Topic: BusinessCase Study

Last updated: March 6, 2019


Introduction of the Residential System
Problems faced by the Residents
Perak : A Case Study
Birch’s Murder
James Birch vs Hugh Low
Effects of Residential System on Perak
Achievements of Hugh Low
Introduction of the Residential System?
The Pangkor Treaty introduced the Residential System to Malaya
Arose out of the new Policy of British intervention
A system of indirect British rule in the Malay States that had accepted British protection
4 states only : Perak, Selangor Pahang and Negri Sembilan
The Residential System
A British Resident was appointed in each state
To advise Sultan on all matters of administration and government except those concerning Malay religion and custom
The Sultan remained as Head of State
The Resident was there to advise and not to rule
The Sultan was obliged to act on the Resident’s advice
The Resident’s Duties
1. Peace and Order

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Restore and maintain peace
establish law and order
2. Economic Development

Develop tin mines and other resources of the state
3. Revenue Collection
Set up an efficient system of controlling and collect revenue
Used to develop the state
The Resident’s Difficulties
1. Little help from Britain

had to achieve aims of the system with little help from their government
2. Limited power

No police or army to support them
3. No specific guidelines

Residents received no specific guidelines from the British govt
4. Sultans and followers resistant to changes

Difficult to change and learn a new system of govt after centuries of traditional rule
Success or failure of the Residential System depended on one very important factor – The Resident’s working relationship with the Sultans and his Malay chiefs

British Government
The system had certain advantages for the British government :
1. Limited Expenditure

Only one man was sent
Salary paid by Sultan
Accommodation provided by Sultan
2. No Government Responsibility

Resident held full responsibility for anything that went wrong
British Government is thus not put in any difficult situation
What happened?
Each Resident worked his own way
Different methods, different results
Some successful, some not
First attempt almost ended in disaster for the Residential System when JWW Birch, the first Resident of Perak, was murdered
Later efficient administrators like Hugh Low made the system workable
Implemented in 3 other states
PERAK : A Case Study
The Residential System was first introduced in Perak
The first Resident, JWW Birch did miserably; in fact, he “died” miserably when he was murdered by angry Malay chiefs in 1874
Who in the world was Birch?
James W W Birch
First Resident of Perak
Appointed by Sir Andrew Clarke on 4 Nov 1874, 10 months after the signing of the Pangkor Engagement
Civil servant for almost 30 years, mainly in Ceylon (now Sri Lanka)
He was Colonial Secretary to the Straits Settlements before becoming Resident
Thus an experienced administrator
Did not speak Malay, thus an obstacle to building up relations with the Sultan and the Malay chiefs
Had a poor opinion of Malays and Malay customs
Reported to Clarke that
“it concerns us little what were the old customs of the country…….I consider that they are not worthy of any consideration”
BIRCH’S FIRST ACTION : Collection of State Revenue
Re-organized Perak’s revenue system to come under his direct control
Birch felt that revenue collection was the Resident’s responsibility, not the Sultan and the chiefs
Discontinued Sultan Abdullah’s leasing of “revenue farm”
Also stopped collection of revenue by chiefs of Upper and Lower Perak
This antagonized the Sultan and his chiefs
no respect for Malay traditions and customs
Put an end to their main source of wealth; provoked anger of the Malay chiefs
BIRCH’S SECOND ACTION : Administrative Reform
Code of Civil and Criminal Law
Enforced by a government police force
Penghulus now responsible to Resident, not local chief
British-appointed judge replace Sultan as Chief Justice
Vague compensation
Birch wanted to end debt-slavery
Openly defied custom by helping slaves escape and sheltering them
Did not even offer to compensate the Sultan ands chiefs for the abolition of this long established practice
His action seen as a direct challenge to traditional customs
Also reprimanded the Sultan when he demanded the return of his runaway slaves
Consequences of Birch’s Actions
Open challenge to Malay tradition and custom
Direct violation of the terms of the Pangkor Treaty
By July 1875, Sultan and his chiefs had rejected both Birch and the Residential System
Sir William Jervois
Birch as “Queen’s Commissioner”
Sir William Jervois succeeded Sir Andrew Clarke as Governor of the SS in May 1875
Agreed with Birch that Abdullah should be firmly dealt with
Proposed that Residents be made “Queen’s Commissioners” and rule the states directly on behalf of the Sultan
Threatened to depose Abdullah if he didn’t agree
Abdullah’s complaint to Clarke went unheeded
Birch insisted that Abdullah sign a proclamation to give him the right to collect revenue
Threatened to replace him if he didn’t agree
Meeting among Sultan and Malay chiefs (except Raja Yusof – remember him?)
Decision : KILL BIRCH & drive the British out of Malaya
Maharaja Lela, chief of Pasir Salak, volunteered for the assignment
Raja Ismail (remember him???) agreed to support Lela
1 NOV 1875
Birch was at Pasir Salak after distributing the proclamations (remember the proclamation that he forced Abdullah to sign?) in Lower Perak
He was murdered at the bath house (what a way to die – while bathing!)
Stabbed through the attap walls of the bath house
His body was thrown into the river
Jervois launched a series of attacks with forces from Penang and Singapore, and later India and Hong Kong
By July 1876, all accomplices to the murder were captured
Punishment was severe
Abdullah deposed and sent into exile with Ismail and others involved
Maharaja Lela and accomplices were hanged
Raja Yusof was appointed Regent and in 1886 Sultan of Perak
Sir Jervois was reprimanded for attempting to replace the Residential System with direct rule
Colonial Office was very angry with him and held him responsible for the revolt
Jervois was removed from his post
Perak was placed under a state of military control after Birch’s murder and the revolt
Mar 1876 – J G Davidson was appointed 2nd Resident of Perak
Resigned in Feb 1877 because of difficulties and problems he faced
The man to save Perak and lay the foundations of her prosperity was Hugh Low
He saved the Residential System in Perak
1. Wrong Choice of Resident
2. Conflict between Birch and Malay chiefs
3. Abdullah not suitable as Sultan
4. Misunderstanding about Treaty
5. Unsympathetic Attitude of the British Government

