The Political and Economic Relationship of American-Dutch
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The Political and Economic Relationship of American-Dutch Colonial Administration in Southeast Asia: A Case Study of the Rivalry between Royal Dutch/Shell and Standard Oil in the Netherlands Indies (1907-1928) by Agus Setiawan A thesis submitted in partial fulfillment of requirements for the degree of Doctor of Philosophy in the field of History Approved Dissertation Committee Prof. Dr. Marc Frey Jacobs University Bremen Prof. Dr. Dominic Sachsenmaier Jacobs University Bremen Dr. J. Thomas Lindblad Leiden University Date of Thesis Defense: 14/07/2014 School of Humanities and Social Sciences (SHSS) Printed with support from the German Academic Exchange Service i Statutory Declaration (on Authorship of a Dissertation) I, Agus Setiawan, hereby declare that I have written this PhD thesis independently, unless where clearly stated otherwise. I have used only the sources, the data and the support that I have clearly mentioned. This PhD thesis has not been submitted for conferral of degree elsewhere. I confirm that no rights of third parties will be infringed by the publication of this thesis. Bremen, May 8, 2015 Signature ___________________________________________________________ ii TABLE OF CONTENTS Acknowledgement v Abstract vii List of Illustration viii List of Maps ix List of Tables x CHAPTER ONE: INTRODUCTION 1. Oil in The Dutch Indies 1 2. The Temporal Scope 3 3. Previous Studies 4 4. Source Material 6 5. Organization of This Study 8 CHAPTER TWO: THE INDISCHE MIJNWET Introduction 11 1. Mining Activity in the Archipelago and the Arrival of VOC 11 2. The Dutch Colonial Administration and Mining Activities 16 3. The Discovery of Oil and The Urgency of The Dutch Indies Mining Act 31 4. The Enactment of the Dutch Indies Mining Act 38 5. The Indisch Mijnwet and The Local Rulers 44 6. Conclusion 51 CHAPTER THREE: THE BEGINNING OF THE ROYAL DUTCH/SHELL AND STANDARD OIL COMPANY RIVALRY Introduction 55 1. The American-Dutch Diplomatic and Economic Relationship 55 2. The Beginning of Oil Competition in Asia 61 3. The Revision of the Indische Mijnwet 84 4. Standard Oil and Royal Dutch/Shell During World War I 89 5. Conclusion 94 iii CHAPTER FOUR: THE FAILURE OF AMERICAN OIL DIPLOMACY IN THE CASE OF THE JAMBI OIL CONCESSION 1919-1921 Introduction 98 1. Oil and American National Interests 98 2. Jambi Oil Concession 104 3. The Efforts and Obstacles of The American Oil Diplomacy 107 4. The Failure of NKPM To Obtain Oil Concession in Jambi 111 5. Oil and Political Rivalry Between The United States and The British 117 6. Conclusion 120 CHAPTER FIVE: AMERICAN POLITICAL EFFORTS FOR OIL POLICY RECIPROCITY WITH THE DUTCH GOVERNMENT 1922 – 1928 Introduction 124 1. The International Oil Trade After World War I 124 2. The American-Dutch Relationship: Strain and Retaliation 128 3. American Challenges In Obtaining Oil Concessions In The Dutch Indies 136 4. The Dutch Indies Political Situation and Foreign Investment 139 5. The American Applications for oil concessions and Volksraad 144 6. The Change of Governor General and The Turning Point in The Dutch Government’s Attitude to the Granting of Potential Oil Concessions to American Oil Companies 152 7. The Reciprocal Policy Between The Netherlands and The United States of America 160 8. Compromises and Normalization Efforts 173 9. Conclusion 177 CHAPTER SIX: CONCLUSION 181 Bibliography 187 iv Acknowledgements Completing a PhD is truly a marathon event. It is a long, and at times challenging journey and I would not have been able to complete this journey without the help and support of several people over the past three years. It is not possible to name everyone who has assisted me, but I would like to extend my deepest gratitude to all those individuals and institutions that have played a role in helping me complete this dissertation. In particular I would like to express my deepest gratitude and thanks to my principal supervisor, and Chairman of my Dissertation Committee, Prof. Dr. Marc Frey for sharing with me his expertise and knowledge on a range of subjects, especially in American, Dutch, and Indonesian history. His support, corrections, suggestions and feedback from the preparation to the implementation of this study have been essential to its success. My thanks also to Prof. Dr. Dominic Sachsenmaier, my second supervisor and member of my Dissertation Committee for sharing his knowledge on Asian history, for his helpful discussions, and for allowing me to join his lectures. My gratitude also to Dr. J. Thomas Lindblad for being so generous with his time and for allowing me to benefit greatly from his knowledge during discussions in Leiden, and for agreeing to be my external reviewer. My deepest thanks also to Prof. Dr. Corinna R. Unger for her helpful insights and discussions and for allowing me to participate in her historiography class at Jacobs University Bremen. My deepest