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The Colonial Office and British Business before World War I: A Case Study

Published online by Cambridge University Press:  11 June 2012

Vincent Ponko Jr.
Vincent Ponko Jr.
Affiliation:
Dean, School of Humanities, California State College, Bakersfield
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Abstract

As Great Britain expanded its economic sphere at the turn of the century, what was the nature of the relationship between the imperial government and private firms seeking profits within the free trade empire? Was there a “well-planned and consistent program directed from the top,” or was the government's so-called “high policy” toward business actually the result “of ad hoc compromises among various departmental heads” buried three and four levels deep in the Colonial Office? The experience of the Tanjong Pagar Dock Co. of Singapore suggests that the opportunities for British firms to exploit the resources of British controlled territories could be seriously circumscribed by the “arbitrary paternalism” of “crusading bureaucrats.”

Type
Research Article
Information
Business History Review , Volume 43 , Issue 1 , Spring 1969 , pp. 39 - 58
Copyright
Copyright © The President and Fellows of Harvard College 1969

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References

1 For a broad political view of imperialism as differentiated from an economic interpretation, see Louis, W. R., Great Britain and Germany's Lost Colonies, 1914–1919 (Oxford, 1967), 155–60.Google Scholar The ecological approach and the shift in emphasis from origin to activity is reflected in such recent works as Hammond, R.J., Portugal and Africa, 1815–1910: A Study in Uneconomic Imperialism (Stanford, 1966)Google Scholar, and Heussler, Robert, The British in Northern Nigeria London, 1968).Google Scholar

2 For a contemporary account of the legal superiority of the Secretary of State in relation to the non-self-governing colonies, see SirJenkyns, Henry, British Rule and Jurisdiction Beyond the Seas (Oxford, 1902), 91–104, 122.Google Scholar The importance of studying this institutional factor in relation to the limitations of discretionary activities within the empire by individuals and groups is employed by Robert I. Crane, review article of Morley and India, 1906–1910, by Stanley A. Wolpert (Berkeley and Los Angeles, 1967), in American Historical Review, LXXIII (February, 1968), 883–84. See also Ponko, Vincent Jr.,“Economic Management in a Free-Trade Empire: The Work of the Crown Agents for the Colonies in the Nineteenth and Early Twentieth Centuries,” Journal of Economic History, XXVI (September, 1966), 363–77.CrossRefGoogle Scholar

3 MacLeod, Roy M., “Social Policy and the ‘Floating Population’: The Administration of the Canal Boats Acts, 1877–1899,” Past and Present (December, 1966), 104.Google Scholar The first part of this article contains a summary of the conflicting positions taken by various historians regarding the administrative developments in Great Britain during the nineteenth century.

4 Great Britain, Colonial Office, Straits Settlements. Eastern No. 98. Confidential. Expropriation of the Undertaking of the Tanjong Pagar Dock Company by the Government of the Straits Settlements Instructions for Brief and Counsel to Advise upon Evidence (August, 1905), 2–3.

5 The Tanjong Pagar Dock Co. was the first of its kind in Singapore to be organized on a Joint stock basis. Since no local authority existed under which it could be incorporated, its promoters had recourse to Indian legislation for this purpose. To make this legislation more effective, the government appointed a local Government Registrar in May 1864. Bogaars, George, “The Tanjong Pagar Dock Company (1864–1905),” Memoirs of the Raffles Museum, No. 3 (December, 1956), 121.Google Scholar

6 Colonial Office, Great Britain, Straits Settlements. Eastern No. 96. Confidential. Correspondence [November 18, 1903, to July 13, 1906] Respecting the Expropriation of the Tanjong Pagar Dock Company, Limited (July, 1906), #1, “Acting Governor Taylor to Mr. Lyttelton, November 18, 1903,” pp. 1–2; Eastern No. 98, p. 3; Bogaars, p. 191–201. An expurgated version of this confidential series of documents is in Great Britain, Parliamentary Papers, LXXVIII (Accounts and Papers, XIV), Cmd. 3249, 1906, pp. 78–287.

