The term ‘comfort woman’ is a bleak euphemism for a young woman who was forced into prostitution. The women and girls who were structurally abducted after each invasion by Japanese army units, were abused daily in villas, bathhouses, hotels, schools, temples, and churches which had been converted into brothels. These brothels were run hierarchically and had strict regulations.
The forced prostitution system was developed by the Japanese government to prevent venereal diseases among the troops. The immediate motivation was the high percentage of venereal diseases among the expeditionary force stationed in Siberia between 1918 and 1922. As many as one third of the soldiers were then put out of action by syphilis and gonorrhoea, with a large number of them dying. Equally important was the emotional aspect: as long as the military’s sexual needs were met, there was no reason for discontent or mutiny.
The Japanese system of army and naval brothels also served a higher purpose: the money the women earned, was used to co-finance the war. This was shown by the sworn statements by members of the Japanese secret naval police on Borneo in the Dutch East Indies. Shortly after the war, the Dutch military intelligence service NEFIS – the Netherlands Forces Intelligence Service – investigated the large-scale sexual abuse by the Japanese occupier.
That financial purpose of the Japanese brothels has remained under the radar for years, partly because the NEFIS report was archived in a fragmented way: incomplete and with limited public access, and divided between the Netherlands Institute for War Documentation (NIOD) in Amsterdam and the National Archives in The Hague. Not until 2007 were the documents available in their entirety, at the National Archives in London.
AUGUST 14TH: INTERNATIONAL COMFORT WOMEN'S DAY
On August 14th, the victims of Japanese forced prostitution are commemorated. On that day in 1991, Korean Kim Hak Soon revealed that, for years, she had been abused by Japanese military personnel as a ‘comfort woman’. She demanded that Japan take responsibility for the structural sexual abuse in the territories occupied in wartime. By being the first ‘comfort woman’ to break the silence, Kim Hak Soon gave a voice and a face to the thousands of victims of this forced prostitution.
In December 1992, Dutchwoman Jan Ruff-O'Herne announced that she had been abused as a young woman in an officer’s brothel in Semarang, Java. Her revelation forced the Dutch government to investigate the extent of this war crime in the Dutch East Indies, its former colony. During the Second World War, over 350 thousand Japanese soldiers and marines were stationed there.
The subsequent government report concluded that ‘with certainty 65, and in all probability three hundred Dutch women were victimised on the islands of Java and Sumatra’. In reality, at least 70,000 young women (Dutch, Indo-European, Indonesian, Moluccan, Papua) were abused in Japanese brothels throughout the archipelago.
On July 5th, 1946, NEFIS captain J. Heijbroek signed the report. ‘The brothels [..] were managed by the manager of the Nanyo Kohatsu Kabushiki Kaisha, the South Pacific Development Company,’ he wrote. ‘The supervision [..] was carried out by the Hokukai, the Association of Japanese Businessmen, which also furnished the houses. The manager used his firm’s employees for day-to-day work, such as accounting. Every morning, the previous night’s payment slips and receipts were handed over to the cashier of the Nanyo Kohatsu.’
The manager, who had to submit a monthly financial statement, explained that the average profit per brothel was 60 guilders per day. ‘One-third of it was claimed by the Japanese businessmen for the expenses incurred. Two-thirds went to the young women, but instead of being paid out, the money was deposited at the branch of the Bank of Taiwan.’
Financing the Japanese militarization
The Bank of Taiwan plays a pivotal role in reconstructing the money trail of the Japanese army brothels. The bank was opened in Taiwan, Japan’s first colony, in 1899, under the Japanese name Kabushiki Kaisha Taiwan Ginkô, to support companies such as Mitsubishi and Mitsui with their investments. The bank had 5 million yen in seed capital and offered financial services, including foreign currency exchange. In addition to financing trade with Taiwan and other countries in Southeast Asia, the bank had another important purpose: to finance Japan’s militarization.
Although the headquarters were legally based in Taipei, the capital of Taiwan, the central office was located in Tokyo. Here, all important banking matters were handled. In terms of the money invested directly by the Japanese government, the Bank of Taiwan was the second largest bank in Southeast Asia. The first branch outside Taiwan was opened in Singapore in 1912, followed by branches in Thailand, British Malaysia and the Dutch East Indies. The new services offered by the bank included issuing local currency and depositing cash.
By 1931, the Bank of Taiwan in Tokyo issued government bonds to finance the expansion of the navy fleet for the impending invasions. The Japanese government wanted the bonds – making up half of the bank's capital – to be cashed in, and required the bank branches use their customers’ savings for this purpose.
As of March 1st, 1941, 3,209 shareholders held 150 thousand paid-up shares of 100 yen each, and 150 thousand shares with a par value of 100 yen, of which 25 yen per share is deposited.
