Ceylonese Participation in Tea Cultivation
By Maxwell Fernando
Capital formation during the British period
Cinnamon industry gave the locals the first break
Local participation in nation building
Internal trade and transport was entirely theirs
Development of the Coconut industry
The mining industry
Part played by the Low Country Products Association
The Ceylon Agricultural Association
From agricultural to trading operations
The De Soysa saga
Local pioneers of the 20th century
Ceylonese participation in tea cultivation
Major constraints for Ceylonese entrepreneurs
Local pioneering work gets under way
The native era
Ceylonisation of the tea plantations during the 20th century
Economic Expansion of the Low Country Ceylonese
Capital Formation During The British Period.
A question that surfaces very often when discussing Ceylon in medieval times is the part played by the ancient rulers in promoting the cultivation of paddy. It is often stated that Ceylon in ancient era was the granary of South-Eastern Asia. Perhaps it may have been so before the arrival of the Portuguese and the Dutch. When the British arrived in the island, these conditions had totally lapsed, and it is recorded that rice had to be imported from India to feed the troops and the local population residing in the urban areas.
Military rivalry between India and Ceylon during the early days had driven the Sinhalese to the mountain zone more to the south and the west. Cultivation of rice was mostly concentrated in the Northern, North Central and the Eastern provinces, and although the Sinhalese generally considered agriculture the most honourable of all callings, the newly acquired areas were found less suitable for rice than for fruit and root culture.
On the question of rice growing, it was the opinion of one of the most experienced of Ceylon Civil Servants - Sir Charles P. Layard who served in the island from 1829 to 1879 that the cultivation of paddy was the least profitable pursuit to which a native could apply himself. It was endured from habit, and the value of time and labour never enters into the calculation.
Sir Henry Ward was however determined to re-introduce the perennial rice culture by spending large sums of money collected from surplus revenue for the restoration of irrigation tanks. This action mostly benefited the Muslims and the Hindus residing in the North Central and Eastern Provinces. They were most enterprising and were on the move all the time. It was for this reason that these people were called the “Scotsmen of the East.” With their participation in rice production, imports of rice decreased tremendously.
Imported rice from India and Burma nevertheless were found much cheaper to those grown locally. It was at this stage that most of the low country Sinhalese turned their attention to plantation and garden products such as coconut, betel, nuts, pepper, cinnamon, nutmeg, cacao, tea, cardamoms, and fruits of all tropical kinds. Their activities however only centred round its cultivation, but its marketing was entirely in foreign hands.
It will still be seen that from the arrival of colonial powers commencing with the Portuguese, that there had been very restrictive trading policies imposed on the indigenous population which checked the accumulation of wealth and stifled the growth of a bourgeoisie in the country. Suppression of free competition was the order of the day, and these were backed through state monopolies. There was state patronage for trading organisations such as the British and French East India companies. By the time the English East India Company conquered the seaboard of Ceylon, the maritime provinces became virtually a closed territory and the Company unhesitatingly adopted the monopoly practices of its predecessors.
The Portuguese who controlled the maritime provinces during the period 1505 to 1656 established monopolies in respect of all major export products such as cinnamon, arecanut, pepper, pearls, gems, and elephants in all the regions they controlled.
The Dutch that followed in 1656 established trading posts along the seacoast and followed the same policies of the Portuguese. The Dutch East India Company monopolised all import and export trade and eliminated private trade. The main exports of Ceylon were the natural minerals, vegetable and animal products of both land and sea, gems, pearls, sea-shells and elephants. The principal imports were textiles.
The colonial powers regulated all aspects of economic activity, and above all, maintaining a favourable balance of trade. The main source of revenue for the government was from taxes and not from productive investments. The position had not changed very much even in the 1830’s, and the government revenue was mostly composed of revenue from land rents, cinnamon, grain tax, pearl fisheries, duties on spirits, fish rent, stamps, salt monopoly, and tolls.
From early times, the island of Ceylon had close links with India as an integral unit of the inter-coastal trade in the region. Trading was mainly in the hands of South Indian mercantile communities, but the requirements of capital was so large that the locals living in and round Jaffna, Galle and later in Colombo got an opportunity to seek a foot-hold in commerce by investing their capital in the fast expanding trading activities. The Drones, the ancient crafts which plied between the coasts with the monsoons, were the carriers of trade, and many of them were owned by the locals. An exchange had not developed, and barter was its chief feature.
Profits in trade were considerable, but it remained rather concealed, because of the restrictions imposed by the East India Company. Subsequent British Governors recognised its importance to the colony and it was William Colebrooke who made a determined attempt to free it of restrictions.
Many changes followed after the maritime provinces were brought under the Crown in 1802. Restrictive practices were removed, and European and their descendants were permitted to purchase or receive as grants land up to 4,000 acres. With these changes, Ceylon ceased to a “White Man’s colony” but still remained a field for European speculators.
With the unification of the country in 1815, and in the absence of foreign competitors in the neighbouring coast, the Crown Government was in a better position to enforce the monopolies more effectively than their predecessors. The policies they adopted to maintain the monopolies in most cases were only self-defeating. Although the Crown Government tried to give the impression that they were promoting a liberalised economy, they were in fact adopting without modifications the practices of their predecessors, much to the detriment of the interests of the colony and its people.
The strong monopolistic tendencies which characterised early British rule slowly began to break down, and development of trade which widened exchange economies, became the main agency for this transformation. Improvements in communication aided this process further by providing a link between the coastal areas and the interior. All internal trade barriers were removed, and this economic change provided further opportunities for commercial advancement, and they soon moved into new areas of activity.
Renting, which was regarded a big money spinner was virtually monopolised by the locals. A subsistence production economy gave way to the cultivation of export crops. Their early involvement in the cultivation of coffee, made them give strong competition to European interests, and at one stage, “native coffee” outstripped “plantation coffee.”
It is noteworthy that these new opportunities were mostly exploited by the low-country Sinhalese from the maritime provinces. They were able to established trading posts in the Kandyan provinces. The additional employment opportunities that surfaced with the coffee industry were all theirs for the asking, and they made a tremendous success of them all. The Kandyans were not at all insensitive to the changes that were taking place in the hill country, but they preferred to retain their identity during the initial stages of development,
After the 1830’s many commercial developments took place based on the consumption patterns of the fast emerging middle class society. A few commercial establishments were set up to cater to their needs. They dominated the import of British goods demanded by the foreign elite, but there was still a small circle of wealthy Sinhalese who were eager to identify themselves with the foreigners, and emulate their life-styles.
Trade restrictions still ruled the day, but there were the Indian traders who were making a disparate attempt to break into the import export and internal trade with a certain degree of success. The Tamil- Hindu community of Nattukottai Chettiars were the pioneers of the local trade, and by the mid 1830’s they became the exclusive importers of Indian manufactured goods.
All this goes to prove that up to about the mid 1830’s, the locals had only limited opportunities for capital accumulation. The native traders however were able to penetrate certain specialised areas where there was ample room for expansion. The Indian coastal and internal trade was exclusively theirs. They provided goods and services to the expanding economy in the interior. Collection of taxes, and most important of them all, the right to retail liquor was their stronghold. This became the major source of local capital accumulation.
Cinnamon industry gave the locals the first break
Prior to nineteenth century, Ceylon was the main supplier of cinnamon to the entire world, and the country was referred to as the “Cinnamon Isle.” The Dutch, who instituted the cinnamon trade, were dependent upon the cinnamon that grew wild in the jungles. Supplies from Kandy became most inconsistent, as the peelers from the low country were not always permitted in the hill country.
Governor Falck encouraged government participation in cinnamon cultivation, and accordingly plantations were opened up first in Maradana, and later in Negombo, Kalutara, Galle and Matara. In addition, the government encouraged the Sinhalese to open up cinnamon plantations, but maintained its monopoly in marketing. The annual average exports were retained at 400,000 pounds, which was considered the estimated world consumption. The price was fixed at the highest possible level, and profits on sales were high as 200%. This was the first break the Ceylonese got to participate in the agricultural development of the country.
Colebrooke, who visited the country in 1829, as an emissary of the British government, condemned the cinnamon monopoly and recommended its abolition. It was found oppressive and injurious to the Ceylonese. He also sanctioned the sale of government cinnamon lands to private individuals. His intention was to increase the production of cinnamon in the country, and at the same time, re-establish the superiority of Ceylon cinnamon. Colebrooke however was unaware that the cinnamon industry was on the verge of a steep decline. It was the high duty imposed by the Colonial government that out-priced the local variety in world markets. Consumers soon developed a taste for cassia which was a cheap substitute for cinnamon.
All the duty reductions that followed came far too late and failed to put the industry on track. A few enterprising locals however were able to hold on to their possessions until a much later date. The incentives offered by the government give the industry a boost at least for a short time, but sales were on a steady decline in the long term. The consumers were looking for cheaper substitutes.
The decline of Ceylon cinnamon is clearly marked by the history of the sale price per pound in London, as stated by Lennox A. Mills in his book “Ceylon under the British.” In 1835 it stood at 9s.9d. By 1841 it had fallen to 5s, 1d. By 1846 to 3s 9d, and by 1855 to 1s per pound. During the same period the price of cassia fluctuated between 6d and 1s per pound.
The sale of government cinnamon lands commenced, but at prices well below the anticipated levels. During the period 1834 and 1839, about 2,000 acres of abandoned cinnamon lands were sold. This was the first opportunity the locals got, to engage in large-scale plantations. By 1840, the Moratuwa, Kadirana, and Ekala plantations had been sold, mostly secured by the local entrepreneurs. With it, the cinnamon industry soon passed into the hands of the local capitalists, who were then called upon to play an important role in the affairs of the country.
By the close of the nineteenth century, the cinnamon trade had recovered from its worst unexpected changes, and went on once again to establish itself as one of the important minor crops of the island. It however remained unprofitable The value and the quality of the bark suffered in the struggle, but the country was able once more to retain its position as the centre of the spice trade.
This was all due to the continuing support extended by a group of die-hard locals whose determination saw to it that their old favourite cinnamon was not permitted to be wiped out from the face of the country.
The following small group of families however invested successfully in cinnamon plantations mostly purchased from the state. Among them were Gabriel de Croos and his heirs, C. H. de Soysa, Lindamulage Jusey de Silva, Mudaliyar S. R. de Fonseka, Sampson de Abrew Rajapakse and his heirs, A. Van Rooyen, J. W. Vanderstraaten, F. R. S. Schrader and N. Ratnasabapathy.
Michael Roberts in his book Caste Conflicts and Elite Formation mentions “that much of the cinnamon, and in some measure products such as coffee, arecanut and fruit were gathered rather than cultivated. They were gifts of nature, and not systematically cultivated.”
The future for the majority of the locals in the cinnamon industry however was short-lived. The trade was riding the crest of a wave until about the mid 1830’s. and remained by far the most valuable of the country’s exports. No one at that stage could have foreseen that within a short period that followed, the cinnamon trade would be sinking towards death.
Local participation in nation building
When the British Conquered Ceylon in 1790, export of natural products and shipping activities were at a low level, agricultural productivity was depressed, and no progress made in the field of manufacture. The country’s finances were in a sorry state, and it reflected the condition of a typical colonial economy before the penetration of capital.
The Rajakariya system was abolished by Colebrooke in 1832 and he initiated a move to transfer crown lands to individuals, through a system of land grants. In1833 the Colonial Office adopted a regularised system for the sale of crown land. Since this order was made, such lands were sold, subject to a minimum price of 5 shillings per acre, later it was increased to pounds sterling 1 per acre. This permitted individuals to bid freely to obtain their requirements of crown land at bargain prices. This move was supported by a series of administrative acts, and with the machinery of the government revamped, the country saw an entirely different form of a market economy emerge, with a large portion reserved for the natives.
During this period the policies pertaining to trade and commerce were fast changing in the western world. They were advocating laissez-fair, free trade, free enterprise and a liberalised economy. Unlike the earlier two colonial powers, the British were willing to adopt themselves to existing structures. It was not until about the 1830’s that the locals got an opportunity to get themselves involved in the trading activities of the country.
In 1833, the British enforced a unified administrative system in Ceylon, after having taken control of the Kandyan Kingdom in 1815. The process of unification of the administrative system that followed, necessitated the establishment of specialised departments such as Survey, Public Works, and a Police Force, as and when needed.
Before the British pioneer planters began work in 1837, Ceylon was a mere military dependency costing the mother country a good round sum each year. When the coffee era ended, the local population had more than doubled, and military strength greatly reduced. This resulted in a tremendous upsurge in revenue. This meant that the life styles of the people were gradually improving, and they were better cared in every way. During the early stages of coffee cultivation, there was a free flow of capital and a sum of about 30 to 40 million pounds sterling had been paid to the locals connected with the plantations.
The extension of the communication network, originating with the construction of the Colombo Kandy road in 1832 set the stage for a complete revitalising of the economy. This form of progress tended to change the entire political, economic, and social structure established by the former colonial powers.
The propagation of coffee had been enlivened by the Dutch, which in due course came to be referred to as “native coffee.” The most far-reaching expansion in coffee and coconut cultivation by the local agriculturists came about during the 1840’s. It was during this time that the British were determined to set up a market oriented economy in the country, and it was no coincidence that these moves helped in no small way for this upsurge in local agricultural activities.
Investments in plantations usually called for substantial amounts of capital. The participation of Ceylonese in such large numbers in the cultivation of cash crops on large plantations during the twentieth century, only discloses the fact that huge sums of capital had been amassed by them. Perhaps the plantations themselves providing the bulk of it. It could also be attributed to their prudent investments in other fields, beside coconut and rubber. Over and above all this, there had always been a short cut to fame and fortune. Marriage in those days played a vital role in increasing ones position in life.
