Oei Tiong Ham
Interview: Oei Tjong Ie
Oei Tjong Ie
Date: August 13, 1987
Place: Kian Gwan Engineering, Jurong, Singapore Interviewer: Yoshihara Kunio
A Brief Profile of Oei Tjong Ie
Oei Tjong Ie was born in Semarang in 1918 as the eldest son of Ho Kiem Hoa Nio (or Lucy Ho), the seventh wife of Oei Tiong Ham. After receiving primary education in Semarang, he went to the Netherlands for secondary and university education. In 1940 he returned to Indonesia, and began working for Kian Gwan. In the early postwar years, he worked for Kian Gwan in Shanghai and in Bangkok. For the past few decades he has been heading Kian Gwan in Singapore. After the death of his brother, Tjong Hauw, in 1950, he served as chairman of Oei Tiong Ham Concern. He is also a founder of Malayan Banking Berhad and served as chairman in its first several years.
1. Personal Background
Mr. Oei, can you tell me first who you are and how you are related to Oei Tiong Ham?
My name is Oei Tjong Ie. I was born in Semarang in Indonesia on January 9, 1918, which makes me 69 years old by European count and 70 by Asian count. I am the eldest son of one of my father's wives. As you may know, my father was a polygamist. My mother was the second to the last wife my father married, and I am the eldest son of that mother, but in the total number of Oei Tiong Ham's sons, I am the tenth son.
Could you tell me a little about your educational background?
I went to a primary school in what was then the Netherlands Indies, and then went to what was called in the Dutch system a middelbare school, which was a middle school. A middle school was a school which gave you entrance to a university. At the middle school called HBS, it usually took five years for science students to finish. For arts students who had to study languages like Latin and Greek, it took six to seven years to finish. I was an arts student, and after finishing the middle school, I joined the Dutch Law University in Leiden, and a few years later, passed an intermediate examination for the Dutch equivalent of L.L.B. In 1940, when I had another six months to complete my law study, I went back to Indonesia to be properly installed as one of the shareholders of Oei Tiong Ham Concern, since I had come of age. But the subsequent German invasion of Holland followed by the Japanese invasion of Java forced me to stay behind, and I joined the import department of Kian Gwan as a trainee salesman in the provision & drinks division.
Can you talk a little bit about your brothers and sisters and the different wives of your father?
I remember the wife of my father who was the mother of Tjong Hauw. She was a quiet, nice lady who was not at all disagreeable to me, being a son of another wife, and I know that she even received my mother quite well and was very friendly to her. In an early postwar year, she left Indonesia for New York with two sons when they decided to live there. I think she must have been miserable there, living in a strange, American environment. I met her there once. She always stayed on the first floor in their house; I believe she never left it, and finally died there.
Another wife I know is the wife my father took after my mother. She had only one daughter. She was also a very nice lady. I used to go to her house. She served me with all sorts of food.
This was in Semarang, wasn't it?
Yes, it was in Semarang. The rest of my father's wives, I don't know personally.
You have a sister called Hui Lan, don't you?
Yes. She is Mrs. Wellington Koo. She is the second daughter of my father's first wife. She is the one who writes all those saucy stories about my father being poisoned by my mother and you know all these mosquito articles. She must be still alive-if she is, she must be well over 90.
She was never involved in business, was she?
No. She was a very autocratic lady. I remember I saw her in Shanghai in 1946 for the first time. She was living there, and she was very close to the American ambassador's wife. She had always lived in diplomatic circles. She sort of summoned me to the American embassy, and asked me about my personal life. When she found out that I had a Dutch wife, she told me to get rid of her because I am Chinese, and also get rid of my Dutch passport and get instead a Chinese passport. She tried to tell me how to run my life. But I explained to her, "Look, my dear sister, I respect you because you are my elder sister, but I am a rather independent type of person. So, please let me live my life in the way I like, and you live in the way you like."
Did she have a brother?