The Japanese Ministry of Finance had appointed its own regulators at the very powerful bank, which meant that shareholders had little opportunity to object to government policy. One shareholder, Kora, had an exceptional position: it determined policy together with the government. Behind Kora are Emperor Hirohito and his relatives, who own 7,566 shares.
The emperor also owns shares in Japan’s largest bank, the Yokohama Specie Bank: no less than 22 per cent. This bank, founded in 1880 with a seed capital of 3 million yen and specialising in foreign transactions, simultaneously acts as the ‘paymaster’ of the army troops.
Preparing the invasions
Shortly before the attack on the American naval base Pearl Harbour (December 7th, 1941), the Japanese government orders the preparation of several denominations of foreign currency: in guilders for the Dutch East Indies, in Straits dollars for British Malaysia and North Borneo, in rupees for Burma, in pesos for the Philippines, and in pounds for the territories under Australian control.
The exchange rate of all foreign currencies is fixed at one Japanese yen, with the exception of the Australian pound, which is worth ten yen. All this leads to an increased value of the yen. At the same time, it underlines Japan’s new role: shortly after, it invades several countries and islands. Borneo is invaded on January 10th, 1942; the KNIL, the army in the Dutch East Indies, capitulates on March 8th, 1942.
Subsequently, the Bank of Taiwan, paymaster of the Imperial Navy, opens new branches in the occupied Dutch East Indies. The Yokohama Specie Bank, too, has an extensive network of branches. In addition to its headquarters in Yokohama, and four branches in Japan, it has thirteen branches in China, plus offices in Singapore, Manila, Jesselton (British Borneo), Rangoon (Burma), and multiple locations on Java and Sumatra. The Yokohama Specie Bank surpasses the Bank of Taiwan in its total number of loans and cash deposits.
Those deposits also include the money earned by the victims of Japanese forced prostitution: the tens of thousands of young women incarcerated in army and naval brothels are exploited not only sexually, but also financially. Officials from the local Japanese authorities oversee the brothels, check the administration, and deposit the daily profits at the bank branches.
Dismantling the war banks
Following the Japanese capitulation on August 15th, 1945, the Yokohama Specie Bank is classified as an enemy bank. As Supreme Commander of the Allied Powers, American general Douglas MacArthur orders the liquidation of all bank branches within Japan and abroad. Their dismantling will be placed in the hands of the local authorities, in accordance with the so-called territoriality principle. Proceeds from the liquidation are used as compensation for the damages suffered by the occupied countries.
With the exception of China and Thailand, all countries in question are still colonies: the Philippines and Guam (United States); Burma, British Malaysia, British Borneo and Hong Kong (Great Britain); Indochina (France); Australian New Guinea and Nauru (Australia); Portuguese Timor (Portugal); and the Dutch East Indies (Netherlands). As such, it is in fact the western colonisers who will liquidate the enemy banks.
Korea, which has been under Japanese rule from 1910 to 1945, is split after the capitulation into the northern Democratic People's Republic of Korea and the Republic of Korea in the south. Both the Korean branches of the Bank of Taiwan and the Chosun Bank, the local enemy bank, were subsequently nationalised by these two new governments.
After Kim Hak Soon shared her shocking story at a press conference in Seoul on August 14th, 1991, the South Korean government decided to offer financial support to all ‘comfort women’ who had officially registered: since then, due to their age, they have been living in nursing homes at government expense.
The situation on Taiwan
Taiwan, too, gains its independence from Japan: on October 25th, 1945, the island is handed over to the Republic of China, which is then led by General Chiang Kai-Shek’s Kuomintang (‘Chinese Natonalist Party’).
MacArthur, the Allied commander, considers the general and his party to be the lawful Chinese government. Kuomintang troops then nationalise all major corporations, including the offices of the Bank of Taiwan. On May 20th, 1946, the reorganised bank is launched as China’s first state-owned bank. Limited numbers regarding this reorganisation have survived.
On March 31th, 1945, the Taipei headquarters had nearly 6.5 billion yen in assets and liabilities, or 1.48 billion dollars. Nearly 10 percent of that – 145,573,415 dollars – came from cash deposits. What part of this regards the earnings of the victims of forced prostitution can only be ascertained with the aid of the archives of the ‘old’ Bank of Taiwan.
‘It’s been too long,’ says the press officer at the Taipei headquarters. ‘All the bank employees who were involved in this at the time have long since retired. Colleagues at the bank in Taipei have searched for the old data regarding the cash deposits, but have not been able to find anything.’
The liquidation process in the Dutch East Indies
Fortunately, the money trail of the dismantling of the enemy banks in the Dutch East Indies can be reconstructed: the Dutch East Indies government had the inventory of the bank balances carried out by NEFIS employees. This procedure takes place during the violent Indonesian war of independence, which erupted immediately after the Japanese capitulation.