On of the pioneers in the capitalist class who gave many a British hard time, at land auctions was Warusahannadige De Soysa, who owned Hanguranketa coffee plantation which yielded substantial profits. In addition, most of these land-owning gentry possessed large extents of urban properties which helped in more ways than one, to accumulate their capital further. They served as collateral’s and extended their credit-worthiness.
The entry of C. E. A. Dias into the ranks of tea plantation owners suggests that much of the wealth had been acquired through prudent investments in the arrack trade. It is equally important to mention that his marriage to the daughter of a leading capitalist of the time, Vidanalage Jacob de Mel in 1903 would have without a doubt placed him in a more appropriate position to challenge the might of the British. In 1917, he had paid £9750 for a 165-acre tea plantation, followed by another purchase of a tea estate of 223 acres in Hatton for £ 29,500. As pointed out in the Tropical Agriculturist, there had been brisk bidding and severe competition always prevailed among local capitalists whenever plantations came under the hammer.
There was a wider diffusion of local capital at that stage, and more affluent capitalists chose to invest in other lucrative fields, and at that point of time, coffee and coconut agriculture proved the best for them. Further, the administrative changes that followed, helped them to venture on a new voyage of discovery.
International market conditions that prevailed during that time offered all assistance to both the local and the foreigner to forge ahead in agriculture. Application of technical knowledge to crop production, borrowed from the British helped, the locals to produce a more marketable product. The construction of a network of modern communications by the British, assisted the local capitalist to engage in further economic advancement.
This economic progress that came the way of the locals helped to establish a resident capitalist class. They were prepared to put to good use all the opportunities that came their way, and in the process enhanced their wealth further, by investing liberally in the agricultural sphere. Obtaining land during that time was an easy task as most areas were sparingly populated. There was hardly any population pressure on land at that time.
The promotional activities undertaken by the British to establish a plantation economy in the country in the early 1830’s were mostly characterised by experimentation and study. The rapid advancement that followed was preceded by a process of learning by error. Most of the early plantations in the central hills were economic failures, but the results achieved after years of critical study by the British were freely available to the locals, and they capitalised on this issue.
The timeworn slogan that “nothing succeeds like success,” has been marvellously illustrated on several occasions in the history of British planting in the country. Some of the planters with no special excellence in judgement, common sense or competence, have been carried to the full tide of prosperity, to proficiency and fortune, while his neighbour, through no fault of his own, failed to enjoy this rare good luck and collapsed. The stories of the early plantation history in the country among the locals are full of dejection’s and lamentations.
Planters who opened up land together and treated them with the same care and attention invariably ended up with mixed results. This was the sense of discomfiting that prevailed in the country during the early stages of the plantation industry, where speculation and not cultivation reigned supreme.
Unlike the Ceylonese, the British were reluctant to try out new crops during the early stages of British plantation enterprise. A generation among European colonists was usually considered not to exceed ten years. This accounts for their hesitation to move into totally different areas of crop production.
It has been found out that only about 10% of the whole body of planters who made fortunes in coffee ever decided to stay in the country. The profits made during these short periods of time, enabled them to build up reserves abroad with local wealth. The locals were utterly lacking in reserve funds to prop the industry when the period of adversity and depression arrived.
Ceylon, in the best coffee days had been referred to as the incubator to which British capitalists sent their eggs to be hatched, and on receiving an abundant brood, left nothing but the shells for the locals. Had the profits from the abundant coffee crops in those favourable days been retained in the country, Ceylon would have found the necessary wealth to triumph over difficulties when the lean periods came along.
The plantations would have been more diversified, and more industries would have sprung up, had they only remained in the country. A great number of European families would have been living in affluence, and there would have been a better distribution of wealth even among the locals.
Once the cultivation of coffee got under way, prospective local plantation owners had a choice of acquiring undeveloped crown land, undeveloped private land, and cultivated plantations when investing his capital. They also had a variety of crops to pledge their fortunes on.
Indigo cultivation was undertaken near Veyangoda in the wet-zone lowlands. Sugar was started in Negombo, Kalutara, Baddegama and Udugama in the Galle district. A few experimental plots were opened up at Peradeniya and Dumbara in the central highlands.
Attempts were made to bring the dry zone areas under cotton cultivation. These projects were undertaken in the Jaffna Peninsula and in the Eastern Province. These ventures however were undertaken mostly by a few enterprising British speculators. At that moment these endeavours were considered too speculative by the indigenous capitalists, and coffee and coconut were singled out when the chance came their way for further economic expansion.
These speculative venture undertaken by the British to expand the agricultural base in the country paved the way for the attraction of further foreign capital for major economic undertakings which could not have been undertaken by the natives. These developments provided a whole new range of employment opportunities, and modest investment possibilities for the locals. The availability of opportunities for gainful capital investment and employment expanded for the greater good of the indigenous inhabitants.
Internal Transport and Trade was entirely theirs
During the early days, the traditional economy was characterised by the importance achieved by exchange trade. Articles such as salt, tobacco, and cloth that were found in abundance in Jaffna were bartered for arecanuts, cotton and bees wax from the south west coast areas. Kandyans exchanged cash crops such as gram, juggery, and arecanuts for salt, pickled fish, and cloth with the Maritime Provinces.
The internal trade was exclusively in the hands of the Muslim traders in the early sixteenth century. It is claimed that in 1519, Muslims were found in every seaport and city, monopolising commerce and trade. They enjoyed special privileges which the Sinhalese took some time to acquire. They had foreign contacts, and were conversant with the requirements of the Europeans and the well-to-do locals. The Pettah which was generally referred to as the “black town” was the commercial centre of the Muslims and the Chettiar merchants.
However, internal trade before the 1830’s remained very small, and the involvement of the locals in this preoccupation was very limited. Apart from supplying the basic requirements to the hill country such as salt, and imported textiles from South India, there were hardly any other manufactured goods to be traded, with the result facilities for local trading remained at a very low level.
With the British occupation, this pattern of trading changed. After the abolition of restrictions placed on trade Sinhalese traders from the low country started to penetrate the hilly areas,. The internal trade was quite trifling during the initial stages, but once the trade in arrack caught on in the Kandyan areas, distillers from Bentota, Kalutara, Negombo and Colombo made fortunes, and with it they were able to make inroads to the business held by the Muslims.
Several factors accelerated this shift, the most important of which was the construction of a network of roads between the coastal areas and the interior. The removal of all internal trade barriers by the British, and above all, the restoration of peace in the island, aided this transformation further. The cinnamon monopoly was abolished, and the system of rajakariya was done away with. All these moves helped the locals to enter the mainstream of economic activity.
The trade that was centred round the main ports earlier soon spread to the interior. It initiated an economic change to the people by providing new opportunities to further their economic advancement. The new enterprise in coffee brought money into the hands of a host of local cart contractors, artisans, renters, and traders. The more adventurous types in the service trade set up their operations in new localities where development was taking place. New merchant stores, boutiques and service centres and bazaar towns sprang up, creating new opportunities of employment to many.
Immense accomplishments in commercial endeavours were achieved by the low country Sinhalese during the period 1830 to 1850. In all these pioneering activities, names of Jeronis and Susew de Soysa from Moratuwa always surface. Most of the initial traders to penetrate the interior had been from Moratuwa and Panadura. There were also others from the Southern Province who was able to secure a good proportion of the service trade in the hill country during the period.
Coffee cultivation from the 1830’s caused a land market to grow, and with it the local speculators got the opportunity to engage in land sales.
Plantations organised on rational economic lines called for a regular and a disciplined labour force. To the vast majority of Sinhalese, social minded as they were, this type of work did not appeal to them. It was most unpalatable as this form of occupation carried low status in the Sinhalese value system. They however looked for more congenial occupations. During the initial stages, being skilled woodsmen, they undertook the more specialised jobs such as jungle clearing, and construction of roads and buildings on a contract basis. These offered them a better status in life and extra money. During the pioneering days, the Britishers did not get absorbed in the tasks involving transport, and this responsibility was entrusted entirely to the low country Sinhalese.
Prior to the construction of the Colombo Kandy road in 1866, it was estimated that there were 8,000 to 15,000 carts engage in transport of supplies to the plantations. These included building material, furniture, and mostly foodstuffs.
Before the advent of the coffee era, internal transport was not considered such a profitable venture, but the pioneer in this trade such as Warusahennedige Jeronis Soysa saw a bright future unfolding for him in this trade at a future date. Coffee was on its way to the top, and he was prepared to wait. He made Kandy the nucleus of his operations, and with a band of carters from Moratuwa, he established his business in 1820. He commenced business by transporting foodstuffs, liquor, fuel and other basic requirements of the British troops stationed in Kandy.
The low country Sinhalese in particular after having watched the fast changing tide of economic activities, in the country were determined to channel their accumulated wealth the British way. The British merchants dominated the import trade, and their goods were imported mostly to serve the requirements of their own clan in the country. There was however a thin stratum among the wealthy Ceylonese who were ever prepared to emulate the consumption styles of their foreign counterparts.
This trend had been observed, that led a foreigner in the country to comment that “the Sinhalese officials fit up their houses in European style, and burn candles in silver candle-stands.” Another observed that “wine brandy and beer are now consumed by people who drank arrack before. Foreign sugar is used by those who were before content with jaggery, All the natives are better clad.” This goes to prove that the local at some stage or other would have invested their savings in some un-productive ventures.
In the 1840’s the ownership of coffee plantations were mostly British, but not wholly so. Many Ceylonese purchased British owned plantation properties and the first few were Jeronis de Soysa. Lames Alexander Dunuwille, Cornelius Perera, Galagoda Basnayaka Nilame, J. P. de Silva and Karunaratne Muhandiram. By about the 1850’s these numbers steadily increased. The contribution from the smallholder sector towards coffee production was also phenomenal and cannot be ignored. During the peak period, approximately 50,000 acres had been under their control.
When the coffee crash came about during the early part of the 1880’s most Europeans left he country. It was at this stage that the local capitalists got a further chance to invest in European owned coffee plantations, with the sole idea of converting then to tea at a later date.
In contrast, only about 10% of the British planters who worked during the period 1837 to about 1860 benefited materially. Most of them lost their money, health or even life itself. It was however left to them to have pioneered an enterprise in coffee which was the mainstay of the country for at least a short period.
The plantation industry, in a way, helped to activate the entire economy of the country. It helped to build new townships and villages, which in turn brought in a train of peddlers, tavern keepers and a host of others who were eager to profit from the economic boon that was about to take place. With it came the need for consumer goods. The import trade, transport and sale of which found new avenues of employment for the merchant, the retailer, the transporter, and their servants. This in turn brought into existence a new category of shop-keepers, domestics and others, who but for the success of the coffee planting, would not have found such profitable employment.
The material changes that took place in the planting districts of Ceylon during the coffee days have been remarkable. “What appeared as barren waste or thick jungles were dotted with villages and towns. Gampola Badulla, and Matale, which consisted only of a rest-house and a few huts had sprung up like magic,” so says Ferguson. Nawalapitiya, which had no existence at all in 1837, had turned into a popular town, while Teldeniya, Madulkelle, Deltota, Haldamulla, Lunugala, Passara, Welimada, Balangoda, Ratotta, Rakwana, Yatiyantota etc. had begun to feel the favourable impact of the fast growing coffee enterprise.
“All the talk of planters and barbecues, coolie immigration, the penny post, Bishops, and agents of Governments, the Legislative Council and banks, news papers and mail-coaches would have confused any local who would have lived a fifty years before,” was the remark of a senior coffee planter. Such like was the spate of development that took place during this period. This prompted Sir Edward Creasy in his book History of England to say, “I have seen more human misery in a single winter’s day in London than I have seen during my nine year’s stay in Ceylon.”
At the time of the coffee crash, if one were to have looked at some tracks of land which had been consigned to weeds and waste, imprints which, for long years had poured forth rich harvests for their owners only tell a sad tale. The question that disorient the whole picture is, what would have been the condition of these lands if their owners had been settled on them, and their families, homesteads and accumulated profits all remained in the country to enrich the land of their adoption.
Perhaps, these lands laid to waste, would have been flourishing farms where the natural fertility would have been increased by scientific treatment. There was also the possibility that these plantations would have been thriving with many other tropical products when coffee failed.
Unfortunately, none of these come to pass as all the riches accrued from coffee had been heaped elsewhere out of the country. If on the other hand, the British stayed in the country to salvage the coffee industry and to re-invest their accumulated wealth on new products, perhaps the local entrepreneurs would have had to wait much longer to get involved in the plantation industry. When the coffee industry established by the British failed, there were the adventurous locals with the required capital to fill in the void. Unlike the British, the indigenous capitalists were prepared to venture into other fields, with the result, there was wide diversity in their investments.
The coffee culture in the country did not enjoy an even history, and it had always dependent on financial and market environment abroad. The early stages of the industry were devoted to critical study. Rapid and unrestricted expansion followed during the period 1839 to 1846. This rapid expansion was checked during the depression of the 1847, which lasted until 1850. Stable growth followed thereafter and it lasted until 1880. Virtual annihilation came next and by 1890 the entire industry was wiped out caused by the coffee leaf fungus.
British grown coffee plantations were mainly centred round Dimbulla, Dickoya, Madulsima, Hewa Eliya, Matale East, Sabaragamuwa, Haputale and Uda-Pussellawa. The largest number of abandoned plantations was found in the low-lying Kurunegala district. Every acre in the Morawaka Korale too had been cast aside. These areas proved a haven for local investors.
