The Great War kept the Netherlands on the side again, military that is. WWI was a result of numerous events and Royal arrogance elsewhere in Europe. The conflict is usually blamed on the Germans, but that seems hardly fair or at least not the whole story. The conflict was a mixture of many scores to settle between many nations. The ancient European nobles and royal houses, ordinary imperialistic matters, the world colonial powers and even some ethnic matters; it all contributed to the worst modern conflict the world had ever known.
The Dutch had nothing to do with either of the roots that led to the First World War. That's why the Dutch nation could once again rely on its neutral policy although the Dutch did fear a German invasion of the south. The Dutch had also mobilised its army when the murder of the Austrian crown-prince in Sarajevo happened. The whole of Europe was preparing for war.
The war itself did not involve the small country in the northwest of Europe, but the conflict did have a devastating effect on the economy of the Netherlands. Apart from the fact that the conscript army had to remain mobilised for the entire duration of the war - excluding many soldiers from their regular work - the import and export came almost to a complete stop. In those days the Netherlands was also depending on huge import of basic agriculture products for its daily meals and as such poverty and near starvation were common matters - especially in the last year of the war when the blockade of the Dutch merchant fleet was hard felt.
WWI did not directly involve the Dutch nation, but the indirect effects were huge and would have an enormous impact on the events that would occur at the eve of battle in 1940. The effects that we point at are especially the relationship with Belgium and the UK.
The Belgian-Dutch relationship
The band with the Belgians was already far from friendly, not the least due to the recent war of independence [1830-1839]. When Belgium - as one of the Entente Nations during WWI - got involved in the preparations of the Versailles Treaty in 1918, it claimed considerable portions of the Dutch territory.
The Dutch - totally taken by surprise by the Belgian brutality, especially since its position as a neutral nation during the entire war - were suddenly summoned by the Entente to attend the preparation summits [of the Treaty] and defend themselves against the Belgian claim. France, Britain and the US proved not to be in support of the Belgian claim, which saved the day for the Dutch.
Belgium had claimed some 'border corrections' in order to get the country better defendable in future [the southern part of the Dutch province Limburg] and to open up Antwerp [Southern part of the province Zeeland: Zeeuws Vlaanderen]. The first demand was quite absurd and nothing more that plain imperialistically motivated, but the claim on Zeeuws-Vlaanderen was somewhat understandable. Indeed the large harbour of Antwerp was totally depending on the Dutch maintenance of the Westerschelde and Schelde mouth. And the competing largest harbour of Europe, Rotterdam, had every bit of interest not to facilitate Antwerp. Regarding this matter, the Belgian claim seemed fair. In the end the parties agreed - both under protest - to facilitate the Belgian economy by sealing a trade agreement, which also incorporated the expansion of canal routes to and from Belgian waters. In the end the Dutch would seriously stall the development of the agreement. The frail Belgian-Dutch relation had been smashed to pieces by the Belgian Versailles claims, not to improve very much in the years to come.
The Anglo-Dutch relationship
The Netherlands had a long history of (trade)wars with the United Kingdom [UK]. Basically the countries respected each other as worthy competitors in world-trade, but many wars had been fought at sea between the two nations. Four large maritime conflicts are identified as genuine wars, of which two were won by the Dutch and two by the British [1652-1654, 1665-1667, 1672-1674 and 1780-1784].
Both countries had huge interests in the East and were competitors in the world trade of spices during the 16th, 17th and 18th century. Although these wars were a standing fact, the nations never actually fought any land-war amongst each other in the same periods. On the contrary, during the four maritime wars nationals could freely travel to and from each others country and were not harmed or harassed in any way. Both countries saw these wars as "strictly business". It was even so that when the situation emerged that both nations had to join forces, they did.
