The Penang-centred region of the 1860s to the 1880s witnessed not only dynamic commercial and intensifying business competition. Opium revenue farming generated the most intense competition among the mercantile and political elite groups in the region. The Ghee Hin, a sworn brotherhood huicontrolled by the Cantonese, Teochew, Hakka (mainly Fui Chew) business elite, was the arch-rival of the Big Five. Besides, the Big Five also faced challenges from the Siamese local chiefs and British officials who attempted to break their monopolistic control of opium farms. This chapter investigates this competition. It begins by introducing the Cantonese, Teochew, and Hakka that clustered around the Ghee Hin before considering the challenges posed by the Ghee Hin, the Siamese, the British, and the Singapore Hokkien mercantile elite to the Big Five's opium and tin business. It then examines the strategies the Big Five adopted to deal with these challenges, showing how the Big Five weakened the challengers and achieved their opium farming hegemony in the region.

Sworn Brotherhood Hui: The Ghee Hin and Kian Teik To ng

The sworn brotherhood hui, more commonly known in Western sources as secret societies, were an inseparable element of the nineteenth-century Chinese society in the region. Carl Trocki has defined the sworn brotherhood huias organized agencies of social control and avenues of economic progress.1 As Francis Light wrote in January 1794 to the Governor-General of Bengal, the Chinese in Penang were a “valuable acquisition, but speaking a language which no other people understand, they are able to form parties and combinations in the most secret manner against any regulation of government” (Purcell 1948, p. 40). Light's statement indicated the existence of the sworn brotherhood hui, or the so-called secret societies in 1790s Penang. The Ghee Hin, founded in about 1790, was most probably the first and dominant huithere (Wong 1964/65, p. 120; Teoh 2002, p. 232). At the time it was jointly controlled by a group of influential Hokkien and Cantonese merchants.

In the early nineteenth century, however, as the Hokkien faction emerged as a dominant force in the business of revenue farming and played an active role in shipping and trading, the growing economic wealth of its main families enabled them to become more powerful in the hui.

Tin had been mined and traded in Southeast Asia since at least the tenth century. Although the production and trade in the early period was limited in scale, tin was no doubt a valuable and popular commodity. The mountain ranges in peninsular Burma, Thailand and Malaya share the same geological structure of granite masses forming and contain rich tin reserves (Courtenay 1972, pp. 47–52; Ooi 1963, pp. 295–97). This tin belt, centred in Malaya and extending for hundred of miles northwards into southern Thailand and lower Burma, and southwards to the islands of Singkep, Bangka and Billiton, was the richest and most extensive in the world. It was not until the Industrial Revolution spurred the demand for tin and motivated Chinese merchants and miners, however, that this tin belt was turned into a production powerhouse. As mentioned in Chapter 2, the tin mining business in Phuket and Perak, the two richest tin producing states in the nineteenth century, was in the hands of the Big Five. But this does not mean that the Big Five faced no challenges. In fact, the competition for “White Gold” (tin) was no less than for “Black Gold” (opium). It is not surprising that the Ghee Hin was one of the most aggressive competitors, since tin mining was a very profitable enterprise and was also inextricably tied to the opium farming business. Besides Ghee Hin, the Singapore Hokkien mercantile elite also made attempts to break into the Big Five's tin mining domain in Larut of Perak. This chapter will examine the competition from the various sides and how the Big Five responded.

Larut and the Big Five's Tin Mining Interests

With the discovery of tin fields in late 1840s, Larut quickly became the magnet for coolies and capitalists from Penang. This phenomenon was due to the expansion of the U.K. tinplate industry which in turn led to an increasing demand for Straits tin. The Hakka from Zengcheng district of Guangdong province, who formed the majority of the members of the Hai San hui, were the first miners who went to Larut.

The Western inroads into the Big Five's shipping and trading enclaves, as discussed in the previous chapter, were not the full extent of the Western business challenge. From the 1910s onwards, Western enterprises extended their business interests towards the primary production sector, especially in tin mining and plantation agriculture. It was at this point that the full force of Western commercial powers first descended on this Penang-centred region. By organizing as public joint-stock companies, Western mercantile interests were able to gather the larger amounts of capital necessary to adopt new technologies and to attract the skilled management that would enable them to establish their supremacy in the tin and rubber industries. On top of this, the modernization and expansion of Western-style political and administrative apparatus, which increased state power, had adverse effects on revenue farms and landownership. In the face of these changes, the Big Five lost their ability to compete and began to disintegrate. This was not a natural or inevitable process, but a result of their unsuccessful attempt to cope with the problems and challenges that emerged in a dynamically changing economic and political order.

This chapter broadly outlines the economic and political changes that would ultimately disadvantage the Big Five and considers why the Big Five failed to survive as the dominant economic force in the new order. We will consider two main arenas of change in turn, beginning with tin.

The Tin Industry

Western enterprises began to gain ground in this traditionally Chinesedominated industry from the late nineteenth century. Their first inroads were in the smelting sector. From the late 1880s, Western companies began to break the practical monopoly of smelting held by the Chinese (Brown 1994, p. 77; Yip 1969, p. 105). The Straits Trading Company was most successful in this respect and by 1902, it was smelting 55 per cent of the tin exported from the Straits (Cushman 1991, p. 76). Challenged by this growing Western control over tin smelting, in August 1907 the Big Five and theirassociates established a local limited company — Eastern Smelting Company — with modern smelting facilities as part of the Khaw Group (Wong 1965, p. 229; Cushman 1991, pp. 76, 78). This enterprise was floated in England with a capital of $1.5 million.

