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Albert Gates

How the Dutch Exploit the East Indies

Fabulous Profits Wrung from Native Slaves

(February 1942)

From Labor Action, Vol. 6 No. 8, 23 February 1942, p. 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

With the fall of Singapore the attention of the world is now directed to the Japanese struggle for the conquest of the Netherlands Indies, more commonly known as the Dutch East Indies. Should Japan succeed in its present aim, it will have won what is considered the richest possession in the Western Pacific.

The Japs have already taken Borneo, the Celebes and have established a strong foothold on Sumatra. They have taken a series of important bases on the numerous islands forming this group and are now pointing toward the invasion of the most important island of them all, Java.

The legends about the Dutch East Indies are many; Hollywood has done its part and from that seat of magic and fancy has come the common picture that the Dutch East Indies are famous only for the beautiful women of Bali.

Some people know that oil is to be found on the islands, and perhaps even rubber and tin. But very little real knowledge exists of this Dutch possession. Few people know how the Dutch came to control the islands or why the struggle over them is so fierce. It is our purpose in this article to sketch briefly the facts of its seizure from the native peoples and how it has been exploited for the benefit of butch imperialism and a few large corporations in Great Britain and the United States.

A Little of Its History

Twenty-five years before the Pilgrims set foot upon Plymouth Rock, the Dutch East India Company was already in the islands seeking to establish control of the spice trade with the islands. This company had done well for a period of years. But later reverses led to its collapse in 1798. It was then that the Dutch government took over the business of the company and as a government proceeded to the complete possession and control of the East Indies.

During the Napoleonic wars, when the Little Corporal had overrun Europe, the possession of the East Indies changed hands, first going to Napoleonic France and then to England. Following the defeat of Napoleon, the Dutch regained the islands and have held them until this moment, when their control is threatened by Japan.

Once the islands were regained, the Dutch government began to exploit them with a vengeance. The government employed what became known as the “forced culture system.” By this policy, the natives were taxed in labor and compelled to work (without pay) on the government plantations. The system was so profitable that in 40 years the government made a clear profit of $334,000,000, or an average of more than $8,000,000 a year (Fortune Magazine, May 1934). The system was abolished by a mass liberal protest in Holland. But these profits were only a forerunner of what was yet to come.

If you were to lay the Dutch East Indies across the United State’s, they would reach from Baltimore to San Francisco. Java is the most important island of the group with a population of more than forty million of the islands’ 65,000,000 people. Java is the world’s most densely populated country, having about 850 persons per square mile, as compared to 41 in the United States. This is greater than the population density in Japan.

These 65,000,000 people are exploited by a foreign power with only 8,000,000 people (Netherlands). The Dutch and Chinese capitalists dominate the islands economically, while the Arabs have given the Malay-Polynesian population its religion, Mohammedanism.

The Material Wealth of the Islands

Thee East Indies are extremely rich in natural resources. Here are some of its products:


Percentage of
World Production















Kapok (mattresses etc.)


Rattan (furniture mfg.)





Sisal (rope making)







These products have been produced in great abundance and have gone to enrich the foreigners who have appropriated the production of the islands. The native population gets precious little benefit out of the natural richness of their home. Even Fortune, the magazine of big business, was led to say:

The 59,000,000 black and brown inhabitants of the Indies have been exploited in the past without mercy to produce this mighty total of commodities.” (May 1934)

It is necessary only to add that this exploitation has never ceased!

World capitalism has almost two billion dollars invested in the islands. All but $69,000,000 is held by four countries. The Dutch lead with an investment of almost $1,250,000,000, followed by England with $175,000,000, the United States with $164,000,000 and Chinese capital of $137,000,000. (Figures for 1934)

The largest corporation on the islands is the Royal Dutch Shell Oil, which controls 75 per cent of the oil production. Other large corporations with a rich stake are: Goodyear, U.S. Rubber Co., Standard Oil Co. of N.J.; Anglo-Dutch Plantations, Ltd., Amsterdam Rubber Co. and Handels Vereenigung, Amsterdam.

The biggest interest, of course, is the Dutch and they are the most vitally concerned with maintaining control of the East Indies. Between one-fourth and one-third of the Dutch government’s revenues are profits from its property and plantations. It has a monopoly on opium, salt and pawnshops. Evidently, with the great poverty of the native peoples, the latter is a profitable business.

The unfavorable balance of trade of Holland, the mother country, was offset by the more than $244,000,000 average favorable balance of trade of the East Indies.

Thus the East Indies have been the source of economic prosperity for the ruling classes of Holland. Little wonder why John Gunther, in his book, Inside Asia, writes:

The Indies have a European as well as an Asiatic function. The life blood of the Netherlands comes from here. Pumping into Holland from Insulinde, as the Indies are called, is a stream of invigorating wealth. The Indies tail is what wags the Dutch dog. As a consequence, Dutch policy in the East is to conserve this precious appendage, to see that the Japanese are held off and that the Malays do not rise.”

How the Dutch Rule

There is the background to the whole Dutch policy: to maintain a stranglehold on the riches of a possession taken from its people. While Holland is counted among the democratic powers of the United Nations, the government in the East Indies, as Gunther pointed out in his book, is “a complete autocracy.” The Dutch, less hypocritical than the British, make no bones about a “white man’s burden.” They frankly avow that their main purpose is to maintain control of the islands and the people in order to drain off the wealth and enrich the great corporations which have investments there.

The Dutch have kept the island peoples from self-government. The Dutch APPOINT their governor (from professional politicians or big business) FOR FIVE YEARS AT A SALARY OF $122,000 A YEAR and he is a dictator, since his rule is final and no governmental bodies exist to countermand him.

A Volksraad or People’s Assembly exists, but 22 of its 60 members are appointed. The others are elected by an “extremely limited franchise” of one per cent of the population (Gunther). It has practically no powers outside of advisory.

One of the methods by which the Dutch have maintained their rule is through keeping the people in ignorance. Fortune, in its praise of the Dutch as colonizers, said: “They have given the islands an extensive native school system.” But this is completely contradicted by Gunther, who wrote:

Indeed, the record of the Dutch in education is miserable. Illiteracy is 95 per cent and the public school system is a myth.” (Inside Asia, page 327)

The Conflict with Japan

The plan for a Japanese conquest was prepared some years ago by the economic penetration of the Nipponese. Japan was, prior to the war, the chief competitor to the Dutch and British.

For example, in 1928 England supplied 29 per cent of textiles imported into the Indies. Holland and Japan, were tied for second with 26 per cent.

In 1933, Japan’s share rose to 76 per cent, while Holland and England tied for second with 7.1 per cent!

Japan’s share of total East Indian imports rose from 10 per cent in 1928 to 31 per cent in 1933, while Holland’s share dropped from 20 per cent to 12 per cent. Thus, the Japanese were defeating the Dutch economically in their own possession.

It is clear from the foregoing facts what the war is about. It has nothing to do with democracy – something which never existed for the colonial peoples of the Far East. Japan desires the possession of the great material wealth now in the hands of Great Britain and the Dutch. The Japs want the oil, tin, rubber and other material resources of these great colonial possessions.

They will no more educate the native peoples than did the Dutch or British. They will give the colonies as little democracy as they have had heretofore. They will keep the living standards of these people just as low as they have been kept these many centuries. The only thing they are interested in – as is England and the Dutch and the United States – is the material exploitation of the Far East for PROFIT.

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