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Published online by Cambridge University Press: 07 April 2017
Within the space of a few years a remarkable transformation took place in the taxation system of the Federated Malay States (FMS). Up until the early 1900s the British administration of these states relied, as had the sultans and chiefs from whom the British had taken control in the 1870s, on the revenue farm system for collecting many taxes. Most revenue farms were constituted according to the standard pattern found elsewhere in Southeast Asia at this time and in Europe up to the eighteenth century. The government granted a private contractor, the revenue farmer, the exclusive right to collect a certain tax in a specified area for a set number of years in return for a fixed rent, and the farmer kept for himself any money which he collected over and above what he owed the government in rent. A great variety of taxes were collected in this way. There were farms to collect the export duty on atap, firewood, timber, and rattan; most towns had market farms; and in Perak there was even a ‘farm of river turtle eggs’.
1 A few explanatory notes are in order. The four states which are the subject of this study are Perak, which became a British protectorate in 1874, Selangor (1874), Negri Sembilan, which consisted of Sungei Ujong (1874) and the original Negri Sembilan (1883–87), and Pahang (1888). Up to 1896 the British Resident of each state was directly responsible to the Governor of the neighbouring British colony, the Straits Settlements, made up of Singapore, Penang, and Malacca. In 1896 the four states were combined to form the Federated Malay States, headed by a Resident-General, who was responsible to the Governor, who also carried the title of High Commissioner of the FMS.
2 Except where otherwise noted, the statistics in this paper have been calculated from the annual reports of the FMS and the separate states, the 1904 and 1916 editions of the Manual of Statistics Relating to the Federated Malay Stales (Kuala Lumpur), and the annual Estimates of Revenue and Expenditure, all of which were consulted at the National Archives of Malaysia. Each volume in the last-mentioned series gives full details of the estimated revenue and expenditure for the year in question but also, in most cases, the actual revenue for the year two years before that year (e.g., the Estimates for 1911 reports the actual revenue for 1909). The unit of currency referred to in this article is the Straits dollar, which was fixed at 2s. 4d. sterling in 1906. I have rounded off all revenue figures to the nearest $10,000.
3 For an example for such a case: SSF 3421/1899.
4 SSF 3431/1899; memorandum by Resident of Sungei Ujong and Jelebu, 2 December 1894, in Mitchell to Ripon, confidential of 8 February 1895, CO 273/202.
5 Memorandum by the Resident of Perak (p. 4), 20 March 1894, in confidential of 8 February 1895, CO 273/202.
6 Sadka, Emily, The Protected Malay States 1874–1895 (Kuala Lumpur, 1968), p. 331Google Scholar; Singapore and Federated Malay States Opium Commission (Singapore, 1908), I (Report), 43, and II (Proceedings), 694, 845, 959; evidence by Swettenham, Frank, ‘Royal Commission on Opium and Opium Consumption …’, p. 18Google Scholar, in Mitchell to Ripon, 70 of 8 February 1894, CO 273/194; Blythe, Wilfred L., The Impact of Chinese Secret Societies in Malaya (London, 1969), pp. 253–4Google Scholar. The reasons why early officials in Penang adopted the revenue farm system are thoroughly discussed in Ken, Wong Lin, ‘The Revenue Farms of Prince of Wales Island, 1805–1830’, Nan-yang Hsueh Hui (Journal of the South Seas Society), 19, no. 1 (1964), 56–127.Google Scholar
7 Wen, Cheng U, ‘Opium in the Straits Settlements, 1867–1910’, Journal of Southeast Asian History, 2, no. 1 (03 1961), 52.Google Scholar
8 Hare, G. T., Report on Taxation of Opium in the Federated Malay States (Taiping, 1898), pp. 31, 32, and 40, in SSF 991/1898Google Scholar; Opium Commission, II, 729, 810, and 853Google Scholar; SSF 100/1901; NSSF 6920/1904 and 3535/1905; HCO 1238/1900.
9 The most revealing sources for understanding the views of officials on the gambling farms are the memoranda in confidential of 8 February 1895, CO 272/202.
10 Separate figures do not exist for the value of the gambling farms since they were let as part of the general farms, but after evaluating tenders (e.g., in SSF 5414/1907) and considering estimates made by officials (e.g., in SSF 5106/1906) I have estimated the percentage of the revenue from the general farms attributable to gambling to be 60.65 in the case of the three west-coast states and 30 in the case of Pahang.
11 In the following discussion, as well as elsewhere in this paper, I owe a general debt to Ken, Wong Lin, The Malayan Tin Industry to 1914 (Tucson, 1965)Google Scholar, and Sadka, , Protected Malay States, especially pp. 332–6.Google Scholar
12 Resident of Perak to Colonial Secretary, 27 August 1890, in Dickson to Knutsford, 425 of 31 October 1890, CO 273/168; SSF 2560/1889, 8030/1892, 5475/1895, 3357/1898.
13 Hugh Clifford, minute of 10 November 1897, HCO 1049/1897.
14 Minute of 30 October 1894, SSF 5322/1894.
15 Memorandum by A. R. Venning, 18 December 1895, in Mitchell to Chamberlain, 18 January 1896, CO 273/212; SSF 3263, 3568, 4819/1895.
