Wednesday, January 17, 2018
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Mad Ridley and the rubber boom

Millennium markers - Economic History

IT IS hard to believe that the rubber trees that line our highways are not native to Malaysia. It is even more unbelievable to think that rubber might not have been planted here if not for the persistence of one Englishman in the Singapore Botanical Gardens during the turn of the last century.

H.N. Ridley, (left) popularly remembered as "Mad Ridley'', arrived in Singapore as the Director of the Botanical Gardens there in 1888. He had, on his way to Singapore, examined the rubber plantations of Ceylon (as Sri Lanka was known then) and, prior to his outward journey, he had discussed the possible importance of rubber with Sir Joseph Hooker, Director of Kew Gardens in London.

At the Singapore Botanical Gardens there were 1,100 Heveas (rubber trees transported from South America via London) of varying ages, left unkempt by the Straits Government. Ridley's biggest complaint was levelled against the British Colonial Government and British planters in Malaya. In his personal correspondence, he expressed his views more strongly: "There is one considerable difference between this place and Ceylon and that is the absence here of the planting interest ... the people ... don't care about rubber or peppers or cultural products ... at present everything is commerce.''

European planters were more interested in coffee. Early attempts to cultivate rubber were unsuccessful as existing methods of extracting rubber were inefficient, resulting in negligible latex yield and damaging the rubber trees, which made it unprofitable to plant rubber on a large scale.

One of Ridley's strongest critics was Sir Frank Swettenham, who was not convinced of the viability of cultivated rubber. Swettenham's attitude towards rubber and his rebuke of Ridley's interests in rubber as "exotic'' also reflects the colonial officer's general view of rubber cultivation.

It was Ridley's assiduousness that kept the interest in rubber alive in Malaya. Ridley is reported to have said he foresaw that the world's demand for rubber would explode by the turn of the century.

Since its "discovery'' by Amazonian Indians and after various inventions--beginning with the "Macintosh'' method to make waterproofed garments, followed by Goodyear's vulcanisation process to cope with temperature changes, and Dunlop's invention of the pneumatic tyres for bicycles and later for motorcars--demand for wild rubber shot up in the late 19th century. Exports of wild rubber reached 43,310 tons in 1900. Several factors contributed to this rise in output, one of which was the steady increase in rubber prices between 1895 and 1900.

The American motor industry's rapid development in the early 1900s was largely responsible for the high prices of rubber in the international market. In 1900, American motor vehicle factory sales stood at 4,192 units but by 1904, 22,830 units had been sold, a fivefold increase.

In Malaya, "Mad Ridley's'' efforts began to pay off. Ridley had invested time and energy in research and development and in 1897 his published works reveal him to be a staunch supporter of the Heveas, claiming that the species was particularly free of diseases and most economical for cultivation. However, it was Ridley's "herringbone'' method of rubber extraction that truly made cultivated rubber a viable crop to replace coffee (which was facing a drastic fall in prices from the mid 1890s anyway).

Between 1898 and 1900, various botanical gardens in Malaya had to cope with meeting the demand from planters for rubber seeds. In 1898, European holdings of rubber amounted to only 800ha but by 1910, it was 150,800ha, an increase of 188 times.

Between 1906 and 1910, rubber cultivation exploded at a rate unknown to any crop cultivated in Malaya. The number of Sterling companies (rubber companies incorporated in Britain, as opposed to dollar companies incorporated in Malaya) formed in 1906 stood at 27 from only two in 1903, experiencing another phenomenal increase in 1909 to 65 floatations and 80 in 1910. Asian cultivators also enlarged their cultivation of rubber between those years, increasing from 800ha in 1907 to 65,599ha in 1910.

The "madness'' of Ridley transferred itself to the mania of the two rubber booms, the first from 1906 to 1907, the second from 1909 to 1910, when competition in the rush to acquire land exceeded expectations.

Despite a depression in rubber prices between 1907 and 1908, the export of cultivated rubber from Malaya doubled from 885 tons to 1639 tons. By 1915, Malaya was the biggest producer of rubber, contributing 70,200 tons or 41% of world rubber exports, surpassing wild rubber for the first time.

The rubber boom--which finally reached a barrier in 1913 in the form of declining prices--left an indelible mark not only in the economic history of Malaya but also contributed to Malaysia's present social make-up: for instance, Indian immigration designated for rubber cultivation increased from 38,351 arrivals in 1900 to 122,583 in 1913.

The rubber boom also saw the establishment of giant agency houses like Guthries & Co, Edward Boustead & Co and Harrisons & Crosfield. While Guthries diversified from its trading roots and moved into the plantation industry, Boustead's involvement in rubber was initiated by its substantial financial stake in a number of sugar estates in the Penang area which switched over to rubber.

Harrisons & Crosfield's entry into rubber began with its acquisition of £1,000 of shares in Pataling Rubber Estate Syndicate Ltd in 1903. In 1905, eight properties in Negri Sembilan and Selangor were amalgamated as the Anglo-Malaya Co Ltd, coming under its management.

In fact, land acquisition for rubber cultivation was so fierce that the British enacted the Malay Reservation Enactment of 1913 to protect native land ownership in Malaya.

Undoubtedly, H.N. Ridley's position as the "father'' of rubber is more apt a label than the madness that truly belonged not to him but to the rubber booms.

Dr Loh Wei Leng is a lecturer in Universiti Malaya's History Department; Khor Jin Keong is a research assistant there. The authors have research interests in business history.

Millennium Markers is a weekly series that looks at events and happenings that shaped Malaysia and the surrounding region over the last 1,000 years; it is coordinated by Dr Loh.

Notes: STF- Foundation of the modern economy Malaysia's modern economy is usually associated with the post World War II and post-Independent periods when manufacturing and industrialisation took off. However, the primary commodity industries cannot be ignored because they have provided the basis for the resources on which the country has been able to draw on in its move towards modern industry and services and, presently, towards the Knowledge Economy (also dubbed the New Economy). Today's Millennium Markers is the first in a series that will look at commercial agriculture in Malaysia, beginning with rubber--considered one of the two pillars of the economy together with tin--in the first half of the 20th century.

Notes: Statistic- Early Developments of the Rubber Industry.


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