No, her mother had only two daughters. The other daughter, I never met in my life. I hear that she married a high-ranking Kuomintang official. She must be no longer alive.
Did your father take a wife in Singapore?
No. When he came to Singapore, I think I was about three to four years old. I was born in Indonesia and went to Singapore with my father. To the best of my knowledge or my mother's, my father did not have another wife in Singapore.
So, did your mother come to Singapore, and was she the only wife living in Singapore?
Yes. The old man was settling down, you see. My mother was an overseas Chinese born in the Netherlands Indies, and compared with my father's other wives, she was well educated-Western-educated. I know, for instance, in the later years of his life, my mother helped him a lot in his business, especially in dealing with Dutch-speaking people. I think she was also useful to my father in Singapore.
You said the first wife had two daughters. And the second wife?
The second wife had one daughter. The third wife had many children. I think she was the wife who had most children. She had five sons (Tjong Tee, Tjong Swan, Tjong Tiong, Tjong Yoe, and Tjong Liam) and a few daughters. The fifth wife, the mother of Tjong Hauw, had four sons and one daughter. Altogether, my father had eight or nine wives. My mother was the second to the last. But the last one was not kept for long. Maybe, my mother protested to my father.
Did all wives live in Semarang except your mother who went to Singapore with your father?
Did your mother tell you what sort of house your father had in Semarang?
We had a huge house. It was situated at the beginning of Tjandi. Tjandi is a hilly area. It was in the outskirts of the downtown. It was called Gergadjie. That was a big house. If I remember correctly, there were sixteen to eighteen rooms in it. It had a main building, and two pavilions on its sides. A lot of the unmarried children of my father lived there. This was like a compound. There was one large dining hall. When a gong sounded, everyone went to eat. It was quite a walk from where we lived. That house also had a big garden. It was a little like the Tiger Balm Gardens in Singapore. On Sundays and public holidays, it was open to the public. It was made a bit in the style of a Japanese garden. There were ponds with fish and rocks where you could go up and down. There were also cages. I hear my father once kept tigers, but in my time, there were no more tigers. Instead, we had a lot of deer and horses.
Did your father's wives stay in the same compound?
No, they stayed separately. My mother stayed with my father in the big house, but the other wives stayed in other houses. My grandfather, I am told, who lived in Penggiling near the family cemetery, kept two to three wives in the same house.
2. Oei Tiong Ham's Business Method
Did your father speak English?
Did he speak Dutch?
In your half-sister Hui Lan's memoirs, she says your father went with her to the residence of the Governor of Singapore for dinner one day. Is it possible that although he did not speak Dutch or English, he understood them? And did he speak Malay or Javanese?
I doubt he had some understanding of Dutch or English. If he went to the residence of the Governor of Singapore for dinner with Hui Lan, he must have depended on her to interpret. He had a smattering of Malay but he did not speak Javanese.
Who did negotiations with the Netherlands Indies government?
He had professional people to do that. My father's strong point was that he was not afraid of delegating authority and had a knack for finding the right people. Sometimes, a successful businessman need not be very clever himself, but he must have a gift for choosing the right people.
But that is difficult for a Chinese businessman. Eu Tong Sen and Loke Yew of Malaya, for example, found delegation of power difficult. How did your father overcome this?
One time, I was looking into the histories of OCBC and Lee Rubber. The success of Lee Kong Chian, who founded Lee Rubber and was a major shareholder of OCBC, can be explained by the fact that he built up a professional management team. But in his case, he was influenced by Western management because he studied English and read English books on management. But your father did not speak English or Dutch.
How did he find out about the importance of delegation of power in business?
I think he looked around.
Modern companies in Indonesia at that time were almost all Dutch.
Yes. He saw that they were running better than his business, and looked into why. He learned about their business system and introduced some of their management practices.
He did not have Dutch friends, because he did not speak Dutch.
No, he did not mix with Dutchmen. I don't remember ever seeing any Dutchmen coming to our family, and my mother told me that he was never close to any European.