7 Eastern No. 98, pp. 8–9; Bogaars, 166–67, 173.

8 Eastern No. 98, p. 20.

9 Eastern No. 98, pp. 20–21; Bogaars, 169.

10 Eastern No. 98, pp. 8–9; Bogaars, 170–71. Some individual shareholders, however, disliked the arrangement from the beginning and quarrels about the vote played by the London Consulting Committee were not absent from the company's affairs in the nineteenth century.

11 Eastern No. 98, pp. 3–16; Makepeace, Walter, et al. (eds.), One Hundred Years of Singapore, Being Some Account of the Capital of the Straits Settlements from its Foundation by Sir Stamford Raffles on the 6th February 1819 to the 6th February 1919 (2 vols., London, 1921), 1, 18Google Scholar; Bogaars, 191–215. Subsequent critics of the company claimed that the 1899 reconstruction was intended to disguise the high dividend rate paid on the formerly smaller number of shares.

12 In 1899, the Tanjong Pagar Dock Co. purchased the New Harbor Dock Co., but since these two firms had been operating on a joint purse basis since 1881 this action did not add to the Tanjong Pagar Dock Co.'s facilities absolutely. Bogaars, 192–99.

13 Eastern No. 98, p. 29; Eastern No. 96, “Acting Governor Taylor to Mr. Lyttelton, November 18, 1903,” p. 1; Bogaars, 202, 215–17, 240.

14 Eastern No. 96, Enclosure A in #5, “Acting Governor Taylor to Mr. Lyttelton, March 30, 1904,” pp. 116–18.

15 Eastern No. 98, p. 15; Bogaars, 223. As a result of this opposition, Nicholson returned to England to consult with the engineering firm of Coode, Son & Matthews. In October 1904, a combined report was issued which called for an expenditure of around £1,500,000 or $15,000,000 (Straits Dollars), an increase of some $3,000,000 over Nicholson's first estimate. See Tanjong Pagar Dock Co., Ltd., Singapore, Report on Proposed Reconstruction of Wharves and Extension of Dock Accommodation by Messrs. Coode, Son and Matthews and J. R. Nicholson (London, 1904).

16 Eastern No. 96, Enclosure D in #5, “Acting Governor Taylor to Mr. Lyttelton, March 30, 1904,” pp. 10–31.

17 In a letter dated March 30, 1904, Acting Governor Taylor wrote to Lyttelton that “it is proper that the Consulting Committee should desire that when placing this report in the hands of the shareholders the directors should, if possible, show how the necessary capital was to be obtained; but the reference to the condition that a dividend of 12 per cent, was not to be endangered appears to Justify those who are not, for one reason or other, supporters of the Consulting Committee, in considering the action of the Committee as influenced by regard for dividends rather than by prudence in the matter of expenditure.” Eastern No. 96, #5, “Acting Governor Taylor to Mr. Lyttelton, March 30, 1904,” p. 6. See also Eastern No. 96, Enclosure D in #5, “Acting Governor Taylor to Mr. Lyttelton, March 30, 1904,” p. 6, 31–34.

18 Eastern No. 96, Enclosure A in #5, “Acting Governor Taylor to Mr. Lyttelton, March 30, 1904,” pp. 7–8; Eastern No. 96, Enclosure C and D in #11 “Mr. J. Anderson to Colonial Office, August 17, 1904,” pp. 62–66.

19 Eastern No. 96, #6, “Governor Sir J. Anderson to Mr. Lyttelton, June 15, 1904;” pp. 34–37; Eastern No. 96, #8 “Mr. J. Anderson to Colonial Office, August 7, 1904,” with enclosed memorandum, pp. 38–50; Eastern No. 96 #11, “Mr. J. Anderson to Colonial Office, August 17, 1904,” with enclosed memoranda, pp. 59–68. Mr. J. Anderson had both a personal and financial interest in the advice he gave to the Colonial Office. He felt that the consulting committee had bypassed him while giving instructions to the Board's subordinates for the purpose of undermining his leadership; this he took as a personal affront. In addition, he owned shares in the company to the value of £4,000. Moreover, for “patriotic” reasons be wanted only people from Great Britain to be on the board of directors.

