711.94/2216
The Chief of Naval Operations (
Stark
) to the
Secretary of State
Op–10–MD
Washington
, July 22,
1941.
My Dear Secretary: The enclosed is
self-explanatory. I sent it to the President via his aide, Captain Beardall.
The President told Captain Beardall that he liked it and asked me to send
you a copy. Hence, the within.
I hope you are feeling better and stronger every day.
We miss you very greatly, and all of us look forward to your return.99 We are still hoping you will not come back until
fully restored to health. It is better to be sure than sorry.
With every good wish [etc.]
P. S. Admiral Nomura is having lunch with me tomorrow at my house. The
President’s only suggestion is that I tell Admiral Nomura that it is
rather difficult to make our people understand why we cut oil and gas at
home and then let Japan have all she wants.
Of course, we understand this, because Japan carries the oil in her own
bottoms—and our own shortage in the East is due not to lack of oil and
gas at the refineries, but to our inability to transport it from the oil
fields to points where needed.
H. R. S.
[Enclosure]
The Chief of Naval Operations (
Stark
) to President Roosevelt
Op–10–MD
[
Washington
,] July 21, 1941.
Memorandum for the President
I think you will be interested in the enclosed.1
Had I seen Nomura, I think I would have told him exactly what Turner did,
and, in fact, have given him this picture before, which is one we have
talked over rather frequently in the Department.
I have also told Nomura that were our two nations to clash there could be
only one ending, because, regardless of how long it took, once we had
started it, the United States would finish it in its own way, etc.,
etc.
[Page 836]
I propose to make a date with Nomura on Wednesday.2 I thought possibly you might have
something you wanted me to get over.
I feel that Nomura has no heart for the Axis tie-up. In fact, he once
said that his lips and his heart might be at variance. It was clearly
evident that he had to at least give lip service to the Axis, but that
his heart just wasn’t in it.
What he had to say about commodities is also more or less, I believe, in
line with your thoughts. I thought the plea you made for peace3 (I believe it
was in September, 1939) was one of the best things I ever heard,
particularly where you promised the world to do all you personally could
for such distribution of raw materials as would permit all nations of
their share, etc., etc. These words meant so much to nations like Japan
that they undoubtedly sunk deeply into them. Of course, the picture has
changed greatly since then.
You remember your request that we draw up an estimate of what the effect
of an embargo of essential raw materials might be on Japan. I turned it
over to Kelly Turner, head of the War Plans Division, and, upon inquiry,
find that he has it completed, except for the import tables which will
probably be ready tomorrow and which I will send over by Jack then.
However, the report does not really need the import tables to be
understandable. I thought it might be of interest to you in connection
with Nomura’s visit.
I ran up home Saturday afternoon, so I missed Nomura on Sunday.
I think the reason for Nomura’s dealing with us is that he is used, as
all Naval officers are, to direct speaking, and I think at times he gets
downright lonesome. His friendship for the American Navy is of long
standing and beyond question.
[Subenclosure]
The Director of the War Plans Division of the Navy
Department (
Turner
) to the Chief of Naval
Operations (
Stark
)
Op–12–djm.
Washington
, July 19,
1941.
Subject: Study of the effect of an embargo of trade
between the United States and Japan.
Enclosures:4
[Page 837]
- (A)
- Copy of the following tables:
- (1)
- “Exports to Japan—December 1940 through May 1941.
- (2)
- Exports from Hawaii to Japan—December 1940 through May
1941.
- (3)
- Exports from the Philippines to Japan—December 1940
through May 1941.
- (B)
- Copy of the following tables:
- (1)
- Imports from Japan—December 1940 through May 1941.
- (2)
- Imports from Japan to Hawaii—December 1940 through May
1941.
- (3)
- Imports from Japan to the Philippines—December 1940
through May 1941.
1. Purpose.
The purpose of this study is to determine the effect that would be
produced by the enforcement of an absolute or partial embargo on trade
between the United States and Japan. Detailed consideration has not here
been given to the trade between Japan and the Philippines.
2. United States Exports to Japan in
1940.
United States exports to Japan in 1940 were valued at $227,000,000, a
decline of $5,000,000 from 1939, and of $13,000,000 from 1938. During
the first ten months of 1940 the value of exports advanced, due to
higher commodity prices and Japan’s increased demand for American
products as a result of enforced curtailment of her purchases from
Europe. However, sharp recessions in export trade during the last two
months of 1940, occasioned in part by the application of export license
control to certain products, wiped out earlier gains. In November and
December, particularly sharp declines were registered in machine tools,
ferro-alloys, and refined copper, while scrap iron exports were
practically negligible.
3. Present Trends of Exports.
- (a)
- United States exports to Japan during the first five months of
1941 were valued at $47,000,000 as compared with $91,500,000 for the
same period of 1940. During the current year, trade has declined
steadily from $11,336,000 in January to $6,594,000 in May (see
Enclosure (A)).
- (b)
- The principal factor affecting exports to Japan during the past
year has been the progressively restrictive effect of export control
measures. The virtual disappearance from the trade in 1941 of iron
and steel products and of metal working machinery, which together
accounted for shipments valued at $67,000,000 in 1940, was the
direct result of an embargo on shipments of these commodities to
Japan. The sharp drop in Japanese purchases of raw cotton, during
1940, however, was the result of other influences.
- (c)
- (1) During 1939, Japan purchased American raw cotton valued at
$42,500,000, while in 1940 her purchases amounted to only
$29,500,000. This drop was due to the large quantity of piece goods
then on hand in Japan, the relatively high price of American cotton
compared to that of India and of Latin America, and shipping
requirements for items needed more urgently. In November 1940
American exports of raw cotton were valued at only $157,000; they
have risen steadily since then, reaching $881,000 in May
1941.
