Second Waigani Seminar
The University of Papua and New Guinea
The Research School of Pacific Studies, Australian National University.
THE ESTABLISHMENT OF A PLANTATION ECONOMY IN
THE BRITISH SOLOMON ISLANDS PROTECTORATE
The main theme of this paper is the relationship between Colonial Office land policies and practices, or the lack of them, and the establishment of European plantations in the British Solomon Islands Protectorate, between 1893 and 1914.
The considerations which, in 1893, moved the Liberal Government to protect the Solomon Islands, were mainly those of foreign and imperial policy, and were almost totally unrelated to the development of the resources of the group. The Protectorate was established mainly to keep the French out of the Solomons. Associated with
this motive was a concern for public opinion in the Eastern Australian colonies, already alarmed by the presence of the French in New Caledonia and the New Hebrides, and the Germans in the northern sector of Eastern New Guinea. Of less significance, although much publicised as the real reason for intervention, was a desire to have more control over labour recruiting in the Solomons for plantations in Queensland and Fiji.
In 1886, agreement had been reached between the governments of Great Britain and Germany as to their respective spheres of influence in the Western Pacific, and the Solomons south of Bougainville fell within the British sphere. The French however, were not parties to this agreement, and by this time were the subject of more apprehension in the Australian colonies than were the Germans.
When the Solomons were brought under British protection there was only a handful of European residents in the group, for the most part traders, some of whom operated from their vessels, without possessing any permanent habitations on shore. Others occupied small trading stations, but at this stage none of them seem to have developed plantations of their own on any scale. Although they dealt in copra, this was brought from the Solomon Islanders.
In 1893, no plans were made for the immediate administration of the Protectorate, which was expected to pay for itself, and had virtually no revenue. A Resident. Commissioner was not posted to it until 1896, and then only on a temporary basis, with a tiny staff.
Land alienation on an extensive scale, and the establishment of European plantations in the Solomons, followed, rather than induced, the establishment of the Protectorate. The first large scale alienation of Protectorate lands was to the Pacific Islands Company Limited. However, this alienation did not immediately, or even directly, lead to the development of a plantation economy
in the British Solomon Islands Protectorate, although the original aim of the Directors was not only to develop copra plantations on an extensive scale, but also to bring it under chartered company rule. In 1898, the year of its formation, the Pacific Islands Company sought a concession from the Colonial Office comprising "all the unoccupied lands" of the Protectorate.
The Directorate of this Company was composed of men with rather dissimilar backgrounds. Mandarins who had spent most of their lives as Colonial and Colonial Office Administrators sat
with merchants and traders. But the trading and imperial ambitions of the two groups were at times inextricably interwoven. Of the Colonial Administrators, Lord Stanmore, formerly, as Sir Arthur Gordon, Governor of Fiji and first High Commissioner for the Western Pacific, was the most known. In his colonial service period he was notorious amongst the traders and planters of the Pacific for his not always successful efforts to prevent the alienation of Pacific Islanders' lands; in his commercial period
he hastened this alienation with conspicuous success, and an almost total absence of notoriety. Sir Robert Herbert, who, in 1898, had recently retired as permanent Under Secretary of State at the Colonial Office, was Trustee for the debenture holders in the new company, and Sir John Bramston, an assistant Under Secretary of State, was also interested in it.
The principal commercial director was John Thomas Arundel, who, on its formation, transferred most of his interests in the Pacific to the company. These, together with those acquired from the trading and plantation firm of Henderson and McFarlane, comprised its principal assets, prior to its acquisition of lands in the Solomons and Ocean Island. These assets for the most part consisted of licences issued by the Crown to remove guano and plant coconuts on a number of small, and for the most part uninhabited, Pacific islands. There is some uncertainty as to the amount of capital which was actually subscribed on or after the formation of the Pacific Islands Company, but the Directors' original aim to operate on a capital of £250,000 made up of 125,000 5% cumulative preference shares of £1 each, and 125,000
ordinary shares of £1 each, was certainly never realized. Despite, or perhaps because of, its grandiose designs, the company remained chronically short of capital throughout its existence and was loaned money from time to time. by Stanmore and other Directors
when its bankers became pressing. It owed at least E60,000 on being wound up in 1902.
Arundel and Stanmore had been interested in the Solomons since at least 1895 as a field for large scale plantation development by a chartered company, but by 1898, when the formal application for
a concession was made, rule by chartered company was becoming less popular in the Colonial Office than it had been in the past. Joseph Chamberlain, then Colonial Secretary, was not prepared to repeat the doubtful experiment of chartered company rule in the Pacific.