20 Eastern No. 96, #12, “Colonial Office to The Tanjong Pagar Dock Company, Limited,” pp. 68–69.

21 Eastern No. 96, #13, “The Tanjong Pagar Dock Company, Limited, to Colonial Office, September 6, 1904,” p. 69; Eastern No. 96, #16, “The Tanjong Pagar Dock Company, Limited, to Colonial Office, October 14, 1904,” pp. 70–73.

22 P.R.O. CO 273/306. P.R.O. 88S/5, Conf. Print Misc. 65; P.R.O. 885/8, Conf. Print. Misc. 154.

23 This position was also reflected in the letter of Sir John Anderson. “The suggestion that there should be upheld a system giving control, direction, and the power or right of veto to a group of retired merchants 7,000 miles away from the scene, over the working of machinery on which more than one-half of Singapore's whole volume of shipping trade is dependent, is one that I most earnestly hope will never be adopted.” Eastern No. 96, #6, “Governor Sir J. Anderson to Mr. Lyttelton, June 15, 1904,” p. 35.

24 P.R.O. CO 273/306. John Anderson had previously voiced the opinion that the existence of two Chinese members on the board of directors constituted a possible security leak and, therefore, a threat to the defense of the port in times of trouble.

25 Eastern No. 96, #19, “Mr. Lyttelton to Governor Sir J. Anderson, November 4, 1904,” p. 75; Eastern No. 96, #4, “Mr. Lyttelton to Governor Sir J. Anderson, April 22, 1904,” p. 5; Eastern No. 96, #6, “Governor Sir John Anderson, June 15, 1904,” p. 36.

26 Eastern No. 96, #29, p. 91.

27 Ibid..

28 The Federated Malay States held 2,931 shares in the Tanjong Pagar Dock Co. and this plus the offered 8,000 would give the government 10,000 votes under the revised articles. Eastern No. 96, #30, “The Tanjong Pagar Dock Company, Limited to Colonial Office, December 15, 1904,”p. 81–82; Eastern No. 96, #47, “The Tanjong Pagar Dock Company to Colonial Office, January 25, 1905,” pp. 99, 102.

29 Governor Sir John Anderson thought Lyttelton unduly influenced by Mr. John Anderson. “I am afraid that the statements in the late Chairman 's speech at the General Meeting of the Company in March last may have induced you to take an unduly pessimistic view of the actual value of the Company's property and business, and of the strength of its position as regards the future.” Eastern No. 96, #34, “Governor Sir John Anderson to Mr. Lyttelton, December 8, 1904,” p. 87. In his letter of November 4, Lyttelton also presented expropriation as “a course which he has reason to believe, has already presented itself to the minds of the Committee as a possible solution.” Eastern No. 96, #28, “Colonial Office to The Tanjong Pagar Dock Company, Limited, December 9, 1904,” p. 80.

30 Eastern No. 96, #19, “Mr. Lyttelton to Governor Sir J. Anderson, November 4, 1904,” pp. 76 '77. In a subsequent telegram Lyttelton stated to Anderson that “a letter was sent last night to the London Committee, giving notice of the intention to expropriate. You should consider the advisability of making a confidential communication to the Board outlining future policy and hinting at intention to make use of them and of their staff in the management of the business, though without committing yourself to retaining the whole of the present Board.” Eastern No. 96, #29, “Telegram Sent 11:43 A.M. December 10, 1904,” p. 81. One other “expert” was Sir Frank Swettenham, who first opposed a government board and then turned around and approved Lyttelton's arrangement. Eastern No. 96, #14, “Colonial Office to Sir F. A. Swettenham, September 9, 1904,” p. 69.

31 This point was brought out by a member of the Singapore Legislative Council in the debate on the expropriation ordinance. Bogaars, 241.

32 Eastern No. 98, p. 27.

33 Ibid., p. 22.

34 Eastern No. 98, pp. 22–24. Later the English counsel and the firm of solicitors used by the Colonial Office recommended that the income approach be used. Eastern No. 96, #233, p. 239. See also Eastern No. 96, #237, pp. 243–44.

