Most earlier works have long held that Penang's hey-day finished when Singapore emerged in 1819 at the tip of the Malay Peninsula. This new British colony was strategically situated and able to attract commerce and investment from both the region and the world. Thereafter, Penang was of no real importance, as the rise of Singapore necessarily reduced it to nothing but a local commercial centre. However, this chapter reveals that Penang continued as a flourishing regional hub for the whole of the nineteenth century, and was in some respects even more important than Singapore. It then goes on to discuss the operations of the leading Hokkien merchants, the Big Five, considering their various economic activities from shipping through to entrepot trade, commodity production, opium farming, to coolie trade, and how the Big Five dominated all these economic activities.

The Continuing Prosperity of Penang

The foundation of Penang by the British in 1786 was mainly due to strategic and commercial interests. A series of events in the early 1780s — the active presence of French naval forces in Indian Ocean and their intention to secure the tin trade of the Tenasserim coast during the early 1780s, the closure of Dutch East Indies ports to British ships during 1782–83, and the Dutch conquest of Riau in 1784 — had made the British (East India Company) greatly aware of the dangerous stranglehold two hostile European powers had on their mercantile interests in Southeast Asia. This exigency prompted the British to establish a base in Penang, an island off the west coast of Kedah. Situated at the northern end of the Melaka Straits and on the periphery of the archipelago, Penang was in close proximity to some old trading ports. Aceh in northern Sumatra was nearby in the west, while Kedah and Perak in the western Malay states flanked the east of the island. To the north, it was open to Rangoon and Mergui in southern Burma and Phuket of southwestern Siam, Selangor and Melaka lay to the south. Penang, in the middle of this matrix of ports, developed rapidly as an entrepot. If Penang suffered a decline in trade when Singapore was established in 1819, it quickly rose as a centre of regional trade in the 1820s (Raman 1969/70, pp. 29–30; Freeman 2003, p. 139).

The secret of how the Big Five could assert their dominance in the Penang region lies in the multiple alliances between them and other prominent families. However, different from the conventional beliefs that Chinese family networks were as closed as they could be, cross-dialect and crossethnic alliances played a major role in the Big Five's business partnerships. Yet this cluster of five families was able to form all these alliances and attain their economic predominance in the face of the fluid and plural socio-economic environment of the region. This chapter explores how and why this situation came about.

The family network of the Big Five, which was composed of a web of kinship ties based on extended consanguineal lineages and strategic intermarriages, inextricably bound the five families together and while also connecting them to other prominent Hokkien and Hakka families. Further a field, Indo-Malay families in Penang, Kedah, Perak and North Sumatra as well as Siamese and Chinese families in southern Siam and southern Burma were all woven into the net of marriage alliance. Extensive criss-crossing of kinship ties clearly served as an important foundation for the forging of inter-family and inter-ethnic alliances and partnerships between business families in the promising, yet potentially hostile and insecure, environment of competing colonial and indigenous powers. Through this web of kinship ties the Big Five families were able to establish their business concerns in Penang and the surrounding states.

Clan association in Penang is more popularly known as kongsiand here it refers to an autonomous organization of shared interests based upon blood ties and geographical affinity among its members. Each of the Big Five was grouped within and represented by its own kongsi: the Seh Khoo Kongsi, the Seh Cheah Kongsi, the Seh Yeoh Kongsi, the Seh Lim Kongsi, and the Seh Tan Kongsi (Yen 1995, pp. 81–86). Both Cheah Kongsi and Tan Kongsi were established in 1810; it was then followed by the Yeoh in 1834, the Khoo in 1835, the Tan in 1851, and the Lim in 1863. With such groupings each of the five families was able to develop extended consanguineal lineages which in turn led to the formation of a substantial agnatic or blood-related kinship group.