Southeast Asian Studies, Vol. 27, No.

2, September 1989

Chinese Capitalism in Dutch Java

ONGHOKHAM*

In Indonesia, a legend often grows around a

man of great success, and this is certainly true
I Introduction
in the case of Oei Tiong Ham. Therefore one
There are not many writings on Indonesian should not always accept everything that has
business. Even the writings on Indonesian been written about him at its face value. For
Chinese have been mostly on their politics, example, his daughter Oei Hui Lan's descrip-
despite the often-stated importance of their tion of her father's elaborate morning toilet
role in the economy. Indonesia today con- and gargantuan breakfast reminds us more of
siders economic development as its main aim, a mandarin than a businessman [Koo 1943:
and has been relying more and more on the 34-35], for the typical picture of a Java-Chinese
private initiative of its citizens in achieving businessman is that he did everything fast,
this aim. It is in this context that it might be though in his days life was indeed much
useful to draw attention to the rise of Oei slower than today. Oei Tiong Ham's father,
Tiong Ham Concern in the prewar period. Oei Tjie Sien, might also have had some share
Engaged in international trading, sugar mill- in this legend-making. A typical new im-
ing, banking, shipping, and some other trade- migrant from China was poor and illiterate,
related activities, it was the first modem but Oei Tjie Sien, who was the first of the fam-
business conglomerate in Southeast Asia. ily to come to Java, might have been an excep-
The founder of the Concern, Oei Tiong Ham, tion. However, Oei Hui Lan's story of the
was an exception among the Chinese who ran aura of light around him during sleep [Koo
small businesses relying on family members. 1943: 6] was probably not true, for it was
Oei Tiong Ham was not what L. Williams probably borrowed from Javanese society in
calls a mere business manager [Williams which such a story has old and deep roots
1952], or even a simple bearer of risk, but a [Koo 1943: 7]. Even today Oei Tiong Ham
leader in economic development as well as a is still talked about in Indonesia. He is said to
modernizer of business in the region. His have been a persuasive and sweet-talking
achievements contradicted the prewar colo- diplomat, somewhat of a financial raider, and
nial order and J.H. Boeke's dualistic theory a charmer of women. Unfortunately, there is
[Boeke 1931]. Ironically, it was the passing no way of knowing today how much of it is a
of that order which caused the decline of Oei myth and how much of it was reality.
Tiong Ham Concern. Oei Tiong Ham's life and career can be
* Faculty of Letters, University of Indonesia, Jakarta understood better if we know the social and
Indonesia. economic environment of his period. But

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 ONGHOKHAM: Chinese Capitalism in Dutch Java

since we cannot discuss every aspect of it, we money. The Dutch founder of Batavia, J.P.
would like to narrow our discussion to what Coen, who was Governor General of the col-
had direct bearings on his life and career, ony from 1919 to 1923, thought of the Chinese
namely: the formation of the Chinese, in the city as an essential economic asset.
especially peranakan society in Java; the rise The Chinese formed a majority in Batavia's
of capital in this society; and Dutch colonial population, living as artisans, traders, contrac-
policy which shaped these developments. tors, and coolies. And in the 18th century,
And then we want to focus our attention on they began operating sugar mills in the en-
Semarang, where Oei Tiong Ham grew up, virons of the city. They were its middle class
and view his business expansion against the as well as its proletariat. The traders were
business and social background of the city. intermediaries between the Dutch and the
indigenous people as well as between city and
hinterland [Blusse 1986: 78-79].
II Peranakan Society under Dutch
In early colonial days, the Dutch tried to
Colonial Policy
populate Batavia with free burghers, by en-
Although the Chinese began coming to couraging immigration from their country.
Southeast Asia a long time ago (probably as But this failed because the VOC did not really
far back as the dawn of history), the structure want to develop a city of free burghers from
of the Chinese community in Indonesia today the fear that such a city would threaten its
started to develop only after the advent of trade monopoly and its authoritarian political
Dutch colonialism in the region. In 1619, the structure [Taylor 1983]. Ultimately, the
VOC (Vereenigde Oost-Indische Compagnie, VOC preferred forming an economic partner-
or Dutch East India Company) made Batavia ship with the Chinese, and this became a
its headquarters for its trading operations in permanent aspect of the Dutch colonial order.
Asia, and Java, where Batavia was located, Early Batavia was already what J .5. Fur-
became the cradle of Dutch colonialism in the nivall later called a pluralistic society [Fur-
Indonesian archipelago [Masselman 1963]. nivall 1939]. Each group tended to have an
Colonization of the Philippines, however, independent social life and was administered
started earlier than that of Java, but compared by its own headman. In Jakarta today, the
with the Dutch, the Spaniards who colonized pattern of residence developed in early
the Philippines were less commercially Batavia is still reflected in such locational
oriented and less efficient in exploiting their names as Kampung Cina, Kampung Bali,
colony. Because of this, they had less need Kampung Melayu, and Kampung Arab. Un-
for Chinese labor. At the end of the Spanish til 1740, however, the Chinese seemed to have
period, there were about 40,000 Chinese there been able to live anywhere in the town. They
[Purcell 1980: 496], but around the same were, however, managed by their own
time, there were 300,000 Chinese in Java headmen-the so called officers, such as
[Purcell 1980: 386]. Like the Dutch, they kapitan, lieutenant and quartermaster. The
came to the Indonesian archipelago to earn officers were appointed by the Dutch and usu-

157
ally selected on the basis of wealth-the source Dutch and the Chinese seemed to have been
of respect and influence in merchant com- restored within one or two years, even sooner
munities· like that of the Chinese. Later, in Batavia, but one permanent effect of the
when the local Chinese developed a sense of 1740 massacre was that the Chinese were
solidarity among themselves as peranakan from then on assigned to their own residential
and established themselves as a group quarters, called Chinese kamp [de Haan
different from the newly arrived Chinese 1935: 376-395], and were forbidden to live
(singkeh/totok) , Chinese officers were ap- elsewhere. The quarters were called Chinese
pointed only from them. ghettos, or Chinatown, and this residential pat-
The existence of the Chinese officer system tern led to a zoning system. In Dutch it was
did not mean that the VOC did not intervene called wijkenstelsel, which together with the
in Chinese community affairs. In 1655, the passenstelsel, which required a pass for the
Dutch established the Council of Chinese planning to travel outside, restricted
Boedelmeesters (Trustees), consisting of both their freedom of movement. However, it was
Dutchmen and Chinese, to administer the in- not until 1830 that these restrictions were
heritance of the Chinese who died without rigorously enforced by Dutch officials [Rush
issue or without children who had come of 1977: 95-96].
age. The fund the trustees came to ad- Even before 1740, the Dutch tended to keep
minister was used to build hospitals and or- the various ethnic groups they ruled separate
phanages. The Dutch and the Chinese also from each other. In the beginning, this
had to jointly deal with some other problems tendency was derived more from religious con-
such as sanitation and debtor-creditor rela- siderations than from racial ones. This is not
tions involving both. And also, from early too difficult to understand if we remember the
days, the Chinese could take advantage of the fact that the Dutch came from the Europe of
Dutch commercial law which gave protection the 17th century, when religious intolerance
to their property. Being the headquarters of was at its zenith. The term "peranakan," for
the VOC, Batavia enjoyed the best legal pro- example, reflected the Dutch religious bias.
tection, so many Chinese preferred to stay Until the early 19th century, the term was
there [Blusse 1986: 85]. used to refer to the Chinese who became
From the founding of Batavia in 1619 to the Moslems, or the shaven Chinese-the Chinese
end of the VOC in 1800, the relations between who shaved off their pigtails when they
the Dutch and the Chinese seemed generally became Moslems. Their number seems to
good, but in 1740 there occurred a massacre have been quite large. The VOC segregated
of Chinese in Batavia. This was followed by them from the non-Moslem Chinese and ap-
the so-called Olanda-Cina (Hollanders- pointed their own officers. The position of
Chinese) war, which in tum led to a war of suc- major in the Moslem Chinese community in
cession among the Javanese princes, dividing Batavia was, however, abolished in 1827
them into the pro-Chinese and pro-Dutch when they became indistinguishable from the
groups. Peaceful relations between the indigenous Moslem population [de Haan
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 ONGHOKHAM: Chinese Capitalism in Dutch Java

