AAS Annual Meeting

Japan Session 117

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Session 117: Deterioration of Japan-US Economic Relations Leading to Pearl Harbor: The Role of the US Economic Sanctions

Organizer: Munehiro Miwa, Kyushu University, Japan

Chair: Kevin M. Doak, Georgetown University, USA

Discussant: Hajime Shimizu, Waseda University, Japan

We focus on Japan-US economic relations and the effect of embargo. We look over statistics of trade on cotton, steel scrap, oil products, and relations with the Dutch East Indies Crude. We put stress on the oil embargo as a crucial factor which lured Japan into the war. Within Japan, two views prevailed after the US put full embargoes on Japan (1) plunge into a great war owing to a time-limit of oil reserves(Naval General Staffs and young officers both in the Navy and the Army) (2) avoid war by getting synthetic oil(Navy Minister Admiral Oikawa) Admiral Stark was against a full embargo because he thought that it would be a trigger for Japan to go into the Dutch East Indies and invoke war. Postmaster Franc C. Walker wrote in his unpublished memoir, “Hotheads would scream at Hull about scrap and oil going to Japan and Hull just couldn’t take it”. This is the same as Japan’s top leaders who were against entering war. Japan and the US started negotiating payment for two tankers of oil in Washington. Assistant secretary of State Dean Acheson, in cooperation with the Department of Treasury, did not say anything about payment. When Ambassador Grew informed Cordell Hull of the imperial conference of November 5, he came to understand grave situation. We would trace the modus vivendi and Hull’s ten points note from the point of reopening oil trade and lifting the oil embargo. It might be not good enough for both sides’ hard liners.

The Collapse of Japan-USA Trade Relation about Cotton and Scrapped Iron
Takeshi Abe, Osaka University, Japan

In the interwar period two industries, cotton and iron, were indispensable for Japan’s economic development. The USA was not only the market of cotton textiles made in Japan but also supplied these two industries with their materials, namely raw cotton and scrap iron. After Japanese silk reeling industry, which had exported huge volume of raw silk mainly to the USA, drastically declined during the Great Depression, the cotton industry became the champion of Japan’s export industries. Although Japan surpassed the UK in the volume of cotton cloth export in 1933, the Japanese cotton industry had to import all the raw cotton from India, the USA and so on, which occupied twenty or thirty percent in the total value of Japan’s imports. Compared with the cotton industry, the iron industry was underdeveloped in the prewar Japan. As that industry could not provide the relatively developed steel sector with enough pig iron, it had to depend on lots of scrap iron imported from the USA. The Sino-Japanese War greatly influenced those two industries. While the Japanese government soon limited the development of the cotton industry in order to reduce the import of raw cotton, the iron industry was well promoted, and the American scrap iron became more and more important for it. The US Embargoes against Japan in 1940 and 1941 seriously damaged two Japanese industries. Especially the iron industry did completely lose the possibility to secure US scrap iron, which further obliged the cotton industry to scrap its machinery.

A full embargo and the decision making of waging war: two views prevailed from first to last
Munehiro Miwa, Kyushu University, Japan

Japan and the Japanese navy had been aware of the feasibility of being too dependent on U.S. oil products. In order to reduce the military weakness caused by oil dependency, Japan made the following basic plans; 1) stockpiling oil 2) developing synthetic oil production projects (oil from coal) 3) diversifying its oil supplies to include Dutch East Indies crude , North Sakhalin crude , domestic crude and oil shale from Manchuria. The Japanese navy converted to fuel oil from coal after world WarⅠand paid much attention to the US adoption of 100 octane aviation spirit starting in 1935. The United State placed moral embargoes and economic sanctions. In December, 1939, a ban on plant designs on Aviation Gasoline manufacture. In July1940 moral embargo on oil products, Scrap steel. In July 1941, the embargo and freezing of assets resulted in a total embargo. The Japanese Navy, especially young officers, became indignant because of the US economic sanctions. After a full embargo was effective, a spirit of bravado and a fear of losing military power without oil stocks seemed to prevail. Some argued that the Japanese Navy should never lose its chance of securing DEI Crude and sweeping away US fleets in the Pacific Ocean. On the contrary, the Navy Minister ordered supply branches to secure oil and build up synthetic oil plants as much as possible. Within Japan, two views prevailed from August to November 5( or December 1) 1941 (1) attack at once; or (2) avoid war.

