In May 1921 the League of Nations gave Australia a mandate to govern the former German colony of New Guinea which Australia had occupied in 1914 at the outbreak of World War I. Australia administered the Territory until the invasion of the Japanese in 1942.
Through an Expropriation Board established in 1920, Australia took over German land and property (mostly copra and cocoa plantations) and sold it to British and Australian individuals and companies. Until the early 1930s copra was the most important export. Other cash crops included cocoa, rubber, coffee, palm oil and tea. These crops were produced almost entirely by Melanesian labor on plantations owned by expatriates, mostly Australian.
Gold was found in the Wau-Bululo region in the early 1920s, and a rich strike in 1926 at Edie Creek, near Wau, brought thousands of European prospectors to the area. These were followed by large mining companies such as the Bulolo Gold Mining and Dredging Company and the New Guinea Gold Company. Because of the rugged nature of the terrain, much of the equipment was air-freighted from the coast to the mines. Giant dredges were disassembled, flown to the goldfields in pieces and reassembled at the site. In the 1930s the route from the coast to the Wau-Bululo mines was the busiest air-freight route in the world. Gold protected European investment in New Guinea against the effects of the worldwide economic depression of the 1930s and changed the nature of the cash economy. In 1933 gold overtook copra as the colony’s most valuable export, and there was a shift in European commercial activity from the islands to the mainland. Commerce was dominated by Australian-based companies such as Burns Philp, W.C. Carpenter and the Bank of New South Wales, and by Chinese who operated small retail stores. In 1938, following the eruption of the Matupit volcano in Rabaul harbor in 1937, the Administration began moving its headquarters from Rabaul, in East New Britain to Lae, on the mainland coast.
In 1933 gold prospectors Michael and Daniel Leahy and Administration patrol officer James Taylor were the first Europeans to enter the densely populated central highlands. They were followed later that year by Lutheran and Catholic missionaries. The Administration and missions established stations in the highlands in the next decade.
The plantations and mines employed indigenous indentured labor. Administration regulations concerning the length of contract and minimum wages and working conditions were often ignored. However, many men were prepared to become indentured because they valued cash and Western goods which gave them additional status when they returned to their villages. The involvement of men in the cash economy and the Administration’s attempts to impose Western law disrupted traditional village societies.
Traditional ways and beliefs were also disrupted by the Lutheran, Methodist, Catholic, Seventh-Day Adventist and Anglican missionaries who made many converts to Christianity. The missions were the main providers of Western education and health services and wrote down and translated local languages.
Some New Guineans who received a basic education were employed as mission teachers, clerks, police, boats’ crews and, occasionally, boat captains. However, most expatriates were reluctant to train indigenous men and women for non-manual work because they did not believe them to be capable of learning anything beyond simple skills. The vast majority of the expatriate community was strongly racist. Resistance to racism, alienation of land and exploitation of labor was sporadic and unsuccessful. The only organized attempt at resistance was made during the Rabaul strike of 1929.
In 1942, when the Australians were driven out of the Territory by the Japanese, they left a colony in which British and Australian expatriates and companies had, on the whole, prospered, and an indigenous population much further integrated into Western culture and the modern economy than had been the case in 1921.