3. Line of Succession
Your father moved to Singapore towards the end of his life, didn't he?
Yes, he did, because he had trouble with Dutch tax authorities. Dutch taxation was, I think, one of the harshest in the world.
Could you tell me under what circumstance your father died? Was the death expected, or was it sudden?
I would say that he died suddenly. Nobody expected him to die so quickly. He was 57 when he died, and he had no alarming symptom of illness which would explain such a sudden passing. As I told you, I was very young at that time. I only remember it vaguely and know what my mother told me later. He died of a heart attack, which I think is very possible because our family is known to suffer from a bad heart condition.
No. I am an exception. I have a perfect heart condition. But all my other brothers died of a heart attack at quite young ages.
Could you tell me the line of succession in Oei Tiong Ham Concern after your father died?
After Oei Tiong Ham died, the eldest son, Oei Tjong Swan, became the head of the Concern. But he did not stay long, and sold his shares to his brothers. He was succeeded by my other elder half-brother, Oei Tjong Hauw.
How many years did Oei Tjong Hauw head the Concern?
He took over when I was nine years old. Was it around 1927?
Yes. And he continued to head the concern until 1950, when he died suddenly. He died at the young age of 47.
Did he die by accident?
No, he died of a heart attack.
It was sudden, wasn't it?
Yes. It was very sudden.
Who took over after his death?
After he died, for some years, that is, two to three years, Oei Tiong Ham Concern was run by a team consisting of his brothers and professional managers. They were Tan Tek Peng, one of the most senior directors; Dr. Djie Ting Ham, who was in charge of the sugar factories; Dr. Djie Ting Liat, who was a chartered accountant and the financial director of the Oei Tiong Ham Concern; and the three younger brothers of Oei Tjong Hauw's-Oei Tjong Tjiat, Oei Tjong Yan, and Oei Tjong Ik. Then, after several meetings, they decided that I should take over because the chief executive officer of Oei Tiong Ham Concern had to travel, but none of Oei Tjong Hauw's brothers was prepared to travel. So, because of that and because I was all-round in the company and more extrovert, I was considered to be a suitable successor. And the title of "president director" was changed to "chairman of the board." This was decided at a meeting which we held in Amsterdam.
Were you heading the group in 1961 when the Indonesian government decided to confiscate your family interests in Indonesia?
Yes. I was heading the group as such, but its Indonesian operation was headed by my youngest brother, Oei Tjong Tjay, who was living in Indonesia. This was necessary for political reasons, but the impression was mistakenly created at that time that Tjong Tjay was heading the whole group. However, for political expediency, because of our difficult and vulnerable position in Indonesia, we never contradicted the impression.
4. Oei Tiong Ham Concern around 1940
Could you tell me about Kian Gwan around the year 1940? Especially about how big it was and what were its major activities at that time.
The major operations of Kian Gwan... Oh, you have to remember that it was a department of Oei Tiong Ham Concern, Kian Gwan being the trading arm of Oei Tiong Ham Concern.
Then, could you tell me about the major activities of Oei Tiong Ham Concern?
The principal activity was sugar milling. We had at that time five sugar mills, if I remember correctly. They were located in a place outside Semarang, called Pakkies; near Madiun; in Tanggoelangin; in Ponen; in Krebet, near Malang; and in Redjoagoeng.
In Krebet, did you have a tapioca factory?
Yes. There were a sugar factory and a tapioca factory there.
Besides sugar, was Oei Tiong Ham Concern involved in shipping and banking at that time?
Correct. We had a small banking department called "Bank Vereeniging Oei Tiong Ham." In Dutch, "vereeniging" means association. So, Bank Vereeniging Oei Tiong Ham could be translated as the "Bank Association of Oei Tiong Ham."
How about shipping?
The shipping company was called "Heap Eng Moh Steamship Co."
Was it based in Semarang?
It was based in Semarang as well as in Singapore. I do not remember whether its ships were sailing under the British or Dutch flag. It might have been under the British flag.