The sudden collapse of the coffee industry brought economic disaster to many foreign proprietary interests. To the many affected, the options were few. Some turned to the cultivation of cash crops, but tea proved a sturdier crop. The pruned tea bush soon took the mantle of the coffee tree, to become the bedrock of the country’s economy at a later date.
The crash of the coffee industry did not seriously affect the low country Sinhalese. Their risks were well spread out. Only a few capitalists actively participated in coffee cultivation on a large scale, and most others had their interests centred round other affiliated industries that sprang up as a result of the coffee industry.
Collapse of coffee only intensified the determination of the indigenous estate owners to improve their plantations further. Land sales increased three-fold in the north western province. Coconut trees were interplanted with a variety of other plants such as jack, mango, and cadju, which always found ready markets locally. The main region of expansion after the depression of the late 1840’s was on the south western coastal areas and in the “coconut triangle” marked roughly by Colombo, Ambepussa, Kurunegala, and Chilaw. They were all undertaken by the Ceylonese.
Although coconut cultivation was encouraged both by the Portuguese and the Dutch, and dates back to the fifteenth and sixteenth centuries, it was not until the latter part of the eighteen century that the expansion of the coconut industry really got under way. This is believed to be directly associated with the distilling of arrack. These observations are supported by the fact that the coastal strip from Puttalam through Colombo to Galle and beyond is a continuous coconut grove where much of the distilling of arrack takes place.
Coconut cultivation became the favourite mode of investment for the native mercantile, trading, and industrial classes of the Sinhalese and Tamils, who had enhanced their wealth through their involvement in the coffee and allied industries.
The success of the coconut industry and its rapid expansion, according to Michael Roberts was due to internal demographic migration. A study undertaken on this subject reveal that the population expansion that occurred in the Chilaw district in the 1880’s was due to the introduction of capital for plantation development from Colombo and Negombo districts. Coconut planters were in great demand, and their free movement aided the expansion of the industry.
Accurate statistical date with regards to the coconut industry is difficult to come by, but according to known facts, the expansion of the industry that got under way in the 1850’s gathered momentum thereafter. Originally it was mainly centred round small holdings, but during the early part of the twentieth century, capitalists purchased groups of such holdings already planted. They introduced scientific methods of cultivation, and improved the general conditions of the plantations. The emergence of large plantations originated at this point.
A survey undertaken in the early twentieth century revealed the following facts.
North Western Province
North Central Province
The coconut industry has assisted the low country Ceylonese to accumulate wealth that was used to acquire a position in the tea industry, and an equally strong status in the trading activities of the country.
There were still a host of other local entrepreneurs who had acquired sufficient wealth from the coconut industry itself, the arrack trade, the service industries, and mostly from money lenders such as the Chettiars who pioneered its cultivation from grass root levels. This called for extensive reserves of capital, taking into consideration the various operations that had to be undertaken before the coconut palm was brought into bearing.
The uses of the coconut palm are many, and this palm constituted a very important garden and plantation industry in the country The kernel of the nut is used in many forms. The oil expressed from the kernel of the nut is used in Europe as a lubricant. It is also an important component in the soap and candle making industry, and until recent times, coconut oil was used for lighting purposes.
Apart from its basic uses, there was money to be collected at every turn. In addition to the millions of foreign exchange amassed from the sale of coconut oil, the local plantation owners excelled in the art of processing the by-products of the coconut palm further. Several small-scale industries were set up for this purpose along the coconut belt. Coconut fibre, arrack distilled from the coconut flower, yarn turned out from the husk, and fresh nuts, found ready markets in India. Desiccated coconut obtained from the kernel of the coconut was one of the main ingredients required in the confectionery trade, and it was mostly shipped to Britain. The residue obtained after milling copra for oil, was a popular cattle feed in the island.
It has been commonly remarked that the uses of the coconut palm are as numerous as the days of the year. A ship that had arrived at Galle from the Maldive Islands during the early stages of the nineteenth century. had it entirely built, rigged, provisioned, and laden with all the products of the coconut palm.
In 1893 the average value of the products of the coconut palm exported may be taken as follows, oil Pounds sterling 400,000; coir Pounds sterling 60,000; copra (the dried kernel sent to India as native food, and later shipped to France for extraction of oil) Pound sterling 100,000: punac (the refuse of the oil, or oil-cake used for animal food) Pounds sterling 10,000; fresh nuts Pounds sterling 10,000; miscellaneous products Pounds sterling 5,000; making a total of Pounds sterling 600,000, not taking into consideration the value of the products locally consumed.
The use of the coconut extends further. The timber is priced for house building purposes. Being exceptionally hard, it is used for rafters, Its leaf is used for tatting roofs of houses. The palmyra plant which is specially suited to the drier regions in the northern and the eastern regions also acted as a money spinner for the low country Ceylonese particularly the Tamils.
Eight hundred different purposes are ascribed to the palmyra tree. It is supposed to live for a lakh of years after planting and lasts for a lakh of years when felled. The wood is mostly used for building purposes. The trunk timber is used for building rafters. Other important uses of this palm are the manufacture of jaggery sugar and the distilling of toddy from the secretion of the palmyra flower. A healthy palm is capable of yielding up to hundred pints of sap within twenty four hours. Fibre extracted from the leaf-stalks is used as rope for tying wild elephants. Besides, the coconut tree was easily the most important for the commodity market. It had a variety of uses. In addition to serving its basic needs as coconuts, there was coconut oil, toddy, arrack, coir, rope mats, cadjan and other products to be obtained.
The expansion of the coconut industry on the other hand virtually forced the British to extend the road and railway communication in these areas. The freight that could have been collected from coconut products guaranteed the maintenance of these lines of communication. The railway line to Matara was undertaken in 1877 and completed in 1895. The construction of the rail track to Jaffna through Negombo and Kurunegala was mostly influenced by the coconut and graphite interests.
Britishers too ventured out to plant coconut, but they concentrated their efforts on the northern and the eastern sectors, which did not appeal to the Ceylonese.
A statistical survey conducted during the 1880’s suggest that about 70% of the of the coconut plantations in non-European hands were owned by Sinhalese, and about 20% by the Ceylon Tamils. The extent of coconut that was reckoned at around 500,000 acres at the turn of the century, increased to over a million by the first decade of the 20th century.
Land holdings were extensive in the coconut industry, It was estimated that during the period 1880 and 1881, only about seventy six individuals held extents of coconut over hundred acres. In 1917 these numbers had increased to over 410. Among them, eighty persons held over five hundred acres and quite a number had over thousand acres.
This goes to prove that the coconut industry has played an important role in the formation of an upper echelon among the Ceylonese during the nineteenth and the twentieth centuries. The advantage the low country Ceylonese enjoyed as a result of their involvement in the coconut industry, has helped them to steal a march over Kandyan Sinhalese in their drive for elite status.
The cultivation of areca-nut had been in existence from Portuguese times, and had remained a medium of exchange between Ceylon and South India. Large quantities of the nut had been exported to South India in exchange for grain. The Dutch encouraged the export of this commodity further, and during the peak period of the early 1820’s exports had risen to about 160,000 cwts.
The areca-nut tree was highly versatile, and grew well in higher elevations. Most areca-nut palms were seen growing wild in most coconut plantations. It was often used to serve as a live fence along plantation boundaries. Most coffee plantations in and around Kandy planted these palms along the perimeter of their estates. Cultivation of areca-nut trees was undertaken exclusively by the Ceylonese. Home consumption was very high, but all the excess was exported which gave the native cultivators an additional income of around Pounds sterling 70,000 to 100,000 annually.
Production of coconut supported a number of rural small industries. In this regard, the Western Province had been a hive of activity at the turn of the century. According to a survey conducted in 1901 the following industries were identified, mostly under the control of the locals. There had been 10 tea coffee and cardamom mills, 8 coconut oil mills, 784 chekkoos (Small oil mills), 6 factories for the preparation of coconut kernels, and 168 arrack distilleries.
In addition, there had been 11 ice and soda-water mills, 1 gas works, 13 saw mills, 64 tea factories, 20 iron foundries, 16 coir mills, and one spinning and weaving mill.
In the service trade, there had been 869 silver-smith’s shops, 561 black-smith’s shops 1,184 carpenter’s shops, 115 carriage factories, 262 tile and brick manufacturing kilns, 74 mills to manufacture cane baskets and mats, 1 steam laundry, 632 potteries, 140 lime kilns, 7 fibre mills, 3 electric installing engines, 4 bulk petroleum oil tanks, 4 tanneries and 34 printing presses.
Besides the export of coconut oil, various essential oils extracted from citronella and lemon grass, from cinnamon and cinnamon leaf, were exported during this time which brought in valuable foreign exchange. This industry was mainly concentrated in the southern province.
In the mining field, Ceylonese held the monopoly for the export of plumbago or graphite. This was the only mineral of commercial importance exported from the country. Although the mining operations were conducted in a very primitive fashion, it was regarded the finest in the world.
Camera Jayawardena in her book “Nobodies to somebodies” has identified the graphite worker as a regular clientele of the tavern-keepers. The working conditions in the mines had been so horrible when it was developed during the 19th century, that liquor became one of the necessities of a miner’s life.
The commercial extraction and trading in plumbago began in a small way in the mid 1840’s. By 1860’s it had gathered momentum. The trade in this mineral was however subjected to violent fluctuations, but there was good money made during the better years of 1899-1901, 1906, 1914-1917. In 1899, about 635,224 cwts. of plumbago had been exported valued at Rs. 22,255,400. Extraction and most trading operations were carried out by Sinhalese. The most illustrious families that were engaged in this business were, the Wannacuwattewaduge Fernandos’ of Keralawatte Moratuwa, the Vidanalage de Mels’ also of Moratuwa, E. D. S. Gunasekera and his heirs, A; E; de Silva, Nanayakkarage Don Poulis Silva, the Hettiyakandage Fernandos’, D. C. G. Attygalle, Don Spater Senanayake and his sons, Merennege Arnolis Fernando and his heirs, D. D. Pedris of Galle, Henry Joseph Peiris, Richard Adrian Mirando, Amadoris and M. S. Fernando-Sri Chandrasekera.
Apart from some of the pioneers who grew up with the plumbago industry, there were others who entered the mining enterprise after having acquired wealth through arrack and other trading activities. H. Bastion Fernando was one of them who had his renting interests in the western province. He established the firm of H. B. and company, that owned Kurunduwatte near Dodanduwa, considered one of the most modern mines of the time employing over 200 workers He also owned Kadirandola group of mines in the Kalutara Galle and Mahagama. He had his stores in Colombo for sorting the graphite before shipment.
The production of plumbago was dominated throughout by the Sinhalese and was the second prominent sphere of Ceylonese economic enterprise. Labour was cheap, and ready markets were found in the UK and America. Very little capital was spent on mechanisation, and when the need arose for installing such machinery, it was more convenient to dig new mines as there was an abundance of plumbago in the Kurunegala and the Kegalle districts.
Part played by the Low Country Products Association
The Planters Association was established in 1839 initially to look after the interests of the British planting community. The Low country Products Association was a parallel organisation set up to foster the interests of the low country Ceylonese planters and businessmen.
During British rule, it used to be said that the policy of the government in regards to economic, commercial, and even fiscal questions was dictated by the Planter’s Association, the Ceylon Chamber of commerce, and the voice of Queen’s House, and Downing Street was merely the echo of the voices of these associations. Whatever justification there might have been for this belief, the fact remains that they were the only organised bodies in existence in the country at that time, whom the Government could have consulted.
During the early stages of the twentieth century, Ceylonese planters and businessmen alike felt the need for the formation of an association through which they could place before the colonial government their views on agriculture and commercial activities, which were often in conflict with those held by the British.
Consequently, under the awe inspiring leadership of Sir James Peiris, who was the pioneer in political reforms and the social service movement in Ceylon, there was established in 1908 an Association styled the “Low Country Products Association of Ceylon.”
Past records of the Association hold some very interesting landmarks in their slow progress to fame and fortune. The inaugural meeting had been attended by some of the most eminent Ceylonese of the day. They were called upon to preside over the destinies of the association. Among them was the first Prime Minister of Ceylon, three distinguished judges of the Supreme Court, The vice-president of the Legislative Council, a former speaker of the State Council, a former President of the Senate, twelve members of the Legislature, and the leading Ceylonese agriculturists.
Under the able guidance of these leaders, the foundation of the LCPA was laid. This newly formed Association worked closely with the Planters Association founded way back in 1854, which was mainly established to safeguard the interests of the European planting community.
This newly formed association was regarded by the Colonial Government of the pre-independent era as representing the legitimate views of the Ceylonese planters and the businessmen. Their reputation with the government had grown gradually, and by 1920 they were given the right in to elect a member to the Legislative Council. This position was held by Sir Henry de Mel until 1924. With the formation of the reformed Legislative Council in 1924, this seat was abolished as the Ceylon National Council did not want special interests represented in the Legislature. Despite the abolition of the seat, the views of the association on matters pertaining to agriculture and commerce were always entertained by the government.
Creation of the Tea Research Institute was no doubt a joint effort of the Planters Association and the LCPA. They went further. By extending their whole-hearted support, to the Planters Association, they were able to establish the Tea Propaganda Board and the Rubber Research Institute on which the representatives of the association had served for many years as members and at times as their chairman.
The setting up of the Bank of Ceylon as the first state-aided financial institution to offer credit facilities to the Ceylonese engaged in agriculture and business, was the direct result of an agitation initiated by the LCPA. It was the only planting body that moved for its early establishment. Representations made by people in the calibre of Mr. R Sri Pathmanathan, the then Chairman of the Association, Sir Henry de Mel, Sir Wilfred de Soysa, Mr. J. Tyagaraja and Dr. H. M. Peiris before the Pochkanawala Commission in July 1934 were so powerful that the government could not possibly ignored their request, and the Bank of Ceylon was established.