Japanese Oil Dependency and U.S. Policy, 1918-1941
Timothy (Ted) Lehmann, Hamilton College, USA

This paper addresses the relationship between economic exchange and grand strategy and explains why rival states exchange with each other. The theoretical debate among realists is defined, while a novel, yet classical, realist exchange theory is proffered and evaluated against the record of U.S.-Japanese exchange, 1918-41. In this particular case, the origins of Japan’s oil dependency on the United States are detailed for the first time as is the U.S. policy toward Britain and the Netherlands that created this dependency. The paper finds U.S. strategic coordination of Japan’s economic vulnerabilities and their use advanced U.S. grand strategy leading into WWII. The paper finds constant political manipulation of Japan’s oil dependency by the U.S., including during the final negotiations for Japanese access to Dutch East Indies oil in Fall 1940. It concludes that the July 1941 U.S. oil embargo against Japan was purposeful and the product of a larger policy arc from the early post-WWI period.

The influence of the United States on Japan’s petroleum procurement from the Netherlands East Indies in 1940
Yune-jung Jang, Waseda University, Japan

Japan, with woefully small domestic petroleum resources, covered 90% of her oil demands with foreign oil in the 1930s. In the late 1930s, 80% of Japan’s imported crude oil and petroleum products came from the United States and most of the rest were procured from the Netherlands East Indies. After the break of the Sino-Japanese war in July 1937, a host of incidents arising from Japanese military expansion into China recurrently harmed American interests in China and relations between Japan and the United States deteriorated. As rumors of an American oil embargo against Japan grew stronger, the oil procurement from the Netherlands East Indies, which were the second major oil supplier for Japan, became the most pressing issue in Japan. As a result, the Japanese government launched negotiations with the Netherlands East Indies in September 1940 to import petroleum on a larger scale than ever before. However, due to the involvement of the United States, Japan’s endeavors to procure oil met with less success than expected. Although the Netherlands East Indies were initially willing to meet Japanese demands, the intervention and the influence of the United States government caused the Netherlands East Indies to change their attitude. This study traces the process of the negotiations between Japan and the Netherlands East Indies and examines why and how the United States government was involved. It concludes that the heavy influence of the United States was the deciding factor in Japan’s failed attempt to secure oil from the Netherlands East Indies.

Reassessment of failures of modus vivendi and Japan’s diplomatic communications in connection with the breaking-off of Japan-US negotiations
Takeo Iguchi, Independent Scholar, Japan

Doubts about the intention of the Japanese military persist whether they would adhere to the proposed compromise between Japan and the U.S. that should lift the U.S embargoes if Japan would not march into British and Dutch colonial possessions, once the war in the European theaters turn decisively in favor of Hitler defeating Britain and Russia. By late November a provisional accord, modus vivendi, was near agreement. However Chiang Kai-shek feared that, by reopening oil supply and achieving temporary peace in Southeast Asia, China might be abandoned and appealed to Roosevelt and Churchill to forsake the compromise. Churchill sided with Chiang and persuaded Roosevelt to torpedo the modus Vivendi and Hull submitted the uncompromising Hull Note to demand withdrawal of Japanese troops from China. Japan could not compromise and went ahead with its plan of occupying Southeast Asia to secure strategic resources. Japanese army opposed delivering prior declaration of war and a decision was taken to give a prior notice to the United States in the form of terminating negotiations without declaring war, and no diplomatic notice be given to Britain. A delay occurred in the delivery of final note, and Japanese army’s maneuver to delay telegrams on the eve of Pearl Harbor attack is suspected. Also doubts persist whether the army could have finally accepted the modus Vivendi terms with such a limited oil resupply.