When you joined Oei Tiong Ham Concern, did you feel that it had grown larger since Oei Tiong Ham died, or did you feel that it had become smaller?
I cannot say that it had become bigger, but I can say that it had become better consolidated. My father laid the foundation for the large trading and industrial organization, which was run very much under the Western system of accounting and engineering. And I think that after my father's death, the successors, Oei Tjong Hauw and Oei Tjong Swan, both of whom were my elder half-brothers, carried out further modernization.
Where was the head office of Oei Tiong Ham Concern located in the prewar period?
Along the coast there?
No, it was downtown. A large two-storey building was its headquarters. It was an impressive building. It was built by a famous architect in Semarang at that time. His name was Liem Bwan Tjie. It was impressive because it was full of marble.
Was it built in a Chinese style?
No, it was built more in an Italian style. The marble was Italian marble. A director's room was impressive; it had a thick carpet, a heavy curtain, and a teak panelling.
When you joined the company in 1940, how many people were working there?
In Semarang or in Oei Tiong Ham Concern as a whole?
In the headquarters in Semarang.
Not that many. Roughly, it was no more than 100 to 120.
In Oei Tiong Ham Concern as a whole?
Including those at the sugar mills and others, it must have been a few thousands.
What do you remember about the Krebet tapioca factory?
It was a big, modern factory. I remember we were very proud of the factory. It was very famous for an excellent laboratory. Tapioca was used to make a glue needed for aircraft wings. This factory was so modern that it was visited by many managers of the factories of Dutch financial combines. They were shown around by the manager of the Krebet factory. He was a big Dutchman. He did not have a moustache, but was an impressive-looking European. I remember his name was Tacoma. I knew him well. As a young executive, I used to spend weekends at the tapioca estate which was combined with a sugar factory. We used to go hunting. Tacoma was a well-known hunter. We went for wild boar shooting. We walked miles and miles in the field.
Was he an engineer?
No, he was not an engineer. He was a nontechnical man; I think he was a well-qualified planter. The engineer of that particular factory was a Chinese named Yap Kie Ling. There were two Yap brothers. Both were engineers. They were graduates of Delft. It was the engineering university of Holland at that time.
How many Dutch were employed at the Krebet factory? Was Tacoma the only one?
No, he was not the only one. I did not pay much attention to it, but since there were a few Europeans in the laboratory, my guess is that six or seven Europeans were working there.
You said that there were five sugar mills. Did you employ Dutchmen there also?
Yes. The manager of a sugar mill in our group was called in Dutch administrateur, whose English equivalent is "administrator." That is because the manager was Dutch. To the best of my knowledge, all managers of my father's factories were Dutch.
They were not necessarily engineers.
Were the chief engineers of your factory mostly European?
No, we had some senior Chinese engineers, like the Yap brothers I mentioned earlier.
Roughly then, were half the chief engineers European and half Chinese?
In my time, the two top engineers were Chinese, not European.
Were they exceptions, or were there other Chinese engineers?
At that time, there were other Chinese engineers. I remember a lot of these engineers were formerly ship engineers. I don't know whether this was a coincidence. Many of our engineers used to work in the engine room of a ship.
Maybe, the same kind of engine was used both in ships and factories.
Maybe the same kind of engine, come to think of it.
Many Chinese were engaged in coastal shipping at that time, so there must have been a number of Chinese who were familiar with engines.
I definitely remember many of our engineers, even senior chief engineers, were Chinese, not European.
Did you employ around 1940 any Chinese university graduates who were not engineers?
Yes, I told you about Dr. Djie Ting Ham and Dr. Djie Ting Liat. They were both Dutch university graduates.
Did they start working under Tjong Hauw?
Yes. Then we had Dutch-trained, Chinese chartered accountants.
Going back to your Dutch employees. How were they supervised? Take the case of Tacoma, whom you mentioned earlier. Who was in charge of him and evaluated his performance? Was this done by Oei Tjong Hauw, or by someone outside the family who was in charge of personnel for the operation of Oei Tiong Ham Concern as a whole?
