I gratefully acknowledge the assistance and criticisms of earlier drafts from Prof. H.W. Arndt, Bob Elson, Bill O'Malley, T. Morris-Suzuki, Tony Reid, Hiroshi Shimizu, Bill Swan and two referees. A version of the article was presented at the workshop on “International Commercial Rivalry in the Interwar Period” organized by Dr S. Sugiyama at Shimoda in April 1988, and the final version benefited from its discussions.
1 Yano, Toru, “The Greater East Asia Co-Prosperity Sphere: Setting the Stage for the Cold War in Southeast Asia” (Discussion Paper No. 83, Centre for Southeast Asian Studies, Kyoto, November 1975) refers to three periods and Suzuki, Morris, “Japanese Multinationals in Southeast Asia: A Case Study of Indonesia” (Ph.D. diss., University of Bath, 1980) refers to four periods. It seems to me that a valid periodization will be the end result and not the starting point for research.
2 Leng, Yuen Choy, “Japanese Rubber and Iron Investments in Malaya, 1900–1941”, JSEAS 5, no. 1 (1974): 18–36 and “The Japanese Community in Malaya before the Pacific War”, JSEAS 9, no. 2 (1978): 163–79; Jin, Denis Koh Soo and Kyoko, Tanaka, “Japanese Competition in the Trade of Malaya: the 1930s”, Southeast Asian Studies 21, no. 4 (1984): 374–99; Morris-Suzuki, T., “The South Seas Empire of Ishihara Hiroichiro: A Case Study in Japan's Economic Relations with Southeast Asia, 1914–1941”, in Japan's Impact on the World, ed. Rixon, A. & Mouer, R. (Japan Studies Association of Australia, Griffith University, 1984).
3 Iwasaki, Ikuo, Japan and Southeast Asia: A Bibliography of Historical, Economic and Political Relations (Tokyo: Institute of Developing Economies, 1983). Although unpublished, T. Morris-Suzuki, op. cit., Chapter 1 offers a good brief survey.
4 I am most grateful to the Tweede Afdeeling of the Algemeene Rijksarchief for permission to consult these archives and to the staff for the assistance which they provided during visits in 1982 and 1987. In the footnotes below, the abbreviation ‘V’ refers to Openbare Verbaal and ‘GV’ to Geheime Verbaal from the archive of the Ministry of Colonies.
5 van Mook, H.J., The Netherlands Indies and Japan: Their Relations, 1940–1941 (London: Allen & Unwin, 1944), p. 17.
6 Hitherto Japanese cargo had mostly been transhipped in Singapore or, in the case of sugar, shipped on inducement by chartered tramp tonnage. On the formation of JCJL see Brugmans, I.J., Van Chinavaart tot Oceaanvaart, KJCPL (1952).
7 JCJL was granted a subsidy for 15 years diminishing from f0.3 million for the first five years to f0.2 million for the last and repayable from profits above a given rate (Brugmans, op. cit., pp. 47–48). Nanyo Yusen received an initial subsidy of ¥150,000 per annum but was soon applying unsuccessfully for this to be increased to ¥250,000 (KPM, Annual Report to the Directors, 1914).
8 Except for a harvest failure in 1912 (Brugmans, op. cit., pp. 74, 82–83).
10 Brugmans, op. cit., p. 79.
12 Weyer, G.A.P., “De Economische Betrekkingen tusschen Nederland en Nederlandsch-Indie en Japan”, in Van Vriend tot Vijand, ed. Graeff, A.C.D. de (Elsevier, 1945), p. 264.
13 This paragraph is based upon KPM, op. cit. (various years).
14 Ibid. and Peattie, M. R., Nanyo: The Rise and Fall of the Japanese in Micronesia, 1885–1945 (Honolulu: University of Hawaii Press, 1988), pp. 119–23.
15 Other areas where Japanese developed interests in the copra trade during this period were West Borneo and the Anambas-Natuna Islands.
17 The impact of the dock strike is referred to by Handelsvereeniging Soerabaia, Jaarverslag (1920), p. 20.
20 De Graeff, op. cit. Copra exports to Japan fell from a modest peak of 6500 tons in 1920 to almost nothing by 1921 (Jacquet, L.G.M., De Industrialisatie van Japan in Verband met de Japansche Handelsexpansie naar Nederlandsch-Indie (Rotterdam: De Schrijfkamer, 1935), p. 67.