The LCPA as a body, supported the proposal put forward by the government to introduce Income Tax, at a time when it was a subject of public disagreement. This proposition was supported by such stalwarts as Sir Marcus Fernando, Sir James Peiris Mr. C. H. Z. Fernando and Mr. Tyagaraja.
The LCPA played a leading role in the establishment of the Coconut Research Institute which since, has played a vital part in promoting the cultivation of coconut on a scientific basis. Further agitation followed for the establishment of a central sales exchange for coconut produce, and in 1935 the Ceylon Coconut Board was established.
With the expansion of coconut cultivation along the coastal areas, Chilaw and Puttalam districts became hubs of activity. Sir Henry de Mal and Sir Marcus Fernando, on behalf of the LCPA made representations to the government to extend the railway line from Negombo to Puttalam. The government acceded to the request, and the line to Chilaw was opened on 1st May 1916 by H. E. Sir John Anderson, and subsequently taken to Puttalam.
The part played by the LCPA in obtaining self government cannot be underestimated. The association played the part of a peace maker initially, when conflicts of interests between foreign investors and planters supported by the government and their local counterparts surfaced. They performed this part in a judicious manner and were able to get other associations of consequence to focus their attention on the all important issue at hand, which was obtaining self government to Ceylon.
It was George Wall, the third Chairman of the Planters Association, considered one of the greatest Englishmen to arrive in Ceylon, who stood shoulder to shoulder with the Ceylonese members of the Legislative Council in a fight to increase the powers of the Legislature, and vigorously sponsored the cause of self-government for Ceylon.
Once Independence was gained, the LCPA was able to generate a great deal of cooperation and good-will between the various organisations such as the Planters Association, and the Chamber of Commerce. Mutual trust between the various organisations had developed to such an extent that Senator Thomas Amarasuriya, a past Chairman of the association was elected the Chairman of the Planters association.
The Ceylon Agricultural Association
It was the belief among the pioneer local agriculturists that whatever the Britishers did, the Ceylonese could do better. It was this convection that propelled the local planting interests to give stiff competition at every turn to the Britishers in all their agricultural pursuits
By the 1880’s Ceylonese were very much onto agriculture. By this time a depression had set in, and unlike in the case of the British, the locals found it difficult to weather the storm. It was felt that unless there was unconditional support from all the sectors involved in the cultivation and sale of Ceylon products, they would be in a frightful situation.
The success of the agricultural enterprise initiated by the British in the country no doubt was mainly due to their united efforts in dealing with common problems. They had set up the necessary machinery to deal with all the uncertainties that rose due to the accelerated forms of development that was taking place in the country.
The Britishers formed the Planters Association when agricultural was still in its infancy. The Tea Research Institution was started to provide then with scientific knowledge on tea. The news papers in the country were under their control to publicise their scientific findings for the benefit of all concerned. They had their influential friends in England to organise the marketing of their products and above all, they were in possession of the much needed wealth to back up their opinions.
The government of the day, they felt, paid very little attention to the requirements of the Ceylonese entrepreneurs, with the result, they were forced to ward away the difficult times through their own efforts.
It was once again the grand old philanthropist C. H. de Soysa along with a group of land owners who pioneered the formation of this association to safeguard the interests of the local producers.
A meeting of interested parties was held at the residence of C. H. de Soysa on 24th June 1881. The meeting was well attended, and represented a cross-section of the wealthy Sinhalese, Tamil, and Burgher communities. The objects were clearly defined. It was to promote the interests of those involved in the cultivation and sale of Ceylon Products.
Every person who was a owner of, either in his own right or as lessee, agent, superintendent or tenant, property in cultivation of the extent of 20 acres was entitled to be elected a member of the association. Any member who possessed more than 20 acres was entitled to more than one vote, and this was regulated according to the cultivated acreage of each member.
The country at that time was going through a severe depression, and it was their belief that unless they joined forces, their future would be in jeopardy. They believed that there was strength in numbers, and the time was ripe for the formation of an association to act as a prop against impending dangers of the depression. It was going to be of great use to the country and to the natives specially.
It was never their intention to work in opposition to the already established Planters Association, but rather to work conjointly with them in so good a cause as the agricultural interests of this country. The Ceylonese had the wealth, intelligence, and energy in their midst, and they were wondering what had held them back all those years without uniting to form a common front.
By then, the cultivation of a major proportion of the crops such as coconut, cinnamon, coffee and the new products that meant so much to the country were under native control. But all the way they were compelled to compete with the trained intelligence and ability of the Europeans, and follow a system of merchandising the British had established in the country. Unless the Ceylonese too formed themselves into an association to exert their rights, they would soon be pushed against the wall.
According to the Ferguson’s Directory, 300,000 acres were under coconut cultivation and an equal amount in coffee during this period. Bulk of the coconut lands were in the hands of the natives. Further, about one fifth of all the coffee produced in the country was of native origin. In addition, all cinnamon lands constituting about 30,000 acres were exclusively owned by the locals. Export value of all native products worked to million of sterling pounds annually.
Despite their participation in the economic activities of the country, they were only taken for granted. The time, they felt had dawned for them to exercise a more commanding position in the shaping of the country. Up to that time, their communications with the government had been weak, but they felt that the voice of an association comprising of people belonging to the upper echelon of society, will not go unheeded.
As in the case of the Tea Research Institution, it was their intention to defuse useful scientific information to its members regarding the nature of the soils, the influence of the climate upon the produce raised on them, the easiest and most paying and practical methods of cultivation, and the types of implements, machinery and fertilisers to be used. It was meant to be a common forum where all problems connected with their operations could be discussed.
They watched the gradual build up of a well shared dependence between the Planters Association and the Government, and they too were confident that a similar understanding would result if they were able to address their grievances as a body. Their powers and privileges had to built up gradually, and perhaps have one of their members represented in the Legislative Council. As was the case with the PA.
They were determined to act jointly and win the confidence of the people at the highest echelons of power in the country, to ensure that the agricultural enterprise of the country was well safeguarded.
They were determined to set up their own trading centres in the major cities in Europe to market native products.
Since the inauguration of the association in 1881, they had been carefully monitoring the export of native produce. They were determined to explore new markets where local products would obtain the best possible price. As a body they were confident that they could communicate with the government on matters of transport which had yet to penetrate the low country areas, where local crops were widely grown. If the local entrepreneurs were to work alongside with the European with the same gusto, they needed some sort of assistance from the government. Taxation was a major issue then, and this was discussed in an atmosphere of mutual understanding with the authorities concerned.
The export figures of cinnamon for the following year revealed that there had been an excessive quantity of chips exported to London as against quills, with the result, prices had suffered a severe setback. One of their major accomplishment that followed the formation of the association was to correct this imbalance. Prompt action was taken, and all members were advised to stop the scraping of chips on their estates. Export of chips fell drastically the following year, and prices recovered. This prompt action saved the day for the cinnamon cultivators.
The natives had now to compete with the trained intelligence and the ability of the Europeans. Through force of representation and understanding, they forged ahead, and this association that was inaugurated on 24th June 1881 soon became the beacon for the agricultural advancement of the locals.
This no doubt was a fresh approach to marketing their products overseas. They were to establish branches of the association in London, Paris, and Berlin, who would undertake the sale of local products without involving the services of the middle-man, and thereby enrich the coffers of the organisation. They also saw the possibilities of obtaining their requirements of foreign goods direct from the sources rather than having them shipped out from London. They saw vast opportunities opening up for them, and they were determined to explore all avenues to enhance the earnings both from the sale of local products, and also obtain the best possible price from imported goods.
It was an Association created with the assistance of all different local communities in the island, for the sole purpose of protecting their rights in the light of stiff competition from the European who were controlling the economic activities of the country. Mr. C. H. De Soysa who promoted the formation of this association was assisted by people of eminence. Names of people in the calibre of Mr. C. Brito, Mr. Barton Grindrod of the firm of Barton Grindrod Jenkins and Company, Hon. P. Rama Nathan, Mr. Jacob De El, Mr. John De Silva, Mr. H. Van Cuylenburg, Mr. J Martin Mr. S. R. De Fonseka, Mr. J. F. Drieberg and Mr. H. L. Daniel, to mention a few very often transpired at all discussions of the association. Further there was Mr. D. M. Areseculleratne Mr. C. W. Ferdinands and Mr. Advocate Dharmaratne, considered legal luminaries of the time to offer all assistance on legal matters.
This was indeed one of the first attempts made by the local agriculturists to gain advantage over the depression that was gripping the country at that time. It was felt that the middle-man in Mincing Lane was wilfully lowering the value of local products to the detriment of local producers. The formation of this association forced the European interests controlling the commercial activities of the country to organise the marketing of local produce in a reasonable manner so as not to anger of the local producers.
From agriculture to trading operations (Elite formation)
Success in agriculture provided the Ceylonese, with special opportunities of upward social mobility, and opened up vast areas for capital investment in new fields and enterprises. The locals were soon on top of an economic boom , and many experienced unexpected windfalls. A verity of trading activities emerged, some were new and others were not. The start of some of the import and export houses that exist today, could be traced to this period.
They were all started to cater to the vast expanding economy of the country, that was taking place during the period. Certain functions, such as Government contracts, maintaining toll records, cash crop production on small holder plantations, urban property investments, the gem trade and the graphite trade, and above all, the arrack trade, considered the biggest money spinner, were all reserved for the locals.
With all these new opportunities made available to local inhabitants, there was a tendency to embrace and emulate the British way of life. The knowledge of the English Language, paved the way for procuring prestigious jobs. The pioneer entrepreneurs utilised their wealth to educate their children, either in the best of public schools in the island, or abroad, mainly to consolidate their elite status.
Majority of the schools that provided a westernised form of education were under the management of Christian missions. The fact that many Buddhists and Hindu youth embraced the Catholic faith during the early stages only suggest that they saw certain material advantages in being a Christian. This system of education sponsored by the British did not exist island-wide. It was mostly concentrated on the western sector of the island, with the result certain locations were better served and others were not.
University education did not get under way until 1912, whereas Universities were opened up in India way back in 1857. Prior to this date, the more talented and those with the right frame of mind get themselves enrolled as external students in London or Indian universities. Professional technological institutions were established in the island very much later, with the result, it becomes clear that education had played only a minor role in the process of elite formation in the country.
These prestigious positions acquired through education acted as stepping stones to titles of fame and respectability. It is also stated that these opportunities for upward mobility, were mostly taken up by persons from amongst the Burghers, Ceylon Tamils, the Moors, and above all the low country Sinhalese. The participation of the Kandyans in these fields, was negligible until well into the 20th century.
The Agency House Commission Report, in discussing the role of the directors of Agency Houses, found it necessary to note that most of them were drawn from the Ceylonese elite that derived their income and its social position from a link at some point with the plantation industry. As a social formation, this elite considered itself the sole and true descendants not only to that part of the agricultural and commercial interests in the country given up by the British in the years after the world war 11, but also the heirs to British manners, moral principles, and customs.
The Ceylonese interests within the Ceylon Chamber of Commerce, in 1939 proudly accepted the collective reference made to them as the gosling of the British goose that laid the golden eggs. The commission was very critical of some of those who at that stage, sometimes unknown to themselves, were defending foreign interests in the country. Things have changed considerably since then, and the future of the country is all that matters, without maintaining the power and prestige of vested interest.
The Southerner excelled in Trading activities
The earliest entrepreneurs to penetrate the hill country were the low country traders, renters and artisans. The more enterprising sorts with the correct disposition established their trading empires in the Kandy district and in other parts of the hill country. A few others however dominated the commercial activities in the Morawaka Korale, and other commercial cities in the southern sector of the island.
The Southern province of the country had always been a hive of activities, and had always been a strong trading post in the island. There had been a constant movement of men and material from these areas, and business opportunities had always flourished. The opening up of new land for various agricultural undertakings, and finally for tea, gave a further encouragement for commercial activity to those in these areas.
During the frontier days, many moved to Trincomalee and Batticaloa to establish trading posts. There was also a small group of enterprising traders mostly from Moragolla, Galle, who ventured out across the seas looking for greener pastures. With the business opportunities fast developing, in other areas, the world was at their feet.
The more popular outposts for the local traders turned out to be in Singapore, Hong Kong, and Penang. Others moved across to Bombay and Aden. They took their risks in these far off places. Some went on to offer stiff competition to the well established Moors in the gem and jewellery trade in the countries of their adoption.
In this regard, the most famous families from the southern district to achieve a great measure of success in foreign countries were H. H. M. de Silva and Company and B. P. de Silva and Company. Even today, the last mentioned is a house-hold name in Singapore, and they have expanded their activities from just being gem merchants then to marketing tea and other local produce.
With further expansion of the countries economy during the early twentieth century, all available opportunities were virtually captured by the low country Sinhalese. If any one were to examine the structure of the flourishing commercial ventures in the country, it is likely that one would locate a low country person at the helm. This was mainly due to the opportunities they enjoyed being the main inhabitant of the maritime provinces.
Before the arrival of European powers, Ceylon occupied an important place in the Inter-Asian trade in commodity exchange. The island had in abundance a variety of commodities such as arecanuts, cinnamon, elephants, gems, timber, coconut, coconut oil, copra, coconut fibre, and tobacco that attracted the attention of foreign buyers. Being an island, the sea was considered the best medium for bulk transport. The movement of goods was further aided by the presence of a network of harbours round the island. In the Northern sector there were well fortified harbours in Mannar, Kalpitiya, and Jaffna. On the Eastern side, Kottiyar, and Batticaloa provided a safe anchorage.
