Part 4 of a four-part series examining the rapid growth of relations between Australia and the Netherlands East Indies immediately before the Japanese invasion.
In November 1941, a Netherlands East Indies Economic Mission arrived in Australia to negotiate increased trade and establish more effective purchasing arrangements. It was the last in the concentrated series of reciprocal missions that had brought Australia and the NEI closer together during the final year before the Pacific War.
The mission followed Australian ministerial, military and press visits to the NEI and the Netherlands East Indies Press Delegation’s tour of Australia in October. Its focus was economic, but the visit cannot be separated from the deteriorating strategic situation. The NEI needed Australian food, munitions, machinery and manufactured goods, while Australia recognised the importance of NEI oil, rubber and other raw materials.
The mission reached Australia on 2 November. Five weeks later, Japan attacked Allied territories across the Pacific. Commercial discussions intended to strengthen a regional partnership were overtaken by invasion, emergency supply and evacuation.
Complementary economies
Trade between Australia and the NEI was not new. Australian flour, dairy products, coal and horses had been exported to the archipelago, while Australia imported sugar, kapok, rice, crude oil and petroleum products from the NEI.
Nevertheless, the commercial relationship had not reached its potential. Much of Australia’s trade policy remained oriented towards Britain and the wider Empire. The NEI was also part of a Dutch colonial economy whose international commercial and financial connections traditionally extended through the Netherlands and other overseas centres.
This did not mean that all goods physically travelled through the Netherlands. Australian and NEI ports traded directly, and shipping services connected the two territories. The more significant limitation concerned commercial policy, finance and negotiating authority. Neither Australia nor the NEI had previously developed its external economic relations with complete independence from the European imperial systems to which they belonged.
The war in Europe disrupted these established patterns. After Germany occupied the Netherlands in May 1940, the NEI could no longer depend on the homeland for manufactured products, military equipment and commercial services. It urgently needed alternative suppliers.
Australia was geographically close and possessed agricultural resources, a growing industrial sector and a rapidly expanding munitions industry. The crisis created an opportunity for the two neighbours to deal with each other more directly.
Trade and defence become connected
Economic and military cooperation had already begun to overlap. Dutch and NEI representatives approached Australia about weapons and ammunition, while Australian officials considered arrangements under which NEI raw materials could be supplied in exchange for Australian armaments.
As discussed earlier in the series, in late 1940, a three-member KNIL commission inspected 65 Australian weapons and munitions factories. Australia agreed to supply five million rounds of small-arms ammunition, although its own shortages prevented it from meeting many additional Dutch requests.
During 1941, military discussions broadened to include shipping, fuel, communications equipment, vehicles, bombs and supplies for the proposed reinforcement of Ambon and Timor. Australia needed Dutch cooperation and access to facilities in the eastern NEI. The NEI required the industrial and logistical support that Australia could provide.
Economic cooperation was therefore becoming part of a larger regional security relationship. Arms, raw materials, merchant shipping and military planning could no longer be treated as separate matters.
The Economic Mission arrives
The NEI Economic Mission arrived in Sydney by air from Batavia on 2 November 1941. Its members included:
- Dr J.E. van Hoogstraten, a senior official in the NEI Department of Economic Affairs
- Baron E.O. van Boetzelaer, an official in the General Secretariat of the NEI administration
- Dr W.A.F. Stokhuyzen, president of the Netherlands Indies Association of Importers
The delegation combined government administration with commercial experience. Van Hoogstraten represented the NEI’s economic administration, Van Boetzelaer its central government secretariat, and Stokhuyzen the businesses responsible for importing the goods the NEI required.
Their objective was to increase Australian exports to the NEI and improve the machinery through which those supplies could be purchased and transported.
The mission’s arrival received less public attention than the preceding press delegation. Nevertheless, its work had potentially greater practical consequences. It was attempting to build a durable supply relationship at a time when the NEI’s access to traditional markets was being progressively restricted by war.
What the NEI needed from Australia
The NEI was looking to Australia for a broad range of products. These included foodstuffs and agricultural commodities as well as machinery, industrial materials and defence-related supplies.
The need was partly created by the loss of the Netherlands and the disruption of European trade. It was intensified by the war economy, shipping shortages and the growing possibility that supply routes through Southeast Asia could be interrupted.
