British India and the Dutch East Indies, in the half-century before the First World War, became what the Europeans envisioned when they imagined their "ideal colonies." They illustrated the kind of empire that all imperialists would have wished to have, and a glace at them reveals the goal toward which European imperialism was moving and the system that it was trying to create.
Whereas all countries of western Europe showed a surplus of imports, receiving more goods from the rest of the world than they sent out, India and the Dutch East Indies invariably, year after year and decade after decade, showed a surplus of exports, sending out far more goods than they took in. This export surplus was the hallmark of a profitable colonial area, geared closely into the world market, with low purchasing power for the native population and kept going by foreign investment and management. Both regions, in addition, were so large as to have a good deal of internal business, commerce, insurance, banking, transportation, which never appeared in the statistics for world trade, but which, being dominated by Europeans, added immeasurably to their profits. Both had rich and varied natural resources, tropical in character, so that they never had to compete with the products of Europe, though India even before 1914 showed tendencies to industrialization. In both regions the colonized people were adept and quick to learn the methods of modern economic and bureaucratic institutions. But they were divided by religion and language, so that, once conquered, they were relatively easy for Europeans to govern because they could not easily come together in a united political movement.
Neither region before the First World War had any self-government at the highest levels. Both were ruled by a civil service, honest and high-minded by its own lights, in which the most influential and best paying positions were reserved for Europeans. Hence upper-class families in England and the Netherlands valued their empires as fields of opportunity for their sons, somewhat as they had formerly valued an established church. In both India and Indonesia (as the Dutch colony began to be named by anti-Dutch nationalists in the early 20th century) the governments were more or less "benevolent" despotisms, which, by curbing warfare, plague, and famine, at least allowed the population to grow in numbers. Java, with 5 million people in 1815, had 48 million in 1942. India's population in the same years grew from less than 200 million to almost 400 million. Finally, as the last virtue of a European-defined perfect colony, no foreign power directly challenged the British in India or the Dutch in their islands.
The Dutch in 1815 occupied little more than the island of Java itself. In the following decades the British moved into Singapore, the Malay Peninsula, and north Borneo, and mad claims to Sumatra. The French in 1860 entered Indochina. The Germans in the 1880s annexed eastern New Guinea and the Marshall and Solomon islands. Ultimately it was the mutual jealousy of these European powers that preserved the Dutch position. The Dutch also took the initiative themselves. To forestall occupation by other Europeans, and to put down native pirates and find raw materials that the world demanded, the Dutch spread their rule over the whole 3,000 mile extent of the archipelago. They created an empire in place of the old chain of coastal trading posts and suppressed internal revolts in 1830, 1849, and 1888; not till the 20th century was northern Sumatra or the interior of Celebes brought under control. For some decades the Dutch exploited their huge empire by a kind of forced labor, the "culture system," in which the authorities required the farmers to deliver, as a kind of tax, stated amounts of specific crops, such as sugar or coffee. After 1870 a freer system was introduced. The Dutch also, as an important matter of policy, favored instruction in the Malay and Javanese languages, not in Dutch. This preserved the native cultures from the disintegration that could result from the imposition of European schooling, but at the same time it meant that European ideas entered more slowly.
In India in 1857, the British faced a dangerous rebellion, which they commonly called the "Indian Mutiny", as if it had simply been a revolt of undisciplined soldiers. The British army in India, with it "sepoys" (native Indian troops), was the only organization through which Indian could exert any collective pressure. The proportions of sepoys in Britain's Indian army was high in 1857 (about five-sixths) because units from Britain itself had been withdrawn for the Crimean War and for action in China. Many Indian outside the army had been unhappy with British policies for decades. Rulers had been conquered and dethroned. Landowners had lost their property and been replaced by new owners more friendly to the British. Religious sentiments were inflamed. The British too obliviously Indian believes as wrong or even repulsive; they had outlawed suttee, or widow burning, the ancient Hindu practice of a widow burning herself to death on the funeral pyre of her deceased husband; suppressed the Thugs, a small sect of holy assassins; and one British officer even declared that in ten years the government would abolish caste. Many Hindus therefor saw the British as dangerous opponents of their ancient religious traditions. Meanwhile, the Muslims were mobilized by Wahhabi fundamentalism, a popular reform movement that sought to purify and defend the religious practices of Islam. Mysterious propaganda circulated over India. It infiltrated the sepoys, announcing to Muslim soldiers that certain newly issued cartridges were greased with the fat of a pig and to Hindus that the same cartridges were greased with the fat of a cow. Because for Hindu's the cow was sacred, and for Muslims to touch pork was profane, there was much agitation among soldiers from both of India's main religious groups. The sepoys launched an uprising in the Ganges Valley; and with them the other injured interests, including the fading Great Mogul and his court, also rose against the British.