The British strongly supported the Dutch war of independence [from Spain: 1568-1648] and also in 1815 the nations fought shoulder to shoulder at Waterloo and Quatre-Bras. Great-Britain even returned most of the Dutch colonies after the Dutch had lost control over most of them during the almost twenty years of French occupation. Ceylon and South-Africa would remain British though.
This mutual respect and business-like attitude did however fundamentally change with the Boer-wars in South Africa [1880-1881, 1899-1902]. Especially the last and well-known conflict between the Boers [mostly descendants of Dutch colonists, lead by Paul Kruger] and British pioneers in 1899-1902, dramatically reset the Anglo-Dutch relations. It was not only the fight for better rights [under Cecil Rhodes] but especially the Boers ambition to connect with German West-Africa [Namibia] that provoked all out British army support for their citizens in South-Africa. Obviously economic motives played a major role too.
The fragile Anglo-Dutch relation [due to the Boer-war] was even worsened during WWI, when British ships blockaded the Dutch waters and openly raided Dutch shipping. In March 1918 the British even seized the entire Dutch merchant fleet in all the foreign harbours they controlled. The British accused the Dutch of breaking the trading ban that was laid upon Germany. As a result of the British blockade, the Germans started an all out U-Boot war against all shipping in the European waters. The Dutch merchant fleet lost about 25% of its fleet due to this all out maritime war, during which all belligerents sunk every ship coming in sight, indiscriminately under which flag it sailed. Meanwhile the Dutch suffered almost as much as the Germans from the international blockade and the British were blamed for that. At the end of WWI the relationship with the British was below zero.
Obviously the Dutch decision to provide a safe haven to the German Kaiser in 1918, did not please the former Entente nations. It was seen as the final bit of evidence that Holland silently supported the German cause. That 'evidence' was in fact totally absent. The Dutch had not supported the German economy, although some border trade had continued between the regions.
Relationships on the eve of WWII
Although a little bit ahead of the era in focus, it is good to expand a little bit on the international relations after the WWI era.
The bad relationship with the Belgians intervened considerably when the Dutch would later endeavour to come to agreement with Belgium in respect to extending the Peel-Raamline to the south on Belgian soil. The Belgian staff refused to take the request in consideration. Basically that request wouldn't have had any impact on the Belgian defence-plans - on the contrary - the Belgian strategy would have benefited too. On the other hand, refused the Netherlands to defend the south of Limburg with more forces and defensive structures. Holland considered the province undefendable and didn't really care about the huge disadvantage that Belgium suffered from this Dutch attitude. Besides the Belgian staff and Government had tried to get Holland into a provisional Belgian-Dutch defence agreement that would seal a conditional alliance between the two nations in case they would be invaded by Germany. Time and again the Dutch diplomates refused to even consider the case.
One cannot state that either of the two nations was more (or less) guilty of the tensed relationship. Both nations had their own reasons not to trust the other, and both nations had some items that spoke for and some items that spoke against them. Neither country was able to step over the differences.
The relation with the UK was still quite reserved in 1940 - with exception of the Anglo-Dutch navy band. Both navies had a considerable mutual respect for each other's knowledge, trade and skills. This was one of the reasons why the evacuated Dutch navy units were immediately adopted by the British Royal Navy in May 1940 and made operational without any further delay. That privilege was only given to the Dutch navy and to none of the other Allied navies.
The Anglo-Dutch political and army relationship would however remain poor during the entire war and continue after the war when the matter of the Netherlands East-Indies would put a lot of tension on the relationship between the two nations. Holland-hater Mountbatten played a key-role in that conflict.
The relations with the French had never been very close since 1815. The French had supported the Belgian uprising in the 1830's. In a way the Dutch had very reserved relations with all of the Allies to be in 1940. The only good relationship that the Dutch had nearby, was with Germany.
It is therefore quite understandable that the Dutch had not been pushing at the door to pre-war alliances with any of the Allies to be. And on the other hand, it was as understandable that the Allies to be would later put little effort in supporting the Dutch cause ...