THE CULTURE SYSTEM.
Financial system previous to the British occupation--
Raffles' changes--Return of the Dutch--Financial
policy--Van den Bosch Governor-General--Introduction
of the culture system--Its application to sugar--To
other industries--Financial results of the system--
Its abandonment--Reasons of this--Present condition
of trade in Java--Financial outlook.
As I have already mentioned, the Colonial Government succeeded the Dutch
East India Company in the administration of Java towards the end of the
last century. During the period antecedent to the British occupation,
the revenue of the Government was derived from two monopolies: (1) that
of producing the more valuable crops, and (2) that of trading in all
products whatever. Meanwhile the mass of the natives were left entirely
to the mercy of the native princes, by whom they were subjected to all
manner of exactions.
The financial results of this state of things were seen in the fact that
in 1810 the gross revenue of Java was only three and a half million
florins,[16] a sum wholly inadequate to the requirements of
administration.
During the five years of British occupation (1811-1816) Sir Stamford
Raffles was Lieutenant-Governor. He at once introduced reforms. The
native princes were displaced; the village community, with its common
property and patriarchal government, was modified; a system of criminal
and civil justice, similar to that in force in India, in which a
European judge sat with native assessors, was introduced; the peasants
were given proprietary rights in the soil they cultivated; and complete
political and commercial liberty was established. An inquiry into the
nature of the respective rights in the soil of the cultivator, the
native princes, and the Government resulted in establishing the fact
that, of the subject territory the Government was sole owner of
seven-tenths. Of the remainder, two-tenths belonged to the Preanger
Regents, and one-tenth was occupied by private estates, chiefly in the
neighbourhood of Buitenzorg and Batavia. In order to teach the native
the western virtues of industry and independence, Raffles determined to
introduce the Ryotwarree system. The property in the land vested in the
Government was handed over to individual peasant proprietors. In return
for his land each proprietor was made individually and personally
responsible for the payment of his land tax, and his land was liable to
be sold in satisfaction of his public or private debts.
[Footnote 16: 12 florins = £1.]
Before the English administration the peasant had paid--(1) a land rent
for his rice lands to the native princes, amounting to a sum equivalent
to one-half of the produce of sawah (irrigated) and one-third of tegal
(unirrigated) lands; and (2) a tax of forced labour to the Dutch
Government, which took the form of unpaid labour in the cultivation of
the produce for export. Raffles abolished both, and in place of them he
established a fixed money payment equivalent to a much smaller
proportion of the produce of the land than had been paid before to the
native princes alone.
The Dutch regained their East Indian possessions by the Treaty of
London. On their return to Java, they restored the village community
with its joint ownership and joint liability, and abolished all
proprietary rights of the natives in the soil, only allowing ownership
of land to Europeans. They contend that this attempt of Raffles to apply
Western principles to an Eastern society had already proved disastrous.
The peasants, on the one hand, had not acquired the habits necessary for
the successful development of their holdings, but, on the other, through
their inability to pay the land rent, were becoming hopelessly involved
in debt to the Chinese and Arab money-lenders. The broad fact, however,
remains that during the short period of British rule the revenue rose
from three and a half to seven and a half million florins, and the
population from four to five and a half millions.
As the old monopolies from which the chief part of the revenue had
formerly been derived had been abolished by the policy of unrestricted
commerce introduced by Raffles, it was necessary to find some other
method of raising money. It was decided to retain the land tax as a
basis of revenue, but, in order to make it more profitable, a return was
made to the original principle of land tenure under native rule, by
which the cultivator paid one-fifth of his labour and one-fifth of his
produce in return for the usufruct of the land. One day of gratuitous
labour in seven (the European week) was substituted for one day in five
formerly given to the landlord. In certain districts, namely, those of
which the Dutch became possessed by treaty and not by conquest, this
contribution in kind and labour was paid to the native princes, and not
to the Government. On private estates, again, as the Government had
parted with their feudal rights in alienating the property, a tax of
three-fourths per cent, on the estimated value of the property was
substituted. This tax, called _verponding_, was at most equivalent to
one-fifth of the net yearly income.
As before, the produce due from the peasants cultivating Government
lands was commuted into a money payment assessed upon the rice crops;
but this payment was made, not by the individual peasants, but by the
_wedanas_, or village chiefs, on behalf of the whole community. Beside
the land tax, an additional source of income remained in the profit
arising from the sale of coffee, grown either by the Preanger Regents
and sold to the Government at prices fixed by treaty, or on the coffee
plantations established by Marshall Daendels, which were now restored.
