Scramble for the Indies

German victories in Europe in the spring of 1940 emboldened Japanese military leaders, who saw opportunities to profit from the distress of colonial powers in Southeast Asia. On April 12, powerful section chiefs within the Japanese Navy General Staff declared that "the time has come to occupy the Dutch East Indies." Plans were actually laid to send the Japanese Fourth Fleet south, but fear of a U.S. reprisal embargo on petroleum products held the navy back.^[38] But the Foreign Ministry and its press allies showed little rhetorical restraint. On April 13 and 14, editorials in the Japanese press expressed the country's "concern" for the Indies resulting from the German invasion of the Netherlands.^[39] Then, on April 15, Foreign Minister Arita startled reporters at an official press conference when he declared that all of Southeast Asia was "economically bound [to Japan] by an intimate relationship of mutuality in ministering to one another's needs." Should the European war extend to the Indies, he continued, the peace and stability of the South Seas, a region of vital importance to Japan, would be threatened. "In view of these considerations," he concluded, "the Japanese

Government cannot but be deeply concerned over any development accompanying an aggravation of the war in Europe that may affect the status quo of the Netherlands East Indies."^[40]

As Hugh Byas pointed out in the New York Times , this statement, taken at face value, merely echoed long-standing U.S. policy. "By basing his action on Japan's concern for peace and stability in the Pacific," he observed, "Mr. Arita has taken a ground that other nations can share." But he sensed the unspoken view held by many in the capital: "It is admitted that while Americans do not talk of 'lifelines' in other nations and territories the United States also has important economic interests in Netherlands India."^[41]

Soon after the State Department heard Arita's message, Hull called in Assistant Secretary of State Breckinridge Long for a "private chat." They discussed the strategic significance of the Netherlands East Indies and agreed the United States could not overlook any threat by Japan, however veiled, to change its status: "Japan has given every indication that she will resent British or American occupation of the Dutch East Indies in case the Netherlands is attacked by Germany and has left the intimation that she would occupy the islands. Almost all of our tin and most of our rubber come from there. The trade routes of the United States would be crippled, and industry in America would be most importantly affected by the occupation of those islands by Japan. The Secretary has in mind to do something to prevent it."^[42]

On April 17, two days after Arita's statement, with Feis privately hammering on the extreme precariousness of the United States' rubber supplies,^[43] the secretary of state responded directly and forcefully in a public announcement. As he had in private, Hull stressed the importance of Southeast Asian raw materials to the U.S. national interest:

Any change in the status of the Netherlands Indies would directly affect the interests of many countries.

The Netherlands Indies are very important in the international relationships of the whole Pacific Ocean. . . .

They produce considerable portions of the world's supplies of important essential commodities such as rubber, tin, quinine, copra, et cetera. Many countries, including the United States, depend substantially upon them for some of these commodities.

Intervention in the domestic affairs of the Netherlands Indies or any alteration of their status quo by other than peaceful processes would be prejudicial to the cause of stability, peace, and security not only in the region of the Netherlands Indies but in the entire Pacific area.^[44]

Hull's reply laid the diplomatic basis for future U.S. policy toward the Japanese threat to Southeast Asia.^[45]

The interventionist press similarly played up the issue of the Indies' raw materials. The Washington Star warned on April 17 that "Japan appears to be paving the way for her own protectorate in the Dutch islands," adding, "The raw materials of these islands are important to the United States, and this country could not look with approval on a wider Japanese monopoly of the products of the Far East." A Washington Post editorial the same day declared that the United States' "supply of essential raw materials, notably rubber and tin, might be cut off were the Dutch East Indies to be occupied by a nation with a military and economic policy like that of Japan." The New York Times editorialized on April 19: "Riding the Equator east and west for three thousand miles, a distance as great as the whole span of the United States itself, the Netherlands Indies support a population of sixty million and produce commodities—oil, tin, and rubber—which the modern world cannot do without. They are an empire in themselves, and no Pacific Power can be indifferent to their future."^[46]

Hull's warning to Japan provoked an immediate world reaction. The Japanese press reacted with shock and anger, but President Roosevelt backed up Hull, lending further official weight to his statement. And the British and French authorities announced preparations to defend the Indies against a Japanese invasion.^[47] Within the administration, anxieties were running high at the Department of Commerce as well as at State. Secre-

tary of Commerce Harry Hopkins called a hurried conference of department officials to discuss the economic implications of a possible Japanese invasion of the Dutch East Indies, which led to the issuance of a timely public report on the vital raw material riches of the Netherlands East Indies.^[48] Hopkins later called a meeting with the Business Advisory Council, made up of captains of industry, which called "in the strongest terms at its command" for a massive expansion of the stockpile program.^[49]

