As early as in November, 1939, the Japanese Government proposed to the Netherlands Government to open economic negotiations between Japan and Netherlands East-Indies. Havng received the latter's acceptance of our proposal in principle we informally showed them the outline of our proposal. In the meantime, we carried on negotiations with the Netherlands authorities at Tokyo, The Hague and Batavia with respect to the opening of negotiations in a concrete manner. However, the European war spread to the Netherlands in May, 1940, and the Netherlands East-Indies came to feel its effects with the result that the situation developed in such a manner that Japan, striving as she has been for the establishment of a new order in East Asia, could not remain indifferent: The Japanese Government, therefore, made a request to the Netherlands Government that the negotiations with the view to establishing relationship of economic co-operation between Japan and the Netherlands East-Indies be speedily opened.
The situation at that time was such that, since the Netherlands Government had moved to London and decided to carry on the war in alliance with England and the economy of the Netherlands East-Indies was mobilized for war purposes, the economic relation between Japan and the Netherlands East-Indies was bound to be gravely affected. Due to the necessity of establishing relationship of common prosperity through close co-operation among the peoples of East Asia, the Japanese Government cannot, of course, remain indifferent to the spread of the European war to the South Seas. Moreover, it was clear that her demand for the resources in the Netherlands East-Indies would steadily increase in the course of her establishment of high degree defence state. Under these circumstances, it was necessary for Japan to be assured, as soon as possible, of the supply of essential resources, and to establish economically co-operative relations between Japan and the Netherlands East-Indies, thereby bringing about the stabilization of East Asia. The Japanese Government accordingly requested the Netherlands Government, in May of last year, an assurance of supply to Japan of those important materials and goods which Japan expected of the Netherlands East-Indies under the prevailing situation. In response to this, the Netherlands Government expressed their intention of actively co-operating with Japan, by assuring that the economic relations of the Netherlands East-Indies
with Japan would continue as smoothly as before, and confirming that such relations would be in harmony with vital interests of the Netherlands East-Indies and would contribute toward the peace and stability of East Asia. On the basis of this agreement of views between Japan and the Netherlands East-Indies, the Japanese Government have conducted economic negotiations at Batavia since September of last year, exerting utmost efforts for their amicable conclusion.
The negotiations between Japan and the Netherlands East-Indies are so varied as to include not only the question of acquiring materials and goods, but the question of promoting general trade relations, the entry of the Japanese into the Netherlands East-Indies, the pursuit of occupations, the investments in the enterprises, shipping, aviation service, and communications. As regards the aforementioned matters, especially aviation connections, they are already being carried on between the third Powers and the Netherlands East-Indies; and in investments in enterprises, such as the oil industry, the Anglo-American capital has been showing remarkable activities. The third Powers are thus very liberally permitted to engage in all these enterprises. In the light of these facts, the requests of the Japanese Government are very reasonable. If such Japanese requests, as for the participation of the Japanese in the development of abundant natural resources of the Netherlands East-Indies, the entry of the Japanese there accompanying such development, the pursuit of occupations, the call of Japanese ships at closed ports for the purpose of transporting materials produced by such development, partial opening of the coast-wise navigation to Japanese ships and the development of the fishing industry by the Japanese who are there, were dealt with on the basis of promoting economic co-operation between Japan and the Netherlands East-Indies, the solution of these questions would be very simple.
Regarding these requests, the Netherlands East-Indies Government, on their part, have stressed that the basis of their policy lies in the progress, prosperity and emancipation of the inhabitants of the Netherlands East-Indies. It is clear, however, that the proposal of the Japanese Government does not in any respect run counter to such a policy of the Netherlands East-Indies. It is needless to say that the progress, prosperity and emacipation of those inhabitants can be promoted on the part of the Netherlands East-Indies through the establishment of economic co-operation between Japan and the Netherlands East-Indies, and thereby contribute toward the peace and stability of East Asia.
However, along with the intensification of economic warfare the situations surrounding the Netherlands East-Indies have made smooth progress of the negotiations difficult. The reply of the Netherlands of June 6 is not only very unsatisfactory but asserts, in connection with the question of acquisition of essential materials and goods to which Japan attaches importance, that their quantities may be decreased at any time to suit their own convenience. In view of the fact that regarding this question, the Government of the Netherlands and as well as the Netherlands East-Indies authorities
have, on many occasions in the past, made promises or declarations to Japan, the Japanese Government, deeming such contents as are embodied in the Netherlands reply to be hardly worth being specially incorporated in an international agreement, have decided to discontinue the negotiations and to withdraw their delegation, ordering Kenkichi Yoshizawa, their special Envoy, to return to Japan. However, it goes without saying that Japan will hold fast to her just and fair contentions, while the normal relations between Japan and the Netherlands East-Indies will by no means be affected by the discontinuance of the negotiations.