21 KPM, Annual Report (1920). OSK abandoned the Bangkok/Java line in April 1926 after its subsidy had been discontinued (KPM, 1926).
22 Morris-Suzuki, “The South Seas Empire”, op. cit., p. 9.
23 Allen, G.C., A Short Economic History of Modern Japan (Allen & Unwin, 1972), pp. 101–102.
24 Handelsvereeniging Soerabaia, op. cit. (1926), pp. 24–25.
26 The rest of this paragraph is based upon the figures from de Graeff, op. cit., p. 264.
27 Furnivall, J.S., Netherlands Indies: A Study of Plural Economy (Cambridge: Cambridge University Press, 1939), p. 311.
29 Allen, G.C., Japanese Industry: Its Recent Development and Present Condition (New York: Institute of Pacific Affairs, 1940), p. 88.
31 Exchange rates from Japan Statistical Yearbook (Tokyo, 1949), p. 612 and Department of Economic Affairs, Prices, Price Indexes and Exchange Rates in Java, 1913–1937 (Batavia: Bulletin of the Central Bureau of Statistics No. 146, 1938), pp. 65–68.
32 Voluntary export and manufacturers guilds had been set up under the Export Guilds Act of 1925 but it was not until after revision of the acts in 1931 that they began to play an important role in the export drive (see Allen, A Short Economic History, op. cit., pp. 130–31, 152–53).
33 Hiromu, Higuchi, Nanyo ni okeru Nihon no Toshi to Boeki (Japanese Trade and Investment in Southeast Asia) (Tokyo: Migoshooku, 1940) quotes an undated total of 6429 persons (4932 in Java, 609 in Sumatra, 513 in Kalimantan and the balance in the East of the Archipelago. V (4–3–40/K14) (Verslag H. Hagenaar) quotes a total of 6600 for all NEI (4000 in Java) — the figures for East Java are from this source and refer to the end of 1939.
35 Broek, J.M., The Economic Development of the Netherlands Indies (New York: Institute of Pacific Relations 1942), p. 112.
37 Uyeda, T., The Small Industries of Japan (New York: Institute of Pacific Relations, 1938), pp. 39, 41.
38 Uyeda, op. cit., pp. 32–33.
39 Japanese exports of cotton cloth to China fell from 376 million yards in 1929 to a trough of 37 million in 1936. A major cause was the establishment of Japanese-controlled mills in China. Uyeda, op. cit., p. 40.
40 Broek, op. cit., p. 124.
41 Furnivall, op. cit., p. 432.
42 The best summary of the mixture of economic and non-economic concerns is Van Mook, op. cit., pp. 17–20.
43 According to Brugmans, op. cit., p. 79, the development of a distribution chain in Japanese hands was a policy objective as long ago as 1912, when the government instructed Nanyo Yusen to carry Japanese traders free of charge on its new Java line. The origins of the policy are unknown.
“In the long chain that linked the Japanese producer with the Netherlands Indies consumer, every link had to be forged by the Japanese: passing over the existing commercial apparatus, Japanese organization had to penetrate the interior of the Archipelago. It is easy to understand that such aspirations could not be respected. Not only political reasons forbade this but the disturbance of the efficient import mechanism that had been built up with such heavy sacrifices could not possibly be regarded as in the lasting interest of the consumers, and the danger that an import monopoly of a foreign nationality might be operated to the disadvantage of the consumer could not lightly be dismissed” (Broek, op. cit., pp. 29–30). A fine piece of special pleading!
44 The best explanation of the quota system and its impact is Wirodihardjo, R. Saroso, De Contingenteeringspolitiek en hare Invloed op de Indonesisch Bevolking (The Hague: Nijhoff, c. 1948). The data in this paragraph are from this source.
45 Unless otherwise acknowledged, the material in this paragraph is taken from the personal archive of Dr. Meyer-Ranneft (chairman of the Dutch negotiating team) in the Tweede Afdeeling of the Alg. Rijksarchief. I am grateful to Ann Booth for alerting me to this source. Most relevant are files 93 (“De Onderhandelingen met Japan, June-December 1934”, dd. 31/1/35) and 98 (G.H.C. Hart, “Aantekeningen nopens de Japansche Penetratie in Nederlandsch-Indie en de Handelsbetrekkingen tusschen Nederlandsch-Indie en Japan sinds 1933”, dd. 22/2/36).
