Pre-World War II
Until after World War II the western part of the island of New Guinea was part of the Dutch colony of the Netherlands Indies. The Netherlands claimed sovereignty over New Guinea within the Netherlands Indies through its protection over Sultanate of Tidore, a sultanate on an island west of Halmahera in the Maluku Islands. In a 1660 treaty the Dutch East India Company (VOC) recognised the Sultanate of Tidore's supremacy over the Papuan people, the inhabitants of New Guinea. Probably this referred to some Papuan islands near the Maluku Islands, although Tidore never exercised actual control over New Guinea. In 1872 Tidore recognised Dutch sovereignty and granted permission to the Kingdom of the Netherlands to establish administration in its territories whenever the Netherlands Indies authorities would want to do so. This allowed the Netherlands to legitimise a claim to the New Guinea area.
The Dutch established the 141st meridian as the eastern frontier of the territory. In 1898 the Netherlands Indies government decided to establish administrative posts in Fakfak and Manokwari, followed by Merauke in 1902. The main reason for this was the expansion of British and German control in the east. The Dutch wanted to make sure the United Kingdom and Germany would not move the border to the west. This resulted in the partition of the island of New Guinea.
In reality the most part of New Guinea remained outside colonial influence. Little was known about the interior; large areas on the map were white and the number of inhabitants of the island was unknown, and numerous explorations were made into the interior from the turn of the 20th century on. The indigenous inhabitants of New Guinea were Papuans, living in tribes. They were hunter-gatherers.
Pre-World War II economic activity was limited. Only coastal and island dwellers traded to some extent, mostly with the Maluku Islands. A development company was founded in 1938 to change this situation, but it was not very active. So, until World War II, New Guinea was a disregarded and unimportant territory within the Netherlands Indies.
Homeland for the Eurasians
The group that was most interested in New Guinea before the war were the Eurasians or Indo people. Before the war some 150,000 to 200,000 Eurasians were living in the Netherlands Indies. They were of mixed European and Indonesian descent and identified with the Netherlands and the Dutch way of life. In the colonial society of the Netherlands Indies, they held a higher social status than indigenous Indonesians ("inlanders"). They were mostly employed as office workers. As the educational level of indigenous Indonesians was on the rise, more and more Indonesians got jobs previously held by Eurasians. These had no other means of making a living, because, as Europeans, they were forbidden to buy land on Java. This situation caused mental and economic problems to the Eurasians. In 1923, the first plan to designate New Guinea as a settlement territory for Eurasians was devised. In 1926, a separate Vereniging tot Kolonisatie van Nieuw-Guinea (Association for the Settlement of New Guinea) was founded. In 1930, it was followed by the Stichting Immigratie Kolonisatie Nieuw-Guinea (Foundation Immigration and Settlement New Guinea). These organisations regarded New Guinea as an untouched, almost empty land that could serve as a homeland to the sidelined Eurasians. A kind of tropical Holland, where Eurasians could create an existence.
These associations succeeded in sending settlers to New Guinea and lobbied successfully for the establishment of a government agency to subsidise these initiatives (in 1938). However, most settlements ended in failure because of the harsh climate and natural conditions, and because of the fact the settlers, previously office workers, were not skilled in agriculture. The number of settlers remained small. In the Netherlands proper, some organisations existed that promoted a kind of "tropical Holland" in New Guinea, but they were rather marginal. They were linked to the NSB party and other fascist organisations.