Institute of Pacific Relations

New Guinea Mandate and Adjacent Territory to be ConsolidatedAuthor(s): Jack ShepherdSource: Far Eastern Survey, Vol. 8, No. 6 (Mar. 15, 1939), pp. 71-73Published by: Institute of Pacific RelationsStable URL: http://www.jstor.org/stable/3023297 .

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1939 New Guinea Mandate and Adjacent Territory to be Consolidated 71

zation economy. Production of synthetic rubber as such is, of course,

no new development. As was pointed out in this

journal on August 4, 1937 (p. 181), in addition to Ger?

many's buna?which early in that year had been en-

couraged by the imposition of a high tax on rubber

imports to pay for the manufacture of the synthetic product?other countries had followed Germany's World War lead in developing substitutes for the raw material. America has its neoprene (formerly called

duprene), thiokol and the recently announced koroseal. From Soviet reports, at least four large plants are de- voted to the manufacture of the synthetic material; in fact in 1936 the U.S.S.R. inaugurated an intensive drive to make the Union self-sufficient in rubber mainly by the development of the synthetic product (see Far East? ern Survey, Oct. 21, 1936, pp. 226-27). And in Japan, the Tokyo Gazette now informs us that the research work on synthetic rubber, which has been going on for some years, is near completion (see Far Eastern Sur?

vey, Nov. 9, 1938, p. 261). At the moment, however, chiefly because of Germany's growing importance in the rubber market, the new buna factories offer the most immediate threat to the established rubber areas.

German foreign trade statistics show that rubber has

played a very important role in Germany's trade rela-

tionship with Southeast Asia, the center of world rub? ber production. From RM14.9 million, or 10% of the total import from the region in 1932, German pur? chases of rubber in Netherlands India, British Malaya, Siam, French Indo-China and the Philippines rose to RM91.4 million, or 38% of the total import, in 1937. At the same time, according to the figures published by the International Rubber Regulation Committee, Ger?

many's share in world rubber consumption has in? creased from 5.6% in 1928 to no less than 10.7% dur?

ing the first nine months of 1938. In 1937 her con?

sumption was exactly twice as large as in 1929. This

rapid increase cannot be explained exclusively by refer- ence to the progress of motorization; in a large measure it must also be ascribed to German rearmament in

general. The official announcement concerning the production

of buna implies that not all of the German rubber sup? ply can be satisfied by the new factories. While Ger-

man statistics do not give any reliable data about the relative importance of automotive rubber consumption in the total figure, statistics for the pre-Nazi period of German economic history indicate that about half of the total rubber supply was used for automobiles.

Assuming that the same proportion still prevails, the German announcement might be taken to mean that the 1939 consumption figure would only total about half the amount used in 1937 and 1938, that is, roughly 50,000 tons annually instead of 100,000 tons. Thus since annual world rubber consumption during the last three years has averaged about 1,000,000 tons, buna threatens to displace about 5% of the total world rub? ber demand.

Moreover, this reduction in demand is more likely to affect Asia's rubber-producing countries than other

parts of the world; for, while production of rubber out? side the agreement areas has been rather insignificant, Germany has tried to take a much larger share of the world's "free" rubber than any other country. During the first nine months of 1937 and 1938, Germany con- sumed 37.8% and 44.3% respectively of the world rub? ber supply from nonagreement areas. The bulk of this

originated in South America, chiefly in Brazil. As total South American supplies during the first nine months of 1937 and 1938 amounted to 11,699 tons and 10,183 tons respectively, Germany's purchases accounted for

43.8% and 61% of the totals. This emphasis on South American rubber, inciden-

tally, has great significance aside from purely exchange or other considerations. It corresponds very well with

Germany's drive to prepare for a new blockade of her

ports. Just as the Great War showed the necessity of

providing for a domestic rubber supply, it also demon- strated that commercial submarines could successfully run the blockade. Those submarines which reached South America during the war returned with cargoes of raw materials among which rubber played a sig- nificant role. Hence Germany is interested in encour-

aging as large a South American supply of rubber as

possible. Taking this added factor into account, it seems likely that Germany's Asiatic rubber supplies in 1939 may be reduced by more than half, and her total trade with Southeast Asia by more than 20%.

Kurt Bloch.

NEW GUINEA MANDATE AND ADJACENT TERRITORY TO BE CONSOLIDATED

The Australian Government has shown an increas?

ing interest during recent months in the administration and development of territories under its control in New Guinea and the adjacent islands to the north of Australia. This interest is due partly to the demand for the restoration of former German colonies, partly to a

growing realization of the important role which the

dependencies must play in Australian defense, and

partly to the controversy over the future location of the capital of the Mandated Territory of New Guinea. Drastic changes in the machinery of administration and a vigorous effort to speed up the economic development of the territories are to be expected in the near future.