46 Reports in “Tokyo Asahi” and “Tokyo Nichi-Nichi” of 18/1/35 of comments by the returning leader of the Japanese delegation give some insight into Japanese attitudes.
47 Report in “Japan Times” (10/4/36) contained in V (9/9/36).
48 Koh & Tanaka, op. cit., pp. 392–95 argue that the boycott was very effective in Malaya. See also Leong, S.T., “The Malayan Overseas Chinese and the Sino-Japanese War, 1937–1941”, JSEAS 10, no. 2 (1979): pp. 293–320. Given the much smaller number of Chinese consumers in Indonesia and the existence of a Japanese-controlled distribution network, it could be expected that the boycott would have been much less effective in the Indies but GV (2–9–38/N28) contains a report from Nanyo (1/6/38) which confirms that import orders were very slack in the first quarter of 1938. Small traders in financial difficulties were to be assisted with credit from the Taiwan Bank. The report makes the fantastic claim that the boycott was instigated by the Dutch in order to shut out Chinese competition and reap high margins on Japanese goods to offset losses on European goods. Concerning earlier anti-Japanese boycotts of 1908, 1915,1919,1923 and 1928 see Akashi, Yoji, “The Nanyang Chinese Anti-Japanese and Boycott Movement, 1908–1928”, Journal of the South Seas Society 23 (1968): 69–96.
49 Further trade negotiations commenced in September 1940 and dragged on until overtaken by the western embargo of July 1941. See “Overzicht van het Verloop van de Economische Onderhandelingen tusschen Nederlandsch-Indie en Japan”, Economische Weekblad voor Nederlandsch-lndie (EWNI) (11/7/41), pp. 1391–95 and Ibid. (1/8/41), p. 1527.
50 Meyer Ranneft Archive, File 93, “De Onderhandelingen”, op. cit., p. 35.
51 Morris-Suzuki, “The South Seas Empire”, op. cit., p. 13.
53 Meyer-Ranneft Archive, File 98 (Hart), p. 30.
54 Brugmans, op. cit., pp. 150–51.
55 Morris-Suzuki, op. cit.
56 The outcome of the negotiations is recorded in EWNI (1936), p. 767. Larkins, L.P.S., Economic Conditions in the Netherlands East Indies, 1933–1935 (London: HMSO, 1936), pp. 52–54 notes that the Japanese had been willing to offer JCJL 31 per cent of the trade but JCJL had held out for a third — in the event they did much better!
57 Kokaze, Hidemasa, “The Advance of Japanese Shipping into Southeast Asia” (Workshop on International Commercial Rivalry in Southeast Asia in the Interwar Period, Shimoda, April 1988).
58 Unless otherwise acknowledged, material in the next three paragraphs is taken from the respective annual reports of the KPM.
59 Whereas the original ship was registered in the name of Shiohara Soguru of Tokyo, the new ship was registered for Shiohara Kaiun Gomei Kaisha, an unlimited liability partnership (Lloyds Register of Shipping).
60 “Non-conference”: not party to the freight rate agreement of the regular lines.
61 Details of the shareholdings in Cekumij are given in Bijlage No. 177 of the Javasche Courant, No. 102 (20/12/35).
62 The government's concerns are set out in Meyer-Ranneft, loc. cit., File 98 (Hart).
63 Mainly out of deference to British interests, foreign-flag vessels hitherto had been allowed to carry cargo between NEI ports open to foreign trade. On the new legislation see Larkins, op. cit., pp. 52–53. Presumably because she had been in operation before the new regime came into force, the Daiichi Tora Maru was allowed to continue to ply between Surabaya and the Moluccas under dispensation.
64 The company was also refused permission to develop its small slipway in Menado into a proper dockyard (GV: 16–6–38/W19).
65 Morris-Suzuki, Japanese Multinationals, op. cit., p. 27. She also notes (n. 13), however, the wide variation in estimates of Japanese foreign investment.