16 Wong, , Malayan Tin Industry, p. 81.Google Scholar
17 Hare, G. T., minute of 21 07 1903Google Scholar, NSSF 3847/1903.
18 Birch, E. W. to Resident-General, 23 September 1905Google Scholar, in Anderson to Elgin, 332 of 23 August 1906, CO 273/321.
19 Marginal comments by G. T. Hare on a copy of the letter by Birch referred to in the previous note. HCO 1295/1905.
20 Creagh, C. V., ‘Evidence Taken before the Commission Appointed to Enquire into the Question of Public Gambling in the Straits Settlements’, pp. B9–10Google Scholar, in Weld to Holland, 66 of 22 February 1887, CO 273/143.
21 Maxwell, W. E., ‘Memorandum by the Colonial Secretary’, 9 07 1894Google Scholar, in confidential of 8 February 1895, CO 273/202.
22 Rathborne, Ambrose B., Camping and Tramping in Malaya: Fifteen Years’ Pioneering in the Native States of the Malay Peninsula (London, 1898), p. 123.Google Scholar
23 Hare, G. T., report of 19 January 1900Google Scholar, quoted in Protector of Chinese (W. Cowan) to Secretary to Resident, 20 April 1911, SSF 1973/1911. In Fan-tan, one of the most popular games, a handful of Chinese cash was placed under a bowl and players staked ‘on the number of cash which will remain after subtracting as many as possible four at a time’. W. D. Barnes, ‘Games Played in the Licensed Gambling Farms in Taipeng’, 20 March 1894, in confidential of 8 February 1895, CO 273/202.
24 ‘Evidence Taken before the Commission … Public Gambling’, p. B 8.See also Wertheim, W. F., Indonesian Society in Transition, second edn (The Hague, 1964), p. 251.Google Scholar
25 Rathborne, , Camping and Tramping, p. 123Google Scholar, mentions that employers lent their workers money to gamble.
26 Wong, , Malayan Tin Industry, pp. 97, 108, 112Google Scholar; Sadka, , Protected Malay Stales, p. 314.Google Scholar
27 Warnford-Lock, C. G., Mining in Malaya for Gold and Tin (London, 1907), p. 40Google Scholar. In his study of the Chinese in Thailand Skinner has argued, much as I have here, that the taxes on gambling and opium had the effect of preventing workers from returning to China. Skinner, G. William, Chinese Society in Thailand: An Analytical History (Ithaca, 1957), P. 125.Google Scholar
28 SSF 2012/1886.
29 The term ‘mine operators’ in this context includes mine owners, advancers in the Malay States, and their backers in the Straits Settlements.
30 Sources for these generalizations include: the voluminous correspondence in 425 of 31 October 1890, CO 273/168, especially Resident of Perak (Swettenham) to Colonial Secretary, 28 September 1890; Annual Report Selangor 1889, para. 239; Maxwell, W. E., ‘The Malay Peninsula, Its Resources and Prospects’ (paper read at the Royal Colonial Institute, 10 November 1891), pp. 26–7, CO 273/178Google Scholar; P[asqual], J. C., ‘Chinese Tin Mining in Selangor’, Selangor Journal, 4 (1897), 100–1Google Scholar; Smith to Knutsford, 288 of 13 July 1891, CO 272/174; editorial of 12 July, Malay Weekly Mail, 20 July 1905; editorial of 27 September, Malay Weekly Mail, 5 October 1905. Just how strong a relationship there was between the prosperity of the tin industry and the success of the farms is illustrated by the fact that in 1896 the rent for the Perak general farm was calculated at 4.55 percent of the value of tin exports. Annual Report Perak 1896, para. 2. This is to my knowledge the only time when a farm was leased for other than a fixed rent.
31 Maxwell to Cheah Tek Soon and Cheah Chen Eok, 26 April 1890, in 425 of 31 October 1890, CO 273/168.
32 Minute of 16 June 1896, SSF 3129/1896.
33 Swettenham to Colonial Secretary, 8 September 1890, in 425 of 31 October 1890, CO 273/168.
34 Minute of 22 July 1897, SSF 2622/1897; HCO 503/1897. Loke Yew was granted a further reduction.
35 Annual Report FMS 1900, para. 6.
36 For the sake of simplicity the dates referred to in this paragraph are those for Selangor. Identical changes occurred in Perak and Negri Sembilan either at the same time or one year earlier or later.
37 Minute of 24 March 1895, on Mitchell to Ripon, confidential of 8 February 1895, CO 273/202.
38 Sadka, , Protected Malay States, p. 336Google Scholar; Swettenham to Chamberlain, 67 of 10 February 1900, CO 273/260.
39 Anderson to Elgin, 332 of 23 August 1906, CO 273/321; HCO 1292/1905.
40 3 December 1906. This reply and others to questions asked by R. Laidlaw and Claude Hay are in CO 273/322 and CO 273/332.
