The Kinta Valley Home Guard (KVHG) was established by the MCAcontrolled Perak Chinese Tin Mining Association (PCTMA), Ipoh, with the backing and support of General Templer soon after he arrived in Malaya in February 1952. It was an all-Chinese Home Guard, aside from a few senior European officers. Some 4,000 members were recruited and trained by the Government. According to General Templer's biographer John Cloake, it was what he himself described as his “biggest gamble”. Many of his detractors thought it would be a disaster to supply arms to what was to be a large Chinese Home Guard dominated by the MCA for the defence of what were predominantly Chinese tin mines, and referred to what had happened to some of the weapons supplied by the British to the Communist Malayan Peoples Anti-Japanese Army (MPAJA) in World War II, many of which were secretly hoarded at the end of the war to be used later against the British in the Emergency. Nevertheless, General Templer gave his support to the KVHG, which was often described as a “Chinese private army” because of its close connections with the KMT which had been prescribed by the colonial government in Malaya on 9 May 1949, and he played an important role in its funding, organization, training, and deployment. By 1954, when Templer left Malaya, it was reported that there were 323 tin mines defended by the KVHG which remained operational until the end of the Malayan Emergency in July 1960.

THE MALAYAN ECONOMY

The tin and rubber industries then constituted the main sources of revenue for the Malayan Government. They were, in fact, by far the most important sources of U.S. dollars in the whole of the British colonial empire, and the Kinta Valley in Perak, covering some 1,035 square kilometres, was one of the richest tin mining areas in Malaya and accounted for the major part of Malaya's tin exports to the United States. Malaya's tin exports to the United States.

Templer was concerned that the revenue earned from the export of both tin and rubber, mainly to the United States, was vital for Malaya's economy not only to build up the prosperity of the country but to continue to finance the ever-escalating costs of the counter-insurgency operations that were being carried out against the CPM.