The South West coast having being the centre of trading activities from ancient times is dotted with anchorage all the way. Starting from Puttalam along the coast, there is Chilaw, Kammala, Negombo, Mutwal, Colombo, Panadura, Kalutara, Magonna, Beruwela, Aluthgama, Welitara, Gintota, Galle, Weligama and Matara. All these ports provided facilities for the local produce to be exchanged for rice, spices, dry fish, cloth, opium and other requirements of the inhabitants.
With these opportunities unfolding for the low country Ceylonese, the coastal trade and boat building industries developed. Originally, it was the small sailing craft referred to as the “dhonies” capable of carrying 50 tons of cargo that was used for coastal transport. Of all the sailing ships registered in Colombo in 1830, two were described as ships, ten as brigs and small-rigged vessels and 190 as dhonies. They were mostly used to carry private merchandise, but there had been occasions where these crafts had been used to carry government cargo and often helped in the transport of soldiers and administrators to various points along the sea coast.
Transport of salt for the government from Jaffna and Hambantota to Colombo and other ports had been the most lucrative business. The more sea-worthy boats were used to transport local products such as arrack, arecanuts, tobacco, coconuts, coir, and coconut oil to South India, and on their return trip, they would bring back home such items as rice and cloth.
Early ship owners were mostly Tamils and Muslims from the North and the Eastern provinces, but a controversy did exist as to the extent to which the Sinhalese had got involved in the shipping trade. This disagreement was subsequently cleared by researchers who provided sufficient proof to maintain the fact that there had been many Sinhalese such as Hendrick Pieris and Telge David Peiris who had held a prominent stake in the ship-building industry and had carried out a favourable trade, and outdid all others in the buffalo trade with South India.
Coastal and foreign trade was not at all a profitable venture for most Ceylonese, as they were burdened with many taxes, but despite these problems, it is evident that the money accumulated from this trade had been used for prudent investment in land later on.
The produce obtained from other countries at various ports had to be distributed within the country, and export produce collected from the interior transported to the ports of exit. The Kandy area served as a ready market for consumer article such as cloth, dried fish, salt, opium, arrack, coconuts and coconut oil.
These goods were in turn exchanged for paddy, and other varieties of grain, arecanuts, cardamoms and tobacco. Trade in spices became a lucrative business during the later stages. Arrack entered the market in increasing quantities both for local consumption and as a trading commodity to India. These activities in turn opened up new opportunities in internal trade and transport for the low country Ceylonese.
Conveyance of goods by carts driven by cattle was the only means of transport available in the country at that time. With the coffee cultivation, those involved in the transport business were able to broad-base their economic benefits. One of the early pioneers in this field was Warusahennedige Jeronis Soysa from Moratuwa who held the monopoly for road transport from Colombo to Kandy during the zenith of the coffee era. It was a two way operation. The produce from the hill country had to be transported to ports of exit, and all the provisions essential for the expanding coffee plantations and the requirements of the troops stationed in Kandy had to be supplied. These tasks were performed by the low country Sinhalese.
A striking aspect of economic development in the country during the 19th century was the development of a series of towns along the western coast line. The countries staple rice was not suitable for cultivation in these areas, with the result they turned to other occupations. They specialised in occupations such as distilling arrack, carpentry, boat-building, and retail trade with the interior of the country. They were prepared to venture out to unknown inner parts of the country looking for opportunities to promote trade.
Arrack was a commodity well sought after by the Kandyan farm workers, with the result, the low country land owners’ generated large profits from the distillation of arrack. It was to satisfy the retentive demand of this intoxicant that the coastal belt from Puttalam to Galle and beyond, has remained a coconut grove where much of the toddy and arrack distilling takes place. At a later date, trading in arrack with India became a flourishing business. Early research on this subject reveals that arrack had been distilled along the sea coast from Dutch times. There had been steady sales in the coastal areas, with a large quantity been exported. In addition, a thriving illicit trade existed in the Kandyan Kingdom.
The wealth of the coastal traders increased tremendously during this period, and all that excess wealth was channelled in to diverse types of investments. Most of the investments were directed towards securing urban and plantation lands, and graphite mining. They formed a closely knitted community, rarely employing people from other casts
The biggest profiteers were not the distillers, but those who marketed them. There had been instances where the distillers had been forced to seek government assistance to continue in business. The emergence of some of the original distillers could be traced to Dutch rule, but most of those who came into existence during the 1830’s were from Kalutara Panadura and Moratuwa. Some of the distillers had the patronage of the government, and in the year 1823, it was estimated that around 120,000 gallons had been delivered to the Collector of Colombo for distribution in the district. The most successful of them all was Pedro de Silva who was awarded a contract to supply the government 81,000 gallons for a period of eight months from a total requirement of 144,000 gallons. Arrack distillers soon became wholesalers and retailers, when they found it more profitable to be so.
There was money to be made by the distillers, wholesalers and retailers, but all these functions were performed under the control of the colonial powers. Licensing of taverns originated with the Dutch, and in 1660, a few tavern keepers were permitted to run taverns along the coastal belt stretching from Jaffna to Galle on the payment of a fee of six dollars a month. The right to run taverns in Colombo was entrusted to four Dutch families. After the British occupation, the right to retail arrack was opened to the local bidders.
Distilling arrack was the natural adaptation of some of the prominent merchant families in Kalutara and Panadura. Kumari Jayawardena who had researched on this subject has reviewed the position thoroughly, and has compiled a comprehensively list of distillers and renters in the year round 1830. Vidanalage Abraham de Mel, Pattihennedige Jeremias Rodrigo and Ponnehennedige Lawrenty Dias, all from Panadura, and Lindamullage Francisco de Silva from Kalutara were leading distillers and renters of the time. These capitalist families used the arrack trade to strengthen their economic status in the country.
The arrack trade from the very inception had been rigidly controlled by the government, and during the Dutch period, tavern keepers had been mainly Burghers and Colombo Chetties. This pattern of ownership however changed with British rule. Western and Central provinces which were thickly populated areas and economically advanced were found to be the ideal locations for the sale of arrack. Franchise rights had to be obtained to retail arrack, and these were secured in open competition.
The De Soysa Saga
Warusahennedige Soysa's from Moratuwa were the first on the scene, and was considered the richest and the most powerful of the Sinhalese capitalists. Jeronis the founder of the Soysa family enjoyed a very charming personality and the European officials were well disposed towards him. He entered the renting business in 1829, and by 1844 he had dominated the Central Province rents, and soon took control of the Western Province. The Central Province rents for the year 1836 cost him Pounds Sterling 6,800.
During his pioneering days, he was assisted by his brother Susew Soysa, who himself was a courageous and enterprising person. In his very early days he won a contract to supply food rations to the British troops stationed in Nuwara Eliya. On his regular visits to the interior, he found new avenues opening up for further gainful employment. With his transport network he was able to collect coffee seeds from the small producers in the interior and have them transported to Kandy processed in their factories and marketed. This no doubt was a difficult task, but he made good money out of this business.
When Jeronis Soysa faded out from the arrack business in the mid 1840’s Susew with a hand-full of his trusted relatives acquired the Central Province rents which he was able to hold for a considerable length of time. In 1846, he along with another person paid Pounds Sterling 19,700 for securing the Central Province rent. Three years later he paid Pounds Sterling 20,000 to retain the Colombo city arrack rent. These figures only reveal the state of the arrack business during that time.
Jeronis is acclaimed as the first young man from Moratuwa to penetrate the hill country in search of new business opportunities. Although trained as a native physician, he saw a world of opportunities opening up in the plantation sector, and although his beginnings were small, he expanded his activities from being a firewood contractor to becoming a large plantation owner.
Most of the profits accumulated from arrack renting were invested in the acquisition of land for coffee cultivation. His first investment made in procuring agricultural land cost him Pounds Sterling 411 in 1837. For many, this transaction appeared a sharp deal. The property involved was Diyatalkanda in extent 482 acres, which formed a part of the old Royal Garden of Hanguranketa. There was very much of sentimentality attached to this sale, and some felt that he had been requested to purchase this property by the village chiefs. They were determined to prevent it from been purchased by any European.
It was a sale by public auction, and although there was some adverse gossip attached to this sale, the fact remained that Jeronis Soysa in partnership with Mudaliyar Henry purchased this valuable piece of land for a trifling amount of just over one pound an acre. This initial purchase is reckoned to have been the turning point in his career. There was a complete social transformation in Jeronis Soysa. He gradually faded away from his arrack business and established himself as a native coffee plantation owner, thereby improving his social status from an arrack trader to a more prestigious role of a real estate owner.
Many acquisitions followed, and according to data collected by Patrick Peebles, he had spent over Pounds Sterling 1.200 during the period 1837 to 1842 in securing further extents of land. Unlike most European planters, Jeronis paid a great deal of attention to the welfare of his labourers, and it is reported that in one instance, he closed one of his own taverns situated close to his property to ensure abstinence from alcohol among his labour force.
He was a philanthropist in the true sense of the word. He was conscious of the needs of the locality where his properties were situated. He built out of his own resources, roads bridges, and many schools in the vicinity of his plantations, churches and Buddhist temples. He was so public-spirited in his dealings with society, that the British Government was forced to take notice of. In recognition of all these acts of benevolence, the British government honoured with the highest possible titular rank of a “Mudaliyar of the Governor’s Gate” in 1873.
After having reached the topmost in his career, Jeronis de Soysa withdrawn from active participation and settled down in the low country, leaving to this brother Susew the management of the hill country properties.
By the 1860’s they had transferred their activities to plantation capitalism, both in the highlands and in the lowlands. The low country holdings were mostly devoted to the cultivation of coconut and cinnamon. A random survey conducted in 1863 revealed that Jeronis de Soysa had acquired about 2,035 acres, mostly in coffee. Further, he started expanding his possessions at Hanguranketa to over 1,000 acres by acquiring his partner’s share in 1849, and his estimated revenue from this property alone exceeded Pounds Sterling 1000 per year.
His only son was Charles Henry de Soysa. In addition to obtaining his fathers wealth on his death in 1862, he inherited all the properties of Susew who died without an issue. Charles Henry de Soysa switched over from coconut to coffee and then to tea, and finally shipped his own tea direct to London. He was a true and an honest pioneer who with his six sons Jeromis William Charles, Alfred Joseph Richard, Edwin Lionel Fredrick, Thomas Henry Arthur, Walter and Lambert Wilfred Alexander established a plantation empire of superior eminence, which even the Britishers found difficult to match.
According to E. H. Peterson’s Almanac of 1870, de Soysa’s owned 26 properties totalling an extent of 8,189 acres of which 88% was cultivated, 2,936 acres in coffee, 2,378 in coconut, and 1,432 acres in cinnamon. The Ferguson’s Directory of 1880 - 81 records an increase in the family holdings to 25,176 acres, the extent in coffee reaching 6,368 acres with a corresponding increase in coconut. The percentage of uncultivated land however had risen from 17% to 31% at that date.
The seasoned planter he was, he saw the doom of coffee and the boom of tea and acted accordingly to reduce the extent of coffee and introduce tea as a new plantation crop. C. H. de Soysa never encouraged land to lie idle, but in this instance it was his conception regarding the future of tea that made him enlarge his holdings. With his new obsession for tea, he needed land to open up and this was freely available.
Michael Robert who researched the de Soysa enterprise states that that the family owned a total of 34,683 acres spread over 112 plantations in 1971. By that date, the acreage in tea had increased to 3,540. Area under coconut had doubled, from 1890 to 1917, reaching a total of 16,478 acres. These figures speak volumes of the plantation empire established by de Soysa.
The family owned the largest acreage in cinnamon amounting to about 3,000 acres, situated near Moratuwa, Salawa, and Kuruwita. The produce from coconut estates was converted into copra and desiccated coconut at their mills in Slave Island. The vast array of export produce included coconut oil, copra, desiccated coconut, fresh coconuts, coir fibre, mattress fibre, tea, cocoa, citronella oil, spices, betel leaves and plumbago.
They found their way to markets in several parts of the globe. To the bewilderment of the Britishers, and to the pride of the local de Soysas', they considered no item of agricultural or mineral produce or its manufacturing trade or industry inaccessible to the locals, though it was a time when the British were ruling the waves.
As much as they amassed wealth with their stupendous industry and razor-sharp wisdom, they revelled in turning over a substantial slice of it for the succour of the needy and for the rehabilitation of the society in which they lived.
The advent of De Soysa lying-in-home, Medical Museum, Bacteriological Institute in Colombo, The Holy Emmanuel’s Church and Prince and Princess of Wales Colleges in Moratuwa, a multitude of Churches, schools, and hospitals in Panadura, Marawila and Hanguranketta where his coffee kingdom held court, are a silent testimony to their unfailing hospitality and grand generosity.
Among the other pioneer planters of the day were the De Mels', and the Peiris', although they did not bear the same stamp as de Soysas.
Local Pioneers of the 20th Century
The period 1900 to 1910 has been referred to as the “native ere” for tea planting. Gampola, Galle, and Matara districts provided the nucleus for the Ceylonese to make their second attempt at cultivating tea. The wealthy Sinhalese families who owned vast extents of coffee were fast converting them into tea, following the way of the British, but the response received from the government towards this process however was only lukewarm. The state at that time was accused of being indifferent towards this move and without offering all the encouragement towards its progress, they only placed obstacles, which tended to discourage the locals. Despite this apathy on the part of the government, the Sinhalese kept on adding tea to their garden cultivation. Many respectable Sinhalese villages were purchasing tea seeds and tea plants on a regular basis at Rs 10- per thousand cash down.