41 Federal Council Proceedings 1912, p. B 105; HCO 1632/1911, 1245/1912; CO 273/376, pp. 376–7; minute by Harcourt, 6 August 1912, on Young to Harcourt, 27 June 1912, CO 273/386.
42 Acting Resident of Negri Sembilan to Resident-General, 22 May 1907, SSF 3709/1907.
43 See especially letters and minutes in SSF 3802/1910.
44 Birch, E. W., Opium Commission, II, 700.Google Scholar
45 Belfield, H. C., Opium Commission, II, 857–8.Google Scholar
46 Lim, Margaret J. B. C., ‘The Control of the Opium Trade in Malaya 1900–1912’ (unpublished M.Sc. thesis, University of London, 1965), p. 186Google Scholar (for quotation, a statement by the Governor in October 1909) and passim. This is a thorough study of the whole issue. See also Cheng, ‘Opium in the Straits Settlements’.
47 See ‘Annual Report on the Chandu Monopoly for 1911’, SSF 1427/1912; Annual Report Trade and Customs Departments 1911, paras 51–64, and 1912, paras 56–70.
48 See note 38.
49 Opium Commission, II, 686.Google Scholar
50 Opium Commission, II, 685–6Google Scholar; Annual Report Secretary for Chinese Affairs 1905, para. 25; NSSF 7122/1904.
51 Minute of 15 October 1906, HCO 1291/1906.
52 Schedule of Tenders and Petition of 1 October 1907, SSF 5272/1907; SSF 5417/1907; Wong, , Malayan Tin Industry, pp. 104–5.Google Scholar
53 Protector of Chinese to Secretary to Resident, 30 June 1911, SSF 3231/1911.
54 Protector of Chinese (Cowan) to Secretary to Resident, 20 April 1911, and a report by G. T. Hare, 19 January 1900, quoted in this letter, SSF 1973/1911.
55 Editorial, 8 January, Malay Weekly Mail, 9 January 1908; editorial, 23 January, Malay Weekly Mail, 30 January 1908.
56 These changes are examined in great detail in Wong, Malayan Tin Industry, ch. 5.
57 Osborne, F. Douglas, ‘Tin Mining in F.M.S.’, Malay Weekly Mail, 28 December 1905.Google Scholar The frontispiece of Warnford-Lock's book, Mining in Malaya, published in 1907, carries the photograph of a Chinese mine worker and the caption ‘The Passing Man in Malaya’: ‘he is destined to pass away and give place to machinery’.
58 Memorandum by Chung Thye Phin and Low Leong Huat (no date), SSF 3987/1904.
59 Malayan Tin Industry, p. 222.
60 Mining in Malaya, p. 171.
61 Federal Council Proceedings 1912, pp. B93, 96, 111 (for statement by H. D. Griffiths quoted here), 115. It might be added that one of the reasons why the government instituted the government opium monopoly rather than give up the opium revenue altogether was that European unofficials, particularly those in the Straits Settlements, vehemently opposed the replacement of this source of revenue with an income tax. Opium Commission, I, 43Google Scholar; Lim, , ‘Control of the Opium Trade’, pp. 188–9.Google Scholar
62 Annual Report Negri Sembilan 1910, para. 54.
63 Ng to Resident, 19 March 1908, and minutes by Resident, 19 March 1908, SSF 1675/1908.
64 Barnes to Resident, 13 June 1908, and other documents, SSF 3157/1908.
65 Ng to High Commissioner, 29 March 1910, and other correspondence and minutes, SSF 1412/1910. Other relevant files for this extraordinarily complex affair include SSF 2039, 2793, 3106, 3614, 3650/1908; 1432, 2164/1911.
66 Cowan to Secretary to Resident, 31 December 1909, SSF 3292/1909; Cowan, ‘Memorandum for the British Resident, Selangor’, 8 July 1911, SSF 3802/1910.
67 Cowan to Secretary to Resident, 5 September 1910, SSF 3997/1910.
68 Barnes, memorandum of 6 November 1905, HCO 1292/1905.
69 The year 1910 was one of unusually low opium imports, but we can see the same jump by taking longer time spans. In the three years 1908–10 the revenue from opium was $8,780,000 or 11.5 percent of the total revenue; in the three years 1911–13 the opium revenue was $24,900,000 or 20.4 percent of total revenue. Under the government monopoly the price of opium to the consumer was greatly increased. This brought about a great increase in revenue even though it also led to a drop in the quantity of opium imported.
70 Population figures taken from Nathan, J. E., The Census of British Malaya, 1921 (London, 1922), p. 29Google Scholar. The gambling revenue fell from about $5.50 to about $3.75 percapita during the same period.
71 Before these statements are made with full confidence, however, there needs to be an analytical study of changes in taxation over a much longer period than that examined here. A recent article by Anne Booth suggests the kind of work that might well be done on Malaya: ‘The Burden of Taxation in Colonial Indonesia in the Twentieth Century’, Journal of Southeast Asian Studies, 11 (03 1980), 91–109CrossRefGoogle Scholar. A wealth of statistical material is available for work of this kind. See the sources referred to in note 2 above.