1935: 395-396]. The term "peranakan" has for its expansion to other areas of Java and for
been since then applied exclusively to the its relations with the princes of Mataram in
Java-born Chinese. the interior of Central Java. In 1740, the
Whatever the origin of the separation policy massacre in Batavia caused the Chinese in
was, it became later a very useful tool for Semarang (and also other parts of Java) to rise
political control based on divide et impera. It against the Dutch, but in 1742, peace returned
was extended to cover the style of dress each to Semarang [Willmott 1960: 4]. Mter the
group could wear. The Chinese were, for in- treaty of Gianti in 1755, the sultanate of
stance, forbidden on the penalty of a fine or Mataram was divided first into three and later
even imprisonment to dress like Europeans or into four principalities. With the power of
indigenous people. If the Chinese were allowed Mataram crushed, the Dutch emerged as the
to dress like the indigenous people, the most powerful force in Java and kept it in
Dutch feared, they might mingle with them peace until 1825. During this time, the Dutch
and cause trouble; or Chinese debtors who instituted a system of government, which
were sought by Dutch authorities could disap- J .S. Furnivall called indirect rule [Furnivall
pear among the indigenous people. The 1948], by appointing a Javanese "regent" to
separation policy strengthened the attitude of rule over the population in very much the
indifference between the groups. And it was same way as the major, kapitan and lieutenant
easier for the Dutch to identify the Chinese did over the Chinese.
with the dresses, residential quarters, and When peace was restored after 1740,
other distinguishable marks imposed on them. Semarang became prosperous. The Chinese
The Batavia model of a plural society and naturally shared this prosperity with the
especially of Chinese-Dutch relations was Dutch, and became more indispensable to
duplicated all over Java when the VOC ex- them. The Chinese brought the products of
panded its commercial and military power. the interior to coastal cities for shipment out-
Every important colonial town had a Chinese side, and took imported goods from Europe to
quarter. The Chinese brought porcelain, cot- the peasants in the interior. The important
ton, silk, and paper from China and sent back rice trade was also in their hands. Then there
spices. During the 17th century, the VOC set were lucrative incomes from government tax
up fortresses and warehouses along Java's farms and monopolies. With peace in the in-
north coast (pasisir) such as Semarang, terior, the Chinese began also to farm such
Japara, and Pekalongan. In 1672, the taxes in the principalities as the toll-gate tax,
Chinese community in Semarang was regarded bazaar tax, and land tax. The Javanese
as already numerous and important enough princes and nobility rented out their lands (ap-
to have its own Chinese captain or kapitan panages) to Europeans and Chinese. As
[Liem Thian Joe 1933: 9-10]. In 1678, Semarang became prosperous, the post of its
Semarang and its environs were ceded to the governor became the most coveted one within
VOC by the sultan of Mataram. From then the VOC, yielding sometimes more income than
on, Semarang became the Dutch headquarters that of the Governor General in its twilight
159
days when corruption became rampant. ritories came to be confined to the environs of
The Chinese traveler to Java, Ong Tae Hae, their kraton towns after 1830.
who visited Semarang in 1783, described it as With the advent of the Netherlands East In-
a finer town than Batavia, which was suffering dies, the three groups of the population
from malaria at that time [Ong 1849]. Ac- became more clearly defined. The Euro-
cording to him, Semarang had a bigger ter- peans now included the Eurasians whereas
ritory under its trading network, and its pro- the Chinese, Arabs, and other Asians became
duction was more diverse and greater in the foreign Orientals. In the basic law of 1854,
volume. And since it attracted a large Europeans, foreign Orientals, and indigenes
number of trading vessels, its business com- became legal terms, and they were subjected
munity was more active than anywhere else. to different sets of laws and judged in different
Indeed, Semarang was more favored by courts [Purcell 1980: 436]. On the matter of
nature than Batavia. It had hills right behind commerce, however, the Chinese came under
it to which its people could retreat for a cool the Dutch commercial law, as long as it was
climate, while Batavia was surrounded by applicable, since the early VOC days. The
malaria-infested morasses. So, Semarang law of 1854 now covered the kongsi, the form
became the main harbor of the pasisir and of business enterprise most favored by the
kept this position until the 1890s when it was Chinese. In appearance, the kongsi resembled
taken over by Surabaya [Frederick 1978: the Dutch naamloze vennootschap, or
10-16]. limited liability company [Vleming 1926:
The Semarang port was not deep enough 56]. However, since the kongsi was formed on
for the steamships which became the major the basis of business tradition among the Java
means of ocean transport after the opening of Chinese, its structure and function were quite
the Suez Canal. However, Semarang remained different. In the beginning, it was Dutch com-
as a major business center in Java, as seen mercial interests which insisted that the
from the fact that it was the site of the Colo- Chinese be brought under the Dutch commer-
nial Exposition in 1914. In 1864, one of the ciallaw so that the Dutch could have some con-
first rail connections in Java was built be- trol over Chinese debtors and other business
tween Semarang and Surakarta to provide a relations involving the two. In the long run,
better transportation system to link the however, this proved to be very beneficial for
former to the interior [Wright 1909: 489]. the development of Chinese capitalism
However, from 1825 to 1830, peace in Central [Purcell 1980: 436].
Java was once again shattered by the rebellion The Dutch civil law applied fully to Chinese
of Prince Diponegoro, called Java War. business matters, but not to Chinese family
After the suppression of the rebellion, the affairs. For example, Chinese marriage, the
Netherlands East Indies government (which problem of concubines, lineage, inheritance,
replaced the VOC in 1796) annexed the re- bequest, and child adoption were covered by
maining part of Java and closely supervised their adat (customary) law. However, since
the governments of the princes whose ter- nobody had a very clear idea of what was their