Australia appeared to be a logical alternative. It was much closer than Europe or the United States, and direct shipping and aviation connections already existed. Australian businesses also had the potential to develop a large neighbouring market whose requirements had previously been met from elsewhere.
However, Australia faced its own limitations. Its factories were producing for Australian and wider Allied military requirements. Shipping was scarce, and many imported components remained difficult to obtain. The Commonwealth Government could support increased exports to the NEI in principle, but it could not guarantee that every requested product would be available.
Discussions with the Curtin Government
Prime Minister John Curtin received the mission in Canberra on 17 November. He promised practical support for its request that Australia increase exports to the NEI. Contemporary reports indicate that the Commonwealth Government accepted the proposal in principle, although the availability of goods, shipping and wartime production priorities still had to be considered.
The delegation also met Minister for Munitions Norman Makin and other government and industry representatives. These discussions examined the NEI’s requirements and Australia’s ability to supply them.
The meetings took place shortly after a period of rapid political change in Australia. Most of the defence, trade and supply arrangements with the NEI had been developed under Prime Minister Robert Menzies, whose government had encouraged direct discussions with Batavia throughout 1940 and 1941. Menzies had personally met Governor-General Tjarda van Starkenborgh in Batavia in January 1941 and had pressed British authorities to recognise the strategic importance of the NEI to Australia.
Menzies resigned as prime minister in August 1941 and was succeeded by Arthur Fadden, whose government remained in office for little more than a month. John Curtin’s Labor Government took office on 7 October. When Curtin received the NEI Economic Mission on 17 November, he was therefore continuing a relationship developed principally under Menzies rather than initiating a new policy. Across these changes of government, the strategic logic remained consistent: strengthening the economy and defence capacity of the NEI was considered to be in Australia’s own national interest.
Regardless of the change of government, the strategic logic remained the same: maintaining the NEI’s economy and defence capacity was in Australia’s own interest.
A permanent purchasing office
One of the most tangible results of the mission was the decision to establish a permanent NEI purchasing office in Melbourne. Announced on 25 November, the office was intended to organise the purchase of Australian goods required by the NEI and to maintain direct contact with Australian government departments, manufacturers and suppliers.
The decision demonstrated that the mission was planning beyond a single emergency transaction. A permanent office could identify available goods, negotiate contracts and help resolve problems involving priorities, shipping and payment.
Melbourne was an appropriate location. It was then the principal centre of the Commonwealth Government’s defence administration and munitions organisation and an important centre of Australian manufacturing.
The office also became a foundation for the much larger NEI administrative and purchasing presence established in Australia after the Japanese invasion. Van Hoogstraten subsequently became chief commissioner of the Netherlands East Indies Commission for Australia and New Zealand, formed in Melbourne in April 1942.
The economic relationship planned during peacetime was thus carried into the displaced wartime administration.
Direct relations and the question of authority
The mission demonstrated that Australia and the Batavia administration were increasingly dealing with each other directly. This was practical: the NEI authorities understood their immediate requirements, while Australian departments and businesses controlled the nearby supplies and industrial capacity.
Direct dealings did not mean that the NEI had become independent of the Netherlands. Ultimate responsibility for the Kingdom’s foreign relations remained with the Netherlands Government-in-Exile in London. Important financial, diplomatic and constitutional decisions could therefore still require its approval.
This division of authority became more difficult after the Japanese occupation. NEI representatives in Australia needed to make rapid decisions about purchasing, personnel, shipping and military support. The Netherlands Government-in-Exile remained concerned with maintaining central control over the Kingdom and preventing the displaced NEI administration from developing an autonomous international position.
The disagreement was therefore more complex than whether goods had to be traded physically through the Netherlands. It concerned who could negotiate, commit funds, enter agreements and represent the NEI abroad.
Jack Ford’s research in Allies in a Bind shows that these questions became a continuing source of tension among the Netherlands Government-in-Exile in London, NEI officials operating from Australia and the Australian Government. The DACC’s earlier series on Dutch–Australian wartime cooperation examines these wartime disagreements in greater detail.
The mission returns to a region on the brink
After completing its Australian discussions, the mission returned to the NEI at the end of November. Its members reported that Australia could become an increasingly important supplier, although Australian production and shipping constraints remained significant.
The international situation was deteriorating by the day. Negotiations between Japan and the United States were approaching collapse. Japanese forces were assembling for coordinated attacks across Southeast Asia and the Pacific.