Before the 1880s, direct competition from Westerners was insignificant since they had only a peripheral interest in the region and played an auxiliary role as providers of capital. However, the Western mercantile elite began to pose a competitive threat to the Big Five from the mid-1880s, a period which saw a shift from liberalism to management characterized by increasingly powerful colonial governments and rapid expansion of Western interests in trade, shipping, and insurance. This chapter explores the Western competition in this Penang-centred region and the countermeasures taken by the Big Five. It first examines the shipping and trading intrusions made by the large-scale and financially-powerful Western business concerns. It then turns to the response of the Big Five towards the Western challenge.

From Liberalism to Management

The unprecedented Western penetration into the commercial orbit of Penang in the late nineteenth century was not simply a response to its profitable trade and commerce. It was also a result of intensifying international economic expansion and political rivalry. The last decades of the nineteenth century witnessed the change in the global economy from commercial to industrial capitalism.1 As such industrial production became the engine of growth and the key to wealth and power in the West. From this period, Britain, until then the leading industrial power in the world economy, faced fierce competition from new Western industrial powers like Germany, France, Holland, and America.2 The challenge to Britain from these Western powers heralded an intense scramble for resources. Hence, Southeast Asia became more fully open to the impact of the Industrial Revolution and more Western states showed increasing interest in the region. In order to consolidate their control of economic resources and opportunities, the British and the Dutch, who had firmly established themselves in Southeast Asia, began to delineate their respective business spheres. To achieve this, corporate enterprises were organized to penetrate into all the major business sectors while state power was centralized to support this business thrust and, at the same time, to annex territories in contention and solidify colonial boundaries.

These new Western corporate enterprises were different from the Penang-based Western trading and entrepreneurial interests which had been established in the early-to- mid nineteenth century. They were incorporated companies, representing large capital resources and business interests centred mainly in the Western metropolitan cities.

The Big Five Hokkien business families of the nineteenth century controlled the most crucial economic elements of the age and the region, namely labour, capital, organizations, and business networks. The family alliances and power relationships that they formed in and around Penang crucially and profoundly shaped the development of the region. Hence, they serve well as a point of access to recover the vibrant socioeconomic and political life at local and regional levels, to contextualize the subtle interaction between the business elite, the grass roots, and the colonial and indigenous political powers, and to reconstruct the local state and wider regional history. My work serves not only as a complement to the scarce literature on the Hokkien business families and their business networks, but also another trajectory to use the Hokkien business families as a tool of analysis for the study of Southeast Asian economic history in the nineteenth century. This is in contrast to some previous studies which tended to take a Euro-centric approach. It has led us to believe that Western interests played the leading role, while this study on the Big Five tries to deconstruct the conventional narratives and restore the long-neglected local agency and show a more nuanced picture of the Southeast Asian communities, societies and histories in the nineteenth century, where the Hokkien business elite families played such a central role.

My work has also shown that the economic importance of the local Chinese merchants and their crucial business networks in transforming Penang into not just a trading port, but also a financial and business centre from which numerous enterprises were launched and controlled. This development helped to consolidate the business leadership of the Hokkien elite families during the colonial period of rapid economic expansion. A detailed analysis of the Big Five's business operations, family relationships, inter-huiconflicts, economic cooperation and competition has led us to see a wide-ranging web of hybrid and fluid regional business networks that contributed to the Big Five's economic ascendancy and fashioned the contours and patterns of Penang and its surrounding states (southern Burma, southwestern Siam, western Malay states, and the north and eastern coasts of Sumatra) as a single economic unit in the nineteenth century.

Despite the rise of Singapore, Penang, being a maritime base of the Big Five, remained as a regional entrepot.

As a Hakka boy born and raised in Perak, despite its proximity, I only learned about Penang as a trading port established by Francis Light from school history texts. It was not until a trip in the year 2000 that I came to know Penang better personally. Walking around the streets of George Town, the business centre of Penang, I was amazed to see five temple-like kongsi houses standing magnificently in the middle of the town. These five kongsis are believed to have owned at least half of the shops and houses in the old part of George Town. More interestingly, they were once connected with each other by some secret passages and started the worst riots in the British colony at that time. Later, I came to know that a group of wealthy merchants from five Hokkien families founded these kongsisin the nineteenth century. Despite all this mythology, surprisingly, no one has ever seen fit to place them under a scholarly examination. Who were these Hokkien merchants and what roles did they play in Penang? How important were they? It was questions like these that stimulated me to ponder the relationship between those little-known Hokkien merchants and Penang about two centuries ago and to embark on researching the story about them.

In the existing literature, Penang's history has been framed within a colonial paradigm and studied from a top-down angle. The rise of Penang as a hub of commerce and trade, to many scholars, was due to the British free trade and free port policies as well as the legendary Francis Light. As L.A. Mills commented in 1925:

Seventy years later, echoing Mill's view, Sundara Raja remarked in 1997 that Francis Light, who promoted free trade, contributed greatly to making Penang a free port which stimulated vigorous trade and growing migrant settlement (Raja 1997, pp. 104–8). For these scholars it seems the colonial factor was central and sufficient in itself to explain the rise of Penang.