The British put down the rebellion with much brutality, aided by the fact that western and southern India took no part in it. But the uprising persuaded the British to a radically new course of policy, pursued basically until the end of the Indian Empire almost a century later. The British East India Company and the Mogul Empire were both finally and forever done away with. British authorities ruled directly, but the British concluded that they must rule India with and through the Indians themselves, not against them. This in practice meant a collaboration between the imperial power and the Indian upper classes. The British began to shelter Indian vested interests. They supported the Indian landlords and became more indulgent toward Indian "superstitions." Where before 1857, when they conquered an Indian state, they had simply abolished it and incorporated its territories, after the Munity they kept the remaining Indian states as protectorates. States existing in 1857, such as Hyderabad and Kashmir and over 200 others, with their galaxy of rajahs and maharajahs, carried on to the end of British rule in 1947. It was largely to provide a fitting summit for this mountain of Indian royalty that Queen Victoria was proclaimed empress of India in 1877.
India had been a considerable manufacturing country by preindustrial standards, Indian merchants had once been important throughout the entire Indian Ocean, and before 1800 Indian exports to Europe had included many textiles and other finished goods. The native crafts collapsed when modern industrialism backed by political power made its appearance. "India," observed a British expert in 1837. "can never again be a great manufacturing country, but by cultivating her connection to England she may be one of the greatest agricultural countries in the world." Free trade (made possible by military superiority, usually overlooked by economists) turned Britain into the world's workshop and India into a supplier of raw materials. Indian exports in the latter part of the nineteenth century consisted increasingly of raw cotton, tea, jute, oilseeds, indigo, and wheat. The British shipped their manufacturers in return. Business in India boomed; India came to have the densest railway network outside of Europe and North America. It is important to note, however, that Britain in 1914 did far more trading with the 6 million people of Australia and New Zealand than with the 315 million impoverished people of India.
The British, in contrast to the Dutch, decided in 1835 to favor instruction in English, not in the native languages. The historian T. B. Macaulay, one of the commission to make this recommendation, branded the Indian languages as vehicles of barbarous and unenlightened ideas, a bar to progress. The British also, after the great Mutiny, admitted Indians to the civil service and to governor's councils, albeit sparingly, but more than the Dutch in Indonesia. There were also many Indian businessmen. A class of "hybrid" Indian intellectuals and government workers spoke perfect English, often after completing education in England. They demanded more of a role in the public affairs and governance of their country. In 1885 the predominantly Hindu Indian National Congress was organized; in 1906, the All-India Muslim League. Muslim separatism, while favored by the British and sometimes even blamed upon them, expressed long existing religious identities, but these identities now became linked to new nationalist political movements. Nationalism spread. It did so increasingly anti-British; and radical nationalism also turned against the Indian princes, capitalists, and businessmen, as accomplices in imperialism, and so the new nationalism often took on the color of socialism. In the period of the First World War, under nationalist pressure, the British granted ore representation to Indians, especially in provincial affairs. But the movement toward self-rule was never fast enough to overcome the basic anti-British feeling of the Indian peoples, and Indian nationalism grew rapidly after the First World War.
After the First World War the home governments made concessions, but they were always afraid they might go too far. They insisted that their subject peoples were not yet capable of self-government. Huge investments were at stake, and the whole world economy depended on the continuing flow of raw materials rom tropical and sub-tropical countries. But they did compromise. In 1916 the Dutch created a legislative assembly to advise the governor general of the Indies; half of its members were Indonesians. In 1917 the British agree to a measure of self-government in India; and Indian legislative assembly was set up with 140 members, of whom 100 were elected, and in the provinces of British India the number of elected representatives and f local Indian officials was increased.