160
 ONGHOKHAM: Chinese Capitalism in Dutch Java

adat law, it was of no use when a dispute arose 436]. The Chinese complained about this in-
between family members, especially concern- equality, but the Dutch justified it by saying
ing large inheritance. It usually resulted in a that China had not reached the same level of
long and expensive litigation [Fromberg 1926], Westernization as Japan and Thailand had.
and so by the early 20th century, the Dutch But the real reason for the unequal status of
civil law had become applicable to Chinese the Chinese was the necessity on the part of
family affairs as well [Purcell 1980: 438]. the Dutch to maintain the economic and social
This limited the testamentary power of the order of the colony [Williams 1960: 28].
Chinese paterfamilias, but the Chinese did not The restriction on the freedom of move-
protest against it. They could have done so if ment of the Chinese was needed for the same
they really had wanted to, for people were reason. Colonial policies in the 19th century
often protesting loudly at this time if they had evolved around the cultivation system (1830-
grievances. The Chinese voluntarily took 70) and the plantation economy it created.
their disputes with the Dutch or with other The colonial state developed, owned, and
Chinese (often other family members) to managed the plantations of export crops, such
Dutch lawyers, some of whom became rich as sugar, coffee, tea, indigo, and tobacco.
with Chinese customers (for example, D. The cultivation system forced the peasants to
Fock, who later became the Minister of Col- become corvee workers at the plantations of ex-
onies, 1905-08, and Governor General of the port crops in lieu of the taxes they owed to the
Netherlands East Indies, 1921-26) [Purcell colonial government, and created a system
1980: 444]. which used "less money but [brought about]
In the late 19th century and the 20th cen- greater profits" [de Graaf 1949: 407]. The
tury, Chinese grievances against the colonial Netherlands Trading Society had a -monopoly
government centered around the restrictions on the export of those products and took them
on traveling and residence and the treatment to the world market. The system evoked the
under the penal code for the indigenes. The admiration of such writers on colonial affairs
latter subjected the Chinese to the abuses of as J.W.B. Money [Money 1985]. However,
the notorious politie-rol or police court ad- more liberal Dutch and non-Dutch writers
ministered by the local Dutch authorities. In were not so favorably inclined.
1914 the politie-rol was abolished in Java In order to protect the monopoly over ex-
[Purcell 1980: 437]. port products and later over peasant labor, the
The law of 1910 on Dutch onderdaanschap Dutch enforced strictly the restriction on
(subjectship) was based on jus soli, so it made Chinese residence and travel from 1830 to the
the locally born Chinese Dutch subjects. early 1900s. The Chinese brought the money
However, the locally born Chinese and the economy to the interior of Java as traders and
Dutch were not treated equally under the money-lenders. The view of the Dutch offi-
Netherlands East Indies law. On the other cialdom at that time was that greater
hand, the Japanese and the Thai were treated monetization would make the Javanese
in the same way as the Dutch [Purcell 1980: peasants vulnerable to sharp Chinese traders
161
and usurers and lead only to their destitution, every time a revenue farm was taken over by
and that this would make them demand the government and Chinese were no longer
unreasonable wages or run away to cities and needed for this purpose in the rural area.
impair the plantation economy. The view It was, however, the passenstelsel which
was in sharp contrast to the modem was more harmful to Chinese business. It re-
capitalistic view that monetization would in- quired anyone traveling outside the Chinese
duce people to work harder by increasing quarter to get a permit from the Chinese
their material needs. As V. Purcell states officer and show it to local officials at his
[Purcell 1980: 443], the Dutch officials in the destination. A great deal of discretion was
19th century were jealous of the strong given to Dutch officials in the implementation
economic position of the Chinese and were of the passenstelsel as well as of the wi-
worried that this would endanger the planta- jkenstelsel, and they often abused their power
tion economy, but they did not openly admit for their own advantages [Williams 1960: 28;
it. Instead, they attributed the strong Liem Thian Joe 1933: 87-88].
Chinese position to the improvidence and Although Dutch officials considered the
vices of the indigenes and argued that they Chinese as an evil for Javanese villagers, they
should be saved from the clutches of the were fully aware that the Chinese were
Chinese usurers and given guidance. As to necessary to maintain the colonial revenue
the strength of Chinese vis-a-vis Dutch structure and enhance Dutch commercial in-
traders, the Dutch officials attributed it to terests. The Chinese took the goods im-
their lower standard of living and overhead ported from the Netherlands and other Euro-
costs. pean countries to the interior and brought
The negative attitude of Dutch officials caused back the products of the interior to colonial
a great deal of harassment to the Chinese towns and harbors. Furthermore, an impor-
living in the interior. They were allowed to tant part of the colonial revenue depended on
live only in towns where there was a specially farming out tax: collection and monopolies to
designated Chinese quarter. When the wealthy Chinese.
restriction was rigorously enforced in 1830, The revenue farmer and his employees and
many Chinese in the interior were forced to agents were free from the restrictions under
move to such towns and abandon their the wijkenstelsel and passenstelsel within the
businesses, houses, and other properties in territory of the farm since they were con-
the places where they had been living. Some sidered to go there on government business.
Chinese preferred to opt for assimilation to In a large farm many Chinese were employed
the local population than to abandon their and were able to move relatively freely in its
property and move to new towns [Rush territory.
1977: 117]. Dutch colonial reports show that In the early 1800s, the list of revenue and
during the whole duration of the cultivation tax: farms was very 10ng. I ) For example, there
system, the policy of forcibly moving Chinese 1) "Belastingen" in Encyclopaedie van Nederlandsch-
to towns was carried out quite often and done Indie, Leiden, M. Nijhoff and E.]. Brill, 1917-39.