The areas under Australian control fall into two

parts. The Territory of Papua, consisting of the south? eastern section of the island of New Guinea and smaller

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72 New Guinea Mandate and Adjacent Territory to be Consolidated March 15

islands nearby, has been a British possession since 1888 and an integral part of the Australian Commonwealth since 1905. The region known as the Mandated Terri?

tory of New Guinea consists of the northeastern sec? tion of the island of New Guinea, islands of the Bis- marck Archipelago, and the northern part of the Solomon group, all of which were under German control until occupied by Australian forces in 1914, and all of which are now administered by the Australian Govern? ment as a mandate.

At the Paris Peace Conference the Australian Prime

Minister, Mr. W. M. Hughes, urged that the Australian Government be allowed to annex the former German

possessions in this area and refused to accept the ter? ritories as a mandate of the A or B type. The formula for the C type of mandate, which all the former Ger? man possessions in the Pacific eventually became, was devised to satisfy Mr. Hughes, and gave the mandatory power the right to bring the territory within its tariff

system, and to control the immigration of aliens. Under these conditions the mandate for New Guinea was ac-

cepted. Despite the obvious advantages from the point of view of economy and efficiency of incorporating the

newly acquired mandate with the Territory of Papua already under Australian control, the Australian Gov? ernment out of deference to the theory of trusteeship decided to keep the mandated territory and the Terri?

tory of Papua distinct, and so they have remained ever since.

When the new territory had been duly acquired and the first flush of imperialist enthusiasm had died away Australian interest in the mandate tended to die away too; the military officials to whom the administration was at first entrusted were not conspicuously successful, and economic development was slow. The mandate came to be regarded in many quarters as a liability rather than an asset. Australia as a young and rela?

tively undeveloped area itself seemed to lack the re? sources both of capital and personnel required to

develop a "colonial dependency." The discovery of rich alluvial gold deposits and the

rush to the goldfields, especially after 1926, did much to revive Australian interest in the mandated territory and to bring home to the Australian Government its

potential economic value. Interest was further en- hanced by the dramatic development of air routes where no other rapid communication was possible (see Far Eastern Survey, Apr. 28, 1937, pp. 98-100; Feb. 16, 1938, p. 42). The hopeful reports of companies en?

gaged in the search for oil intensified this interest, and

immeasurably strengthened the traditional argument that the chief value of New Guinea to Australia was

strategic. This argument had rested hitherto upon the view that New Guinea in the hands of any hostile Power would constitute a military menace to Australia; it now seemed possible that New Guinea might some

day be able to supply Australia's deficiency in oil and thus become a positive strategic as well as an economic asset.

The rapid deterioration of the general international

situation, the steady forward march of a new and mili- tant Germany demanding the return of her former colonial possessions, the linking up in the Australian

public mind of the new German with the old Japanese "menace" as symbolized in the German-Japanese rap- prochement, and the growing fear that Britain, with her heavy commitments in Europe, might not be able to contnbute as much help in the defense of Australia as had previously been expected, have all helped to launch the Australian Goverment during the past year upon a large scale defense program in which the role of the dependencies is destined to be an extremely important one. And insofar as this defense program is economic as well as military in character a strong effort to hasten the exploitation of the dependent territories is already being made. The intensification of the search for oil in New Guinea was described in the Far Eastern

Survey of January 5, 1939; American, British and Australian companies are being encouraged to partici- pate on a larger scale. The discovery of oil in New Guinea fills a particularly urgent need since the Aus? tralian Government has determined at all costs to estab- lish the manufacture of automobiles and aircraft within the country.

Quite apart from the particular need for oil, it is felt in Australia that if the government is to justify its refusal to return the mandate to Germany it must demonstrate to the world that it is making the fullest use of the resources of the area with whose control it has been entrusted. With a view to stimulating the

development of the territories generally a committee has recently been set up to make a general economic

survey and advise the Australian Government as to means of fostering their primary industries.