These two methods of raising revenue were resorted to by the Dutch upon
their return to the island, and continued in force during the period
1816-1833. They were wholly inadequate. Whether the Dutch were right or
not in characterizing Raffles' reforms as a failure, it is certain that
nothing could be more desperate than the state of the island in the
years immediately preceding the introduction of the culture system. At
the end of the period 1816-1833 both revenue and population seem to have
become stationary. The mass of the natives were becoming so impoverished
that they ceased to be able to keep a supply of domestic animals and
implements necessary for the cultivation of their lands. Apart from the
princes, there was no class, merchants or tradespeople, possessing any
wealth that could be taxed. Not only was the revenue stagnant, but,
owing to a war with the sultans of the interior, a debt of over
35,000,000 florins was incurred by the Government. In a word, the colony
seemed likely to become an intolerable burden to Holland. It was at this
crisis that General Van den Bosch proposed the culture system as a means
of rescuing the island from its financial and social difficulties.
The immediate object of the culture system was to extend the cultivation
of sugar, coffee, and other produce suited for European consumption; its
ultimate object was to develop the resources of the island. This latter
was, of course, the most important. Van den Bosch saw that the natives
would never be able to do this by themselves. In the first place, they
were still organized on the patriarchal model in village communities;
and, in the second, owing to the tropical climate and the extreme ease
with which life could be sustained in so fertile a country, they were
naturally indolent and unprogressive. He therefore proposed to organize
their labour under European supervision. By this method he thought that
he would be able both to raise the revenue and to improve the condition
of the peasants by teaching them to grow valuable produce in addition to
the rice crops on which they depended for subsistence. Van den Bosch
became Governor-General of Java and its dependencies in 1830. Before
leaving Holland he had made his proposals known, and obtained the
approval of the Netherlands Government. He took with him newly appointed
officials free from colonial traditions, and his reforms inspired such
confidence, that a number of well-educated and intelligent persons were
willing to emigrate with their families to Java in order to take up the
business of manufacturing the produce grown under the new system. Upon
his arrival in the island, a special branch cf the Colonial
Administration was created. The first work of the new department was to
found the sugar industry. It was necessary to supply the manufacturers
with both capital and income. Accordingly, a sum amounting to £14,000
was placed to the credit of each manufacturer in the books of the
department. Of this sum he was allowed to draw up to £125 per month for
the expenses of himself and his family during the first two years. From
the third year onwards he paid back one-tenth annually. Thus at the end
of twelve years the capital was repaid. The manufacturer was to apply
the capital so advanced to the construction of the sugar-mill, which was
to be fitted with the best European machinery, and worked by
water-power. Free labour, and timber from the Government plantations,
was supplied; and the customs duties upon the machinery and implements
imported were remitted. The building of the mills was supervised by the
_contrôleurs_, the officials of the new department, and had to be
carried out to their satisfaction. The department also undertook to see
that the peasants in the neighbourhood of each mill should have from
seven hundred to a thousand acres planted with sugar-canes by the time
the mills were in working order. In Java, as in other Eastern countries,
the landlord has the right of selecting the crop which the tenant is to
plant, and therefore the peasants saw nothing unusual in this action of
the Government. The contrôleurs ascertained, in the case of each
village, how much rice land was necessary for the subsistence of the
village, and they then ordered the remainder, usually one-fifth, to be
planted with sugar-canes. At the same time, they explained that the
value of the crop of sugar would be much greater than that of the rice
crop, and promised that the peasants should be paid not only for the
crops, but also for the labour of cutting the canes and carrying them to
the mill. When, at the end of two years, the mills had been built and
the plantations established, another advance was made by the department
to the manufacturers. This was capital sufficient to pay for the value
of the sugar crop, estimated as it stood, for the wages of the peasants,
and generally for the expenses of manufacture. This second advance was
at once repaid by the produce of the mill. At first the department
required the manufacturer to deliver the whole amount of produce to them
at a price one-third in excess of the cost of production. Subsequently
he was allowed the option of delivering the whole crop to Government, or
of delivering so much of the produce only as would pay for the interest
on the crop advance, together with the instalment of the original
capital annually due. Working on these terms, large profits were made by
the manufacturers, and there soon came to be a demand for such new
contracts as the Government had at their disposal.
[Illustration: A PRODUCE MILL. _Page_ 156.]