66 Higuchi, op. cit. is a good general survey with specific sections on the Netherlands Indies and also a useful, albeit incomplete, map. Taiwan Sotobu Kambo Gaijika (Taiwan Governor-General's Office of External Affairs), Nanyo Kakuchi Hojin Shigyo Yoran (Survey of Japanese Enterprises in Southeast Asia) (Taipei, 1937) provides a listing of Japanese enterprises with sections on the Indies and details of date of the original investment, area, production, capitalization, employment (Japanese and local) and wages rates paid.
67 Yoshihara, Kunio, “Nomura's Investment in Southeast Asia before World War II” (English title), Tonan Asia Kenkyu 19, no. 3 (1981): 346–57.
68 De Graeff, op. cit., p. 266.
69 Furnivall, op. cit., p. 437.
70 Hiromu, op. cit., pp. 72–73.
71 Netherlands Information Bureau, Ten Years of Japanese Burrowing (New York, 1942), p. 45.
72 Meyer-Ranneft, loc. cit., File 98 (Hart), pp. 9–10.
73 Netherlands Information Bureau, op. cit., pp. 36–39.
74 Yuen Choy Leng, “The Japanese Community”, op. cit., p. 171.
75 Ibid., pp. 171–72 and Goodman, G.K., “America's ‘Permissive’ Colonialism: Japanese Business in the Philippines, 1899–1941”, in The Philippine Economy and the United States, ed. Owen, N.G. (Ann Arbor: Centre for South and Southeast Asian Studies, University of Michigan, 1983), pp. 42–43.
76 Higuchi, op. cit., pp. 48–53 and map.
77 The material for this paragraph is based mainly on Higuchi, op. cit., pp. 32–37, 71.
78 Netherlands Information Bureau, op. cit., pp. 44–45.
79 At their peak in 1937, NEI timber exports to Japan were worth just ¥2.5 million, about 4 per cent of Japan's total timber imports (excluding Japanese possessions such as Sakhalin); two-thirds of the balance were from North America, whose softwoods were evidently more suitable, Japan Statistical Yearbook (1949).
80 Taiwan Sotobu, op. cit., p. 72.
81 The Nanyo Kohatsu case is referred to by KPM, Annual Report (1933) and that of Furukawa by Morris-Suzuki, Japanese Multinationals, op. cit., p. 29.
82 Higuchi, op. cit., p. 72 and map.
83 Mitsui Bussan had prospected in the Indies for oil as early as 1899. Morris-Suzuki, op. cit., p. 29.
86 GV (11–8–38/B26) and Javasche Courant (19/5/39).
87 The one exception was Bahagia Printery in Semarang. See GV (20–1–39/F2).
88 See GV (7–1–38/Z1) (Japansche Semi-Officieele Kolonisatie Maatschappijen) unless otherwise acknowledged in this section.
89 Conroy, H., The Japanese Seizure of Korea, 1868–1910 (Philadelphia: University of Pennsylvania Press, 1960), pp. 480–84.
90 Cohen, J.B., Japan's Economy in War and Reconstruction (Minneapolis: University of Minneapolis Press, 1949), pp. 34–35.
91 GV (22–7–38/Y23), op. cit., p. 118.
92 Peattie, op. cit., pp. 123–30.
93 See also report of 1937 AGM in Seito Keizai (July 1937) contained in GV (9–12–37/Q34) (Japansche Belangstelling voor Zuidwest Celebes).
94 Ibid. The Celebes Development Company had been formed in June 1935 by one Mr. Shibata (KPM, op. cit., 1935). It is not clear if he was already acting for NKKK.
95 The Governor of Portuguese Timor attempted to block the sale by passing a law forbidding the transfer of assets to foreigners without the approval of the Minister. See GV (7–7–38/E22) (Japansche belangstelling voor Portugueesch Timor).
96 Peattie, op. cit., pp. 132–34.
97 Barclay, G.W., Colonial Development and Population in Taiwan (Princeton: Princeton U.P., 1972), p. 31.Shimizu, S., Japan in the South Seas (Tokyo: Foreign Affairs Assoc, 1938) sets out the functions of the company. The Dutch noted that the Japanese government held 50 per cent of the shares and that the Department of Foreign Affairs, through the Governor-General of Taiwan, needed to approve the location and type of enterprise overseas (GV: 7–1–38/Z1).
