Several scholars recognize the significant transformation that the local elites underwent during the first half of the twentieth century (precisely during the period of Ethical Policy) in the...Show moreSeveral scholars recognize the significant transformation that the local elites underwent during the first half of the twentieth century (precisely during the period of Ethical Policy) in the Netherlands Indies. However, these scholars mainly focus on the transformation of Javanese elites and pay attention to administrative and political perspectives of this transformation. In this paper, I use Memories van Overgave along with additional reports to show that on Java and the Outer Provinces (mainly Sumatra) the local elites were not only involved in administrative and political matters but also in economics. Furthermore, under the increasing influence of the Dutch, the local elites developed into two different groups: the traditional and the new elites. As a result of the Dutch policies during this time, the traditional elite fundamentally changed in order to maintain their connection with the colonial government. In fact, they mostly shifted their attitude toward Western education from a negative to a positive one in order to fulfill requirements of the colonial administration reform, while barely changing their attitudes on economic and political issues. Interestingly enough, many of the new elites descended from traditional nobility and received Western training. However, unlike the traditional elites, they took part in business and political affairs. This new elite transformed the hierarchies within indigenous culture during the late colonial period and later went on to become the leaders of the anti-colonial movements in the archipelago.Show less