History Of Penang | Founding Of Georgetown
The History of Penang and the Founding of Georgetown is a story of betrayal, double-dealing and lost friendship between Francis Light and the Sultan of Kedah. The island of Penang virtually uninhabited at the time belonged to Kedah, itself a vassal state of Siam. Light saw an opportunity for Penang to come under the control of the East India Company.
Francs Light The Country Trader
While the Dutch already held many ports in the region, the British still sought a strategic foothold. Light, a quintessential “country trader,” operated outside the purview of the established East India Company. These independent merchants, like Light, enjoyed the flexibility and adaptability that the larger companies lacked, allowing them to navigate the complex inter-Asian trade networks with greater agility.
The spice trade was booming and Light was a beneficiary.
Country traders traded in a diverse range of goods, from spices and textiles to opium and precious metals. While operating out of Aceh for an independent British trading company, Light also maintained a thriving business in Phuket, where he became fluent in Thai and married a woman of Thai-Portuguese descent. His experience in the region, coupled with his understanding of local politics, made him keenly aware of the strategic importance of a presence in the Malacca Straits.
Light, along with his business partner James Scott devised a plan to promote both Phuket, then known as Thalang and Pulau Pinang to the East India Company. Their proposal highlighted the nature of the two locations. Light would promote Penang, and Scott would take Phuket emphasising that they’d not compete with each other’s application but rather serve the broader interests of the British Empire.
Light’s Pinang at the time was under the ownership of the Sultan of Kedah, and Lights’ familiarity with the Kingdom of Kedah proved invaluable.
The Trader And The Sultan
Over a decade earlier, Light had been involved in a dispute between the old Sultan and a faction of the Kedah royal family, even devising a plan for the East India Company to intervene (though the EIC ultimately declined). This experience created a close relationship between Light and the Sultan’s son, Abdullah.
The precarious situation in Kedah, threatened by both Siam and Burma, further underscored the need for a strong British presence. Light, leveraging his connections and understanding of the region’s dynamics, saw the potential of Penang. With the war between Siam and Burma ending, the Sultan feared for the safety of Kedah. The Siamese had already annexed nearby Pattani and it was increasingly likely that Kedah would be next up.
Light’s friend was now Sultan of Kedah and was becoming ever more concerned about the potential invasion from the north. He sought protection and had learned that the British East India Company could be interested in Penang.
He saw an alliance with the EIC as a way to safeguard his kingdom and proposed ceding Penang Island to them in exchange for military assistance and a yearly payment of 30,000 Spanish dollars. This payment was intended to secure Kedah from both sea and land invasions.
Francis Light Heads To India
Captain Francis Light was tasked with negotiating this deal and so he went off to India to negotiate on behalf of his friend the Sultan.
However, the Governor General of India had reservations. The hefty price tag for what was then an undeveloped island, and the condition of protecting Kedah’s land borders, potentially drawing the EIC into conflict with Siam or Burma, were major concerns. The EIC, primarily focused on trade, was wary of any action that could disrupt its business.
Light conveyed the Sultan’s proposal to EIC HQ in India, who in turn sent a dispatch to London for further instructions. Light returned to Kedah with a letter from the Governor that, while positive about the prospect of acquiring Penang, stopped short of a firm commitment. Disappointed but undeterred, the Sultan suggested that Light proceed to Penang and establish a presence there while awaiting a definitive answer from London.
Gold Coins And Official Documents
The circumstances surrounding Light’s landing on Penang remain unclear. While some accounts depict a forceful takeover, this is likely an exaggeration. Light’s diaries suggest that he landed with a small contingent of men, not the large armed force that some stories claim.
Penang, in 1786, was a far cry from the bustling island it is today — a landscape of mudflats, dense jungle, and tangled mangroves. Though sighted by a British ship over two centuries prior, it had been deemed unremarkable. But the times had changed. The Straits of Malacca, now teeming with traffic, demanded a British presence, especially with the Dutch and French vying for influence.
Francis Light landed on the island on July 17th 1786 with his crew. Anchoring off what is now the Esplanade, they quickly erected a wooden fort where Fort Cornwallis stands today. Legend has it that Light, seeking to quickly clear land, fired cannons loaded with gold coins into the jungle, encouraging his crew to venture in and “reclaim” the land.