35 The arbitration award was based on a valuation of the Straits dollar at 2 shillings, which had been more or less standard for several years, but just before the award was announced the government revalued the dollar at 2 shillings, 4 pence. On the basis of this figure the award comes out to something like $880.00 per share. Great Britain, Parliamentary Papers, LXXV (Accounts and Papers, XI), Cmd. 2684, 1904, “#502 Straits Settlements Report for 1905,” pp. 32–33; SirSwettenham, Frank, British Malaya: An Account of the Origin and Progress of British Influence in Malaya (London, 1907), 334, 334nGoogle Scholar; One Hundred Years of Singapore, 14. The share price had risen steadily from around $240 per share at the time of expropriation; in May 1905, shares were selling at $400. After the governor, Sir John Anderson, received Lyttelton's letter of November 4, 1904, he began to buy shares selling under $250 per share. Lyttelton stopped this activity on the ground that it would prejudice the government's case at arbitration. Eastern No. 96, #24, 25, 26, pp. 78–79. As noted the Federated Malay States held 2,921 shares. For the problems arising out of the procedure of arbitration see Eastern #96, #20–355, pp. 77–319.

36 Bogaars, 203–205; One Hundred Years of Singapore, 9–10.

37 Eastern No. 98, p. 27. The company's attitude toward this affair is summarized in Eastern No. 96, #47, “The Tanjong Pagar Dock Company, Limited, to Colonial Office, February 9, 1905,” p. 101.

38 Only two of the sitting members were dropped. Mr. John Anderson was added to fill one of these places. Eastern No. 96, #270, “Governor Sir J. Anderson to Mr. Lyttelton, August 23, 1905,” pp. 262–63.

39 Eastern No. 96, #207, “Colonial Office to Admiralty, August 4, 1905,” pp. 222–23; Eastern No. 96, #287, “Governor Sir J. Anderson to Mr. Lyttelton, November 2, 1905,” pp. 273–75; Eastern No. 96, #306 with enclosure, “Admiralty to Colonial Office,” pp. 284–85. It is also curious that in view of the use made of the neglect of the company to build a dock large enough to take the most massive units of the British Navy Lyttelton could state in the House of Commons in answer to a question that he was “not aware that the admiralty contemplated any alteration in the existing naval arrangement with regard to Singapore. “Winston Churchill as Under Secretary also stated that” the proposal for the acquisition of the docks did not originate with the Committee of Imperial Defense”. Great Britain, Parliamentary Papers (House of Commons Debates, 151, 160), 1905, 254–55, 869.

40 Great Britain, Parliamentary Papers, LXIX (Accounts and Papers, VIII), Cmd. 3729, 1908, “#582 Straits Settlements Report for 1907,” pp. 7–12; LVIII (Accounts and Papers, X), Cmd. 6007, 1912, “#750 Straits Settlements Report for 1911,” pp. 3–5; LVIII (Accounts and Papers, IX), Cmd. 7050, 1912, “#789 Straits Settlements Report for 1912,” pp. 4–5. It is interesting in this regard to note that the financial health of the colony as a whole during these years depended to a great extent on the revenue derived from the growing and marketing of opium and that this period seems to have been a profitable one as far as this product was concerned.

41 Ponko, op. cit. 363–75. However, selected British business units in Great Britain benefited from the operations of the Crown Agents for the Colonies in the procurement of supplies for the dependent empire as well as in the financing of Crown Colony operations.

42 For example, see Great Britain, Parliamentary Papers, XVI (Reports from Commissioners, Inspectors, and Others, VIII), Cmd. 4473, 1909, “Crown Agents Enquiry Committee Report to the Right Honourable the Earl of Crewe, K.G.P.C., etc., etc., Secretary of State for the Colonies,” in Report of the Committee of Enquiry into the Organization of the Crown Agents Office with a Despatch hereon from the Secretary of State for the Colonies, i.

43 Colonial Office, Great Britain, Miscellaneous No. 269. Confidential. Report of the Concessions Committee with Regard to the System of Dealing with Concessions in the Crown Colonies and Protectorates, 1–9.