Here the South Pacific is defined as those islands located to the north of the Equator and in the center-west of the Pacific that were placed under Japan’s trusteeship by the United Nations prior to WWII, now and namely Republic of Palau, Federated States of Micronesia, Republic of the Marshall Islands and Commonwealth of Northern Mariana Islands.

Japan’s trade with these islands dates back to 14 May 1890 when Tenyu-maru, a 91-ton schooner, left Shinagawa on an expedition to the islands, visiting Guam, Yap, Ponape and Palao before returning to Japan on 2 December with a rich cargo. This trip brought the South Pacific islands to the attention of Japanese traders, including the promise of good trade deals, and in 1893, with investor backing, Nanyo Boeki Kaisha Ltd.(hereinafter called NBK) was launched as an association.

The South Pacific belonged to Spain at the time, transferring to Germany in 1899. The First World War broke out in 1914, and Japan declared war on Germany, seizing all the South Pacific islands, which then became Japanese territory and remained under the governance of Japan until 1945.

During that time, despite various twists and turns of history, branches and offices were established in the islands, contributing significantly to the development of the South Pacific through trade, development, transportation and shipping.

In 1942, the 50th anniversary of NBK, business stood as follows:
Capital: 10,000,000 yen (around 15 billion yen at current rates)
1. Trade
(1) Exports to and imports from the South Pacific islands
Management of large and small department stores (annual sales of 10 million yen)
Imports included the key South Pacific products of copra (more than half of total production), dried bonito, button shell, dried sea cucumber, pearl shell, ivory nut, jute, coconut fiber, coconut charcoal, tannin, and other goods from around the islands.
(2) Exports to and imports from other islands
Exports mainly of cotton, foodstuffs, ceramics, and miscellaneous goods, and imports of key products such as copra, maize, cotton, coffee, cocoa, and tannin, etc.

2. Transportation
Regular and irregular services between the various islands (a total distance about 250,000 miles).

3. Development
(1) Coconut Plantation
Plantations of around 18,000 acreage, with 700,000 trees, Japan’s biggest coconut plantation operator.
(2) Farms
Operation farms each in Palau and Saipan, growing jute, sugarcane, sweet potato, rice, vegetables, etc.
(3) Marine products
Directly-managed fishing boats and factories in Ponape, Truk and Saipan, engaging in bonito and tuna fishing, as well as dried bonito processing (560 tons a year); also harvesting sea cucumber, cultivation of button shell, and manage of freezing, processing and canning operation in other pacific area.
(4) Mining
Gold mining in Palau and iron ore extraction in Saipan and Ponape.
(5) Oil and fat industry
Pressed oil factory handling 30,000 tons per annum of copra established in Yokohama, other processed uses also explored (cooking oil, fuel oil, lubrication oil, leather preserving oil).
(6) Other industry
Civil engineering contracting, steel, shipbuilding, management of a mill on Kusaie (now known as Kosrae Island) and a tannin plant on Ponape.

In July 1942, NBK was amalgamated with Nanyo Kohatsu K.K., which had sugar refineries on Saipan and Tinian (producing 70,000 tons per annum and exporting around 25 million yen worth of sugar to Japan at their peak) and a similar range of business interests on the other islands, as part of national policy, creating the massive Nanyo Kohatsu K.K. (with capital of 50 million yen, or around 75 billion yen today) to handle the South Pacific as a whole. This company also established offices in the Philippines, Indonesia, Celebes, Borneo, Timor and New Guinea.

Of the approximately 130,000 people living on the islands at the time (80,000 Japanese and 50,000 locals), 48,000 worked for Nanyo Kohatsu K.K. (including employees, local hands, harvesters, workers, other staff, and their families). In their hands, enormous strides were made in island development (combined with Japan’s migration policy). Mention especially, the annual budget of six million yen (now around 10 billon yen) handled by the Nanyo-Cho (the South Pacific Agency, the head office of which was in Palau) was virtually all drawn from the taxes paid by the various businesses around the islands, allowing the islands to run independently without the need for subsidies from Japan.

The blood and sweat of our ancestors, and their indomitable will to develop the land, conquered the islands and also contributed to Japan’s national interests, but unfortunately, this all came to nothing when Japan lost the war.

The South Pacific islands were handed on to the trusteeship of America, and the four islands have now become independent nations (Saipan is part of the American federation; the total population of the four islands is around 300,000 people). Since 1945, most of their national revenue has depended on subsidies from the United States, and they have no significant industries other than tourism (most of their fishing revenue comes from catch fees).

Island industries encouraged the development of trade, and according to 1938 materials, exports from the islands amounted to 47 million yen (sugar, copra, shell, bonito flakes, alcohol, etc.), while imports stood at 31.66 million yen (rice, beverages, tobacco, vehicles and ships, machinery, cloth, cloth products, wood and wooden products, etc.), representing a balance in favor of the islands of some 15.34 million yen. The NBK that made this possible was successful because it developed the land and created industries literally out of the sweat and blood of Japanese and local staff, using the outstanding labor force that the Japanese government’s migration policy secured, as well as the injections of the necessary capital from Japan. The other key factor in the success of the various industries was Japan’s provision of a transportation network, development of distribution, and absorption of all South Pacific products as the market for the region.