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"Applications for financial assistance should be submitted to these Advisory Committees and to the British Cousuis-General; and instead of British institutions competing keenly against each other for big contracts in foreign countries, it would be more advisable to do the business on joint
account.
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I am in complete accord with the spirit of this recommendation, but would suggest an alteration in the form, and would recommend that purely British Chambers of Commerce be established at the principal ports in Java, and wherever else there are sufficient numbers of British traders to justify their existence, in order :-
(a) To afford a common meeting ground for the discussion of matters which
affect the general welfare of British residents;
(b) To enable British traders to act collectively, and thus bring greater pressure to bear whether to remedy existing abuses or to promote national interests; and
(e) To form a link between H.M. Government and officials and the trading community, both for the collection and dissemination of useful trade information and also for the purpose of devising schemes for the active extension of British interests in the islands.
This brings one to the necessity for an organised Commercial Intelligence Service in the Netherlands Indies.
Commercial Intelligence Service. The only British official representatives in the islands are the Consul-General at Batavia and trading Vice-Consuls at Sourabaya, Samarang, Medan, and Macassar, The Consul-General is usually a member of the Consular service in Siam, but the Vice-Consuls are British merchants at the ports and are not in the service. Their functions prior to the war were mainly administra- tive in connection with the administration of the Merchant Shipping Acts, the giving of advice and assistance to British subjects trading in, residing in, or visiting the district, the relief and repatriation of distressed British subjects, and the work of a registrar in respect of births, marriages, and deaths. Beyond issuing an annual trade report, which is mainly a resumé of statistics, it may be said that no active official steps were taken to develop and extend British commercial interests in the islands. While British merchants have become accustomed to this policy of "laisser faire"
on the part of the Government, it cannot be said that they were satisfied with it. The more active interference of the Consul officials since the war with regard to the carrying out of the Trading with the Enemy Regulations, and the
and compilation and manipulation of the "White
Black" lists, has given an earnest of what might be done by a systematized and sympathetic official commercial service. British interests are unanimous in voicing the need for active official co-operation in the work of developing and expanding our commercial influence throughout the islands, although they do not appear to have very clear ideas as to the precise form it should take.
R
I would recommend that this constructive function of official activity should be entirely separated from the administrative and restrictive sides of a Consul's work, and should be placed in the hands of a Commercial Intelligence Officer specially appointed. Whether he be a Commercial Attaché under the orders of the Foreign Office, or a Trade Commissioner appointed by the Board of Trade, will, no doubt, be settled by H.M. Government in reviewing the whole question of our commercial service abroad. The main desiderata are that the Commercial Intelligence Officer should have a good general knowledge of the market and conditions of trade; that he should work in close conjunction with H.M. Consul-General and the Vice-Consuls, who would act as correspondents in the various ports; that he should have his head- quarters at H.B.M. Consulate-General at Batavia, and thus be within easy reach of Sourabaya and Samarang; and that he should make periodical journeys in the Outer Possessions in order to study ways and means of fostering the British share in their development. All official commercial inquiries should pass through the hands of the Commercial Intelligence Officer, and he should regularly disseminate semi-confidential commercial reports and literature within his territory. The old system of Commercial Attaché's annual reports has not been satisfactory. These reports frequently contained excellent matter, but by the time they were published the information was often out of date. Commercial reports to be of value should be privately circulated as soon
as possible, and an organisation for the circulation of such documents should be formed in the foreign market concerned as well as in the United Kingdom. In this connection the purely British Chambers of Commerce whose formation is strongly advocated would provide a most valuable link between the official and the merchant. The success of the system would largely depend on the personality of the officer. The personal element counts for more in the East than in Europe, and I feel confident that a sympathetic, active, able man would find the commercial community only too glad to be of assistance to him and to co-operate in the national work. As au instance, I would cite the cordial relations existing between H.M. Commercial Attaché in Japan and the mercantile community, which is the result of a most happy selection for the post.
It may be objected that the appointment of a Commercial Intelligence Officer in the Netherlands Indies would clash with the suggested appointment of a Trade Commissioner for British Malaya. This, however, need not be so. The Trade Com- missioner at Singapore would have the whole of the Malay States trade for his field, and also important subsidiary markets such as Siam. He would, it is true, regard the Dutch Indies as one of his largest dependencies, but it has been seen that the expansion of trade rid Singapore and Penang has been concomitant with a still greater extension of direct trade from the islands, and there is no real clashing of interests. By a strict demarcation of activities, and loyal co-operation between the two officials in the national interests, mutual benefits would result. I would commend this matter to the attention of H.M. Government.
Suggested Measures to be taken against German Trade after the War.-It is reasonable to anticipate intensified German competition in the Netherlands Indies after the war. The popular feeling in the Straits Settlements will be so strong for many years that it is extremely likely that the leading German merchants, such as Beha, Meyer & Co., will transfer their activities from Singapore to the Java ports, and will leave no stone unturned in their endeavour to build up a direct business, and to divert as much trade as possible from the British colony. Such competition, how- ever, can and will be met on equal terms, provided that measures are taken by the mercantile community, fostered by a helpful and sympathetic Government, to safeguard and extend their interests.
It must be remeinbered that we are dealing with the colony of a neutral country, Holland, and that British activity is subject to the laws, usages, and conditions prevailing in that country. Restrictive measures aimed against enemy trading are therefore not possible. even if they were considered desirable. Our policy must, therefore, be constructive rather than restrictive.
The suggestion of the Sourabaya Advisory Committee is as follows:-
We consider that the most effective measure should be adopted, namely, to blacklist all those, no matter what their nationality, who, after due notice has been given to them, continue to work, knowingly and willingly, against the interests of the Allied nations. This blacklisting should continue after the war-wherever practicable.
After giving this suggestion very careful consideration, I have come to the conclusion that it would be extremely difficult to put into practice in normal times; and even were such a policy feasible, it would cause intense friction with the Dutch, and would provoke retaliatory measures, which might shake the foundations of our commercial position in the islands. The enforcing of the black list system during the war has necessitated the application of considerable pressure ou Dutch firms, and has aroused a certain amount of feeling. Such pressure in peace times would raise a storm of indignation and a call for retaliatory action on the part of the Dutch Government. It would, in fact, tend to unite the Dutch and German inercantile communities against the British. A simple method of such retaliation would be the granting of fiscal preference to Dutch manufacturers. At present the tariff is purely a revenue tariff, and all countries, including the Mother Country, stand on the same basis. Were the Dutch, however, to grant a complete rebate on cotton piece goods manufactured in Holland, this quite natural act would place a handicap of 6 per cent. on Lancashire goods, and would seriously affect our export trade (65 per cent. of which is in textiles),
Prior to the war, British activity in the islands was carried on under conditions of amity and scrupulous fairness. The Dutch enjoyed remarkably few advantages which were not shared by the subjects of other countries. In face of this dominant
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