162
 ONGHOKHAM: Chinese Capitalism in Dutch Java

were farms on salt and opium trading, mother tongues in the third generation or
pawnshop operation, wayang performance, thereafter, if not in the second generation.
gambling, river crossing, cattle slaughtering, They adopted many local customs as the
business in a bazaar, and the placing of bird result of the influence of their mothers, but
nests on Java's south coast. But many of were not quite assimilated into the indigenous
these farms were gradually abolished or society. Old peranakan families could trace
replaced by the government's direct involve- neither their ancestry in China nor the places
ment. Every time an important farm was of their origin; they, instead, simply traced
taken over by the government, it caused a their family origin back to the first im-
great stir in the Chinese community, as did migrants who came to Java in the late 18th
the abolition of the bazaar tax in 1851 [Liem century.
Thian Joe 1933: 82-84]. After 1880, the In Java, the peranakan community
opium and pawnshop farms were the only two dominated the singkeh community. Not only
important farms left, but even these were did the singkeh come as poor men, but after
abolished in 1904 [Rush 1977: 261]. they made some money, they also sent a large
These economic and revenue policies of the part of it to China to support their families or
colonial government were an important in- buy the properties they would need to sustain
fluence in the evolution of the economic and their life after they returned to China. But
social structure of peranakan society. One there was no such capital drain in peranakan
can argue that the restrictions on traveling society, and it was the development of this
and residence (especially the latter), the society which brought about the strong
Chinese officer system, and the revenue farm economic position of the Chinese in the colo-
stimulated capital accumulation within nial economy of the 19th century.
peranakan society and enhanced the role of The elites of the peranakan community
the Chinese in the colonial economy. Chinese were the officers, or cabang atas, as the
immigrants coming to Java were generally Chinese chronicler of Semarang, Liem Thian
poor, and needed capital and/or sponsors for Joe, called them [Liem Thian Joe 1933: 140;
starting a business. And when they wanted Rush 1977: 90]. Wealth was the basis for ap-
to get goods on credit from European com- pointment to the positions of major (this posi-
panies, they needed guarantors. For these, tion existed only in Batavia, Semarang and
they often depended on the more affluent, bet- Surabaya), kapitan, and lieutenant. Wealth
ter established peranakan society. also made it possible for peranakan Chinese to
The peranakan community consisted of the become revenue farmers, and so, as Liem
locally born Chinese who were thought to live Thian Joe correctly observed for Semarang,
permanently in Java. In the 19th century, Chinese officers and revenue farmers were
they were predominantly of mixed blood since usually the same persons. And since the late
it was not until later in that century that 18th century, wealth, the revenue farm, and
Chinese women immigrated to Java. They the position of officer tended to be hereditary,
did not speak Chinese, having lost their and were restricted to a small number of

163
peranakan families [Onghokham 1983: 29- usually built up an exclusive trading network
57]. In Semarang, there were the Be, Liem, by using those agents and enjoyed monopoly
Tan, and later Oei families, and in Surabaya, profits. In the 1880s, despite government
there were the Han, The, Tjoa, and Kwee restrictions, the revenue farm enabled several
families which produced officers and revenue ten-thousands of Chinese to move freely in the
farmers for generations [Onghokham 1983: interior.
42]. For example, the Be family in Semarang Through revenue farms and trade
and the The family in Surabaya produced four monopolies, great wealth was accumulated in
to five generations of officers and revenue the peranakan families which could maintain
farmers until the early 20th century, when the the cabang atas status. They consolidated
officer and revenue farm systems were abol- their position through intermarriage and get-
ished. ting their sons and sons-in-law appointed to
Revenue farms were auctioned publicly and officer positions in other towns and helping
with great ceremony in the big hall of the them in getting revenue farms in other
Javanese regent's dalam (court) and were sold districts. Accumulated capital was mainly in-
district by district for one or more years vested within the relatively small Chinese
[Rush 1977: 30]. Theoretically, the revenue quarters, and this made them become the
farm was to be given to the highest bidder, most prosperous and commercially active
but the final decision was left to the local centers of Javanese towns and cities
Dutch resident. He had to have confidence in [Onghokham 1983: 29]. The Chinese
the financial and managerial capabilities of a quarters also developed a network of relations
potential candidate. The farm price was and business ethic which were necessary for
usually paid in installments during the farm- doing business on the basis of trust-a sine
ing period, so that even if someone offered the qua non for capitalistic development. At the
highest bid, he could not win if the Dutch resi- same time, living and working in the Chinese
dent judged that his offer was speculative. If quarters might have reduced living and
he defaulted, the government would lose business expenses for the Chinese traders,
millions of guilders. A Chinese officer, shopkeepers, and artisans and given them an
however, came into close contacts with the advantage in business over the Dutch, as the
Dutch local resident and was better known, so latter often complained about [Purcell 1980:
when an auction came, he was in a better posi- 432-443]. For a singkeh, to become a cabang
tion to win the bid. If he succeeded in becom- atas was his dream. To realize it, he made
ing a farmer, he could send his agents to the efforts to get accepted by peranakan society,
district. Since they were free from the use its capital and business network, and even-
government restrictions on traveling and tually get assimilated to it [Skinner 1963:
residence,2) besides collecting revenues, he 97-117]. It was not an impossible dream since
there were ups and downs in peranakan soci-
2) Williams sates that through the opium farms, the
Chinese could live in 30,000 villages during the etyand only a few cabang atas families could
19th century in Java. See Williams [1960: 32]. maintain their position over generations.

164
 ONGHOKHAM: Chinese Capitalism in Dutch Java

If there were strengths in peranakan soci- Being a big rice exporter and general goods
ety, there were also some weaknesses. A importer, the Be family extended their
great deal of wealth was dissipated on lawyers trading network to as far as Singapore.
and other court expenses because of the litiga- The business interests of the Be family
tion over inheritance, which often arose after were already quite extensive in the late 19th
the death of a wealthy peranakan because he century, but their management was largely
usually had a number of wives and concubines familistic [Willmott 1960: 51]. In some
and children from them [Willmott 1960: ways, peranakan society was much more con-
51]. Even if there was no litigation, wealth servative than singkeh society; they were
was divided by a large number of children more family oriented and employed mainly
(usually sons), and this tended to cause capital family members for their businesses. As
to be dissipated. Relations among the many writers have pointed out, this familistic
children especially of different mothers, or characteristic prevented Chinese businesses
even of the same mother, tended to be bad, from expanding and kept them generally
and for them to cooperate in business was diffi- small and weak [Vleming 1926: 75; Williams
cult. Chinese business was personally struc- 1952]. The Chinese themselves have
tured. The death of the founder, manager or recognized this problem and said that a family
even a partner often ended its life. 3 ) Business business generally lasts, at most, for three
ethic, too, was perceived in personal terms generations. However, in the business en-
[Willmott 1960: 69], and outside closely knit vironment of the late 19th and the early 20th
groups, there were sharp business practices centuries, there were reasons for nepotism.
and a great deal of suspicion about others Since the level of education was generally low
[Borel 1900]. and questionable business practices were
While great wealth was obtained from prevalent outside the well-established net-
revenue farms and trading, the Chinese were work of personal relations, the family was vir-
usually local- and district-bound. The restric- tually the only source of trustworthy
tions on their traveling and residence made it workers. And they, too, employed
very difficult for their business to become clandestine business practices such as tax eva-
Java-wide, let alone country-wide and interna- sion using several books, and had to protect
tional. There were, however, a few excep- these and other trade secrets from leaking
tions in the late 19th century. Some cabang out. Furthermore, capital was scarce, and
atas families of Semarang, notably the Be the most effective way of generating extra
family, the doyen of the cabang atas there capital was to use family labor and minimize
[Rush 1977: 100], obtained opium farms in wage payments.
several districts in Central Java, and had sons The wealthy peranakan Chinese sometimes
and sons-in-law appointed as officers and mingled socially with the Dutch. In away,
revenue farmers in other towns and districts. they were expected to entertain the Dutch to
3) "De Indo-Chineesche Familie en Wetgeving" in enliven their monotonous life in a local colo-
[Fromberg 1926]. nial town. Dutch officials and employees
165
were restricted in spending because they had population groups was the archipelago's
to depend on fixed salaries from the govern- lingua franca, Malay. Unlike other colo-
ment or companies. Although the Dutch resi- nialists, the Dutch did not encourage the use
dent gave receptions on the birthdays of the of their language by non-Dutch people and
Dutch royal family and other national occa- usually thought that the use of the Dutch
sions, to which the Dutch community and the language by the non-Dutch was offensive.
non-Dutch elites were invited, the Dutch often Even in the 20th century, when Dutch schools
depended for feasting on the Javanese regent were established for the non-Dutch (including
and the wealthy Chinese [Onghokham 1983: the Chinese), the Dutch could not emotionally
29-57]. Grand feasts were given by the rich get away from that feeling and were saying
Chinese on such occasions as the Chinese that they preferred the non-Dutch not to
lunar New Year, birth of a son, wedding, offi- understand their language.
cial recognition, and appointment. The Close relations with the Dutch influenced
guests were divided into three groups (the the culture of peranakan society. By buying
Dutch, Chinese, and indigenes), and each was Dutch furniture and other Dutch products, the
provided with its own food and entertainment, cabang atas peranakan adopted the Dutch
but there was some interaction among them, style of living. In the 20th century, when
though it was a little formal and superficial. Dutch naturalization became possible, many
Dutch travelers in the late 19th century report peranakan Chinese sought it and obtained
that they danced with the daughters of the European status [Skinner 1963]. Even in
cabang atas family of Surabaya, the Thes. the early 1940s, when the threat of war began
There were more conspicuous forms of win- endangering Dutch colonialism, there were
ning favors from the Dutch. On New Year's still some Chinese asking for Dutch naturaliza-
Day, expensive gifts (such as a fish with big tion.
diamonds as its eyes) were sent to the resi- In Semarang in the late 1870s, Dutch in-
dent. Or when a Dutch official was going fluences in the Chinese officer families became
home or moving to another town and selling obvious. The lieutenant Liem asked the colo-
his belongings, the Chinese offered high nial government to admit his son to a Dutch
prices-much higher than their real prices. school, but when he was refused, he hired a
They were in effect sending signals to his suc- Dutch governess to teach Dutch to his
cessor as to what he could expect when his children. In the late 19th century, rich
turn came [Liem Thian Joe 1933: 148]. peranakan Chinese began hiring more and
These forms of "corruption" lasted as long as more Dutch teachers for their children and
the revenue farm lasted and was officially sometimes for themselves [Liem Thian Joe
tolerated. But after the revenue farm was 1933: 150]. And around the same time, mis-
abolished, the Dutch officialdom became sionary schools began admitting Chinese
generally clean and free from corruption [Fur- children. As a result, there emerged a group
nivall 1948]. of peranakan Chinese who could understand
The language used between the three the Dutch language and culture.
166
 ONGHOKHAM: Chinese Capitalism in Dutch Java

