The British Swindler
This was a nightmare to follow because as an American, I am not familiar with the Colonial hierarchy and the people in each position. If you have an interest in following the minute details of the case, please go to the Borneo Bulletin Website.
Before the implementation of the British rule, Brunei’s trade and incomes were in the hands of certain people who held a monopoly of trade goods such as camphor and gold. They made one payment to the monarch in exchange for the right to control these commodities or to collect taxes. In January 1906, the new administration changed all of this.
The procedure was to offer the original purchase money minus the number of years they held the right to control the trade good. (I am guessing that the original purchase money was the amount paid to the Sultan minus the number of years they paid that amount to him). This new law pertained to all traders, including Chinese and Malays.
An Englishman named James Hatton Hall objected to this plan. Rather, he wanted money on future profits. The Resident and the High Commissioner of Brunei said no, so he took the case to the lawyers in England.
The problem was, he exaggerated his future profits. He sold mouldy tobacco as first-rate tobacco. He imported his tobacco in the form of “cakes” instead of the common twists. Furthermore, he could pay less in customs duty if the tobacco were sold in cakes.(I can only assume that cakes were padded down tobacco formed into a cake and subject to mould, while twists were the leaves tied and twisted together.) His complaint was dismissed by the lawyers in England. Thereafter, the Sultan’s income was replaced by customs duties instead of yearly payments. The new system caused price reductions throughout the Kingdom.
The Tobacco Monopoly
The tobacco monopoly begins in North Borneo. At the beginning of the 19th century there was a tobacco called Dusun(sigep bilai) because it was sold in twists. Governor Ernest Birch encouraged the hill tribes to grow it to give them a cash crop. Before that, the Dusuns had to buy the crop on the coast, and they had to carry it for several walking days to resell in Brunei or to carry it back into their villages in the mountains.
Mr Birch encouraged the cultivation by teaching them to grow the tobacco and how to cure it. He asked them to sell it by the pound. By an agreement with the Chiefs, minimum prices were fixed for three grades of tobacco. It was also agreed the middleman would not sell for more than twice what they paid for it. The duty on Dutch raised tobacco was raised to protect the local industry.
Hatton Hall established a business in Jesselton. He was given the sole right to purchase and import tobacco. Hall tried to “corner” the market by obtaining an exclusive import licence into Brunei. In a concession dated 4th April 1903, he obtained from the Sultan the exclusive rights to sell tobacco in Brunei for a period of five years, subject to an import duty of 12 straits dollars per pikul. (1 pikul=133 pounds; 3 straits dollars=1 USD) In 1904, this arrangement was extended for another ten years to 1918.
Hall had paid nothing for this concession. His “concession” was that he guaranteed the import duty would be paid. Hitherto, the Sultan had been unable to collect the tax because of smuggling. The Sultan received an advance of $3,000 Straits dollars on future income.
Because of the complaints received by the Foreign Office on the increase in prices of Sumatran and Javanese tobacco, a report was filed to the British in London. It stated the “poorer class” was unable to afford the higher-priced tobacco. Hall explained to London that the higher prices protected his monopoly.
In January 1906, all monopolies were cancelled by the incoming British resident. To compensate Mr Hall for the amount he paid for the concession (which was 0 dollars). Mr Hall refused to tell the official how much he paid, hoping to get money for his supposed purchase.
On 2nd April, Hall repaid the money he lent to the Sultan less the amount due because tobacco was already imported. The funds amounted to $1301.64. The squabble continued when it was determined Hall had been cheating the Sultan of his $12/pikul by under weighing the tobacco. Apparently, the twists weighed much less than the cake form of tobacco.
Mr Hall also wanted the future profits of the tobacco from when the monopoly was cancelled until 1918. He figured the amount to be $57,600, more than the entire revenue for Brunei from 1906, 1907 and 1908 combined. Hall’s proposal was rejected.
Mr Hall then petitioned the various British government hierarchy using different legal arguments. Purportedly, Hall sold his interest in tobacco to Mr Ong Jee Seng an agent of his. He also employed a salesman in Brunei, Inche Muhammed Yusuf.
As the case wound its way through the colonial system, it was finally determined that Mr Hall tacitly conceded the Colonial Office’s verdict that he had been engaged in “something little short of swindling” and had no claim to compensation for the loss of his tobacco monopoly.
Horton A.V.M. Brunei: The Redemption of monopolies and the Hatton Hall Case 1903-1907 Borneo Research Bulletin 1993