The proximity of these events is striking:
- On 25 November, the establishment of the NEI purchasing office in Melbourne was announced.
- On 26 November, the United States presented its final proposals to Japan.
- On 1 December, Japan confirmed its decision to proceed with war.
- On 5 December, the NEI asked Australia to send aircraft to Ambon and Timor.
- On 7–8 December, Japanese attacks began across the Pacific and Southeast Asia.
An economic mission intended to strengthen long-term trade had concluded only days before the region entered a war for survival.
From purchasing mission to wartime administration
Once Japan invaded the NEI, the priorities changed immediately. The normal export of food, machinery and manufactured products gave way to the emergency movement of military supplies, personnel, government records and refugees.
KNILM aircraft and Dutch merchant ships helped evacuate people and material to Australia. Dutch and NEI military organisations established themselves in Melbourne, Sydney and Brisbane. The purchasing office became part of a wider administrative structure supporting the displaced NEI authorities and armed forces.
On 8 April 1942, the Netherlands East Indies Commission for Australia and New Zealand was established in Melbourne. Van Hoogstraten, who had led the economic discussions only months earlier, became its chief commissioner.
This continuity is important. The Dutch and NEI organisations established in Australia after the fall of the archipelago did not emerge from nothing. Their foundations had been created through the trade offices, liaison arrangements, aviation routes, military talks and reciprocal missions of the preceding years.
A relationship transformed
The NEI Economic Mission was the final organised pre-war attempt to build a closer Australian–NEI relationship through normal government and commercial channels.
Together, the four articles in this series show a rapid progression:
- earlier but limited diplomatic and commercial contact
- Australian ministerial and military missions to the NEI
- reciprocal press visits intended to build public awareness
- an economic mission designed to create lasting supply arrangements
The relationship was motivated by geography, security and complementary economic needs. Australia required the NEI to remain outside Japanese control and valued its strategic resources. The NEI needed Australian industrial production, armaments, food and access to a secure neighbouring base.
The reciprocal missions came extraordinarily late. Before many of their plans could be fully implemented, Japan entered the war, Singapore fell and the NEI was occupied.
Yet the work was not wasted. The contacts, knowledge and organisations created before December 1941 helped both sides respond to the catastrophe that followed. A relationship that had begun through trade offices, airline routes and visiting delegations was transformed into an extensive wartime partnership conducted from Australian soil.
Sources
- The Sun, “Dutch Trade Mission Arrives”, 3 November 1941, available through Trove.
- The Argus, photograph and report on the NEI Economic Mission, 11 November 1941, p. 5, available through Trove.
- Morning Tribune, “N.I. Mission Sees Curtin”, 18 November 1941, p. 12, NewspaperSG.
- Contemporary Australian newspaper reports, “Supplies Needed by N.E.I.”, 22 November 1941, available through Trove.
- The Argus, announcement of the permanent NEI purchasing office in Melbourne, 26 November 1941, available through Trove.
- Advocate, “N.E.I. and Australia—Purchasing Office Opened”, 26 November 1941, available through Trove.
- Herman Theodore Bussemaker, “Australian-Dutch defence cooperation, 1940–1941”, Australian War Memorial.
- Jack M. Ford, Allies in a Bind: Australia and the Netherlands East Indies in the Second World War, University of Queensland.
Four part series
This four-part series examines how Australia and the Netherlands East Indies moved from limited contact towards direct diplomatic, military, public and economic cooperation immediately before the Pacific War.
- From distant neighbours to regional partners: Australia and the Netherlands East Indies before the Pacific War
An introduction to the previously limited relationship and the growing connections through diplomacy, trade, aviation and shared strategic concerns. - Australia looks north: Australian missions to the Netherlands East Indies in 1941
Australian ministers, military officers and journalists travelled to the NEI as both neighbours developed direct defence planning and greater public awareness of their shared interests. - Australia and the Netherlands East Indies on the eve of war: the 1941 Press Delegation
Led by Charles van der Plas, the diverse NEI delegation toured Australian military establishments and industries only two months before Japan entered the war. - Trade, resources and the final mission before war: the NEI Economic Mission to Australia, 1941
The November mission sought increased Australian supplies and permanent purchasing arrangements, but its plans were overtaken within weeks by the outbreak of the Pacific War and the invasion of the NEI.