I believe Tacoma was directly answerable to Yap Kie Ling and Djie Ting Ham, who were in charge of sugar mills and stationed in the head office in Semarang. All the senior directors in turn were answerable to the top man and that man was my half-brother Oei Tjong Hauw.
5. Dutch Language and Cultural Influence
At that time, were the documents you submitted to the government in Dutch?
Yes, the official language used in the office was Dutch. Not Indonesian or English, but Dutch.
Did you speak to your brothers in Bahasa Indonesia, Dutch or a Chinese dialect?
We spoke in Dutch. I don't think any of my brothers could speak Chinese. Tjong Hauw claimed that he could speak Chinese, but I never conversed with him in Chinese, so I cannot judge the standard of his Chinese. But later I heard that his standard was not high, and some people said that I spoke Chinese better than he did. I learned Chinese mostly during my detention in prison and later in Shanghai.
So, by 1940, can we say that Oei Tjong Ham Concern had become a "Dutch-oriented" company?
Yes, if you mean by that the atmosphere, management system, and organization. We were very much Dutch-based at that time.
Wasn't it a bit unusual to become like that for a Chinese-owned company?
Yes. Other large Chinese companies were not like that. I remember another Chinese company which was handling food and drinks. It was considered one of the largest companies.
The name of the company was Lauw Tjin. That company was not so Dutch oriented as we were. I knew the manager of the company. He was not Dutch-speaking. He was Chinese-educated in Indonesia.
What did the company do?
They were an importer. They handled, for example, foodstuff and household electric appliances. I remember they handled "Kelvinator" air conditioners and refrigerators.
Did the Chinese community in Semarang consider your family a little strange, since you were speaking to each other in Dutch instead of Chinese?
I don't think that they considered us strange. In a small town like Semarang, we were so well-known that wherever we went, people recognized us and paid us respect. We were big shots. I could speak Indonesian, so most of the Chinese I knew spoke to me in Indonesian. I remember the grandparents on my mother's side, who were not Dutch speaking, spoke to me in Indonesian.
At that time, business in the Chinese community was done in Chinese, I suppose. How did you get around this problem?
Yes, to a great extent, business was done in Chinese, especially in the pasar, or market.
They often spoke in Hokkien.
How did you deal with the merchants in the pasar if you did not speak Chinese?
I could speak simple Chinese, but we had many salesmen who were fluent in Chinese. The importing department of Kian Gwan was selling its goods directly to Chinese shops. We were the importer of, for example, Dr. West toothbrushes, West clocks and alarm clocks, Solingen knives from Germany, General Milk products from the USA, canned abalone and other sea foods from Japan, and American canned foods like Del Monte. These goods were sold to shops in the market by our Chinese salesmen who were either Indonesian-speaking or Hokkien-speaking. But in the industrial division, we had little contact with the market, because we mainly dealt with estates where the managers were Dutch-speaking. And in our sugar sales division, negotiations were mostly with offices abroad, and here again Chinese was of little use.
Going back to your family. Since you did not speak Chinese, am I correct in saying that you did not get much involved in the affairs of the Chinese community directly?
Are you talking about my elder half-brothers or my own brothers?
My elder half-brothers were of a type who came to the office and never left it. They never came into contact with the public.
How about Tjong Hauw? Except Tjong Hauw.
Was Tjong Hauw very much involved in the Chinese business community affairs?
No. He went to the economic ministries of the Netherlands Indies government, went to banks...
So, you were not the leader of the Chinese community. Is this correct?
In a way, it is correct. Socially we were not the leader of the Chinese community, since we were not Chinese-oriented. But since we had money and influence, we occupied an important position in the community.
After independence, did you still speak to each other in Dutch, or did you make an effort to use Bahasa Indonesia in board meetings, management conferences, and other important meetings?