Nevertheless, the Colonial Office hierarchy was quite willing to further the commercial ambitions of the Pacific Islands Company. In the Western Pacific, both the Resident Commissioner of the Protectorate, C.M. Woodford, and Sir George O'Brien, the High Commissioner, supported the company's application for a concession. In later years, Woodford claimed to have
"induced the Pacific Islands Company to take up land in the Protectorate."
O'Brien's view was that the presence of a powerful group of Europeans around New Georgia, the island in the Protectorate most notorious for head-hunting, would lead to the gradual unpopularity of this pastime, and thus slow down the depopulation of parts of the Protectorate. The Directors preferred unoccupied land, and assumed that the Crown not only had title to it but could make grants of it in the form of freehold or leasehold estates. They
did not want to purchase land from the Solomon Islanders themselves, and assumed that a great deal of land which was apparently unoccupied was not subject to any traditional customary rights, a dangerous assumption in the light of subsequent claims.
They were quite happy to accept a long lease, and in September 1899 it was agreed
"to grant to the company a lease for 99 years of any waste land, or land unoccupied by natives, or
purchased from natives, for which the company may apply ..... up to 100,000 acres, subject to
the reservation of all minerals."
Stanmore continued to haggle with the Colonial Office officials about the area of the concession; the rent; the powers of the High Commissioner to interfere in the transaction; sub-letting; and the time in which the lands were to be selected. However, in their correspondence throughout these negotiations both parties specifically referred to the estate which was to be acquired as a lease.
In June 1900 the Secretary of the Western Pacific High Commission, Merton King, wrote to Arundel in Sydney and told him that when Arundel forwarded amended and corrected plans of the areas to be leased, the Kigh Commissioner would issue provisional leases
". . , on the terms laid down in Sir Edward Wingfield's
letter to Lord Stanmore of 16th September, and Mr. Cox's letter of 3rd of October 1899."
In Cox's letter, the maximum area for selection had been doubled, at the company's request, to 200,000 acres.
However, just when it appeared that the company would obtain its leases for the areas it sought, two major difficulties arose. Six days after his Secretary's letter Sir George O'Brien wrote to Arundel and told him that the Deutsche Handels and Plantagen
Gesellschaft - known throughout the Western Pacific as the Long Handled Company - claimed title by a purchase made. in 1886, to a considerable proportion of the lands sought by the Pacific Islands Company. The High Commissioner and the Colonial Office never took up a positive stand as to the recognition or disproof of the Long Handled Company's claims, which had never been perfected by occupation, and eventually, in December 1902 the Directors cut the Gordian Knot by buying the claims for £5000 and surrendering them to the Crown for that price.
In addition, in October 1900, a further problem arose, when John Anderson, later to be permanent head of the Colonial Office, who had conducted the negotiations with Stanmore and Arundel on the basis that the estate granted would be a 99 year lease, gave belated consideration to the question of the legal capacity of the
Crown to grant estates in waste or unoccupied land in the Protectorate. After several years of talking in terms of a Crown grant of Protectorate lands he became suddenly cautious, and advised against
"the use of terms in the instrument issued to the Pacific Islands Company Limited which might imply Crown ownership."
He felt that the Crown could not
"claim property in these wastelands unless we annexed
the islands .... of course, when we are in a position to annex and these derelict or wastelands become legally the property of the Crown the certificates granted,— can then be replaced by proper leases
or other titles."
Meanwhile, all that was proposed
"was to guarantee and protect certified occupation.
We have power to legislate for these Islands under the Foreign Jurisdiction Acts, and under that power we forbid unauthorised occupation of wastelands, and the authorised occupant is protected not by
our giving him proprietary rights, but by our forbidding and preventing occupation by others.
"The process is in fact a measure of police, rather than a sale or lease of land in which the Crown has proprietory rights."
Anderson proposed to protect each authorised occupier of wastelands in the Protectorate by the issue of a 'Certificate of Occupation' or a 'Licence for Occupation', rather than a lease. Lord Selborne,
then Parliamentary Under Secretary of State for the Colonies, agreed with Anderson's opinion as to the inability of the Crown to grant proprietary rights over wastelands in the Protectorate, and favoured the issue. of Certificates of Occupation.
This discussion had been triggered off by a query from High Commissioner Sir George O'Brien, and he was accordingly informed of the Colonial Office reluctance to lease. However, Anderson, who had been in close touch with Stanmore throughout the negotiations, usually keeping him informed of relevant instructions sent to O'Brien, apparently thought it unnecessary to tell Stanmore that he was no longer to get a lease, or any other proprietary right, but
a Certificate of Occupation instead. The Sydney agents of the Pacific Islands Company were the first to hear, being informed by the Secretary of the High Commission, in a letter dated 17 December 1900, that the Secretary of State for the Colonies had
"ruled that the Crown cannot claim property in wastelands and therefore cannot grant leases in the Solomon Islands."