The Government Agent Southern province in his administrative report for 1890 says “that the natives are going in extensively for tea planting,” and in his report for 1893 he goes on to say that the Sinhalese holdings are especially numerous in Wallaboda, and Talpe Pattus. Although they had fears of overproduction, they were nevertheless confident that local consumption would increase to absorb the excess.
The extent under tea in 1895 for small holder native gardens was around 2000 to 3000 acres. It may sound a wild guess, but the fact of it was that, vast extents were been cultivated with tea, mostly in small units.
The small holder sector suffered from an inherent weakness and remained a feeble link in the plantation sector. Unlike the wealthy types, they lacked back up capital. Their persistency in tea was mainly determined by tea prices. They became active when prices were good, but folded up equally fast when prises declined, with the result, they remained a helpless lot up to recent times.
The more well to-do Ceylonese, following in the footsteps of C. H. D. Soysa and family, scrambled in, and once again, the Southern Province became the centre of attraction for the second batch to make a start.
Unlike in the hill country, the growth of the tea industry in the South was a slow process. The hill country tea plantations were fashioned by the British, but tea cultivation in the low country was fully developed by the low country Ceylonese, according to a style of their own.
The Amarasuriya family from Galle, H. W - Thomas - Francis -- and Buddhadasa, after having acquired the necessary skills from their father regarded a notable agriculturist, took to the cultivation of tea in a serious manner. They are well known for having invested widely in tea, and for conducting their businesses with a considerable degree of success in the twentieth century.
The Citrus Group, with a total extent of 2504 acres had 2003 acres in tea. This was considered the largest plantation in the area. Their plantation empire included many other prestigious tea properties. To mention few, there was Kurulugalla Group in Morawaka Korale, in extent 866 acres with 259 acres under tea. Diyadawa Group in close proximity to the above plantation had 661 acres in tea from a total extent of 696 acres. Mahendra Group in the vicinity, was a 263 acre property of which 250 acres were planted in tea. Olympus Grout and the Monrovia Group in the Galle District were two other large properties the family owned, The former was a large property with a total extent of 908 acres, of which 666 acres were in tea. The latter had 197 acres cultivated in tea from a total extent of 649 acres. Up to Land Reform, the above properties remained within the family.
The uncertainties created as a result of World War 11, the subsequent granting of Independence to Ceylon in 1948, and the process of Ceylonisation that followed, brought about structural changes in the ownership of land holdings in the country. The British interests in the plantation sector saw the writing on the wall, and were fast to move out. Many plantations were put up for sale, and this gave further opportunities for the local land owning gentry to expand their holdings, and this time at higher.
Soon the Amarasuriya family was found moving their ownership base to new areas. Their first purchase at higher elevations was Penrhos Group in the Ambegamuwa district, with a total extent of 662 acres of which 400 acres were under tea.
In the Dickoya district, they purchased Castlereagh estate from the Castlereagh Tea Company of Ceylon Ltd. This was a good property with 461 acres in prime tea managed by Eastern Produce and Estates Company Ltd. Very attractive dividends had been paid on a regular basis.
The Fairfield estate in the Dimbula district came their way, soon after. It was a well-managed property of 314 acres of which 288 acres were cultivated in tea. They followed up purchasing Holmwood and Thornley estates in the Dimbulla district with a total of 367 acres under tea. All these properties were bought in open competition with other British interests.
The entry of the Amarasuriya family to the tea scene during the second stage of the Ceylonisation process was most appropriate, and contributed in no small measure towards promoting changes in land ownership, which the government in power at that time was trying to encourage. Their contributions towards the tea industry are well documented.
Thomas Amarasuriya, OBE was elected to the Senate under the SLFP government and subsequently chosen as the first Ceylonese Chairman of the Planters Association in 1956. He continued in that position the following year. He was elected as a life member of the of the association on 24th October 1970.
History has repeated itself, and after 38 years his son M. J. C. Amarasuriya, who had always been a keen observer of the plantation sector, is now occupying the “hot seat” in the PA as it's Chairman.
Mr. Francis Amarasuriya also served on the Board of the Tea Research Institute as Chairman.
In addition to the Amarasuriya family, there are many others who gambled their fortunes in tea with noteworthy results.
Mr. P. L. Buddhadasa, opened up and planted Allen Valley and Andaradeniya Group in the Morawaka Korale district. He constructed a well equipped and a showpiece of a tea factory on this property, at a time when there was insufficient factory capacity in the area to manufacture green leaf. Andaradeniya factory became the nucleus for the processing of green leaf and was the first bought leaf factory in the area. Beverly Group owned by Mrs. V. Wijewardene, Panilkanda owned by D. J. Ranaweera and many small holdings supplied the factory leaf on a regular basis.
Mr, D. J. Ranaweera OBE is another pioneer tea planter who started his planting career in the Southern Province, but soon moved to the hill country where the tea industry was prospering. He was able to out-bid many a European to secure Fetteresso Group in Dickoya which had 890 acres under prime tea.
His holdings in the low country consisted of Kiruwanaganga (385) acres, and Panilkanda (734) acres in the Morawaka Korale and Diddenipotha Group (1075) acres in the Matara district.
Mr. Victor Ratnayake, MBE considered the “laird” of the South, was not only an eminent and a proficient tea planter but was also a notable legislator. He was the son of an equally popular philanthropist Muhandiram A. A. W. Ratnayake of “Ratnayake Group” fame. He was another person who stood out as a nation builder. He, not pursued his personal interests as a tea planter, but devoted much of his time for the promotion of the tea industry in the country. Outside his political career, he was the Chairman of the Morawaka Korale Planters Association, at a time when the interests of the PA were mainly directed towards the British Planter. It would not have been an easy task for him to get the local planters views across to them. Mr was an active member on the Board of Management of the Tea Research Institute Talawakelle. In recognition of his services to the planting community, he was elected as the chairman of the PA in 1961. He remained as the Chairman until 1993.
Mr B. Warusavitarne, a low country tea planter with extensive experience in planting, served the industry in many agricultural and national consultative projects. He had dons much for the promotion of Ceylon tea abroad, and has been a member of the Ceylon Tea Propaganda Board for a considerable length of time. He held the Chairmanship of the Ceylon Planters Association from 1966 to 1969. He also served the Sri Lanka Tea Board as its Chairman from July 1977 to December 1979.
P. Ratnayake of Willie Group Deniyaya is not only a renowned tea planter, but also a well-trained tea taster. In addition, he enjoys the unique distinction of having departed from conventional designing of tea factories to create a new concept in factory construction. His original factory was destroyed by fire in September 1964. Mr Ratnayake planned his new factory without the use of any timber in its entire construction. Further, the Willie Group factory was one of the first factories in the island to go in for the trough withering of tea.
In a study of this nature, a complete identification of personalities who pioneered this great industry is not possible in a publication of this nature but a few families do standout, and they are:--
E. W. Goonatillake family ( Hallala Group - Walimaga ), Senator Sarath Wijesinghe family ( Andapana Group - Kamburapitiya ), M. Jayawickrema family (Charley Mount Group - Weligama ), R. J. Roberts family ( Katahene group - Deniyaya ), Hewavitharana family (Mawarala Group - Mararella ), M. D. Yapa family (Yapland Group - Kotapola ), D. S. Jayawickrema ( Berubulla Group - Matara ), Y. M. Soysa and Brothers for a star purchased Gartmore Group in the Maskeliya district with 755 acres with a cover of prime tea the 1960’s They enlarged their tea holdings further by acquiring Hatale Group in the Kelebokka district with 478 acres under tea.
Another lucrative business that remained exclusively in the hands of the low country Sinhalese was the sale of fish to the interior. Fishing was a specialised undertaking and due to its perishable nature, fresh fish had to be processed further. The low country Sinhalese was skilled in the art of curing fish. For purposes of retaining its flavour, they had it dried, salted or pickled.
Ceylon being a Buddhist country, the consumption of meats was restricted. This meant that the staple diet had to be garnished with condiments or vegetables. Addition of fish in either form was a luxury, but as prices declined it became the standard nourishment of the plantation labourers, labour gangs on construction work sites, and for feeding the many solders on security operations in strategic areas.
Hambantota soon became the main source of supply of fish and related products to the plantations in the Uva district. They were often transported on pack cattle to these areas. Fish being a highly perishable commodity, trading in this form was restricted, but bulk of the trade was conducted in semi-processed or processed forms.
The low country Sinhalese, by virtue of their dealings with the outside world, unlike those cloistered in the hill country, were the first to feel the vibrations of occupational diversification’s that were constantly taking place as a result of rapid urbanisation and Westernising of the country.
Building of fortresses at strategic points received high priority. Constructing of public buildings, Churches and houses for government offices offered them added opportunities for further gainful employment.
The new enterprise in coffee brought money into the hands of a host of native cart contractors, artificers, renters, and traders of all the native races. With the vast expansion in the construction trade, they were called upon to supply building materials such as timber, tiles, stones, bricks, and lime.
To keep this newly acquired occupations supplied with the required material, a number of small and medium industries sprang up in the low country areas, which hitherto had been mainly agricultural. With trading activities fast improving, the trade required various types of packing materials such as timber, coir rope, and mats. The task of supplying these requirements and organising all trading functions once again fell on the low country Sinhalese.
The demand for barrels which were needed for the export of coffee, graphite and coconut oil was on a constant rise. There was also an ever increasing demand for furniture, railway sleepers, and telegraph posts, which provided ample opportunities for saw-mill owners and timber dealers to expand their businesses. Don Carolis Hewavitarana who pioneered this venture is still in business, and has become a household name today.
From the original forest clearing contracts, they soon moved to the service sector. They became the chief suppliers of food and labour. The operation of general merchant stores and boutiques in service centres in the hill country helped them to obtain a foot-hold in areas away from home. Some of the famous personalities from Moratuwa such as Jeronis and Susew de Soysa, David Mendis to mention a few, had pioneered the exploitation of these avenues along the Colombo Kandy road, and later gained entry to the entire Central, Sabaragamuwa and the Southern Provinces.
With the growth of shipping, a number of water front industries were launched, directly associated with the ship building industry. This needed expertise and technical knowledge in several areas. The low country Sinhalese had all this and more. They had acquired these skills from the earlier colonial powers, with whom they had a close relationship. Ships had been constructed at various location along the maritime provinces, and Negombo, Mutwal, Kalatura, Panadura, and Maggona were well known for their competence in ship-building.
Along with the increasing number of ships calling at the major ports, the task of providing all their requirements called for special attention. With it a new group of operators called ships chandlers emerged. It was a professional job, and was retained by a small group of persons. The Hewadewage Fernandos', and the Mathews were the forerunners in this trade.
Arrack distilling and renting trade had been the exclusive and the chosen works of the low country Sinhalese. It had gained popularity from the Dutch times, and had provided sufficient profits to this group. Although the arrack industry carried a stigma in the neighbourly surroundings, they were nevertheless well up on the social ladder, and they were well accepted in society.
Another business that was exclusively carried out by the low country Sinhalese was the commercial extraction of graphite. Large sums were inverted in this field from about the 1860’s. Britain and the United States were our markets, and the country’s exports reached its climax in 1899, when 635,224 cwts of granite were exported which brought in a revenue of Rs. 22,255,400.
During the early times, Ceylon had a complicated system of taxes. The Britishers accepted this tax structure without any radical changes, in the belief that they could maintain healthier relations with the natives. The collection of taxes in this complex tax structure was awarded to the highest bidder, and determined by a system of public bidding.
In this manner, the colonial powers were able to reduce administrative costs and also reduce the natural resentment the locals had in paying taxes to a foreign power. The cordiality that existed between the local tax payers and their native tax collector helped to conduct this operation in a more pleasant manner. Through this system, they were able to overcome their lack of local knowledge.
In the service sector there were numerous forms of rents. They were associated with the sale of fish and fish nets, operation of ferries, tolls at frontier posts, export duties, the paddy tax, the bazaar tax, and the most important of them all, the tax associated with the distilling and retailing of toddy and arrack in specific areas.
In the collection of the paddy tax, it may be reasonable to assume that the upcountry Sinhalese would have had a stake in this operation. In the case of all other forms of tax collection, the low country Sinhalese were at the forefront, and for some, it remained their sole means of livelihood. These renting operations generated sufficient capital for the low country Sinhalese for investment elsewhere. With the capital so acquired, they proceeded to invest in land.
Outside agriculture and trade, there were the others who due to lack of capital were left out of this form of investment and resource accumulation. They were absorbed into the administrative structure, and most of them ended up as administrators and professional men with a status in keeping with the elite of the country. The civil service was the apex of the administrative structure, and they were entitled to the most coveted posts. These prestigious government jobs enabled young and enterprising Sinhalese and Tamil youth to claim a substantial dowry.
The government was under heavy presser to provide all the facilities for the advancement of teaching in the country. The establishment of a government sponsored Medical College in 1870 and the Council of Legal Education, later named the Law College in 1874, gave a tremendous boost for the more intellectual types to gain proficiency in medicine and law.
With the establishment of these institutions, there were vast opportunities opening up in the legal, and the medical services. Many from the medical college joined the Government medical service, and others from the law college joined the government’s judicial service. In addition, there was an assortment of other professions, which called for special educational skills. Once found proficient, they were either absorbed into the public or the private sector, and this area was vast, and there were Ceylonese in every station.
Ceylonese Participation in tea cultivation
It is said that the tea industry in the country was launched on the graveyards of the old coffee plantations. It may not be altogether true, when taking into consideration the newly planted tea areas in the South. It is recorded that practically all plantation crops had been tried and tested in the Southern parts of the island.