When outsiders were involved and they were super-nationalistic, efforts were made to speak in Indonesian. But many Indonesians spoke Dutch, and when they were involved, there was no problem in speaking in Dutch. Many commercial terms were Dutch, and it was difficult to express yourself in Indonesian when you were dealing with business matters. Maybe now, since so many words have been added to the Indonesian vocabulary, it is not too difficult to discuss business in Indonesian, but not at that time.
In order to talk to civilian and military authorities, it must have been important to be good at Indonesian.
Yes and no. A lot of military leaders even came from the Dutch education stream and spoke Dutch. Once they knew you, they often lapsed into Dutch.
6. Pacific War
How did the Pacific War affect Oei Tiong Ham Concern? Did it stop operation during the war?
No. As far as Indonesia was concerned, the mills continued to produce sugar under Japanese supervision. In Java at that time, the Japanese Army set up an administration called "Gunseikanbu," and we operated under their supervision.
During the war, were some of your family members or professional managers imprisoned or harmed by the Japanese Army?
To the best of my knowledge, the only person imprisoned was myself. None of my brothers and our staff was ever imprisoned. But for some time, all of our offices and godowns were sealed. And only after the appearance of certain Gunseikanbu officers were they opened again, and we resumed business activities and tried to do our best under the circumstances.
Many rich Chinese had to pay contributions to the Japanese military government, and a lot of ill feeling was created by this, for example, in Malaya. Did this happen in Indonesia, in particular to your family?
Yes, I think it affected our family. We were compelled to supply a lot of goods to the Japanese Army, like leather. We had a leather stock in Surabaya. But I must say that the Japanese Army was fair. We were paid what I considered correct prices. When I was sentenced to death by Gunritsu Kaigi (a Japanese court-martial), my brother saved my life. He was branded later by the Dutch as a collaborator, but I think this was unfair, because any Chinese businessman had to collaborate with the Japanese. He had to give parties to Japanese authorities, and appear on the front page of newspapers, pledging loyalty to the Emperor. These things have to be judged under the circumstances. Being a member of the War Crimes Commission after the war, I expressed my opinion strongly about this, especially when they came to attack my brother. I don't know whether he liked the Japanese or he believed in the Japanese military expansion scheme, because I never asked him about these, but I feel he had no choice but to act in the way he did. Because he had good contacts with Japanese military authorities during the war, he could exert strong influence on the Japanese, which I believe saved my life. While he appealed to the Japanese Command to spare my life, he donated to the Japanese Navy the check which he had received as the payment for the sugar they had taken from our godowns in Surabaya. The check amounted to about 1.5 million guilders. The Japanese made a propaganda out of this donation. This money, in fact, bought my life. On the day of my execution, I was told that my sentence was commuted to imprisonment for 15 years, of which I spent two-and-half years in prison, until the Japanese surrender. So, after the war, I was in a difficult position. On the one hand, I was the leader of the younger group trying to gain control of our family business. On the other, the elder brother had been my protector.
7. Postwar Evolution
Many Chinese big businessmen in the late 1930s were seriously affected by the Pacific War, but after the war ended, many of them recovered and did well thereafter. In the case of Oei Tjong Ham Concern, if you take 1950 as a reference point, how did the company compare with 1930. Did it become smaller or bigger?
I would say that it became smaller.
Why was this?
First of all, the very difficult political situation in Indonesia after the war. Our major operation was concentrated in Indonesia, and the deteriorating economic situation there affected our overseas branches. And the board of directors did not have any clear-cut policy. There was political in-fighting among several board members, and there was no strong member of the family who could take charge in Indonesia. I say this with certain reservation, but I believe that it is basically correct, for their choice in 1950 of one of our youngest brothers to head our Indonesian operation was not very fortunate. He was too young, although he was a university graduate-he had a master's degree in economics from a university in New York. He was not familiar with the condition in Indonesia. He did not speak Indonesian. He was not aware of the profound change in the mentality of Indonesian officials. He approached the running of the company very much with the colonial attitude which prevailed before the war. It was not entirely his fault. Most of the directors had the same mental attitude. I was in Indonesia at the time the Japanese made the Indonesians become aware of the possibility of attaining independence, and having had many Indonesian friends with whom I spoke very freely-I was fluent in Indonesian, I understood better the profound change in Indonesian mentality. But most of the board directors did not realize this, and continued to run the company on the old colonial basis, so we were not very successful in the postwar years.