In this chaos, Japanese branch employees of the Yokohama Specie Bank in Sumatra try to cover their tracks: by order of their government, they destroy the codebooks in which all transactions are listed. However, NEFIS staff manage to get their hands on a number of documents, including the bank statements of nine branches in Java.
At the Bandung branch, the NEFIS employees seize 313 million Japanese guilders, also calculating the salaries of the Imperial Sixteen Army and of the Imperial Navy in Java during the period of occupation. In total, this comes to just over 242 million guilders. Some of it was spent by the Japanese army and navy personnel on brothel visits.
Royal Decree ‘Enemy Assets’
Where has the forced prostitution money gone, that was deposited at branches of the war banks in the Dutch East Indies? The US commander in chief determined that the liquidation proceeds will flow to the local authorities. That is not the Indonesian government, which declared its independence on August 17th, 1945, but the Dutch colonial authority.
The American provision, moreover, is in line with the Royal Decree on Enemy Assets, as proclaimed by the Dutch government in exile on October 10th, 1944: ‘As of this decree’s coming into force, ownership of capital belonging to an enemy state, or to an enemy, shall be transferred legally to the State.’
The Ministry of Overseas Territories is one of the five ministries involved in the implementation of this decision. ‘The enemy state and nationals’ credit balances must be regarded as enemy assets,’ it confirms on November 25th, 1945, as a prelude to the liquidation of the Japanese war banks.
Dutch supervision of bank liquidation
A few Japanese bank branches are looted by Indonesian troops. At the other branches, it is the Dutch authorities who, from January 15th 1946 on, monitor the transfer. The head of the Economic-Technical Department of the NEFIS, S.W. Tromp, who is trying to map the internal organisation of the Japanese war banks, reports to Treasurer-General Arons in Batavia: ‘But the few hours you have given us, make this impossible.’
Due to the ongoing Indonesian freedom struggle, the liquidation of the Japanese banks needs to be handled quickly. The protocol, which has been determined in the Netherlands, dictates that ‘the [Dutch] Management Institute claims enemy assets; and manages them in order to be able to assess claims’.
However, the Dutch Indies government has decided to ‘follow its own lead’ and is not adhering to the protocol, notes Deputy Treasurer for Finance Alfred Rinnooy Kan. For this reason, until 1948, all branches of the Japanese banks are placed directly under the supervision of the Nederlandsche Handel-Maatschappij (NHM).
Thus, the NHM becomes the beneficiary of the liquidation of the Japanese banks. As a representative of the Dutch authority in the colony, it also demands a dividend exemption with the Ministry of Finance in The Hague ‘from 1941 onwards, given our position as Dutch Indies Bank’.
The Nederlandsche Handel-Maatschappij in brief
The Nederlandsche Handel-Maatschappij was founded in 1824, at the initiative of ‘Merchant King’ Willem I. The NHM was in a sense the successor of the Dutch East India Company (VOC): it was privately owned, but the Crown had shares, and the company acted on behalf of the kingdom.
Like the VOC previously, the NHM focused on trade with the colonies, in particular with the Dutch East Indies. Due to the controversial ‘Culture System’ the Dutch had implemented, the Indonesian population was obliged to use 20 per cent of its farmland for ‘government products’ such as coffee, tea, sugar and indigo. The NHM sold those products in Europe. The profits flowed directly into the Dutch treasury.
From the early 20th century, the NHM transformed itself from a trading company into a full-fledged banking company, with a large international branch network in Southeast Asia. She was quite successful: in 1916, the bank recorded a net profit of 11 million guilders, the highest so far.
It was this bank, with the Dutch state and the royal family as stakeholders, which profited from the liquidation of the Yokohama Specie Bank and the Bank of Taiwan. The enemy assets served as compensation for lost income during, and shortly after, the Japanese occupation of the Dutch East Indies. And so, the NHM indirectly appropriated the Japanese brothel money from the thousands of young women abused as ‘comfort women’ in the Dutch East Indies.
CALCULATING THE FORCED PROSTITUTION MONEY
The Borneo navy brothels had on average ten women working per location. A calculation based on the NEFIS report shows that each ‘comfort woman’ earned an average of 6 guilders a day. At least 70 thousand women in the Dutch East Indies were victims of the Japanese system.
The occupation of the whole of the Dutch East Indies officially started on March 8th, 1942. Since it took several weeks to set up the forced brothels, April 1st, 1942 is used as the starting date of the system for this calculation. The period from April 1, 1942 to August 15, 1945 has 1,232 days.