As for the peasants, they were undoubtedly benefited by the
introduction of the system. While the land rent continued to be
calculated as before, on a basis of the produce of ricefields, the value
of the sugar crop was so much greater than that of the rice, which it
partially displaced, that the money received for it amounted on the
average to twice the sum paid to Government for land rent on the whole
of the village land. Moreover, although the estimated price of the crop
was paid to the wedanas, or village chiefs, the wages for cutting and
carrying were paid to the peasants individually. The value of the crop,
the rate of wages, and the relations between the peasants and the
manufacturers generally, were settled by the contrôleurs.
In 1871, when the culture system was in full operation, there were
39,000 _bouws_, or 70,000 acres, under sugar-cane, giving employment to
222,000 native families, and ninety-seven sugar-mills had been started.
One-third of the produce was delivered to Government at the rate of
eight florins per picul,[17] and the remaining two-thirds were sold by
the manufacturers in open market. In the five years 1866-1870 the
Government profit on sugar amounted to rather more than 25,000,000
florins.
[Footnote 17: The picul = 135 lbs.]
Subsequently the cultivation of coffee, indigo, cochineal, tobacco,
pepper, tea, and cinchona was added to that of sugar. The system pursued
was not identical in the case of all produce. Cochineal, indigo, tea,
and tobacco were cultivated in a manner similar to that adopted for
sugar. But in the case of coffee, cinnamon, and pepper it was not found
necessary to have any manufacturers between the contrôleurs and the
peasants. Of these coffee, the most important, is grown on lands having
an elevation of from 2000 to 4500 feet. Each head of a family is
required to plant a certain number of trees in gardens (the maximum was
fixed in 1877 at fifty a year), and to keep a nursery of young trees to
replenish the plantations. These gardens and nurseries are all inspected
by native and European officials. The process of harvesting the berry is
similarly supervised, but after that is accomplished the peasants are
left to dry, clean, and sort the berries by themselves, and are allowed
to deliver the crop at the coffee stores at their own convenience.
Finally, private persons contract for periods of two or three years to
pack and transport the coffee to the central stores at the ports. Of the
coffee produced on Government account, one-fifth only is sold in Java,
and the remainder is sent home to Europe and sold there.
The culture system was so successful as a financial expedient, that
between the years 1831 and 1875 the colonial revenue yielded surpluses
to Holland amounting to 725,000,000 florins. This total seems the more
remarkable when we know that from 1838 onwards, the colonial revenue was
charged with 200,000,000 florins of the public debt of Holland, being
the proportion borne by Belgium before the separation of the two
countries, which took place at that date.
In 1876, however, the long series of surpluses ceased, and they have
since been replaced by deficits almost as continuous. These deficits
are due to three well-ascertained causes: (1) the Achin war, (2) public
works, and (3) the fall in the price of sugar and coffee. In order to
show that this remarkable change in the financial fortunes of Java is in
no way due to the culture system, it is necessary to go somewhat more
into detail.
(1) Before the outbreak of the Achin war in 1873, the average
expenditure of the Colonial Government for military purposes was
30,000,000 florins annually. During the period 1873-1884 this
expenditure rose to an average of 50,000,000 florins, and the total cost
of the war during that period amounted to 240,000,000 florins. Since
1884 the expenditure has been reduced by confining the operations of the
troops to such as are purely defensive; even then the average annual
expenditure has reached 40,000,000 florins.
(2) Since 1875 the construction of railways and of other public works,
notably the harbour works at Tanjong Priok, the port of Batavia, has
been undertaken by Government. Since the cost has been paid out of
current revenue, and not raised by loans, these works have necessitated
a further annual expenditure of 8,000,000 florins. The total sum spent
in public works between the years 1875-1884, amounting to 75,000,000
florins, is almost exactly equivalent to the deficit incurred during the
same period.
(3) In suffering from the competition of France in sugar, and of Brazil
in coffee, Java has not been peculiar. The British West Indian colonies
are at the present time most disastrously affected by the bounty-fed
sugar industry of France, and Ceylon is only just learning how to
compensate itself for the diminution of its coffee export by the
introduction of a new industry--tea.
As for the general progress of the island, it is sufficiently indicated
by the fact that since the date (1831) of the introduction of the
system, the population has increased from six to twenty-three millions,
and the revenue from thirty million florins to one hundred and
thirty-two.
Although the culture system has yielded such satisfactory results, it
has been gradually abandoned since 1871.
