevertheless it is by
no means impossible that the sales took place and they would have
involved no innovation in Republican policy.
The opium transactions of the Indonesian Republic made a signifi-
cant contribution to its struggle against the Dutch in the years 1945 to
I949. The Republic inherited and maintained the opium monopoly of
the colonial government and was able to use it as a reliable source of
substantial revenue early in the revolution when other revenue sources
had become unviable or irregular. Later in the revolution the Republic
sold opium on an extensive scale outside its own borders. Its attempts
to sell opium direct to traders in Singapore was spectacularly unsuc-
cessful in a commercial and political sense but provided the Republic
with urgently needed foreign exchange at a crucial period in its struggle
for independence. It is ironic that opium, so closely associated with the
rise of European power in Asia, should also have contributed to its
defeat.
26
'Republikeinse wapentransacties met het aangrenzende buitenland', C.M.I.
Signalement no. 9573, Alg. Sec. II, 766/I.

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