On ultimately receiving this news, Stanmore wrote privately to Anderson, pointing out, with controlled asperity, that his company had formally accepted the offer of a lease on 6 October 1899, and had thereupon spent over £3,000 on an expedition to select suitable land. In subsequent discussions with Anderson concerning the Long Handled Company's claims
"no intimation was ever made that there was any
unwillingness on the part of the Colonial Office to issue the leases if we chose to take them. Our last talk on the subject was only a few days ago."
Referring to the letter of 17 December 1900, from the Secretary of the High Commission to his Sydney Agents, he observed that it was
"written in consequence of directions issued by the Secretary of State, and which must therefore have been given some time ago. It is not unnatural
that we should feel some surprise that any direction of such vital importance to our interests should not have been communicated to us by the Colonial Office at the same time that its instructions were sent to Sir G. O'Brien."
After attacking the inadequacy of Certificates of Occupation as security for borrowing money, and because they conveyed no power of sub-letting,
"which to us is essential", he was unable to
"refrain from a little expression of mild wonder that in the course of five months' 'consideration' before the leases were promised, or the year which followed, it should never have been discovered that they could not be given at all".
Anderson failed to reassure Stanmore that the certificates were intended to be the equivalent of a lease, since patently they were not. Stanmore assured him that they were not regarded in this light by those people from whom the Pacific Islands Company
Limited wanted credit and finance. From an investor's and lender's point of view, there was a significant difference between an instrument, such as a lease, which conveyed a proprietary interest and estate in land, and a Certificate of Occupation, which did not.
Stanmore, however, remained committed to his dream of a new gubernatorial role in the Solomons, and reluctantly accepted the substitution of Certificates of Occupation for leases, though he became increasingly insistent on receiving positive rights to
sub-let the lands held under the proposed Certificates. It is probable that by this stage he planned to develop the concession primarily by sub-letting portions of it, as the Pacific Islands Company remained chronically short of capital until its reconstruction, and the opening up of its phosphate bonanza on Ocean Island. Nevertheless, it is unlikely that a majority of Company's Directors would have committed themselves to the Solomons had it been clear from the first that no lease would be granted, and no estate in land acquired.
The view eventually adopted in the Colonial Office as to the limitations on British legal capacity in the Protectorate was consistent with opinions given in 1884, 1887, 1891 and 1892, by successive Law Officers of the Crown, on the limitations of British jurisdiction in Protectorates; and with Colonial Office policies and practices in the Pacific in the last two decades of the 19th
Century. Protectorates were, and are, considered to lie outside the Territorial Dominions of the Crown. In Melanesian Protectorates where jurisdiction was not obtained by treaty or agreement with
local rulers or chiefs, the Law Officers had advised that jurisdiction was limited by the Foreign Jurisdiction Acts, to British subjects,
and did not extend either to European foreigners or the Melanesian inhabitants of the Protectorates.
In these circumstances, it is surprising that the Colonial Office agreed to lease the 200,000 acres of land in the Protectorate to the Company. This is particularly so, in the light of a Colonial Office minute written in August 1898, which doubted
"whether in the Solomons there is anything which
could be the subject of a concession from the Crown. It has been held almost without hesitation hitherto that a Protectorate does not confer on the Crown property in the lands of the Protected State and that assertion of such rights of property involves annexation."
This minute was ignored throughout the subsequent negotiations with the company.
By the time the Long Handled Company's claims had been purchased, and the problems associated with the tenure under which the concession was to be held had been sorted out, the Pacific Islands Company was, not surprisingly, in grave financial difficulties. However, in
1900 the rich phosphate deposits on Ocean Island had been discovered by A.F, Ellis, one of its employees, and from this time onwards it became clear that its main hopes of success lay in mining phosphates rather than in developing its Solomon Islands concession. The Directors realized that a monopoly of guano deposits in the Western Pacific would be a necessary pre-requisite to the sort of financial success they dreamed about, and entered into agreement with the Directors of the Hamburg Company, Jaluit Gesellschaft, which controlled the Nauru deposits. This agreement resulted in 1902 in the formation of the Pacific Phosphate Company, an Anglo German Company controlling both the deposits on Nauru and Ocean Island.