98 See Morris-Suzuki, op. cit., Table 1.3.
99 Ibid., and Kunio Yoshihara, op. cit.
100 Morris-Suzuki, “The South Seas Empire”, op. cit.
101 A fascinating exposition of this view can be found in Dower, J.W., Empire and Aftermath: Yoshida Shigeru and the Japanese Experience, 1878–1954 (Cambridge, Mass.: Harvard U.P., 1979).
102 Benda, H.J., Introduction to Goodman, G.K., Four Aspects of Philippine-Japan Relations, 1930–1940 (New Haven: Southeast Asian Studies Centre, Yale University, 1967), p. iii.
103 Tarling, N., “A Vital British Interest: Britain, Japan and the Security of Netherlands India in the Interwar Period”, JSEAS 9, no. 2 (1978): 180–218, esp. pp. 182–85.
104 Netherlands Information Office, op. cit., p. 20.
105 Van Mook, op. cit., esp. pp. 18–19.
106 GV (1–6–33/E13) quoted by Larsen, G.D., Prelude to Revolution: Palaces and Politics in Surakarta, 1912–1942 (Dordrecht: Foris, 1987), p. 170.
107 Broek, op. cit., p. 64.
108 Morris-Suzuki, “Japanese Multinationals”, op. cit., p. 36.
109 Shimizu, Hajime, “Southeast Asia in Modern Japanese Thought” (Dept. of Pacific and Southeast Asian History, Research School of Pacific Studies, ANU, Canberra, 1980), pp. 34–36.
110 In Surabaya the Japanese Trade Association was formed in 1924. Ten years later the Associations in Surabaya, Batavia, Bandung, Semarang, Padang, Pontianak, Makassar and Menado became branches of an Indies-wide Federation (Appendix to Verslag Hagenaar — GV: 4–3–40/K14).
111 On the situation in Surabaya in the 1930s see Frederick, W.H., “Indonesian Urban Society in Transition: Surabaya, 1926–1946” (Ph.D. diss., University of Hawaii, May 1978), p. 332.
112 After 1934 there was also a Taiwanese Association (Taiwan Tong Djin Hwee) with branches in Malang and Jember. GV (4–3–40/K14).
114 Frederick, op. cit., p. 333.
115 See, for example, Lockwood, W.W., The Economic Development of Japan (Princeton: Princeton U.P., 1974). Peattie, op. cit. (pp. 127, 131) recognizes this pattern in the development of the Mandated Islands.
116 Yuen Choy Leng, “Japanese Rubber”, op. cit.
117 Van Mook, for example, was tendentious enough to argue that “Unlimited admittance of experienced and low-salaried Japanese, with their preference for wholly Japanese personnel, would have put another obstacle in the way of Indonesian emancipation, and would have crowded out the budding Indonesian entrepreneurs.” Op. cit., p. 20.
118 The status quo rested, of course, on British access to the Indies market.
119 Buck, D.D., Urban Change in China; Politics and Development in Tsinan, Shantung, 1890–1949 (Madison: University of Wisconsin Press, 1978), p. 109.
120 On Davao see Goodman, G.K., Davao: A Case Study in Japanese-Philippine Relations (Lawrence: University of Kansas Press, 1967).
121 Van Mook, op. cit., p. 18.
122 On the harbour issue, see GV (20–8–37/J21). A case where military considerations were dominant was the refusal to allow Japanese to buy ground at Wonokitri, near the Surabaya airfield, to lay out a golf course (GV: 15–8–38/W26).
123 On the early advocates of nanshin see Shimizu, Hajime, op. cit. and “Nanshin-ron: It's Turning Point in World War I”, The Developing Economies 25, no. 4 (1987): 386–402.
124 On the influential role of the Governor-General of Taiwan see Yano, op. cit., and also Katayama, Kunio, “The Prehistory of the O.S.K.'s Java Line: On the O.S.K.'s Research in Southeast Asian Waters before the First World War”, Tonan Asia Kenkyu 19, no. 4 (1982): 388–411.