cial buildings, afraid that they might incur the

III Oei Tjie Sien
wrath of the Dutch officials and get their
In 1858, when Dei Tjie Sien, the father of buildings torn down and get fined [Liem
Dei Tiong Ham, landed in Semarang, Java Thian Joe 1933: 150]. Although the Dutch
had long recovered from the Java War (1825- officials were sometimes arbitrary in exercis-
30). The population, estimated at a little over ing power and upholding colonial prestige in
six million in 1831, had doubled by that time front of the Chinese, the worst abuses in
[Nitisastro 1970: 30]. However, the restricting the movement and residence of the
cultivation system was still at its height, Chinese were avoided in Semarang.
limiting the freedom of movement and trade More important for Dei Tjie Sien's rise as a
of the Chinese. At this time, China was in the trader was the possibility of a singkeh's accep-
midst of the Taiping Rebellion, and to escape tance by peranakan society, which became
from its devastations, a large number of peo- difficult in the late 19th century. In the 1850s,
ple fled the country for Nanyang. Dei Tjie Chinese immigrants came in smaller groups
Sien seems to have come to Java during this (sometimes individually) than those who came
emigration wave. Unlike most other im- later. And the Chinese officers were not yet
migrants, he seems to have had some educa- so "Dutchified " and separated from the
tion. This was not unusual in China in the generally ill-educated and poor singkeh as in
1830s when he was born, for village schools the early 20th century. Even the cabang atas
were spreading then [Gernet 1986: 473- families were only a few generations away
475]. However, he probably did not bring from their singkeh ancestors. Dei Tjie Sien's
much capital, since he was peddling Chinese education might have also helped him in
pots and wares in the early days of his life in developing close relations with wealthy
Semarang. Chinese.
Semarang was the right place for an aspir- He moved fairly quickly from rags to riches.
ing trader. During Dei Tjie Sien's time, it In five years after his arrival in 1863, he founded
was the biggest harbor and trading center of Kian Gwan as a kongsi. His easy adapta-
Java. In contrast, Batavia still had its tion, if not assimilation, to peranakan society
hinterland, Praiangan, closed to Chinese or seems to have made this possible. For it was
any other private traders, in order for the certainly not his trading in Chinese wares and
Dutch to be able to protect the forced cultiva- pots which made him a big merchant; it was
tion of tea. And in Semarang, fairly smooth rather the trading of the agricultural produce
relations between the Dutch officials and the of Central Java such as rice, gambir, and in-
Chinese were being maintained by the cabang cense, for which he needed the capital and
atas families which were the oldest and best trading network of peranakan society. At
established in Java. Wealthy peranakan this time, however, the trading of sugar
Chinese had been building houses and (which later became the major commodity of
buildings in the European style, though they Kian Gwan) was still a government monopoly.
did not make them too similar to colonial offi- Dei Tjie Sien founded Kian Gwan with an