In the same year the Pacific Islands Company (1902) Limited emerged from the ruins of the original Pacific Islands Company. The 1902 company acquired interests in the phosphate company, as well as
the Solomon Islands concession, when the Certificates of Occupation were finally issued in 1903, five years after the original negotiations formally began-
Largely because of the concentration of the Board of the reconstructed company on the phosphate business, and its financial difficulties in the early years, the Solomon Islands concession was never developed, From this time onwards efforts were made by a number of Directors to dispose of the concession altogether, though Stanmore remained hopeful until the end that his empire
in the Solomons would eventuate.
The failure of this first attempt at the development of plantations on a large scale in the Solomons, seems to have been closely related to the ambivalence and uncertainty of Colonial Office lands policies, which resulted not so much from humanitarian desires to keep the Islanders' lands from alienation, as from partially digested beliefs as to the legal limitations of British jurisdiction in the Protectorate.
The question of tenure remained fundamental to the development of a plantation economy in the Protectorate, and the first plantings of significance took place not on the so-called unoccupied lands held by the 1902 Company under Certificates of Occupation, but on freehold land acquired direct from the Solomon Islanders themselves. Although, in the period up to 1914, there was considerable emphasis placed on the limitations of British jurisdiction over the alienation of unoccupied lands in the Protectorate, up until 1910 there was only a minimum of restraint placed on the much more significant and permanent alientation of land by private sale. Subject to registration, the approval of the Resident Commissioner, which rarely seems to have been withheld, and to improvement conditions which rarely seem to have been enforced, until 1910
land could be lawfully and permanently alienated from the Solomon Islanders. And after some small degree of security of life and property had been established in the Protectorate, as far as Europeans were concerned, sales of Solomon Islanders' lands took place on an increasing scale. Initially, the purchasers were, for the most part, European traders already established in the islands. For the most part they extended their original tiny holdings, and after some years of buying coconuts from the Solomon islanders, began to establish plantations and grow them themselves. The Resident Commissioner, Woodford, calculated that
988 acres had been planted with coconuts by Europeans by 1901, and b' 1905, the year that Levers entered the group, 3423 acres had been planted. It is likely that the initial success of the traders in turning to copra planting was a factor in inducing Levers to enter the group.
In the early 1900s Woodford was becoming increasingly disenchanted with the Pacific Islands Company, and soon abandoned all hopes that the company would develop its concession. Seeking the economic development of the Protectorate, and its financial independence of Treasury grants, he interested Sir William Lever in entering the Solomons, and was no doubt able to point to the successful, though small scale beginnings, of copra planting in the group. At the same time, the Pacific Islands Company had been trying to dispose of its concession in the Solomons to Lever for
a substantial sum, or, alternatively, to induce him to invest in its development, but Lever soon realized that the company did not have a monopoly of the best lands in the Protectorate. Nor was he particularly attracted by tenure. under Certificate of Occupation. Accordingly, in 1905, Lever began buying freehold in the Solomons, partly from existing traders and planters, and partly from the Solomon Islanders themselves. He eventually acquired 28,870 acres in this way from Solomon Islanders, and 51,000 acres from European planters. Once he had done this, the Pacific Islands Company had little hope of selling the concession at a profit to Lever, or of interesting him in its development of the original concession while it remained outside his control.
Eventually Lever took the almost unmarketable concession for a small sum after the Colonial Office had agreed to extend the term of the Certificates from 99 to 999 years but it is significant that up to the first World War, he concentrated on the development of his freehold property in the Solomons rather than on the land held under Certificates of Occupation. By 1907, Lever, through Levers Pacific Plantations Limited, controlled 300,000 acres. But in so far as the lands held under Certificate of Occupation were
concerned, he remained a disappointment to the Resident Commissioner, because of his refusal to develop them to any extent whilst the parts of his freehold remained undeveloped.
Lever's entry into the Solomon Islands had the indirect effect of putting the Protectorate's finances on a firm footing for the first time, and the revenue accruing to the Protectorate Government, largely through indirect taxation, increased enormously as a result of the flow of money and goods into the Protectorate. Lever's
entry also encouraged other extensive investment in plantation agriculture in the Protectorate, notably by Burns Philp.
Up to 1914 the lands policies of the Colonial Office were significant in retarding the development of a plantation economy in the Solomons, and it seems very likely that the failure of the Pacific Islands Company was to a very large extent due to the
inadequacies of its title and to the delays in acquiring it. On the other hand, though Lever's initial concentration on the development
of plantations held under freehold title was clearly wiser, he had the additional advantages of extensive capital available to him and considerable experience in the production of copra. In addition, his soap works provided his own market, so that while land tenure problems were fundamental to the failure of the Pacific Islands Company, the partial solution of these by Lever was by no means the only factor contributing to his success.