What happened to the five sugar mills you owned before the war?
Of the five, only two were working at full capacity around 1950. They were the factories at Redjoagoeng near Madiun and Krebet in East Java. The others were inhibited-they were laid up; the machinery was preserved but not used.
Did Oei Tiong Ham Concern own sugar plantations before the war?
No. The system was such that we owned sugar factories, but we did not own plantations.
A few years after 1950, when you became chairman of the board of Oei Tiong Ham Concern, what was its major activity? Was it sugar milling or general trading?
I think sugar had become less and less important, since the land on which sugar was grown was not owned by us but by Indonesians and we could not force them to plant sugar cane. What happened was they found other crops more profitable and grew less and less sugar cane. So, the importance of the sugar business declined, and we were very much engaged in assisting the Indonesian government in purchasing rice, mainly from Thailand and Burma. At that time, there was a Dutch company called "Internatio," which was an accredited rice purchaser for the Indonesian government. Since they were a pure Dutch company and we were more Asian, I remember they transferred the license to us. The man instrumental in obtaining this rice agency was my brother, Oei Tjong Hiong, of Kian Gwan, Bangkok, and its general manager, Tan Tjin Koan. We bought a very large quantity of rice for Java, which was very strange because Indonesia had been always self-supporting in rice and been exporting surplus rice. Rice remained a very important product for us until Indonesian groups, out of jealousy, managed to start all sorts of rumor that we bought the rice of poor quality at too high prices and tried their best to put a finger in the pie. I would say that it was because of these Indonesian groups' activities that a lot of bad feeling was created. It was they who bought rice of wrong quality at wrong prices.
In the 1950s under the Benteng program, the Indonesian government began restricting foreign exchanges. Did this affect your trading activity?
Yes, of course. Because you could not open letters of credit and could not obtain foreign exchanges. If you exported, you had to surrender the foreign exchange earnings and were repaid in local currency at very unrealistic rates. If you look at Indonesia now, there is no black market against the official rate because it is a more or less realistic rate, but before, the discrepancy was ludicrous; nobody was prepared to work at the official rate.
In other words, the business environment for the Oei Tiong Ham group changed greatly after the Pacific War. Sugar production declined, so there was less business for sugar milling, and trading was in difficulties because trading, especially import trading, became restricted. Does this mean that the group declined over time in the 1950s?
Yes, I would definitely say so.
How did you get to the Singapore office? Was this your first overseas assignment?
No, I went to our Shanghai office first. Then, when the Communist Revolution came, the office was closed, and Tjong Hauw transferred me to Singapore. Unlike other brothers, I took orders from Tjong Hauw, because I believed that it was necessary for a business organization. In my short career with Kian Gwan, I moved to many places. I worked in Semarang, Surabaya, Shanghai, Hong Kong, Bangkok, and Singapore.
In the prewar period, did both the Semarang and Surabaya offices handle sugar, or was it only the Surabaya office which handled sugar?
Both did. For example, the Krebet sugar factory sent sugar to the Surabaya office, and the Redjoagoeng factory sent sugar to the Semarang office.
In the prewar period, Semarang was a small city compared with Surabaya. Ocean-going ships had to stay offshore since the port was not deep enough and there were no loading and unloading facilities. On the other hand, Surabaya was the major port and the center of economic activity at that time. And after the war, Jakarta became the major city. Didn't you feel that it was better to move out of Semarang?
In the prewar period, we kept our headquarters at Semarang because it was where our father did business. But after the war, although nominally our headquarters was in Semarang, the Jakarta office became de facto our headquarters. Tjong Tjay, who was the chief executive officer for about a decade before the confiscation, lived in Jakarta.