167
outsider called Ang rather than with his 1884, when he was 18 years old, his father ar-
brothers. This was not an unusual thing to ranged for him a marriage with one of the
do for a singkeh because as a new arrival he daughters of the well established Goei family
did not have a big family. Singkeh Chinese in Semarang. This shows Oei Tjie Sien's en-
were usually less familistic than peranakan try into the cabang atas class. The Goei fam-
Chinese for this reason [Willmott 1960: ily were holding officer positions and revenue
107]. What was a little unusual is that Kian farms. 4) The founder of the family probably
Gwan was registered with the local govern- came to Java sometime in the 1770s, and the
ment, for even now, many kongsi are founded family had become very peranakanized by the
only orally and not registered (such kongsi are time of the marriage. It was either Oei Tjie
called kongsi mulut) [Vleming 1926: 67]. Sien's wealth or his entry into peranakan fam-
But at his time, there were some other kongsi ily which enabled him to form this marriage
registered with the government. They were alliance. The Oei family was still new and
patterned after what is known as a limited upstart compared with the Goei family. In
liability company under the Dutch commer- peranakan society, this fact counted a great
ciallaw. According to J. Vleming, since a deal, but Oei Tjie Sien was able to overcome it
limited liability company was the safest form somehow.
of business organization, the Chinese Unlike his dynamic son Oei Tiong Ham, Oei
sometimes made use of it from the early 19th Tjie Sien seems to have been very cautious
century. The Dutch commercial law enabled and conservative in business, but he became
two persons to form a kongsi. A family com- quite wealthy with this business philosophy.
pany or even a company of single ownership Many wealthy Chinese invested their money
could be registered as a limited liability com- in real estate. The revenue farmers and
pany, with the second person as a silent or sugar and rice mill owners thought their
puppet partner. business was basically speculative and full of
Oei Tjie Sien returned to China, and on the risk, and invested money in real estate since
way there and back, he might have stopped at in this way, they could obtain fixed and safe
several places in Southeast Asia. Otherwise, property incomes. Another reason for prefer-
it is difficult to explain Kian Gwan's interna- ring real estate investment was that proper-
tional outlook. In the late 19th century, when ties were easier to manage than business, and
Java needed to import a large quantity of rice,
Oei Tjie Sien developed contacts abroad and 4) Dei Hui Lan (or Koo Hui-lan) says that her
mother's family was newly arrived and poor
became a rice importer. [Koo 1943: 9-10]. In this case, however, her
Oei Tjie Sien's wife was definitely memory seems to have failed her due to her long
peranakanized if not a peranakan herself, as stay abroad. Tjo~ Soe Tjong says the first wife of
Dei Tiong Ham was a daughter of the well-known
attested by her way of life, such as playing and wealthy Goei family of Semarang [Tjoa
Javanese cards and chewing beetle nut, gam- 1963: 607]. According to Wright, the Goei family
of Semarang came to Java in the late 1770s and
bjr leaves, and tobacco [Koo 1943: 14-15]. was one of the oldest and wealthiest peranakan
In 1866 she gave birth to Oei Tiong Ham. In families of Semarang [Wright 1909: 511-512].

168
 ONGHOKHAM: Chinese Capitalism in Dutch Java

were easier to divide among children. But the son of a rich father, but its authenticity is
real estate investment got sometimes heated somewhat questionable. It sounds too much
up, endangering the financial condition of like the story of a Javanese hero (or a Moslem
their main business. In general, it was a saint) who in his youth stole, gambled or did
heavy drain on capital and a constraining fac- some mischief. Javanese servants might
tor for business expansion. have thought that being a big man, Dei Tiong
Like a typical merchant at that time, Dei Ham must have done something wrong in his
Tjie Sien also invested heavily in real estate youth, as a Javanese hero usually did, and told
after becoming successful in business. In this to Hui Lan and his other children as if it
1883, he bought several properties of an was a genuine story.
opium farmer called Hoo, who had gone Dei Tiong Ham's rise in the business world
bankrupt, but he was not yet rich enough to was fast, and surpassed his father's
buy his opium farm [Liem Thian Joe 1933: achievements before his death in 1900. With
151]. Mter this, he seems to have gradually his appointment as lieutenant in 1886, he
retired from business, and started developing entered formally the cabang atas class in
his garden and devoting himself to some Semarang, and ten years later, he was made
literary activities. Before his death, he deter- major [Rush 1977: 267]. In many ways, he
mined the successor to his business, and divided was a different man from the father. The
his properties among his children. It was father was a cautious and conservative man,
not unusual for a successful merchant to do so but Oei Tiong Ham was innovative and dar-
at that time because dreadful litigation often ing. For example, the father had a strong
arose among children after his death. Dei adherence to Chinese clothing and hair styles
Tjie Sien chose Oei Tiong Ham as his [Coppel 1989: 183], but in 1889, Oei Tiong
business successor, though he seems to have HaPl petitioned the Dutch government
left a large part of his wealth to his other through his lawyer for permission to cut his
children. Dei Tjie Sien was a hard worker, queue and dress in a Western style [Godley
but he also enjoyed the good sides of life; he 1981: 19; Liem Thian Joe 1933: 154]. This
became addicted to Dutch biscuits and petition was granted, and he became the first
cognac, as described by his granddaughter Java Chinese to dress in a Western style. In
Dei Hui Lan [Koo 1943: 16-17]. 1904, this example was followed by all the
Kian Gwan personnel [Liem Thian Joe 1933:
183].
IV Dei Tiong Ham and His Time
Oei Tiong Ham was also different from his
Dei Tiong Ham seems to have worked from contemporaries in Java. For one thing, at one
his early years under his father's tutelage. In stage of his life he became an Anglophile,
his youth, according to his daughter Hui Lan, though he was living in the Dutch colony [de
he was a sort of wastrel and gambler, and Veer 1908]. Of course, when the revenue
even lost a great sum of money [Koo 1943: farm system was still operating, he maintained
9-11]. At that time, this was not unusual for friendly relations with the Dutch officials.

169
Even after he became a big businessman, small number of closely knit cabang atas
although Semarang was not a "kota amb- families. These farms had been lucrative and
tenaar" (town of officials), as the historian given them patronage as well as prestige in
Liem Thian Joe explains [Liem Thian Joe Chinese society [Rush 1977: 215]. Oei
1933: 135], Oei Tiong Ham took all the care Tiong Ham kept the opium farms until 1904,
not to offend Dutch officials [Koo 1943: 52]. when they were taken over by the opium regie
For example, when he was riding a horse car- (regime) administered by the colonial govern-
riage, he made sure that he did not overtake ment. During this period of a little over a
the carriage of a Dutch official. In the early decade, he reputedly made about 18 million
1900s, however, he put the British flag on his guilders as net profits.
motorboat and flaunted it before Dutch offi- In the 1890s, Oei Tiong Ham went also into
cials [de Veer 1908]. It was this Anglophile sugar production. In this decade, he acquired
attitude which broadened his vision and enabled five sugar factories and modernized them by
him to venture successfully into the world installing new machines [Tjoa 1963: 605].
sugar market. In 1910, he set up an office in He then expanded into the trading in kapok,
London to sell his sugar. Earlier, Java sugar rubber, tapioca and tea [Godley 1981: 18].
was exported to the Netherlands, but with the In managing his businesses, he relied exten-
increase in beet sugar production, the Euro- sively on non-family members. He hired not
pean market began to be closed, and in its only promising Chinese but also Dutch
place, London became the major export managers and technical experts. He
market for Java sugar. 5) understood well what money could do. He used
It was in the 1880s that Oei Tiong Ham it to hire competent people and evoke their
started trading in sugar, which later became loyalty. In the management of his opium
his major business activity. In general, the farms, too, he seems to have relied on the out-
1880s was not a good decade for the sugar in- siders he could trust, instead of his relatives,
dustry; in the early part of the decade, it was as typically done in the opium farms of cabang
hit by a depression. But Oei Tiong Ham suc- atas families at that time.
ceeded when others failed. He made large According to Liem Tjwan Ling, Oei Tiong
profits by cornering the sugar market in Ham always sought to meet famous and suc-
Java. In 1890, with this success in sugar, he cessful people such as the young Chinese
had enough money to buy opium farms in widow, Tio Tjien Tiong, who had controlled
Semarang, Yogyakarta, Surakarta, and the best sugar fields in the Malang area [Liem
Surabaya. In the late 1880s, there was a Tjwan Ling 1979: 156]. He must have done
crisis in the opium farm, and only four out of the same thing on his trips abroad. He
19 opium farms could survive. This gave Oei visited various trading centers in Southeast
Tiong Ham an opportunity to buy the opium Asia. In Singapore, he became the friend of
farms which had been jealously guarded by a the famous Tjong brothers (or Chang in Man-
darin), Tjong A Fie and Tjong Yong Hian
5) "Suiker" in Encyclopaedie van Nederlandsch-Indie. [Godley 1981: 20], who were Chinese

