In 1941, the United States was the world’s largest producer of petroleum, with more than 60 percent of the world’s output. America also was Japan’s primary source for a variety of strategic raw materials, including about 80 percent of Japan’s oil imports. Because President Franklin Roosevelt had announced a “Germany First” policy and knew that his rapidly expanding armed forces were still too weak to fight a two-ocean war, he wanted to avoid a shooting war with Japan as long as possible. But waging economic war was another matter.
The warning shots of this economic warfare were first fired in January 1940, when the United States ended its 1911 commercial treaty with Japan. Seven months later, in July, Congress passed the National Defense Act, authorizing Roosevelt to ban or restrict the export of resources necessary for national defense. Roosevelt promptly banned shipments to Japan of high-octane aviation gas, certain categories of steel and scrap iron, and other items. By July 1, 1941, the list of proscribed items had grown so much that the economic war was in full swing. Still, Roosevelt resisted a total ban of the one item he knew was the “noose around Japan’s neck” – crude oil.
Roosevelt was hoping that the threat of a complete oil embargo, and the population and industrial disparity between the two nations that indicated any lengthy war with the United States meant Japan was committing national hara kiri, would cause the Japanese government to rethink and reverse the two policies that had led both nations to the brink: Japan’s invasion of China and the Tripartite Pact with Germany and Italy.
But, as historian Forrest Pogue noted, “Japan’s entire national policy – internal economy, the China affair, the Greater East Asia Co-Prosperity Sphere, the southern strategy – was so indissolubly linked that the Japanese feared giving way on any one point would be to break the chain beyond repair.”
It was that “southern strategy” that would prove to be the tipping point. On July 2, 1941, in an Imperial Council meeting led by Prime Minister Prince Fumimaro Konoye, cabinet ministers and senior military leaders discussed Japan’s next move. Konoye got straight to the point, saying, “I believe that it is most urgent for our Empire to decide quickly what policies it should adopt in view of the present world situation.”
The subject on the table was the proposed southern strategy: the occupation of military bases in the French colony of Indo-China, administered by Germany’s ally, Vichy France. This would give Japan a base of operations enabling it to strike at all points of the compass: south at the oil rich Dutch East Indies colony and the British base at Singapore, west to Thailand, Burma and India, north to China and the British base at Hong Kong, and east to the Philippines, then an American protectorate.
Japanese Army Chief of Staff Gen. Hajime Sugiyama, one of the architects of the China incident that started the war in Asia in 1937, noted, “Our occupation of Indochina will certainly provoke Great Britain and the United States.” Yet, he advocated they commence. As U.S. Commercial Attaché Frank S. Williams wrote in his summary of events, “Army authorities . . . long ago reached the definite decision that their future, as the dominating force of [Japan], depends entirely upon their ability to conquer China or at least bring the China Affair to a successful conclusion. And failing this it would be better for the Army to go down fighting a major power.”
There was the nub. Backing down on any point would mean a loss of face. To a Japanese military that had embarked on an expansionist policy in order to achieve parity with the Western powers, such a humiliating prospect was literally a fate worse than death.
On July 21, 1941, Japan signed a preliminary agreement with Vichy granting the Japanese military concessions amounting to an occupation of the colony.
On July 26, Roosevelt froze all Japanese assets in America. It was followed in August with a complete oil embargo.
Through a combination of escalating miscalculations based on mutual cultural ignorance, racial arrogance, and a surprisingly naïve belief that somehow, despite all evidence to the contrary, “reason would prevail,” the United States and Japan were now irrevocably on the road to war.