extension of credit facilities (Government Printer, Singapore, 1921), p. 11.
rubber situation. The report of the Stevenson Committee
recommended that the Government should take action to reduce the amount of rubber exported from producing countries only if the Dutch government agreed on a similar policy for the Netherlands East Indies. The Dutch government was, however, unwilling to participate in any restriction scheme and five months after its first report, in a
surprising volte face, the Committee issued a supplementary report in which it abandoned its original stand that Dutch co-operation was
essential and recommended that Malaya and Ceylon, the two British 9 rubber-producing colonies, should adopt restriction unilaterally. This recommendation was accepted by the Secretary of State and by the British g o v e r n m e n t , ^ and restriction legislation was enacted in
11
Malaya and Ceylon. The Stevenson rubber restriction scheme, which
came into effect in November 1922, was to have a great influence on the development of the Malayan rubber industry and particularly the peasant rubber industry.
The factors which prompted the Stevenson Committee to change
8 The committee comprised the Chairman, Sir James Stevenson,
former Managing Director of John Walker and Sons Ltd., and Commercial Adviser to the Colonial Office; two members of the Colonial Office, G .E .A. Grindle and S , H . Leake; an official of the Malay States Agency, E. Brockman; and five members of
the plantation industry, Sir Stanley Bois, Chairman of the RGA,
E .J . Byrne of the Dunlop Rubber Co., W.M. Duncan of the Straits
Rubber Co., Eric Millar of Harrison Crosfield and Sir E. Rosling
of Anglo Ceylon and General Estates Co. It might be noted that
Stevenson, the Chairman, had considerable investments in plantation rubber and that the findings of the Stevenson Committee closely resemble that of the RGA.
9 Both the reports can be found in CO 717/24/24495.
10 The report was presented to and approved by the Cabinet during
the last fifteen minutes of a meeting. Churchill, the Secretary of State who presented the report, later remarked that
'evidently the Cabinet either felt that the scheme was so excellent that it required no discussion or that it was so complicated that discussion was impossible'. The London
Economist, London, 26 September 1925, p. 487; quoted in
Whittlesley, Governmental Control of Crude Rubber, p. 28.
11 The Export of Rubber (Restriction) Enactment 1922 was passed
in the Federal Council on 24 October 1922. FCP 24 October 1922,
its original view have been examined by various authorities . It has been suggested that there was a grave threat of American interests buying up British plantations should there be no relief in sight. Another explanation was that the British government was concerned over its foreign exchange position of which rubber earnings was a main contributor. Churchill, the Secretary of State when the scheme was approved, declared in 1923 that one of the principal means of paying off Britain's war debts to the United States was its rubber
13
earnings. It has also been pointed out that England alone had a
quarter of a million investors in the rubber industry and that the weakness of the industry was having an adverse effect on the London
market. Yet another explanation was that the authorities were
confident that the British-controlled interests were sufficiently large to ensure success. None of these explanations, however, explain why restriction should have been necessary in October 1922 when it was not deemed so in May 1922. Whatever the reasons for the change
in opinion by the Stevenson committee, the important role of
plantation interests in bringing the decision of unilateral restriction about must be acknowledged, and Swettenham's declaration that 'if it had not been for the Rubber Growers' Association there would have been
14 no restriction' is probably justified.
Throughout the entire proceedings, the subject ostensibly discussed was the survival of the rubber industry - plantation and
smallholders. But was it really so? There was no doubt that the
plantation industry had a vital interest in restriction. It has been
pointed out that the plantation industry was ill-equipped to withstand the depression conditions - the structure of its capitalization, its reliance on an imported labour force, the high proportion of
relatively rigid overhead costs in total production costs: all tended to make an inflexible system which was slow to adjust to the poor
1.2 Among the literature available on the Stevenson Restriction
is Whittlesley, Governmental Control of Crude Rubber; K.E. Knorr, World Rubber and Its Regulation (California, 1945); and J.W.F. Rowe, Studies in the Artificial Control of Raw Material. Supplies No. 2 Rubber (London and Cambridge Economic Service, March 1931).
