1. SMUGGLING FROM NORTH BORNEO 2. SECURITY AND ECONOMIC CONDITIONS IN BANDJERMASIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R008500390005-5
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: December 16, 2016
• Document Release Date: October 3, 2003
• Sequence Number: 5
• Publication Date: September 20, 1951
• Content Type: REPORT

COUNTRY
SUBJECT
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PLACE
ACQUIRE
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DATE OF
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Approved Fo!:;..ptr.-IPn?eierfd9.81i:.,JFitm2_00457Rprip.ri,3?\p3
0 IV FO R NI A VI 0 REPORT c:D a
Indonesia
in Smuggling
2. Security
from North. norneo
and cenomic Conditions in
Bandjermasin
Ob-5
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DI3TR, 20 SEP 51
NO, OF v3AGES 2
NO. OF INCM
(LISTW BELOW)
SUPPLEMENT TO
REPORT NO.
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oF Tag WIWI? STATES INTIM TEM ZNIAMVISO Mg EIWICOMOM ACT 80
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1. Business ie boozing in North f.orneo, The area is not a breed'elg place for Communism
because everyone is working and naking more money than ever before, As leng as
this continues, Communism will not take hold. North Borneo has a surplus of
exportable merchandise, especially timber and rubber. As a result, shipping
to Borneo has increased three to four timen, Jardine Matheson & Ltd, has eet up
new runs and put on additional ships to handle the Hong hong-Borneo aad nepan-
Borneo trade, Although the busy ports of Labuan and Jeseeltoa are engaged in
legal traffic,& great deal of smuggling occurs from Sandakan and Tawau. Goods
smuggled from these oorte are taken to the nouth Phillopinee, particularly Zam-
beanga, and to the Celebes. Tawau is considered a smwelers? paradise, It is
a small place, supposedly under strict Britieh control, becalse of the huge revenue
they receive from the copra bough back into North Borneo. This copra is repacked,
leaving the island as a Borneo product; hence, it is dutiable. The Eritieh are esti-
mated to receive appzvzilrately 200,000 per month from this duty,
2. All fishing boats in the area are engaged in smuggling mall ships come into port
and take on bicycles, dry cell batteries, cigarettes, cloth, radios, and radio earts,
Host of them leave by night. They go either to the Celebes or to Zaaboanea,
where they unload, bringing back copra and sugar in return for the merchandise
delivered? There is also a substaetial barter trade between Dutch Borneo arid
Tawau; the items involved am not knola, Nor is it known whether strategic materials
such as gas, oil, ann, and the like are smuggled.
3. A briek trade is also going on in firewood. It is shi,eed in small swims or
Junks from Labuan end Sandakan to Hong Kone. where this fuel is in ehort eupply
There is no check en coastal ehips, emaller junks, and eaepane strict enough to deter'-
mine :;f they are reverting to China, nost ships come to Indonesia and Borheo on a
charter basis, since this is the only way they can take out complete load
4. Two large Chinese firms in Tawau, Tek Cten Company and Nam Fong Shing Comeenyr
ship at least two thousand cases of cigerettTs eeen pet- Lentl These cigarettes,
labeled Herald cigarettes, are manufacturee in the United States by Martin
Brothers and sold to the Chinese firme through Hong Kong Or ningapore by the '
etephano Brothers, a New York firm. The Chinese company in 6::nr,apore handling
these cigarettes ie gong Hoa Ltd,. No, 1 Church Street The companies in norneo
FIVE
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Approved For Release 2004/01/28 : CIA-RDP82-00457R008500390005-5
CONFIDENTIAL/
CENTRAL INTELLIGENCE AGENCY
insist- that the cigarettes do not bear the marking, "For Expert Only", These ?
firms prefer Carol cigarettes, which are more in demand, but they settle for the
Herald brand because they are cheaper and easily secured.
Travel in North Borneo is very much restrieted. There are few roads and it is
necessary to take a boat or a plane to move around the country, The whole of
North Borneo has only about 300 miles of roady.
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6. Angkatan Darat Republik Indonesia (ADRI) security action in the Bandjermasin area
durinc, June /951 produced lese favorable results than expecte& The only netice?
able improvement in security is in the larger towns.
Rubber prices declined from rphs. 750 per 100 kgs, at the beginning of April to
ephs. 450 at the end of June 1951, Luring the same period rice prices fell from
rphs, 500 to rphs. 300 per 100 kfe, Beceurse of insecure conditions in the
interior rubber production was lfmited. Maly rubber vorkers went over to rice
end guttapercha production, which yielded greater protIts,
CONFIDENTIAL/
Approved For Release 2004/01/28 : CIA-RDP82-00457R008500390005-5
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