ABSTRACT

BANKING IN INDONESIA SINCE the provision and regulation of a currency system are among the major functions of a sovereign government, it was to be expected that in this field the role of Western enterprise in Indonesia and Malaya should be sharply contrasted with that in China and Japan. In Japan the creation of a monetary and banking system was one of the chief constructive tasks which the Meiji Government set itself in the last quarter of the nineteenth century, and the activities of the Westerners soon became limited to foreign exchange banking. In China they went far beyond it. Until the 1930s the Chinese Government failed to discharge-indeed scarcely attempted to discharge-the monetary functions upon which the efficient conduct of modern commerce and industry depend, and Westerners were forced, by the necessities of their developing trade and industries, to accept substantial monetary responsibilities. Yet, in the absence of political control, it was never within their power to extend a modern currency and banking system over China as a whole, and their functions, at any rate in China Proper, hardly went beyond the periphery of the economy to which their commercial activities were Iimited.!