The coffee plants were first introduced to Sri Lanka by the Arabs. This plant originally grew wild in the gardens of the enterprising Southerners, and around temples in which its beautiful scented flowers were used for decorative purposes. During the Portuguese occupation of the island from 1505 to 1665, no attempts were made to cultivate coffee. After the expulsion of the Portuguese by the Dutch, attempts were made to cultivate other commercial crops such as cinnamon, and it was only in 1740, an attempt was made to cultivate coffee.
The first plantation however was opened in the tropical low country about ten miles inland from Galle on the banks of the Gindura river. The project had to be cast aside due to the unsuitability of the location. The British superseded the Dutch in 1776. They too made an attempt to cultivate coffee, but again without success. The failure was so pronounced, that the plants were pulled out, to plant sugar cane. This new crop did not prove a lasting proposal, and subsequently coconut and rubber were tried out.
Tea on the other hand was comparatively a new fashionable idea to the locals in the south, and what is most significant is that large scale cultivation of tea was undertaken in these areas by local entrepreneurs. Through their involvement in agriculture for centuries, they had acquired the inherent skills, and cultivation of tea did not pose much of a difficulty.
Most of the tea plantations in the South were opened up only at the beginning of twentieth century, and the sprawling acres of tea seen in this part of the country stands as a tribute to the local pioneers who ventured out in clearing vast tracks of virgin jungle, which was found less attractive to the Britishers. The Knowledge gained in other agricultural ventures was applied to tea with great success, and with it the low grown segment began to develop.
Major constraint for Ceylonese entrepreneurs
The process of Ceylonisation of the plantations during the early stages could have been accelerated had it not been for the difficulties encountered by the Ceylonese in obtaining capital for investment.
The essential prerequisites for the establishment of a plantation economy were cheap land, and capital at competitive rates of interest. Unfortunately, all these dependent factors were denied to the Ceylonese, when they decided to enter the planting fraternity in the late 19th century.
Land values had appreciated, labour by then had got unionised, and above all, the required capital was not available through the normal channels. Had it not been for these impediments, the local entrepreneurs would have entered the agricultural field much earlier.
Trade at that time was the biggest money spinner, but it was totally controlled by the Indian traders with wide connections in India, Africa and the Far East. Production and trading in tea and rubber were in foreign hands. They further manipulated the local tax structure to favour the sale of British goods in the country. Locally produced goods could not compete with imported varieties. All the projects which guaranteed high returns required capital. It was readily available to the British, but denied to the locals.
Sir Emerson Tennent, a keen observer of nature in the island, reporting in 1885 had observed that there was not a single Ceylonese capitalist in the sense in which the word would have been used in England. He would have had little reason to change his mind, had he was alive in 1915. The wealth of the country was in the hands of the British.
The newly emerged inter-related merchant capitalists such as the de Soysa, De Mel, Peiris, Amarasuriya, and the Dias families who enhanced their wealth through agricultural plantations and the liquor trade on the one hand, and the Senanayake, Kotalawala, and Attygalle families who made fortunes in graphite mining on the other, all found the investment opportunities inadequate.
The small Ceylonese trader too found it difficult to compete with the traditional Muslim trader, the Chettiar, and other minor groups who had established trading outlets all over the country.
When the Ceylonese were denied access to lending institutions that were controlled entirely by the British, they were forced to turn to the Chettiars, referred to as the merchant bankers from South India, for their requirements of capital.
Prior to the establishment of an organized financial market in the country, commencing with the Bank of Ceylon, it had been the Nattukottai Chettiars who provided the Ceylonese the finances to indulge in trade and commerce. Only a few living today will realise this fact. From about 1875 to 1925, the Chettiars had been actively involved in the financial dealings in the country. During this half century, they had helped in no small way to promote the economical well-being of the country.
They were emigrant traders from Chettinad in South India, who were ultimately called upon to set up the economic and the credit structure in the country, at a time when the locals were looking forward to holding a stake in nation building. The dominant role played by them as private bankers, money lenders, financiers, and traders during the early stages of the country’s economic upsurge cannot be taken light of. In recognition of the financial assistance rendered., their name became synonymous with private banking.
They were regarded as the most fascinating of all the non-indigenous business communities that had traded in the country. They were a closely knitted community with very little intercourse with the outside world. Hindus by religion, they devoted a considerable amount of their time to religious activities.
They were known to honour their social and business obligations without any deviation. They followed a code of business ethics, which was not common to other foreigners trading in the country. The Ceylonese had implicit faith in the Chettiars . They borrowed freely from them, and also invested their savings with them. They were always assured of a good return on their investments.
Money was often given to them for safe keeping, and the strong box in his house was considered as secure as any deposit vault in a British bank. They enjoyed a high reputation in the pawn broking business, and the Ceylonese preferred to deal wit6h them rather than with their local counterparts.
The Nattukottai Chettiars were the forerunners in modern day finance companies. More than 505 of the deposits of the early finance companies came from this community. They took risks in speculative ventures that the British banks avoided. The current position however is different. It was the disappearance of these Chettiars from the local money market that paved the way for the rapid expansion of the native finance companies.
The harsh words such as :Jews and Shylocks” that were used to describe these people seems unjustified. At a time when the British banks mistrusted the indigenous population, it was this community that took all the risks to lent to the locals. Their interest rates may have been on the high side, but they were only lending money they had borrowed from the banks. Further, they had to safeguard themselves against bad debts, which at that time was a common feature.
During the early stages, they assisted the smooth conduct of trade with India by discounting the excess Sterling Bills for rupee bills. This paved the way for them in their new role, to become the middle man between the banks and the local population who required capital. The Chettiars were held in high esteem by the British too. .
Coffee was abandoned in the early 1870’s. It was mainly for tea, and later for rubber that the Ceylonese agriculturist and the business person needed finance and credit. During this time of need, it was to the Nattukottai Chettiar that the local entrepreneurs could turn to for financial assistance, as they were regarded as the official money lenders to the nation.
Coffee was abandoned in the early 1870’s. It was for tea, and later rubber, that the Ceylonese agriculturists and businesspersons required finance and capital. During this time of need, it was to the Nattukotti Chettiars that the local entrepreneurs could turn for financial assistance.
The highly complicated nature of local mortgages did not prevent the Chettiar from investing in them. The large scale opening up of jungle land by the locals, for the cultivation of coconut, and later tea and rubber, would not have become a possibility, had it not been for the financial assistance available from the Chettiar community.
They were not rigid in their dealings, and they were always ready to accommodate the businessmen and the speculator, the exporter, and the land owner trying to raise a dowry for the unmarried daughter. They were very liberal in the securities they secured from the borrower, but the fundamental accusation against the Chettiar revolved round “interest rates.” The degree of risk was reflected in the interest rates charged, and they were worked depending on the circumstances of the case.
It is most unfortunate, that the people of the country were not sufficiently trusted by the British lending institutions. The Ceylonese from the very outset, were compelled to turn to the Chettiars for financial assistance, due to the indifference on the part of the British to lend to locals. This meant that the Ceylonese borrowers from the very commencement of a plantation economy, were loaded with high interest rates, unlike the British whom had it cheap all the way.
The Chettiars continued in this role until about 1925, and with the world wide depression of the early 1930’s, the government was compelled to undertake the task of providing the necessary finances to the fast developing economy. State sponsored institutions such as the State Mortgage Bank were set up in 1931. The bank of Ceylon followed in 1941, and the Agricultural and Industrial Credit Corporation were structured in 1941, for the sole purpose of offering financial assistance to the local segment of the business community, who had no access to foreign lending institutions. With most credit functions being undertaken by the state, the volume of money lending businesses of the Chettiars was further reduced.
Vane Ena Lena Shena Letchiman Chettiyar was a famous money lender who conducted a brisk business in Galle, at a time when there was a burst of economic activities in the Southern districts. The original set of Ceylonese who changed their scope of activities from trade to agriculture, was a brave lot. They opened out vast tracks of virgin jungle for the cultivation of a crop established by the British. The names of these prominent planters from the south would have appeared in the books of record maintained for the conduct of his business several times.
Following in the footsteps of the original Chettiars was C. P. Haley and Company. They conducted a thriving business in general merchandising in Galle. In a bid to attract additional business, they too commenced lending money at cheaper rates of interest to those offered by the Chettiars. In this manner they were able to obtain a fair share of the business conducted in the southern province.
Development of the small-holder sector
The plantations in the South were opened up during the early part of the twentieth century. It was no doubt an uphill task all the way, but they took it on the stride, and although the start was difficult, the Korean Boom of the 1950’s provided them with the much needed capital, and assured them of a steady growth for the future.
Another important event that effected the progress of this sector came about with the Land Reform Law No 1 of 1972. Until the above reforms were enforced, there was no law in the country that fixed a sealing on land ownership. By 1972, there were about 5,600 owners of agricultural property who had nearly 1.3 million acres with an average land holding of 200 acres, as against the national average of 0.36 acres per person. The maximum extent of land that may be owned by any person was defined as follows.:
(a) If such land was exclusively paddy land, 25 acres, OR
(b) If such land does not consist exclusively of paddy land, then 50 acres.
Under this new law, land owned by public companies and religious institutions were exempt. It was at this stage that the expansion of the small holder sector developed.
According to a survey conducted in 1874, the total population of Ceylon was 852,000 of which 47% lived in the maritime provinces stretching from Chilaw to Tangalle, reflecting a very high concentrating of people along the sea coast. All of them were not Sinhalese. Many were Europeans, but there were also Chettiars Burghers and Malays. In addition, there were regional distributions between the low country Sinhalese and those of the Kandyan provinces.
British as the Colonial masters accepted the differences present among the Sinhalese, but established a judicial and administrative system which held all people equal before the law.
Under the British, no one was discriminated against, and everyone benefited from the expanding economy. Casts became increasingly a matter for political concern, although a differentiation was generally made on an occupational basis.
In the case of the Sinhalese, the communities major internal division has been geographical between the Kandyan families and the aristocratic families in the low country. This division was broadly reinforced by their respective economic resources. The Kandyan families, holders of Nindagam (Kings land) found themselves reduced to poverty after the unification of the country by the British in 1815. Many of the low country aristocracy however maintained or enhanced their economic power through the cultivation of commercially viable lands in coconut, rubber tea and other products.
The people of the low country had been greatly influenced during the long years of colonial rule. They had been constantly exposed to the economic propositions and activities of the West, whereas the Kandyan prided themselves on embodying the virtues of Sinhalese traditionalism.
The people living in the maritime provinces on the other hand were considered more responsive to changes, and after having acquired all the trading skills of the foreign invaders, they came to be regarded as giants in commerce trade and industry, though out of proportion to their numerical size.
The older families from Moratuwa and Panadura such as the De Mels’, the Peiris’, and the De Soysas’ were heavily involved in the estate owning sector, chiefly in coconut and rubber, and later tea. The older generation followed a pattern of accumulation rather than entrepreneurship, while the younger generation took up to commercial and trading activities.
A great deal has been said about the British planter who started a great plantation industry in the early 1830s. Very little is known of their local counterparts who alongside the British helped to establish a plantation enterprise in the island at about the same time.
First on the scene was Charles Henry de Soysa who switched over from coconut to coffee and then to tea, and finally shipped his own tea direct to London. He was a true and an honest pioneer who with his six sons Jeromis William Charles, Alfred Joseph Richard, Edwin Lionel Fredrick, Thomas Henry Arthur, Walter and Lambert Wilfred Alexander established a plantation empire of superior eminence which even the Britishers found difficult to match.
According to E. H. Peterson’s Almanac of 1870, de Soysas owned 26 properties totalling an extent of 8,189 acres of which 88% was cultivated, 2,936 acres in coffee, 2,378 in coconut, and 1,432 acres in cinnamon. The Ferguson’s Directory of 1880 - 81 records an increase in the family holdings to 25,176 acres, the extent in coffee reaching 6,368 acres with a corresponding increase in coconut. The percentage of uncultivated land however had risen from 17% to 31% at that date.
The seasoned planter he was, he saw the doom of coffee and the boom of tea and acted accordingly to reduce the extent of coffee and introduce tea as a new plantation crop. C. H. de Soysa never encouraged land to lie idle, but in this instance it was his conception regarding the future of tea that made him enlarge his holdings. With his new obsession for tea, he needed land to open up and this was freely available.
Michael Roberts who researched the de Soysa enterprise states that that the family owned a total of 34,683 acres spread over 112 plantations in 1971. By that date, the acreage in tea had increased to 3,540. Area under coconut had doubled, from 1890 to 1917, reaching a total of 16,478 acres. These figures speak volumes of the plantation empire established by de Soysa.
The family owned the largest acreage in cinnamon amounting to 3,000 about acres, situated near Moratuwa, Salawa, and Kuruwita. The produce from coconut estates was converted into copra and desiccated coconut at their mills in Slave Island. The vast array of export produce included coconut oil, copra, desiccated coconut, fresh coconuts, coir fibre, mattress fibre, tea, cocoa, citronella oil, spices, betel leaves and plumbago.
They found their way to markets in several parts of the globe. To the bewilderment of the Britishers, and to the pride of the local de Soysas’, they considered no item of agricultural or mineral produce or its manufacturing trade or industry inaccessible to the locals, though it was a time when the British were ruling the waves.
As much as they amassed wealth with their stupendous industry and razor-sharp wisdom, they revelled in turning over a substantial slice of it for the succour of the needy and for the rehabilitation of the society in which they lived.
The advent of De Soysa lying-in-home, Medical Museum, Bacteriological Institute in Colombo,. The Holy Emmanuel’s Church and Prince and Princess of Wales Colleges in Moratuwa, a multitude of Churches, schools, and hospitals in Panadura, Marawila and Hanguranketta where his coffee kingdom held court are a silent testimony to their unfailing hospitality and grand generosity.