- (2) Declines in luxury items, including automobiles, are due to a
decline in purchasing power in Japan and to Japanese action in
placing restrictions on the importation and use of these items,
rather than to United States export restrictions.
- (d)
- Petroleum exports during 1940 increased by $9,300,000 dollars, or
21%, over the figure for 1939. Exports for the first five months of
1941 were valued at $27,200,000, or 50% of the total for the entire
year 1940. This is contrary to the general trend of exports.
- (e)
- Sharp reductions in available ship tonnage have contributed to the
fall in exports. Due to withdrawals from trade of additional
vessels, future exports to Japan will be even less, regardless of
export restrictions.
4. Imports from Japan.
(a) Imports from Japan to the United States during
1939 were $161,000,000 and in 1940, $158,000,000. For the first four
months of 1941, imports amounted to $40,000,000, a decline of only
$8,200,000 from the same period in 1940; this compares with a decline in
our exports of $37,300,000. Our exports to Japan exceeded our imports
from that country, during the period 1 January to 30 April, 1941, by
only about $500,000, much less than usual. One result of the system of
export control is thus seen to be the arrival at a balance between
exports and imports. This fact permits Japan to pay in kind for all
goods sent to her from this country, and a continuation of the present
trend may soon make her our creditor.
(b) The following table shows items of imports
valued at more than $1,000,000 during 1940:
|
Item
|
Value of 1940 Imports
|
| Crabmeat |
$3,269,000 |
| Tea |
3,190,000 |
| Cotton cloth, bleached |
2,263,000 |
| Raw silk |
105,311,000 |
| Silk fabric, except pile |
1,661,000 |
| Hats, bonnets, and hoods |
1,143,000 |
| China and porcelain ware |
2,423,000 |
| Earthen and stoneware |
1,096,000 |
| Total |
$120,356,000 |
[Page 839]
These eight items account for 76% of our imports and
indicate where curtailment might start if it is decided to take steps to
reduce Japan’s markets.
5. Effect of Further Restrictions on
Exports.
- (a)
- The most important fields for exercising further restrictions on
exports are petroleum products and raw cotton, which accounted for
74% and 13%, respectively, of the trade in May, 1941.
- (b)
- It is generally believed that shutting off the American supply of
petroleum will lead promptly to an invasion of the Netherlands East
Indies. While probable, this is not necessarily a sure immediate
result. Japan doubtless knows that wells and machinery probably
would be destroyed. If then engaged in war in Siberia, the necessary
force for southward adventures might not be immediately available.
Furthermore, Japan has oil stocks for about eighteen months’ war
operations. Export restrictions of oil by the United States should
be accompanied by similar restrictions by the British and
Dutch.
- (c)
- Restrictions on the export of raw cotton would probably be serious
for Japan only if India, Peru, and Brazil should apply the same
restrictions. Cotton stocks in Japan are believed to be rather low
at present.
- (d)
- It will, of course, be recognized that an embargo on exports will
automatically stop imports from Japan.
- (e)
- An embargo on exports will have an immediate severe psychological
reaction in Japan against the United States. It is almost certain to
intensify the determination of those now in power to continue their
present course. Furthermore, it seems certain that, if Japan should
then take military measures against the British and Dutch, she would
also include military action against the Philippines, which would
immediately involve us in a Pacific war. Whether or not such action
will be taken immediately will doubtless depend on Japan’s situation
at that time with respect to Siberia.
- (f)
- Additional export restrictions would hamper Japan’s war effort,
but not to a very large extent since present restrictions are
accomplishing the same result, except with regard to oil, raw cotton
and wood pulp. Thus, the economic weapon against Japan has largely
been lost, and the effect of complete embargo would be not very
great from a practical standpoint.
6. Effect on the United States of a
Loss of Imports From Japan.
- (a)
- As previously mentioned, exports and imports are approaching a
balance. If exports cease, imports will also cease, as Japan would
not have the means to continue her purchases. The same effect would
be produced if we stopped buying from Japan, but attempted to
continue our exports.
- (b)
- In 1940, raw silk formed 67% of United States imports from Japan.
Silk is processed here. It is used in industry and for certain
munitions, particularly powderbags. The armed services have large
stocks of raw silk, and could get along without further imports,
though silk substitutes are not entirely satisfactory. Doubtless
industry could manage without silk, although the lack of it would
cause a considerable dislocation of labor now employed in the
industry. The effect of stopping the purchase of silk would also
have an adverse psychological reaction on the part of Japan, though
possibly not so great as would an export embargo.
- (c)
- Stopping other imports from Japan would not cause any great
hardship in the United States, although the general effect on
industry would be adverse.
7. Conclusions.
- (a)
- Present export restrictions, plus reductions of available
ship-tonnage for use in Japanese trade have greatly curtailed both
exports and imports.
- (b)
- The effect of an embargo would hamper future Japanese war effort,
though not immediately, and not decisively.
- (c)
- An embargo would probably result in a fairly early attack by Japan
on Malaya and the Netherlands East Indies, and possibly would
involve the United States in early war in the Pacific. If war in the
Pacific is to be accepted by the United States, actions leading up
to it should, if practicable, be postponed until Japan is engaged in
a war in Siberia. It may well be that Japan has decided against an
early attack on the British and Dutch, but has decided to occupy
Indo-China and to strengthen her position there, also to attack the
Russians in Siberia. Should this prove to be the case, it seems
probable that the United States could engage in war in the Atlantic,
and that Japan would not intervene for the time being, even against
the British.
8. Recommendation.
That trade with Japan not be embargoed at this time.5
