The Dutch East Indies, also known as the Netherlands East Indies, was a Dutch colony that was made up of Sumatra, Java, Borneo, Celebes, the Moluccas, the Dutch New Guinea, and the Lesser Sunda Islands east of Java. It was formed from nationalized trading posts of the Dutch East India Company. After the Dutch East India Company declared bankruptcy, the government of the Netherlands overtook the company and its assets, including its territories.
The Dutch East Indies contributed to Dutch prominence in spice and cash crop trade in the 19th to early 20th centuries. Colonial social order was based on rigid racial and social structures with Dutch elites at the top of the hierarchy and native subjects at the bottom. The De Javasche Bank (Java Bank) served the banking needs of the colony until the Japanese occupation in 1942.
Due to Japanese occupation in the Second World War, many of the Dutch colonial state, economy, and social structures were dismantled. After the Japanese left the territory on 15 August 1945, Indonesian nationalists declared independence from the Dutch. However, the Dutch formally recognized Indonesian sovereignty in 1949, with the exception of Dutch New Guinea (Western New Guinea), which was ceded to Indonesia in 1963.
Currently, the Dutch East Indies is known as Indonesia.