13 Evening Standard, London, 12 March 1923, quoted in Whittlesley,
Governmental Control of Crude Rubber, p. 39.
prices, Moreover, a 'short-sighted policy of taking dividends up to the hilt in the p a s t ' , ^ together with an extravagant scale of operations, had aggravated the situation so that a scheme of
artificially bolstering rubber prices was essential to restore the profits of the industry, if not to prevent many companies from
actually going under, A statement by the Colonial Secretary in The
Times of 1 August 1.925 leaves no doubts at all about this primary
objective of the Stevenson restriction scheme, He said:
The scheme was introduced for the purpose of saving the extremely valuable position in the plantation rubber industry built up by British enterprise in the East and no one would dispute that it is not proving effective in obtaining this object.
Peasants and Restriction
The peasant rubber industry at this time could not be considered so insignificant that its interests should be entirely
ignored. In the Federated Malay States alone, there were 340,000
peasant agricultural holdings with mature rubber found in 140,000 of
them and immature rubber on many others, A census of rubber areas
in September 1921 also found 415,799 acres of smallholdings scattered throughout the four states, an area comprising 33.37 per cent of the
16
total planted rubber area in the states. This very large body of
rubber producers were very much less inclined towards a restriction scheme, and for good reason. Unlike the planters, peasant small
holders were more flexible in their operations; they were not
employers of wage labour to any great extent, their overhead costs were slight and the problem of capital investment did not loom so
15 There were three main categories of rubber producers in the
FMS - large plantations,over 100 acres; medium plantations,
under 100 acres; and smallholdings, under 25 acres. The
distinction between the smallholding and the other two sectors of the industry has always been clearly understood in official circles as shown in the official statistics of the industry, although the category of smallholdings could cover a great variety of types ranging from small units of a few acres worked by the peasant and his family to large units of 20 acres or more
employing outside labour. The official definition will be kept
to in this study; but, where it is necessary, further distinction will be drawn between the small and large smallholdings.
16 'Census of Areas under Rubber Cultivation in the Federated
Malay States as in September, 1921', enclosure in HC to SS, Desp, 602 of 30 October 1923, CO 717/29/56773.
l a r g e » A l t h o u g h t h e low r u b b e r p r i c e s i n f l i c t e d c o n s i d e r a b l e h a r d s h i p , p a r t i c u l a r l y on p e a s a n t s who w e r e s o l e l y d e p e n d e n t on r u b b e r f o r t h e i r l i v e l i h o o d , t h e g r e a t m a j o r i t y t o o k t h e r e v e r s a l i n
t h e i r s t r i d e . Th o se w i t h kampong and p a d i f i e l d s p a i d more a s s i d u o u s
a t t e n t i o n t o t h e s e s u b s i s t e n c e c u l t i v a t i o n s , w h i l s t o t h e r s w i t h o u t a s u b s i s t e n c e a g r i c u l t u r a l b a s e t o f a l l b a c k u p o n , t u r n e d t o c a s h c r o p p i n g o f m i n o r c r o p s o r b e g a n o p e n i n g s m a l l p a t c h e s o f f ood c r o p s . P e a s a n t s a l s o e n ga g e d i n a w i d e v a r i e t y o f o c c u p a t i o n s s u c h a s h a w k i n g , f i s h i n g and t i m b e r - c u t t i n g . At t h e same t i m e , t h e y r e d u c e d t h e i r e x p e n d i t u r e on n o n - e s s e n t i a l i t e m s , and w h e r e p o s s i b l e s u b s t i t u t e d t h e i r own p r o d u c e f o r w h a t t h e y ha d p r e v i o u s l y p u r c h a s e d . T h i s p e a s a n t a b i l i t y t o s u r v i v e t h e slump i s n o t t o deny t h a t s m a l l p r o d u c e r s wo ul d n o t h a v e welcomed moves t o r e s t o r e s t a b i l i t y t o t h e r u b b e r m a r k e t o r f o r some f or m o f g o v e r n m e n t a s s i s t a n c e . P e a s a n t s who had b o r r o w e d money t o open up l a n d , an d t h e r e w e r e many o f