What happened to your bank after the Pacific War?
Oei Tjong Hauw phased it out after the Pacific War. It had been inactive anyway. I don't think it had done any actual commercial banking. It had been acting as a sort of bank for the group.
Why did he decide to phase it out? You say it was not much of a bank, but he could have expanded it and made it a full-fledged commercial bank.
Yes, the idea was good. But the trouble with the bank in the prewar period was that he put one of his younger brothers in charge. The younger brother, who was a very nice person and with whose family (his wife and daughters) I was very friendly, did not have any business capability. He just sat in the bank and did nothing. If he had been a dynamic person, we would have had a bank which could become a leading financial institution in the postwar period.
What happened to the shipping company?
We sold our shares in Heap Eng Moh Steamship Co. We sold them to the Dutch shipping company, Koninklijke Paketvaart Maatschappij, or KPM for short.
Did you sell your shares before the Pacific War?
No, after the war. I think it was in the mid-1950s, a little before KPM was nationalized by the Indonesian government. The nationalization was a stupid move on the part of the Indonesian government. The whole insurance world turned against them.
What happened to your alcohol distillery in Shanghai?
I was in Shanghai two years ago. I did not go to the factory- But I hear they are using it as a godown.
Was it confiscated when the Communists came to power or was it sold before that?
It was confiscated in 1948 or 1949. After so many years, they decided to pay us a compensation. I think the amount was about 1.5 million Chinese dollars. When my brother started the distillery in the 1930s, our investment in it was 4 million US dollars, so the compensation was entirely disproportionate.
Did you say 1.5 million Chinese dollars? Which was equivalent to. . . ?
At that time, one Singapore dollar was equivalent to one Chinese dollar.
Then, since it was about two Singapore dollars to one US dollar, the compensation was about 750 thousand US dollars, wasn't it?
Summing up the postwar development of Oei Tiong Ham Concern, can we say that it definitely declined and that the decline was partly due to the change in business environment after independence and partly due to the ownership structure which prevented any one person from taking an effective control of the group. Is this correct?
Yes, it is correct. About the problem of ownership structure, every director had the same share and authority, so nobody was effectively in charge. Somebody could be in charge in name but not effectively.
8. Importance of the Military
After independence, did you feel that it became important for businessmen to establish close contacts with the military?
Yes. It was more important to establish contacts with military authorities than with civilian authorities.
Well, I think if you look around even now in Indonesia and look at countries like Thailand and Burma, you'll see that those societies are very much controlled by the military. With right contacts, Chinese companies can survive and do well. As a Chinese company or individual, we are fair game. You see, we have no strong country that stands behind us and protects us, like, for instance, the Japanese. The Japanese have Japan behind them. Also, the English people once had the great navy to protect them. And the Americans, you see, find American citizenship as a strong protective influence. But the overseas Chinese all over the world have no such things. They have to roll with the blows and survive through their own wits. In this particular country, I think, all the Chinese who have done well have done well because of right contacts. Right contacts may involve some civilian authorities, but the majority of important contacts always involved military authorities.
Even during the Sukarno period?
Yes. It was of no use to know the minister who studied in Europe and with whom you could speak in Dutch if your factory was in the rural area, for he could not protect you when you needed help.
Are you saying that connections with the military were more important because they offered security?
Yes. They could provide security, and also help us directly in doing business. For example, in the purchasing of rice and other materials, somehow we found that this was mostly in the hands of military authorities, or they were connected with such activity.
I want to ask you about the role of the military in the smuggling trade in Indonesia during the Sukarno period. Did you have to deal with them at that time from Singapore?
I bought a lot of copra from Sulawesi. I did a lot of dealing with Colonel Sumual who rebelled against Sukarno. I offered him to be his representative in Singapore. So, a young Indonesian lieutenant came here. I helped him to charter a ship to get copra from various places in Sulawesi, such as Menado. We sold the copra to Germany.