In The Name Of The King
Just three weeks after landing in Penang, Captain Francis Light and his small team had accomplished a remarkable feat. A small wooden fort was completed, providing a basic defence for the nascent settlement. Beyond the fort, Light had laid out the foundations of a town, with four roads marking the beginnings of urban development. With the fort finished, a ceremony was held, complete with cannon fire and the raising of the British flag. Light formally claimed the island for Britain, christening the new settlement Prince of Wales Island.
“…I have taken possession of the island called Pulau Pinang, now named Prince of Wales Island and hoisted the British Colours in the name of His Majesty George the Third and for the use of the Honourable English East India Company…”
Francis Light
News of this new trading opportunity in the Straits of Malacca, even in the late 18th century, spread rapidly. Enterprising individuals quickly recognised the potential of the fledgling colony. Within a year, sixty Chinese families had established businesses on the island. Despite lacking official confirmation, Penang’s settler influx proved its promise. Light’s actions, though premature, had already transformed Penang from a quiet island to a bustling outpost.
Letter Finally Arrives
By May 1787, the Sultan of Kedah’s patience had worn thin. He had been waiting for a response from the British East India Company regarding their agreement to take possession of Penang Island, but no word had arrived from London.
The promised share of profits from the island’s trade, as stipulated in the temporary agreement with Captain Francis Light, had not materialised either. Frustrated by this lack of communication and compensation, the Sultan took action. He retaliated by making it more difficult for food supplies to reach Penang; and imposed a tax on rice exports destined for the island.
The Sultan was facing pressure from the Siamese, who were requesting food, funding, and troops to aid them in their ongoing conflict with the Burmese. The Sultan, however, was hesitant to commit resources while his situation with the British remained unresolved.
Incredibly he was still consulting with Light regarding what to do with the Siamese. His plans involved organising a coalition of Malay states to fight the Siamese, but Light advised against it — reminding the Sultan that the Siamese were far too powerful.
Finally, a letter arrived from London. The East India Company offered the Sultan two options: a one-time payment of 10,000 Spanish followed by annual payments of the same amount for ten years, or a perpetual annual payment of 4,000 dollars for as long as the Company held the island.
However, the Company made it clear they were unwilling to defend the Sultan’s mainland border against potential threats.
Sunken Costs And The Founding Of Penang
To address the escalating situation, Lord Cornwallis, the Governor-General of India, arrived in Penang to negotiate with the Sultan. Meanwhile, Light, anticipating a potential Siamese invasion, strongly advised Cornwallis to deploy more troops to reinforce the island’s defences. Light’s fears were not unfounded. Feeling betrayed, the Sultan built two mainland forts opposite Penang and considered hiring mercenary pirates.
The deteriorating situation in Penang was being discussed back in India. In a gesture of appeasement, the Company offered the Sultan an increased annual payment of 20,000 Spanish dollars, along with back payments to compensate for the previous delays. However, their stance on defending the Sultan’s mainland remained unchanged.
Light Launches Attack
Before negotiations resumed, Light, reinforced by British troops, attacked the Sultan’s forts and allied pirate strongholds. Within a few hours, the forts were destroyed, effectively ending the immediate threat to Penang and solidifying British control.
After the battle, the Sultan must have realised he was in a losing situation. Light was ordered to pay the Sultan 10,000 dollars, but offered only 6,000, stating further negotiations would occur in India.
Forced by sunk costs (lost forts, disrupted trade, and alienated people), the Sultan accepted the situation despite broken agreements. He understood that prolonging the conflict would only lead to further losses. He’d invested significantly in building up his defences, only to see them destroyed in hours. He had also lost revenue due to the disruption of trade with Penang.
Perhaps most painfully, he had lost a trusted friend and advisor. Light had proven to be more concerned with the Company’s interests than with their prior agreements. Realising the unfavourable circumstances and the cunning nature of his former friend, he finally gave in to Light and the EIC. In the history of Penang, the island was formally signed over to the British in 1800.
