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  • The Chettiar Role in Malaysia's Economic History by Ummadevi Suppiah and Sivachandralingam Sundaram Raja
  • Salma Khoo Nasution
The Chettiar Role in Malaysia's Economic History Ummadevi Suppiah and Sivachandralingam Sundaram Raja Kuala Lumpur: University of Malaya Press, 2016

The Chettiars are well known as a historical trading caste in south India. The Chettiar Role in Malaysia's Economic History reveals many hitherto little-known facts about this business group. The Chettiars are a subgroup of traders (tanavaisya) of the Vaisya class. Their prerequisite skills include price-setting, collecting supplies and careful speculation, as well as knowledge of foreign cultures. Their qualities include being trusted with secrets, experienced and patient in business, and so disciplined in daily routine as to 'return home before sunset'.

Ummadevi Suppiah's thick PhD on the Chettiars was abridged and condensed into a pithy 180-page book, co-authored by her supervisor Sivachandralingam Sundaram Raja. This book focuses on the Chettiars as money-lenders in Malaysia. The character of Chettiar money-lending has been amply described in K. S. Sandhu's classic study Indians in Malaya, first published in 1969. However, Ummadevi's study provides much greater detail about the Chettiar business community—personalities, business units, business relationships, historical circumstances and localities.

A Chetty merchant named Nina Chatu was headman of the South Indian community in Malacca during the Sultanate. He readily cooperated with the Portuguese conquerors and was raised to the position of Bendahara. After the fall of the Vijayanagara Empire in India in the sixteenth century, Dutch records show that the Chettiars were active in the salt and textile trade. In Dutch Malacca, the Chettiars did not fare as well for they had to put up with competition from the Dutch and other Indian traders. It was during the British colonial period in India and Southeast Asia that the Chettiars acquired their renown as a caste of moneylenders. On both sides of the Indian Ocean, Chettiar capital was able to penetrate further and deeper into local networks than British capital.

In a peripatetic fashion, the Chettiars made their way through every village and town in nineteenth- and twentieth-century Malaya. News of their ready financial services was disseminated by word of mouth. Pioneers of double-entry book-keeping among Asian trading groups, all records were written by hand. Western banks preferred not to deal directly with small Asian borrowers, but provided loans to Chettiars against promissory notes, property deeds and other collateral deposited in the bank vaults. Thus Chettiar enterprise expanded as a result of the great demand for microfinancing which arose in tandem with the development of shops, factories, tin mines, rice-fields and rubber plantations in British Malaya. [End Page 159]

Like other Asian business groups which emerged from the pre-capitalist period, the Nattukottai Chettiar or Nagarathrar (town) Chettiar was a community bound together by endogamous marriage. The Nagar Koil, the temple for the worship of Lord Murugan or Thandayuthapaani, son of Lord Shiva, was also a focus of economic and community life. Leading a disciplined and austere lifestyle, the Chettiar ethic could be said to be devoted to the twin principles of religious worship and capital accumulation. A portion of each Chettiar's income was dedicated to the temple charity (magamai), which functions as a business cooperative so the accumulated funds could be tapped for business expansion.

The book devotes one chapter each to the Chettiar's dealings with the three major ethnic communities of British Malaya. The Chettiars were the main financier to Malay farmers, rubber smallholders, civil servants and aristocrats. In the Federated Malay States, the Malay Reservation Act was supposedly constituted in order to forestall, if not prevent, Malay agricultural land from falling into the hands of the Chettiars.

The Chettiars also financed Chinese commodity traders, revenue farmers, miners, and rubber producers. Chinese compradors of British banks, Chinese financiers and Chinese kongsis also offered loans, but often the Chinese turned to Chettiar instead of Chinese lenders, for whatever reason. As Chinese businessmen often charged their shophouse properties as collateral, the Chettiars also acquired a number of town properties. As the financial centre for the northern states, Penang was the state with the largest concentration...

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