1. Wrong Choice of Resident

Did not speak Malay; relied on interpreter
Knew little about Malay tradition and customs and didn’t care to understand them
Despised the Malays
Arrogant and impatient man
unable to win support of Sultan and the Malay chiefs
2. Conflict between Birch and Malay chiefs

Reforms went against tradition and custom; antagonized Malays
Reforms such as new revenue collection system and abolition of debt-slavery
No consideration, no consultation and little or no compensation
3. Abdullah not suitable as Sultan

Blindly entered into Pangkor Treaty
Not clear about actual implications of the terms
Weak ruler who wasted a lot of money
Selected by British only because he was willing to accept British protection
A poor choice indeed by Clarke
Had ten months to consolidate his rule before Birch arrived
4. Misunderstanding about Treaty

misunderstanding over the terms
Abdullah and his chiefs thought the Resident merely assisted and advised the Sultan
Not prepared for the changes that were forced on them
5. Unsympathetic Attitude of the British Government

Andrew Clarke to share the blame
Delay of 10 months
Did not respond to Abdullah’s complaints about Birch
Led to Sultan and his chiefs taking matters into their own hands
Jervois was unsympathetic and aggravated the situation by forcing the Sultan to accept direct rule by British
Sir Hugh Low was most suitable for the post of Resident
1. Experience

many years of experience as an administrator and diplomat in SEA
Experienced the Residential System in Sarawak
2. Familiar with Malay customs and traditions

also familiar with the practice of debt slavery
3. Speak Malay

Hugh could speak Malay
easier to establish a rapport with Malay chiefs
4. Understanding, patient ; tolerant

strategy to understand before being understood
Hugh believed in winning their friendship through tact and patience
50 years old when he was made Resident of Perak
J G Davidson had given up the post of Resident after 9 months
Perak was in great disorder
Heavy debt
No proper government
No control over Malay chiefs in collecting revenue
No money in State Treasury
Locals suspicious of British
Sultan Yusof unpopular
A discouraging situation for Low right at the very start
Hugh Low turned in an impressive performance
Within weeks of his arrival, Low managed to get the co-operation of the important Malay chiefs
By his third month, he had drawn up a rough guideline for an efficient system of administration
1. The Perak State Council
2. Collection of Revenue
3. Law & Order
4. Debt Slavery
5. Development of Perak

1. The Perak State Council

To encourage the chiefs to take more interest in state government
State revenue & expenses
Appointments & salaries of officials
Pensions of Malay chiefs
Eventually became the State Government as it took on the role of passing laws
2. Collection of Revenue

Abolished privilege of Sultan and his chiefs to collect revenue
No objection because firstly, they trusted Low & were thus willing to cooperate, and secondly, they were well-compensated for their loss
Control & collection of revenue was thus regulated
3. Law and Order

Courts of Justice
Presided by European magistrates & assisted by Malay magistrates
Perak divided into districts
Further subdivided into villages with headman
The Headman acted as police, kept the peace, settled minor disputes, helped to collect revenue
4. End of Debt Slavery

Low felt that this was a cruel practice
Indicated his views tactfully
Over time, introduced law s that slowly controlled and checked debt slavery
Eventually debt slavery was abolished in Jan 1884
Sultan and Malay chiefs given compensation for the loss of slaves who were set free
5. Development of Perak
1. State Treasury
2. Communications
3. Agriculture

1. State Treasury
proper collection of revenue
prevented overspending
encouraged investment in Perak
Accumulated revenue to pay off debts of $800,000 (1877)
Low helped Perak accumulate a surplus revenue of $1.5 million by the time he retired in 1889
2. Communication
State revenue used to improve communications to develop tin-mining industry
Roads, railways built
Public health care, drainage, water supply and street lighting
3. Agriculture
Development of agriculture
Experimented with tea, coffee and cinchona (quinine)
Responsible for introducing rubber into Malaya
Greatest achievement was the establishment of law and order
with this, he developed Perak into Malaya’s richest state
Residential System under Low was a huge success
copied by Selangor, Negri Sembilan and Pahang
Low retired in 1889 after 12 years in Perak
Residential System was successful because the Residents made it work
1. More effective government

Perak State Council led to the reform of the legal system
2. Peace and security led to political stability

3. Law and Order led to economic development and consequently higher standards of living

Rapid increase in population
immigrants attracted to Perak
made Perak more multi-cultural
4. Improvement in communications

roads and railways built
5. New cash crops introduced

Rubber, pepper, sugar cane, gambier and tobacco
6. Economic development brought social benefits

health facilities
social amenities
water supply
street lighting
Perak citizens enjoyed a higher standard of living compared to unprotected Malay states which remained backward
1. No uniformity of Government between the four states

although answerable to the Governor in S’pore, the respective Residents had very little contact with him
2. Residents became more powerful at the expense of local chiefs

Because of his dominant nature, Perak was actually ruled by him
Sultan and the State Council had only limited influence
3. Different rates of economic growth

Development depended on the capabilities of the Residents
Perak and Selangor developed rapidly
Pahang and Negri Sembilan remained relatively poor and backward


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