gratitude and particular thanks also to Craig Paul Taylor, a fellow Ph.D candidate, for diligently going through and correcting my English. This dissertation would never have been completed without his assistance, corrections, and suggestions. I am also indebted to Jacobs University Bremen for providing the excellent facilities, tuition waiver, and for the excellent staff from the Dean’s and Registrar’s office who provided assistance; special thanks must go to Peter Tsvetkov for all his help. To all the professors at the School of Humanities and Social Sciences at Jacobs for their direct, and indirect, contributions during the admission process, colloquiums, seminars and lectures during the past three years. I am truly thankful. And to my fellow Ph.D Candidates at Jacobs: Karin Hagen, Lisa Heindl, Stefan Hübner, Clara Kemme, Christoph Meyer, Boris Niclas-Tölle, and Craig Taylor for our informal discussions, for sharing their ideas and thoughts with me, and for their words of encouragement during our time together as Ph.D candidates. My gratitude also goes to the Roosevelt Student Center in Middelburg, The Netherlands, for the generous research grant. Special thanks goes to the Director, Prof. Dr. Cornelis A. van Minnen, Assistant Director Dr. Hans Krabbendam, and to the Management Assistant, Mrs. Leontien Joose, for their kind hospitality and assistance during my research at the Center. My thanks and appreciation to the Deutscher Akademischer Austausch Dienst (DAAD) for the financial support, and to the DAAD staff, especially Frau Schwarz-Bergmann and Frau Anne Schmitz for their administrative support. I also wish to thank Drs. H. OK. Ubaidullah Indra bin Datoek Mahidin Gelar Datoek Indra Perkasa, Zulkarnaen Idrus, and H.M. Zamroni for giving me their time and sharing their knowledge and expertise on the history of the oil mining industry in Langkat during interviews with me in Medan and Langkat, North Sumatra. My thanks also go to M. Suhaemi, S. Stp, M. Hidayat, S.Stp, M. Taufik, S. Stp, Razaq Arifin, and M. Ichsan Kurnia, S. Kom, who supported me during my research in Medan and Langkat. v I also wish to mention my colleagues in the History Department, Faculty of Humanities at the University of Indonesia: Prof. Dr. Susanto Zuhdi, Dr. M. Iskandar, Dr. Priyanto Wibowo, Dr. Nana Nurliana, Dr. Saleh As’ad Djamhari, Dr. Magdalia Alfian, Dr. Wardiningsih, Dr. Linda Sunarti, Dr. Abdurakhman, Dr. Yuda B. Tangkilisan, Dr. Bondan Kanumoyoso, Kasijanto, M. Hum, Dra. M.P.B. Manus, Triwahyuningsih M. Irsyam M. Hum, Dwi Mulyatari, MA, Didik Pradjoko, M. Hum, Siswantari, M. Hum, Mohammad Wasith, M. Hum for their tremendous moral support and assistance during all stages of my research. To my friends, Dr. Ing. Agus Arif Munawar, Pak Lun Pujianto and his family, Pak Gerry and his family, Pak Chandra Perpatih and his family, Ariandy Yoga Benggolo, Yudi Nurul Ihsan, Riza Setiawan, Rima Rachmayani and all the members of the Indonesian Student Association and Community in Bremen for their friendship, support, suggestions, and assistance during my stay in Bremen. And finally, I am indebted to my family whose love I shall always cherish, and who have provided me with so much in order to enable me to complete this journey. To my beloved parents, Hj. Maruning and H. M. Chozin, and to my mother and father-in-law, H. Faisal Idrus and Hj. Rosmiaty, who have supported me and prayed for me during my time in Bremen. To my wife Fitriaty Sylvia without whom none of this would have been possible. Her patience in accompanying me to Bremen, her support and unwavering love were instrumental in making this work a reality. To all those who have helped and assisted me, I wish you all the best, and may God reward you for your sincerity. Lastly, it of course goes without saying, that any errors in this work are my sole responsibility. vi Abstract Competition for control over the exploration, exploitation, distribution and marketing of the world’s oil sources has been a key feature of 20th century history. Competition was usually fierce; oil is a highly sought after commodity and was an essential part to industrialization efforts. In Southeast Asia, in particular in the Dutch Indies in the late 19th and early 20th century, competition for oil was fought between three companies: the oil companies Standard Oil and Royal Dutch, and the transportation company – Shell Transport and Trading Company. The latter two companies would merge into one of the biggest oil companies in the world, and become Royal Dutch Shell. Competition between Standard Oil and Royal Dutch Shell would eventually involve not only the two companies but also the governments of the two countries they were headquartered in: that is the United States of America and The Netherlands. Washington and The Hague became involved once it was clear that the Dutch were attempting to prevent Standard Oil from operating in the Dutch Indies by refusing to grant oil concessions to the American company.