170
 ONGHOKHAM: Chinese Capitalism in Dutch Java

kapitan in Medan, East Sumatra, where wanted to free himself from the Dutch civil
Chinese immigration started later than in Java law which restricted his freedom to select the
and where ties with Singapore and British children who would inherit his business.
Malaya were closer. Oei Tiong Ham realized When he went to Singapore, he did not report
in due course that Singapore was the most im- to the Dutch consulate; according to the
portant trading center in the region and that Dutch law of 1910, a Dutch subject who failed
the Chinese there were treated much better to report to the Dutch legation within three
than in the Netherlands East Indies. So, he months of his arrival in a foreign country
soon established an office in Singapore and would lose his Dutch subject status [Purcell
made it a major link to the outside world for 1980: 442-443]. Because he was no longer a
his expanding trading network in the Dutch Dutch subject after three months in
colony. Thus he joined the small league of Singapore, he could now determine his suc-
successful overseas Chinese who, as M.R. cessors as he wished. He died in Singapore
Godley describes it, behaved as if there were in 1924.
no national boundaries [Godley 1981: 20]. The expansion of Oei Tiong Ham's business
His success in sugar trading in the 1910s, coincided with the rise of Chinese na-
during which sugar prices fluctuated wildly tionalism. In Java, there arose at the turn of
due to the First World War, earned him the the 19th and 20th centuries a movement
name of "Java's sugar lord" in British against the Chinese officer system and the colo-
circles. The postwar decline in commodity nial government's discriminatory treatment
prices, sugar price in particular, did not seem of the Chinese [Williams 1960: 63]. It
to have harmed Oei Tiong Ham very much. seems Oei Tiong Ham did not care much
What seems to have pained him most was the about the officer system, for in 1896 he re-
so-called war profit tax, or a tax on excess quested the colonial government to relieve
profits earned during the war. Since it was in him of the position of lieutenant citing various
addition to the income tax he paid, he felt it pressing business matters as the reason
discriminatory. In 1917, the Netherlands [Rush 1977: 268]. The Dutch granted his re-
adopted a 30 percent tax on excess profits quest, but kept him as honorary major, which
earned during the war, with 1914 as the base title he kept during his lifetime. From the
year. 6 ) Although the colonial government in 1890s, the officer system began to fall into
the Indies adopted the same measure, since disuse, and the officer titles became merely
its bureaucracy was much slower in its im- honorary. Dutch attempts to prop up the
plementation, the tax was not imposed until system by giving Chinese officers Dutch
1919, and in some cases, it was collected as uniforms with a lot of gold braid made them
late as 1924 [Tjoa 1963: 651]. Oei Tiong look silly, and antipathy towards them
Ham moved to Singapore in 1921 partly became stronger [Williams 1960: 128].
because of this tax. At the same time, he According to J. Rush, the opium farm crisis
in the 1880s which destroyed so many old
6) "Belastingen" in Encyc/ojxl£die van Nederlandsch-Indie. officer families brought great discredit to the

171
officer institution [Rush 1977: 231]. As a out. So, for the singkeh, they were not
result of this crisis, an anti-opium movement, around in the neighborhood when they were
which some Chinese intellectuals also joined, needed. And the singkeh felt they were not
could gather some strength in Java [Indie en well understood in their dealings with govern-
het Opium 1931]. Quite a number of novels ment authorities since the officers did not
were written in Malay by peranakan Chinese understand Chinese-the main language for
about the sinister and evil powers of the the singkeh. On the other hand, the
officer-cum-revenue farmer. One common peranakan, especially the wealthy Chinese
theme was that the officer frames an honest officers, began looking down upon the singkeh
Chinese for a vicious cause by using his since they were poor and uneducated, and
monopoly right over opium (for example, by prejudice grew against them. The tension
planting opium in the victim's house and let- sometimes resulted in physical clashes be-
ting it be discovered by the police) [Rush tween singkeh and officers, or non-officer
1977: 239-242; Salmon 1981]. peranakan, especially around 1910 when the
The social tension in the Chinese commu- revolution broke out in China [Williams
nity was partly caused by demographic 1960: 124].
developments within the Chinese quarters. Meanwhile, in the Netherlands, a new wave
There was a natural growth of population, and of moral conscience arose concerning the
added to it were the new waves of Chinese im- welfare of the Javanese masses. In 1900, the
migrants since 1870 which accelerated in the Dutch Queen spoke of "debt of honor" to the
early 20th century. Under this demographic Javanese masses in her· speech from the
setting, the end of the two remaining major throne, and this inaugurated the so called
farms, the opium and pawnshop farms, made ethical policy. This newly discovered moral
the Chinese feel sharper than ever the restric- duty to elevate the Javanese from poverty, ig-
tion on movement. They lost not only an im- norance, and over-crowdedness was the result
portant source of livelihood but also the of the electoral victory of the Dutch Christian
justification for going into the interior. Mean- political parties, though it had perhaps existed
while, since capital could not be invested in consciously or unconsciously in the minds of
revenue farms any longer, a large amount of many colonial officials [Williams 1960: 38].
Chinese capital became available for invest- However, it was only after the Queen's speech
ment in other areas, but there were few attrac- that moral conscience became loudly proclaimed.
tive areas for investment because of the The colonial government created commis-
restriction on traveling and residence. As a sions to study the declining welfare of the
result, the Chinese quarters suddenly became Javanese, unfair distribution of tax burdens,
too cramped [Rush 1977: 268]. and many other socio-economic problems fac-
At the same time, the relations between ing Javanese society. In fact, the colonial offi-
officers and singkeh worsened. After 1890, cials of the "ethical school" thought that the
since Chinese officers were allowed to live out- Chinese were glaringly prosperous in com-
side the Chinese quarters, many of them moved parison with the Javanese, overlooking the ex-
172
 ONGHOKHAM: Chinese Capitalism in Dutch Java

istence of a large number of poor Chinese, Hollands Chineesche Scholen (School); it

