Abstract:
was the plantation crops that supported the entire economy of the island. The chief exports at that time were tea, rubber, coconuts and several by-products from these crops. However, the export economy o f the Galle district was mainly based on rubber, coconut products, and plumb ago. Of these products rubber was exported to countries like Great Britain, the United States of America, and several other European countries. Eventually the demand for rubber became impressively higher due to the rapid development of the motor industry. Sri Lanka’s natural rubber supply specially to United States doubled particularly Sri Lanka’s economy during the early twentieth century was sustained through plantation activities. It during the period after the World War I. When the USA became of the very first victim of the economic depression in 1929 the demand for natural rubber dropped heavily. Owing to this crisis the plantation economy in Sri Lanka had an unprecedented downfall. However, it did not affect the plantation economy of the Galle district, because the plantations in the Galle district developed as smallholdings managed by the proprietors themselves with local labour and indigenous capital. In this environment, the planters had the expertise for cultivating alternative cash crops, maintaining subsistence agriculture, and managing various cottage industries making use of their own domestic resources and the technical know-how. This led to a miraculous recovery of the Galle district economy when the rest of the island was in a panic. This paper examines the situation in question in theoretical framework developed from an economic point of view