Each victim earned an average of 6 guilders per day. The 70 thousand victims achieved a ‘turnover’ of more than 517 million guilders in 1,232 days. Two thirds of that – nearly 345 million guilders – was deposited at branches of the Yokohama Specie Bank and the Bank of Taiwan.
The question is how much brothel money was confiscated during the liquidation of the enemy banks. A conservative estimate (counting only the deposits of the last three months before the Japanese capitulation) puts this at 25,76 million guilders. Indexed over the period 1945-2021, that amounts to just over 156.5 million euros.
The state also benefited
As the commissioning party and beneficiary of the Nederlandsche Handels-Maatschappij, the Dutch state collected part of this brothel money.
After the Second World War, the NMH focused more on the Netherlands and Europe. In 1959, the plantations that were still partly keeping the NHM afloat, were nationalised by Indonesia, and a year later the bank branches followed. In 1964, the NHM merged with the Twentsche Bank to form the Algemene Bank Nederland (ABN), making it one of the largest banks in the Netherlands. In 1990, after another merger, ABN Amro was created.
The current ABN Amro consists of the Dutch remnants of Fortis and the parts of ABN Amro that Fortis took over. All of that was bought by the Dutch state during the 2008 credit crisis, when Fortis – and ABN Amro with it – were on the brink of collapse. Since then, ABN Amro has been a state bank. And somewhere, in all those financial wanderings, there must be traces of the Japanese brothel money that the NHM collected shortly after the war. But where?
The Ministry of Economic Affairs refers Follow the Money to ABN Amro: ‘After all, the Nederlandsche Handel-Maatschappij became ABN, the current ABN Amro.’ The Ministry of Finance is the next stop. Were they, or the Dutch state, informed at the time of the brothel money? The answer: ‘The Ministry does not have the requested information. Based on the information shared by Follow the Money, we cannot verify what happened to said brothel money or who might have relevant knowledge.’
The spokesperson does refer to the speech of the Prime Minister, who, this February, on behalf of the cabinet, responded to the investigation Independence, Decolonization, Violence and War in Indonesia,1945-1950. ‘In this speech, the Prime Minister apologises for the extreme violence on the part of the Dutch.’ While the reoccupation of the colony in that period was indeed very bloody, it is unrelated to the accounting liquidation of the Japanese war banks.
In his speech, Prime Minister Rutte emphasises that ‘healing starts with finding the truth’. Is the ministry perhaps prepared to make a gesture to the last living victims of Japanese forced prostitution and the children of the deceased victims? ‘This is a question that extends beyond the domain of the Ministry of Finance. To answer this question, I would refer you to the Ministry of General Affairs.’
On to General Affairs. The answer is a copy paste job: ‘Based on the information shared, the Government Information Service (RVD) acting on behalf of General Affairs and the Ministry of Finance have not been able to verify what happened to the brothel money and who might have relevant knowledge.’ Again, we are referred to Prime Minister Rutte's irrelevant speech.
The royal NHM shares
The royal family was a major shareholder of the NHM. The 4,000 shares that Willem I owned were declared inheritable when the NHM was founded. When the assets of the enemy banks were transferred to the NHM in late 1948, the shares were in the possession of Princess Wilhelmina, Queen Juliana, Prince Bernhard and the four princesses. The dividend per royal share, which increased sharply in value as a result of the liquidation proceeds of the Japanese war banks, was at the time paid out untaxed.
When asked whether the House of Orange, as a major shareholder, was at the time informed of the brothel money from which they were profiting, the Government Information Service says: ‘We have not been able to verify what happened with said brothel money and who might have been aware of it.’
So, there will be no restitution? ‘The King is part of the government. In addition, the ministerial responsibility applies.’ Like the spokespersons for Finance and General Affairs, the RVD refers to a recent speech, this time one given by the King during his state visit to Indonesia, in 2020.
The RVD: ‘In this speech, the Netherlands, through the King, apologised to Indonesia for violent derailments on the part of the Dutch in the years 1945-1949. Queen Beatrix also commented on this during state visits to and by Japan (1991, 2000), as did King Willem-Alexander during his state visit to Japan in 2014.’
Taking advantage of expropriated Japanese assets by the royal family is a completely separate issue.
The Japanese Imperial Family
The Dutch royal family is not alone in this painful issue: the Japanese Imperial Family has also never disclosed its shares in the Yokohama Specie Bank and the Bank of Taiwan. How has the family benefited from the great wealth of both war banks, where the earnings of victims of Japanese forced prostitution were deposited? Despite repeated requests, the Kunaicho, the Imperial Family’s press service, declined to respond.
Ironically, Emperor Naruhito, grandson of war emperor Hirohito, preaches the Reiwa (order and harmony): he wants to close the book on his country’s war history. But there is still a large account to be settled: the Japanese brothel money will have to be refunded to the last living victims and the children of deceased ‘comfort women’.