Among the other pioneer planters of the day were the De Mels’, and the Peiris’, although they did not bear the same stamp as de Soysas’.
The Native Era
The period 1900 to 1920 has been referred to as the “Native Era” for tea planting. There were feverish activities directed towards converting vast tracks of land in the Gampola, Pussellawa, Badulla, Galle and Matara districts into tea lands. These areas were full of promise, and provided the new comers ideal conditions to make a start. For the other wealthy families who had already commenced with coffee were fast converting them into tea after the sad experience of their European counterparts.
Ever at this stage the expected government assistance did not come the way of the local entrepreneurs. Instead, they were placing further obstacles in the way of the industry among the Sinhalese. Notwithstanding all impediments, the locals were gradually expanding their tea coverage in their garden cultivation’s. During the early stages, unknown to the government authorities, many responsible villages were purchasing tea seeds and plants on a regular basis at the rate of Rs.10/- per thousand, for inclusion in their home gardens.
When this tendency became more noticeable the state took notice, and the Government Agent Southern Province in his administrative report for 1890 had recorded that “the natives are going in extensively for tea planting,” and reporting in 1893 he had said that “Sinhalese tea gardens are specially numerous in Wallaboda and Talpe Pattus.” The growth of the small holder sector in the country could be traced to this period. Although its development had been slow during the initial stages, it ultimately proved to be one of the most effective growth areas in the country’s tea industry.
There were fears of overproduction at this stage, but they were nevertheless confident that local tea consumption would increase to absorb this excess.
Along with the development of the small holder sector, there were also the wealthy families from the Southern Province investing their capital on tea after the turn of the century. H. W. Amarasuriya and Buddhadas, sons of acclaimed agriculturists, after having acquired the necessary skills in planting from their fathers went for the cultivation of tea in a more serious manner. They are well known for having invested widely in tea and for conducting their businesses with considerable success in the twentieth century.
The Amarasuriya family owned Citrus Group (Total extent 2504 acres-Tea 2003 acres) considered one of the largest plantations in the southern Province. The family plantation empire included many other famous tea properties:- To mention a few, Kurulugalla Group in Morawaka Korale (Total extent 866 acres-Tea 259 acres), Diyadawa Group Morawaka Korala (Total extent 696 acres-Tea 661 acres), Mahendra Estate Morawaka Korale (Total extent 262 acres-Tea 250 acres), Olympus Group Galle district (Total extent 908 acres-Tea 666 acres), Monrovia Group (Total extent 647 acres-Tea 197 acres).
The second push into tea, and this time to purchase developed properties from sterling companies came their way after Independence. The uncertainties created as a result of the second World War and granting of political independence to Ceylon in 1948 offered the Ceylonese further opportunities to expand their holdings in tea.
This was a chance they were all waiting for, as they were now able to venture into an area which up to this time had been the exclusive fortification of the British. They were now in a position to savour the odour of upcountry teas and have a stake in its decision making. They accepted this opportunity with open arms. In this instance, they were able to penetrate the hill country by purchasing outright well developed properties from the British.
Amarasuriya holdings in the Hill country included Castlereagh Group (985 acres in Tea), Penrhos Group (525 acres in Tea), Fairfield (291 acres in Tea) and Holmwood (350 acres in Tea). They were all clustered in the Dimbula and Dickoya valleys. Some of these tea fields are buried today under the waters of the Maskeliya reservoir.
The entry of the Amarasuriya family to the production of tea during the second phase of the Ceylonisation process was most appropriate and contributed in no small measure towards changes taking place in the ownership of land. A process which even the government in power at that time was promoting. Their contributions towards the tea industry are well documented.
Thomas Amarasuriya OBE who was elected to the Senate under the SLFP government was subsequently elected as the first Chairman of the Planters Association in 1956 and continued in that position the following year. In consideration of his services to the planting community, he was elected a Life Member of the Association on 24th October 1970. In addition. Mr. Amarasuriya also served as the Board of the Tea Research Institute as its Chairman.
History has repeated itself. After 38 years his son Mr. M. J. C. Amarasuriya who had always been a keen observer of the plantation sector is now holding the top berth in the Planters Association as its Chairman.
In addition to the Amarasuriya family, there were many others who gambled their fortunes in tea with great success, and in a similar manner, P. L. Buddhadasa opened up and planted Allen Valley and Andaradeniya Group in the Morawaka Korale district where a well equipped tea factory was constructed. He provided processing facilities for the many small holders in the area. This became the nucleus in the area for processing out-growers tea, and is rated as the first bought leaf tea factory to be constructed in that area. During the initial stages, in addition to the leaf from the small holdings, he obtained continuous supplies of green leaf from Beverly Group, owned by Mrs. V. Wijewardene, Panilkanda held by D. J. Ranaweera.
Another name from the Southern Province, famed for having pioneered the tea culture is Mr. D. J. Ranaweera OBE. His laid the foundation in the South but soon obtained a foot-hold in the Dickoya district. He like the Amarasuriya family purchased Fetteresso Group a well groomed plantation in Dickoya with an extent of 890 acres. He owned two famous plantations Kiruwanaganga (385 acres) and Panilkanda (734 acres) situated in Morawaka Korela and Diddenipotha Group (1075 acres) in deep south Matara.
P. Ratnayake of Willie Group Deniyaya enjoys the unique distinction of having departed from orthodox designing of tea factories and went on to create a new concept in factory construction. His original factory was destroyed by fire in 1963, but within a few months Mr. Ratnayake had planned out his own factory which ultimately out to be fire proof. His new unit was completely devoid of any timber and meant to be incombustible. As a result, he was able to obtain very competitive rates for insurance coverage. Further, the Willie Group factory was one of the first factories to adopt the trough system of withering for tea. .
Ceylonisation of the tea plantations during the 20th Century
The remarkable recovery of the plantation industry under tea by the turn of the century, created a great sense of self-satisfaction among the business community in the island. What had initially looked like a major economic disaster had turned within a few years into a resounding success.
The island had been successful in many aspects. The climate conditions ensured that tea could be plucked all the year round unlike in Assam where the crop is seasonal. The increasing demand for tea coincided with the switch over from coffee to tea in the Western world. Per capita consumption of tea grew from 1,22 pounds to 6 pounds during the period 1820 to 1900 in England.
This rapid recovery however obscured the fact that Ceylon has once again become dependent on a plantation economy, a fact that became apparent during the world depression thirty years later. Further the structure of the plantation economy and subsidiary commercial agencies were owned and managed exclusively by non-nationals whose main concern was to remit home as much of the profits as possible. Local involvement in the economy of the country was limited to the transport and food production sectors.
A revival of nationalistic sentiments at some time or the other is a natural hangover which most people who have been subjected to long periods of foreign domination’s suffer from, and Ceylon was no exception.
While the British were making further inroads into the country’s economy, there was a undercurrent moving towards a progressive form of Ceylonisation. The leftist parties and the trade unions were responsible to a great extent for the revival of a nationalist slant which began with the independence movement of the 1920’s. They wanted not only political freedom but also a greater stake in the country’s economy. They wanted recognition and control of vital sectors of the economy by nationally accountable agencies.
The British government was able to feel the political pulse of the people, and they in turn were considering political reforms to smother these new desires. A commission was formed in London led by Lord Donoughmore to initiate political reforms in the country. The result was the drafting of the Donoughmore Constitution which gave greater measure of self-government to the people of the island, including the granting of universal franchise. It was however felt in certain quarters that this action was pre-mature, but nevertheless as the old saying goes “the best way to play the flute is to play the flute,” and this held true to Ceylon.
It was argued that the people of Ceylon had the benefit of almost twenty-five years in the use of the democratic vote before the country obtained Dominion Status in 1948. This made the outcry for greater participation in the political, economic and social affairs of the country by the nationals.
This nationalistic fervour began to manifest more strongly during the world trade depression which lasted from 1929 to 1934. The outcome of this was the rationalisation of the management of most European owned plantations. This tendency emerged at a time when the National Government had adopted a strong policy towards Ceylonisation.
This turned out to be a weak link in the management of foreign owned plantations, and soon there was a mass departure of planters from the country. According to a report issued in 1952 by the Commissioner of Labour, of a total of 1912 executives on the plantations, only 684 were Europeans.
This mass exodus of European planters from the country, turned well for the locals, and the demand for further Ceylonisation of the trading activities was voiced with even greater urgency. The political reforms of 1931 followed, which ushered in universal franchise and an elected Parliament with a Board of Ceylonese Ministers.
The tea sector fell under the direction of the Minister of Agriculture D. S. Senanayake, who later became the first Prime Minister of the independent Ceylon.
The Ministers main concern was to ensure that the tea industry and the Agency Houses were controlled by Ceylonese personnel. He was a person with a vision for the future. He was committed to creating a new order in the field of agriculture. He was also conscious of the complete repatriation of profits earned by the sterling companies in the country. He had several social welfare plans for the future, but he was without sufficient funds. The amount of pressure he could apply however was limited by the presence of a British Governor and a British hierarchy who were pledged to protect interest British interest.
He however feared the formation of trade unions on the plantations, and the Legislative Council in 1947 disenfranchised the Tamil plantation worker.
With this bold step, a series of other changes followed. Although the government’s policy on Ceylonisation was clearly laid down, the tea sector was still restricted by the strait-jacket of Colonial control. All the retail outlets were controlled by London buyers, so that the local producers could not overpower the multinational buying agencies. The Russian market, which had remained the second largest outlet for Ceylon teas up to the time of the revolution of 1917, was lost. All these factors made the tea sector a virtual prisoner of the London tea market.
A more national approach was required to improve the position of the tea industry, and a series of structural changes followed. The Tea Research Institute was created in 1925 to improve the technical side of tea cultivation. In 1932 the Tea Propaganda Board was set up to promote tea sales in foreign markets. The International Tea Agreement of 1933 helped to level off global over-production of tea. The government became a party to the Imperial Preference Agreement signed in 1933 in order to safeguard tea and rubber prices in London. Through the mechanism of the Company’s Audience of 1937, the government actively promoted the formation of Rupee companies. The establishment of the Bank of Ceylon in 1942 also assisted the Ceylonisation policy of the government in the tea industry.
At the time of Independence in 1948, two-thirds of the tea sector was owned by Sterling companies based in London. They were mostly managed by Agency Houses in Colombo. Banking, Insurance and all shipping activities were controlled by them, while marketing remained in the hands of the metropolitan agencies.
After Independence, the movement towards Ceylonisation included among other measures, the imposition of export duties on tea. After this action the government’s intentions became conspicuous, and it became very clear that the tea industry was going to be the milk cow for most development work to be undertaken in the country. Exchange regulations were promulgated in 1937 and repatriation of capital halted in 1957.
These measures caused increasing concern to foreign capital investment in the country. East Africa was quick to react, and offered the British capitalist a stable economic and political alternative for investment. Repatriation of foreign capital commenced, but the Metropolitan Agencies used their influence on Sterling capital to maintain their control over the marketing aspects of the trade.
The concept of nationalisation was the brainchild of S. W. R. D. Bandaranayake, and it was mooted for the first in the country in 1956, although it took a further two decades to become a reality.
The flight of capital once started could not be halted. Estates were being sold steadily through the 1950’s increasingly on a piecemeal basis to Ceylonese Companies and individuals, thus threatening the output and productivity of the entire industry. The situation reached such alarming proportions that the government was compelled to pass the Anti-fragmentation Act of 1958, to prevent large-scale segmentation of large properties.
By and large, opportunities to own tea estates and purchase shares in sterling companies operating the plantations came the way of the Ceylonese only after the second World War. The local capitalists who had the resources were quick to seize these new investment opportunities when they did come their way.
Meanwhile the uncertainties brought about by political independence exaggerated further the future of the tea industry from a foreigner’s point of view. This led many of the Britishers to sell their shares in the plantation companies.
This changeover of land holdings from Foreigners to locals was greatly aided by the “Korean Boom” of the 1950’s, which pushed commodity prices to high levels. This excess wealth in the hands of the local estate owners and the trading community was reinvested in securing shares or in purchasing the properties outright from the British.
These events opened new vistas for the Ceylonese to enter into a field which had hitherto been exclusively dominated by the Europeans. Locals entered the industry only at the production level leaving the actual pursuit of international marketing of tea to the Europeans, which lasted for a further four decades.
During the two decades commencing from 1930, radical changes took place in the ownership of plantation land in the country. In 1930, about 80% of tea and 50% of rubber plantations were owned by sterling companies. By 1950, these figures had shrunk to 50% tea and 38% rubber. By the mid 1950’s these figured had slumped further to 37% and 13% respectively.
It has been estimated that between 1950 and 1960 a sum of Rs. 182 million had been sent out of the country by local investors mainly to finance the purchase of foreign plantations.
According to Snodgrass who had researched extensively on this subject is of the view that between 1935 and 1958, the sterling companies had sold 35,845 acres of tea of which 27,400 acres had been bought by locals, 3,044 by other sterling companies, 5,023 by small holders, and 769 acres by the government.
In order to assist the indigenous estate owners with their purchases, the State Mortgage Bank was established in 1931. And the Agricultural Credit Cooperation came into being in 1942. In addition, the government also introduced a series of measures to help plantations to keep afloat when the boom of 1950’s ended.
The process of unification of the administrative structure that followed required the establishment of specialised departments. The survey, the Public Works, and the Police Department were set up as and the need arose. The extension of the communication network originating with the Colombo Kandy road, in 1832 set the stage for vast changes in the country. The series of economic reforms that followed tended to change the entire political, economic, and social structure established by the former colonial rulers.