The speeding up of economic development in the territories is also to be accompanied by extensive re-

organization of their administration. Last November the control of dependent territories was removed from the jurisdiction of the Minister of External Affairs, Mr. W. M. Hughes, and placed in the hands of an assistant Minister, Mr. E. J. Harrison, working with the Prime Minister's Department. One of the new Minister's first tasks was to settle the vexed question of the location of the capital of the mandated territory. This problem arose as a result of the discovery that the old capital, Rabaul, on the island of New Britain, was unsafe because of its proximity to an active volcano, which recently erupted and nearly destroyed the town and the harbor. Various alternative sites were sug? gested and in the face of strong opposition, both in the territory and in Parliament, Mr. Hughes chose

Salamaua, a rather insalubrious spot on the mainland

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1939 Japan's Fertilizer Problem Still Unsolved 73

of New Guinea. This choice was extremely unpopular in many quarters, and the new Minister in charge of territories has since announced that the shift of admin? istrative headquarters to Salamaua is to be merely tem-

porary, and that the government is considering the

amalgamation of the administrations of the Territory of Papua and the Mandated Territory of New Guinea, with one capital at Port Moresby. This is a solution of the problem to which Mr. Hughes has in the past expressed violent opposition but it is in line with the recommendations of many experts at the time of the establishment of the mandate, including Sir Hubert

Murray, the Lieutenant-Governor of Papua. The government now feels that while there are some

legal difficulties involved in bringing a mandated terri?

tory and a possession under a single administration, the arrangement will have great advantages from the

point of view of economy, both in money and personnel, and from the point of view of defense. Under the terms of the mandate the government is precluded from forti-

fying the territory entrusted to it by the League, but it

is perfectly at liberty to fortify territories over which

it has sovereign power. In other words while it must leave any capital situated in the mandated territory undefended, whether it be Rabaul or Salamaua, it is free to fortify Port Moresby in the Territory of Papua. It is significant that the announcement of the proposal to amalgamate the two administrations and an an? nouncement that the government was actually propos- ing to fortify Port Moresby were made almost

simultaneously. Before taking action to bring about the proposed

amalgamation the government is seeking the advice of

a specially constituted committee regarding the legal

difficulties, but as these have been overcome by other

mandatory powers, it would seem extremely probable that in the near future the largest practicable measure

of unified control will be introduced. The very fact

that a move has been initiated to integrate the admin?

istrations of mandated and sovereign territories is

further evidence that the Australian Government is

firm in its determination never to agree to a restoration

of former German colonies under its control. Jack Shepherd.

JAPAN'S FERTILIZER PROBLEM STILL UNSOLVED

Latest developments indicate that control of the fertilizer industry in Japan, though dating back to the

prewar period, is as yet far from successful. The

main reason doubtless is that the original purpose of

the system?to protect the farmer against monopoly and to assure him of ample supplies of commercial fertilizer at moderate prices?conflicts sharply with the

wartime aim of self-sufficiency. At any rate price reg? ulations have been evaded; the distribution system has

had to be overhauled; self-sufficiency has not been

achieved; and, following a new move to cut down on

imports, announcement has been made of a plan to

restrict farm consumption by means of a quota system. State regulation of the fertilizer industry is based on

the Fertilizer Control Law which went into operation in November 1936, supplemented by a second law

which became effective about a year later. (See Far

Eastern Survey, Feb. 16, 1938, p. 44.) The first pro? vided for regulation of company sales and sales prices; the second authorized a reorganization and centraliza-

tion of the distribution system. A third law, passed in

the winter of 1938 but delayed in application, was

designed to stimulate fertilizer production by granting tax exemption and other special privileges.

Price control got under way first but was hampered

by the division of authority between the Ministries of

Agriculture and Commerce. The one is supposed to

safeguard the interests of consumers of fertilizer, the

other those of producers, and a good deal of friction

seems to have occurred. Supervision has been partially successful in keeping down the prices of ammonium

sulphate, calcium cyanamide and potassic fertilizers.

Nevertheless the official price of ammonium sulphate, which has claimed a major share of government atten?

tion, rose from ?3.40 per bag in April-July 1937 to

?3.73 in August - December 1938. Superphosphates were not regulated until November 1, 1938, and nearly doubled in price in the course of a year, largely because

of restriction of imports of phosphate rock, but were

expected to decline with the institution of price control.

Price regulation has been widely evaded by the use

of mixed fertilizers, to which the law did not apply. At

one time there were said to be 1,800 varieties on the

market. In August 1938 the Ministry of Agriculture announced that prices of mixed fertilizers would be

fixed and their number limited to 500. So far, however, it appears that the farmer is paying more rather than

less for the fertilizers which form a large proportion of his production expenses.

Nor, it is evident, has distribution control worked

smoothly, though available details present a far from

lucid picture. Control of the distribution of ammonium

sulphate was stiffened in January 1938, when the Min?

istry of Agriculture formed the Japan Ammonium Sul?

phate Sales Co., a cooperative selling agency. The plan

provided for eleven authorized dealers, including Mit-

sui, Mitsubishi, the Fertilizer Dealers' Association and

the Farmers' Cooperative Association. They were to

sell through prefectural federations and local cooper? ative associations. The system has been called an un-

qualified failure and a new one has been devised, which

gives further evidence of friction between the respon-

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