The reason for this change of policy is the feeling that the system,
though necessary originally to develop the resources of the island, is
at variance with the best interests of the natives, and hinders the
introduction of private enterprise and capital. Increased commercial
prosperity is expected to compensate for the loss of revenue caused by
the withdrawal of the Government from the work of production. In the
mean time, it has been found necessary to impose various new and direct
taxes. The most important of these is a poll tax on the natives, which
has taken the place of the personal services formerly rendered by them
on the Government plantations. Originally imposed in 1871, it yielded
two and a half million florins in 1886. Another compensating source of
revenue is the growth of the verponding. As already mentioned, this is a
tax of three-fourths per cent, on the capital value of house property
and industrial plant. It is assessed every three years, and therefore is
an accurate test of the growth of private wealth invested in the colony.
In the fifteen years from 1871 to 1886, the amount yielded by this tax
showed a growth of seventy-five per cent.
It is not necessary to detail the various steps by which the Dutch have
carried out this policy of abandonment. It is sufficient to note the
general result.
To-day all industries, with the exception of coffee, opium, and salt,
are free. In the production of the two latter, opium and salt, the
Colonial Government maintains a complete monopoly; in the case of coffee
they compete with the planters. The extent of the shares respectively
taken by the Government and private enterprise in the trade of the
island is exhibited by the following returns for 1889:--
IMPORTS. EXPORTS.
Government 13,009,445 florins 33,072,175 florins
Private persons 160,375,326 " 164,590,439 "
----------- -----------
Total 173,384,771 " 197,662,614 "
The Government still produces two-thirds of the coffee crop. In 1889 the
amount produced respectively by the Government and the planters was
578,000 and 356,000 piculs.
Of the two chief industries of the island, sugar and coffee, the exports
in 1890 amounted in value to fifty and fifteen million florins
respectively. To these must be added two new industries--tea and
cinchona bark. The former is only in its infancy, and is confined to the
immediate neighbourhood of Soekaboemi, the head-quarters of the planting
interest in Java. Here there are two important estates, Sinagar and
Parakan Salak, which are from 12,000 to 15,000 acres in extent. The
latter industry is especially hopeful. In 1890 the area of cinchona
plantations was 22,500 acres, and 6,000,000 pounds of bark, containing
four per cent, of sulphate of quinine, was exported. This amount is
equivalent to half the world's supply for the year.
Of the import trade it is not necessary to say more than that the most
important item is that of the various cotton goods, coming mainly from
this country, which serve the natives with material for clothing
suitable for their tropical climate. It is also important to remember
that there are a quarter of a million Chinese residents in the island,
by whom all the retail, and part of the wholesale, trade is conducted.
Last year the administration of Java was the subject of a severe
criticism in the Netherlands Parliament. The complaints were chiefly
directed against the conduct of the Achin war, the opium monopoly, and
the continued interference of the Government in the coffee industry. The
reply of Baron Mackay, the colonial minister at the Hague, was in
substance as follows:--
The Achin war, he said, was the result of unavoidable circumstances, and
neither the Colonial nor the Home Government could be regarded as
responsible for the loss of revenue involved in it. He added, however,
that "excellent results were expected from the blockade system" now
adopted, and that there were already signs that the Atchinese would
before long be brought to terms. With regard to the sale of opium, he
assured the States-General that "every possible means were being taken
to reduce the sale of the drug, and to remedy its evil effects." He
frankly recognized the importance of the question of coffee-culture, but
at the same time urged the advisability of maintaining the system for
the present. It was not certain, in the first place, that the existing
system could be changed with advantage; and, in the second, "no product
in the immediate future could be looked for to replace coffee as a
source of revenue."
Undoubtedly the resources of Java are at the present time subjected to a
heavy strain. On the other hand, it must not be forgotten that (1) the
burden of the Achin war may be at any time removed, and (2) all public
works are being paid for out of current revenue without recourse to
loans. There is, therefore, no reasonable ground for supposing that the
present financial difficulties of the Colonial Government are more than
temporary. A glance at the balance-sheet of the island for the year 1889
shows to what an extent the difficulties are due to an increasing sense
of responsibility towards the natives, and to an intention to
eventually open all the industries of this singularly fertile island to
private enterprise.
HEADS OF REVENUE AND EXPENDITURE FOR 1889 IN
MILLION FLORINS.
_Revenue._ _Expenditure._
Taxes 40 Instruction 10
Monopolies 31 Army and navy 40
Sale of produce (of this Public works (of this
coffee contributes 37, railways cost 10) 20
sugar 2) 49
Administration, etc. 60
Other sources (railways,
school fees, etc.) 14
--- ---
In round numbers 134 130
When the natives have been educated and the industries of the island
freed from unnatural restrictions, financial and commercial prosperity
will return to Java.