especially among the newly arrived. More became necessary to keep the loyalty of their
than ever, the "ethical" officials came to feel Chinese subjects. Also as a response to the
that the Javanese had to be rescued and pro- movement (and the pressure of Dutch
tected from the tentacles of the Chinese. businesses which felt that the restrictions on
Ending the revenue farms, especially the Chinese traveling and residence were
opium and pawnshop farms, was part of the detrimental to their business interests), the
"ethical policy." The Dutch also founded the Dutch practically abolished the restrictions on
rural credit bank, competing with the Chinese traveling and residence in 1910, although it
in money-lending to the Javanese peasants. took another several years for these to be com-
The Minister of Colonies, who became rich in pletely abolished (this was done in 1916).
Batavia as a lawyer for the Chinese, wrote to If Oei Tiong Ham was a daring "gambler"
the officials in the Indies to restrict Chinese in business, he seemed to be very cautious in
movements into the interior, for "they are a politics. There is no record showing that he
pernicious influence" [Purcell 1980: 444]. made a major financial contribution to the
Moral conscience spread among a great Young Chinese Movement. He did not seem
number of colonial officials, and this awaken- to have been a founder of the T .H.H.K.
ing seems to have caused a number of ill School in Semarang or even a member of its
treatments of the Chinese by Dutch officials. board. He kept even greater distance from
And prejudice against the Chinese increased the more politically oriented Soe Po Sia.
more sharply than ever in the 1900s. However, from the very beginning, Oei Tiong
It was in this situation that there arose a Ham helped the founding of the Chinese
movement among the Chinese in Java, or the Chamber of Commerce in Semarang, and
Young Chinese Movement, as was called by played a key role in it for some years. Kian
P .H. Fromberg, the Dutch colonial advisor for Gwan directors in various cities and towns in
Chinese affairs and main advocate of Chinese the Indies also played an important role in
cause. 7) It was a movement against the colo- their respective local Chambers. There was
nial government policy on the Chinese. The no politics involved, however, in Dei Tiong
Chinese demanded the colonial government to Ham's and Kian Gwan's involvement in the
end the restrictions on traveling and residence Chinese Chambers. For example, in 1912
and give them legal status equal to the Euro- when some groups tried to use the Chambers
peans. The movement also led to the found- to boycott Japanese goods, the Kian Gwan fac-
ing of the Tiong Hwa Hwee Kwan School tion blocked the move. But a few years later,
(T .H.H.K. School), Chinese Chamber of Com- the Kian Gwan faction organized a boycott
merce, and a more politically oriented reading against its Dutch business rivals [Williams
club, SoePo Sia. It was partly in response to 1960: 105].
this movement that the Dutch established the Dei Tiong Ham seemed little interested in
7) "De Chineesche Beweging op Java" in the question of China and other political mat-
[Fromberg 1926]. ters. Certainly, he headed welcoming com-
173
mittees and acted as host to Chinese imperial of the town [Batavia], the Chinese included"
and republican envoys, but he did the same [Blusse 1986: 5-6]. This state of affairs has
thing for the crown princes of Denmark and existed in any polity in Indonesian history,
Greece. Many factions in China must have whether it was colonial, traditional or na-
contacted him for help since he was probably tional.
the richest man in Nanyang and certainly the The Dutch realized that they had no com-
most influential Chinese in the Netherlands mon interests with the Chinese, but only "like
East Indies. However, despite his knowledge interests" [van den Muijzenberg 1965]. So, the
of the revolutionary movement in China, he Dutch sometimes saw the Chinese as rivals, as
kept a neutral stand and did not support it many traditional ruling groups did when they
financially [Godley 1981: 184]. One close tried to dominate the economy with political
associate of Sun Yat Sen once complained power. In fact, nowhere were the Chinese
that the Chinese capitalists in Nanyang were regarded with greater suspicion than in the
against the revolution and afraid of it. But Netherlands East Indies. In contrast, in the
for Oei Tiong Ham, the question was not British and French colonies, there was
possibly whether he was for or against the relatively little suspicion of the Chinese mer-
revolution, or whether he was afraid of it or chants. Even in the postwar period, this
not. It seems that he wanted to be as suspicion did not decline; at times, it got
apolitical as possible. Except the honorary ti- worse under nationalist Indonesia. In tradi-
tle of major of the Chinese in Semarang, he tional Javanese peasant society, the Chinese
did not seek any official position. He did not merchants still do not have much legitimacy.
receive any decoration or mandarin title dur- It was under the condition of suspicion that
ing the last days of the Ch'ing dynasty, though Chinese capitalism was born and grew.
he was obviously among the first persons con- Naturally this molded its character. Not-
tacted in its courtship of the Nanyang Chinese withstanding the obvious importance of the
[Godley 1981]. In contrast, a number of Chinese economic role, recent scholars on In-
lesser Chinese in Java received decorations donesia have been rather pessimistic about
and mandarin titles from the imperial dynasty. their leadership role in economic develop-
ment [Williams 1952; Willmott 1960: 51].
Chinese capitalists have been short-term
V Concluding Remarks
oriented; they only serve as a link in the
Indonesian capitalism has always been economic chain. They are highly con-
politically connected. Writing on Dutch Java spicuous in consumption, and speculative in in-
before 1800, the Dutch historian L. Blusse vestment, only interested in making a fast
observed: "Only those individuals who coupled back. And one should add that Chinese
their fate with that of the Company [VOC] or capitalists do not venture imaginatively and in-
who plundered it from within were able to novatively outside the government ~phere
build considerable fortunes, a state of affairs where they could get lucrative contracts.
as valid for the Dutch as for other inhabitants Hence, their entrepreneurship has always

174
 ONGHOKHAM: Chinese Capitalism in Dutch Java

been a step behind national development It goes without saying that without trust be-
needs. tween society and business, neither the govern-
The Dei Tiong Ham story is an outstanding ment nor the economy could modernize and
exception to Indonesian entrepreneurial take the lead in national development. In this
history. His business career was relatively regard, the recent economic success of
free from government patronage. He did not Thailand is worth considering. One major
get much involved in government or military reason for Thai success is the relatively
contracts as the other wealthy merchants of healthy relationship between society and
his time invariably did. Unlike his contem- business. Basically, the Thai government
poraries in Southeast Asia, Oei Tiong Ham has confidence in business, and there is little
was innovative in finding new opportunities social prejudice against it. Indonesia and
for investment and rationalizing his business Thailand have many common features (social
organization. It should be pointed out at the structure, climate, etc.), and even in their
same time, however, that the 1910s, when his history, there are many parallels. Perhaps in
business rapidly expanded, was a decade the future, Indonesia should look at the Thai
when the Chinese enjoyed the unrestricted model in order to create a healthy environ-
freedom of movement, which was un- ment for business and make it the propelling
precedented in Indonesian history. With no force of economic development.
need for government patronage and a rela-
tively corruption-free bureaucracy, Oei Tiong
Ham could concentrate all his energy on References
business expansion and rationalization. Blusse, Leonard. 1986. Strange Company: Chinese
The end of Oei Tiong Ham Concern came in Settlers, Mestizo Women and the Dutch in vac
Batavia. Dordrecht: Foris Publications.
the post-independence period, during the time Boeke, J. H. 1931. Inleiding tot de Economie der In-
of Sukarno. In 1961, the Sukarno govern- heemsche Samenleving in Nederlandsch-Indie.
Batavia: Albrecht.
ment took over the company, charging that it Borel, Henri. 1900. De Chineezen in Nederlandsch-In-
had committed certain economic crimes. It is die. Amsterdam: L. J. Veen.
true that government suspicion against Coppel, Charles. 1989. Liem Thian Joe's Unpublished
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