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The colonies of German New Guinea (GNG) and British New Guinea (BNG; from 1906 the Territory of Papua) experienced different paths of development due to the virtually opposite decisions made regarding commercial activities. The establishment of these colonies in the 19th century, and all of the major events and decisions relating to them up to 1914, were based on solely commercial motivations. This thesis examines the circumstances leading to the founding of GNG and BNG. It analyses the impact of government decisions and the growth of capitalist enterprises in East New Guinea during its first 30 years (1884–1914). This thesis argues that both the German and British governments were reluctant to become involved in colonisation. In the context of the political pressures prevailing in Berlin and London respectively, both governments succumbed but insisted that the cost of administering and developing the colonies was to be borne by others. The establishment costs of GNG were accepted by the Neu Guinea Compagnie (NGC) until 1899. It was a haphazard and experimental undertaking which was expensive financially and in human life. When the German government assumed administrative and financial control in 1899 the development of GNG had generally progressed in line with Chancellor Bismarck’s view that Germany’s colonies should be treated as economic enterprises. This was despite the bureaucratic form of government NGC had established. In contrast, there were claims that BNG was to be established on defence strategic requirements and to protect the indigenous Papuan population from non-British influences. This was fallacious posturing by the Australian colonies in order to attain control over the entire eastern sector of New Guinea and adjacent islands. The objective of the Queensland sugar planters was to procure cheap labour and for Queensland, New South Wales and Victoria to prevent the setting up of competitive agricultural industries. After Britain acquired southeast New Guinea, and the recruitment of Papuan and Melanesian labour into Australia had been outlawed, BNG was left to the gold prospectors, with no sustainable plantation industry taking place until Australia assumed administrative control over the Territory in 1907. Neither colony had any military significance. Both colonies shared a common European morality in administration. By 1914 GNG had become a commercially viable enterprise; BNG, now Papua, had failed to take advantage of the 1902–1912 boom in tropical produce. Given their similar size and geography, the economic performance of the two colonies should also have been similar. That this did not occur is beyond dispute. / Thesis (Ph.D.) -- University of Adelaide, School of History and Politics, 2008