1941: Netherlands East Indies

The Netherlands East Indies automatically abandoned neutrality and became a part of the Allied Front against Germany when the Netherlands was invaded on May 10, 1940. Since that time the Royal Netherlands Navy has worked in close cooperation with the British Naval Commander-in-Chief in China and Dutch warships have participated actively in the hunting of Nazi raiders in the West Pacific. The policy of the Netherlands Government in London and of the Netherlands East Indies in the Pacific has been the maintenance of the status quo. When Japan launched a sudden attack without warning on American territory in the Pacific in December 1941 the Netherlands East Indies immediately entered the war against Japan. In the first few days of hostilities before Dutch territory was attacked by the Japanese, naval forces of the Netherlands East Indies sank six Japanese transports with several thousand Japanese soldiers on board off the Malayan coast.

Oil and Trade.

The oil wells of the Dutch East Indies were one of Japan's main economic objectives in South-Eastern Asia. Rubber, tin, and quinine included in the United States Army and Navy Munitions Board's list of seventeen strategic materials had been imported mainly from the Netherlands Indies.

War in Europe caused a great change both in the direction and composition of Dutch East Indian trade. By 1941 trade with European countries, except for Great Britain, had practically disappeared. This was more than offset by increased trade with the United States and Asiatic Countries. In 1941 the United States became the chief exporter to Netherlands India as well as remaining the chief market for imports from that territory, a position gained in 1939. The main reason for the rapid growth of imports from the Netherlands India to the United States was the accumulation of rubber and tin as a policy of American national defense. The war in Europe resulted in a decrease in demand for the agricultural products of Netherlands India such as tea, coffee, sugar, tobacco, and pepper. The Netherlands Indies imported large amounts of finished munitions, planes, machinery, and iron and steel products from the United States in 1941.

Strained Relations with Japan.

Relations between Japan and the Netherlands East Indies were strained for some time before actual warfare broke out. Economic negotiations between the two countries were renewed early in 1941. A former Japanese Foreign Minister, Mr. Yoshizawa, headed a Japanese economic delegation to the Netherlands East Indies. During the negotiations the Japanese demands became more sweeping until they included 'permission to explore the Outer Islands, concessions, exploitation of undeveloped areas, permits of entry for professional men and small traders, establishment of an air line from Japan, and mining and fishing rights'. A crisis was reached in June 1941 when Dutch officials rejected a virtual Japanese ultimatum. Mr. Yoshizawa returned to Japan and Tokyo permitted the negotiations to lapse. In July 1941 the freezing of Japanese assets in the Netherlands East Indies stopped trade with Japan. This action was part of a common diplomatic policy followed by the United States, Great Britain and the Netherlands Government in reply to Japan's military occupation of Southern Indo-China in July 1941.

War in the Pacific.

The Netherlands East Indies was destined to play an important role in the war in the Pacific. At the outbreak of the war in December 1941, the Netherlands East Indies had 3 cruisers, 8 destroyers, 15 submarines, approximately 500 planes, and a small but professional regular army, well trained, well equipped, and mechanized. Behind this professional army stood a reserve of trained men who had served for shorter periods of one to two years. With a population of over 70,000,000, on more than 2,000 islands stretching a distance of 3,000 miles from the northern tip of Sumatra to the eastern frontier of New Guinea, the Dutch East Indies are of vital importance to Great Britain and the United States not only for raw materials but for purposes of military strategy. The shores of Borneo are close to outlying islands of the Philippines. The line of islands in the Netherlands East Indies screen the approaches to Australia and its northern coasts and provide easy air communication between the main base of British defense at Singapore and British naval stations in Australia and New Zealand. Thus, the Indies with its great wealth and its strategic position became one of the principal goals of Japanese aggression as the year ended. See also JAPAN; PETROLEUM; WORLD WAR II.