them, and whose t r e e s w e r e n o t m a t u r e , w e r e e s p e c i a l l y h a r d - h i t ; b u t a s a wh o l e t h e s e c t o r was i n a v e r y much s t r o n g e r p o s i t i o n t o w i t h s t a n d t h e d e p r e s s i o n , and t h e r e was c o n s i d e r a b l e f e e l i n g among p e a s a n t s
t h a t r e s t r i c t i o n was n o t i n t h e i r i n t e r e s t s and t h a t , i f i t was i n t e n d e d t o i n t r o d u c e a r e s t r i c t i o n s c h em e , i t s h o u l d n o t a p p l y t o
t he m. A few a d m i n i s t r a t o r s had r e c o g n i s e d t h e s e f e e l i n g s . Brockman,
a f o r m e r C h i e f S e c r e t a r y m an a gi ng t h e Malay S t a t e s Agency i n London a t t h e t i m e t h a t t h e r e s t r i c t i o n c a m p a i g n was b e i n g waged by t h e Ru b be r G r o w e r s ' A s s o c i a t i o n , had n o t i c e d t h a t t h e demand f o r
r e s t r i c t i o n was coming f ro m t h e E u r o p e a n p l a n t a t i o n s . He had wa rn e d
t h a t r e s t r i c t i o n c o u l d be a b r e a c h o f f a i t h by t h e g o v e r n m e n t w i t h i t s c o l o n i a l s u b j e c t s and was c o n c e r n e d a b o u t t h e p o s s i b i l i t y o f d i f f e r e n t i a l t r e a t m e n t t o w a r d s E u r o p e a n s and A s i a n s s h o u l d s u c h a
scheme be implemented/ But these warnings were ignored, and in the final headlong plunge towards restriction, the interests of the peasant producers were almost completely abandoned,
A large part of the responsibility for what amounted to a sell-out of peasant interests must be placed on the Malayan administration which was supposed to have been articulating the peasant case but which merely added its voice to the chorus of unsubstantiated allegations that restriction was good for the
peasants and that the peasant sector urgently wanted it. It has
been suggested by one observer that since the outbreak of war the rubber industry in Malaya had been moving towards control by the
imperial authorities and that the restriction scheme was a culmination 18
of this process . One inference which might be drawn is that the
local authorities would have been powerless to intervene in the events
unfolding in London. Indeed, the principal bargaining parties in the
final negotiations leading to restriction were the British government
and representatives of the plantation rubber industry. But the
Malayan authorities had not only capitulated to the demand for restriction long before Whitehall but were also putting forward
exaggerated stories about smallholdings being abandoned and harbouring diseases should restriction not be imposed, besides allowing other
parties to usurp their responsibility towards peasants. Swettenham,
a retired Malayan hand, with influence in the Colonial Office, was therefore able to misrepresent the peasant position and claim that
17 These warnings were given in his letter containing his
observations on restriction. In this letter Brockman quoted
from a letter from a smallholder to the Malay Mai l , 5 January 1921, in which the writer pointed out that it was unfair to restrict the output of smallholders simply because estates could not produce at their price and Brockman maintained that
this was the attitude of many 'if not most of the Asiatic
cultivators'. Sir E. Brockman to Under Secretary, Colonial
Office, 8 March 1921, CO 717/18/11486. An early indication that peasant rubber interests would be disregarded in any restriction scheme had been provided by the Report of the
Rubber Industry Protection Commission in 1918. The Resident
of Pahang and the Chief Secretary then had felt compelled to speak out against the Commission's unsympathetic attitude towards the peasant smallholder and its bias towards the
plantation industry. See Expression of views in FMS on report
of Rubber Commission, enclosures in CS to H C , 17 October 1918, HCOF 1808/18.
18 J.H. Drabble, ^The Plantation Rubber Industry in Malaya Up to
t h e Ru bb er G r o w e r s ' A s s o c i a t i o n was t h e o n l y body w h i c h c o u l d
i n f l u e n c e t h e s m a l l h o l d e r s who b e l o n g e d t o no o r g a n i z a t i o n . ' They