Deli Bank: The Tjong Brothers and Chinese Overseas Banking in the East Coast of Sumatra

Abstract

After experiencing two major events in the second decade of the twentieth century―the Xinhai Revolution and the First World War―Chinese overseas capitals in the South Seas (Nanyang) simultaneously faced a turning point that greatly affected their fortunes. After the formative years of the Chinese overseas enterprises through the Late Qing period in the 1890s to the Chinese Revolution in 1911, the post-war political and economic order began to inexorably transform the structure of preexisting commercial and financial networks shared among the Nanyang Chinese magnates. The paper’s primary objective is to chart the rise and fall of the Chinese business pioneers in Nanyang by retracing the example of the formation of the financial network of the prominent Tjong family of Medan in the early 20th century. Focusing on the establishment of Deli Bank as the first Chinese formal banking institution in the East Coast of Sumatra, the author seeks to explore the socio-economic factors that contributed to the setting up of such a financial institution in an economic hinterland like Deli at the time. Simultaneously, this paper also bids to examine the elements responsible for the devastating insolvencies of the once feted Nanyang capitalists.