125 Morris-Suzuki, “The South Seas Empire”, op. cit.
126 Hajime Shimizu, Southeast Asia, op. cit., p. 33.
127 Iriye, Ikira, “The Failure of Military Expansionism”, in Dilemmas of Growth in Prewar Japan, ed. Morley, J.W. (Princeton: Princeton U.P., 1971), p. 25. Shimizu, op. cit., p. 26 points out that in Navy circles nanshin can be traced back to 1907, whereas the Army tended to think in terms of expansion to Korea and China.
128 Yano, op. cit., p. 3 quoting Ministry of Foreign Affairs (ed.), Nihon Gaiko Nenpyo Narabi ni Shuyo Bunken (Japan's Diplomacy: A Chronology of Selected Documents), Vol. III (Tokyo: Hara Shobo, 1966), p. 344.
129 Shimizu, op. cit., p. 7.
130 Goodman, G.K., op. cit. and Four Aspects of Philippine-Japan Relations, 1930–1940 (New Haven: Yale University Press, 1967).
131 The Japanese managed to gain control of the Batavian daily ‘Bintang Timoer’ but were thwarted in their attempts to gain control of the Surabaya dailies ‘Soeara Oemoem’ and ‘Nam Seng’. Saito ototsugu, Consul in Surabaya and later Consul-General in Batavia, seems to have been the main conduit for the import of propaganda material. See GV (4–3–40/K14). G.D. Larson, op. cit., pp. 169–72 gives details of Japanese contacts with leaders among the courts of Central Java.
132 On various incidents of Japanese ‘burrowing’ and some ‘selected documents’ see Netherlands Information Bureau, op. cit. and Frederick, op. cit., pp. 329–31, 336–37. Lockwood, R., War on the Waterfront: Menzies, Japan and the Pig-iron Dispute (Sydney: Hale & Ironmonger, 1987), Chapters 4–7 provides some fascinating details on a somewhat similar pattern of Japanese activities in 1930s Australia.
134 GV (22–7–38/Y23) (Verslag van den Dienst der Oost Asiastische Zaken over 1935 en 1936), pp. 120–22.
135 GV (27–4–38/F14) reports 19 seizures of Japanese fishing vessels abetween February 1937 and February 1938, despite the very limited patrolling capacity of the NEI navy. The Australian Navy faced a similar problem but was even more poorly equipped. See Haultain, C.G.T., Watch off Arnhem Land, Roebuck Society, Canberra (1971).
136 A subsequent propaganda chapter entitled “The Economic Assault on the Indies” was sub-titled “Japanese Fishermen as the Vanguard of the Navy”. Netherlands Information Bureau, op. cit.
137 See GV (16–6–38/A20).
138 According to the Japanese consul in Sandakan, in mid-1938 there were 1105 Japanese in the vicinity of Tawao, of whom 449 were associated with the fishing venture Borneo Suisan and 379 with Japanese rubber estates (GV: 27–12–38/U42). The rubber estates were extensive, covering some 25,000 hectares and including large estates of Mitsubishi and Nissan. Taiwan Nippo (7/4/38) reported the commencement of an assisted immigration program under the auspices of the Governor-General and Taiwan Takushoku, but the results seem to have been very modest. See GV (9–8–38/Q25) and GV (27–12–38/U42).
139 As the crow flies, Menado is closer to Palau (1200 km.) than to Surabaya (1700 km.) and likewise Manokwari (1000 versus 2500 km.).
140 Hatano, Sumio, “The Japanese Navy and the Development of the ‘Southward Advance’” (Workshop on International Commercial Rivalry in Southeast Asia in the Interwar Period, Shimoda, April 1988) and Peattie, op. cit., pp. 247–51.
142 Iriye, op. cit., pp. 125–26.
143 Ibid., pp. 126–27, 131–34, and Yano, op. cit., p. 11.
144 Iriye, op. cit., p. 134.
145 Ibid. and Morris-Suzuki, “The South Seas Empire”, op. cit.
146 Shimizu, op. cit., p. 40.
147 Iriye, op. cit., pp. 107–138.
148 Iriye, Akira, “The Failure of Economic Expansionism, 1918–1931”, in Japan in Crisis, ed. Silberman, B.S. & Harootunian, H.D. (Princeton: Princeton U.P., 1974), p. 238.
149 Iriye, “The Failure of Military Expansionism”, op. cit., p. 107.