Prompted by the flap over Arita's remarks, Feis and the other members of the Interdepartmental Committee on Strategic Materials formally presented Hull with a tough memorandum on the need to speed up the stockpiling of materials acquired from the Far East, such as rubber, tin, and quinine. If war broke out, they warned, "supplies of all three materials would be pitifully inadequate." Feis later explained, "The headlines of the past fortnight had impressed many hitherto unperturbed figures. Overnight the appeal of the [stockpiling] enthusiasts received the magical support of authority. The Acting Secretary of State [Welles] on May 1 sent the . . . memorandum to the White House with an urgent recommendation that a comprehensive program for accumulation of strategic and critical materials be undertaken at once."^[50]

Roosevelt, smarting politically from attacks in the press, the business community, and his own administration over the slow progress of the stockpiling program, tried to paint a less dire picture of the situation. On May 23, he told members of the Business Advisory Council that U.S. rubber stockpiles would allow six to eight months for the creation of a synthetic rubber industry. "Now, I am told that that is a practical thing. . . . That synthetic rubber, as we know, does cost more, but the damn thing works." The United States could also put its low-grade manganese mines to work to replace lost foreign supplies, albeit at greater expense. And should tin shipments from Singapore be cut off, "we will still have something to fall back on and that is the Bolivian mine. . . . If we are cut off from that by water, we have got to do two things: We have got to do what the Germans did, which is go around the country and collect all the

old tin we can find. . . . Furthermore, with the help of the metallurgists, we have got to try to use 'ersatz' stuff as the Germans are doing: in other words, other metals as substitutes for tin."^[51]

But such German techniques were the desperate measures of a command economy at war. The administration was united in striving to forgo them at home by deterring Japan if possible. Still smarting from Arita's interest in the fate of the Netherlands East Indies, the administration decided to show the flag more prominently in the Pacific. Already, in the course of a year, the fleet had been moved from the Atlantic to a base almost 2,500 miles into the Pacific. Now the fleet began a series of extensive maneuvers off the Hawaiian coast involving 140 ships, 500 planes, and thousands of seamen.^[52] The Japanese were duly impressed.^[53] Then, in order to emphasize the point, Roosevelt ordered a delay in the scheduled departure of the fleet from Pearl Harbor. On May 7 Admiral Richardson received his orders from Stark to postpone departure for two weeks.^[54] The same day, Stark wrote Richardson a letter with the latest word from Roosevelt: "When the Fleet returns to the Coast (and I trust the delay will not be over two weeks, but I cannot tell) the President has asked the Fleet schedule be so arranged that on extremely short notice the Fleet be able to return concentrated to Hawaiian waters."^[55] The Navy Department, meanwhile, issued a bland press release to the effect that the fleet would remain in Hawaii indefinitely to "carry out further tactical exercises."^[56]

Admiral Richardson complained that from a purely military point of view, the fleet should be moved back to the West Coast, where better docking, supply, repair, and recreation facilities were available. But Admiral Stark quickly informed him that when the decision to retain the fleet at Pearl Harbor was made, "it looked as if . . . a serious situation might develop in the East Indies, and that there was a possibility of our being involved."^[57] The same day, May 22, Richardson wrote to ask why his ships could not return to the mainland, now that the threat seemed to have subsided. "You are there because of the deterrent effect which it is thought your presence may have on the Japs going

into the East Indies," Stark replied on May 27. "We believe that both Germany and the Italians have told the Japs that so far as they are concerned she, Japan, has a free hand in the Dutch East Indies."^[58]

High-ranking U.S. officials hoped that by presenting a show of strength against further expansion by Japan to the south, war could be avoided. By the same token, however, war might result if deterrence failed. The U.S. ambassador in Tokyo, Joseph Grew, reported to Hull on May 14 that he believed Japan's prime minister and foreign minister were "not deluded by theories of American restraint" in the event of a Japanese occupation of the Indies.^[59] Not ready to take any chances, Secretary Hull spoke with the Japanese ambassador two days later in order to condemn any threat to the status quo in the Netherlands East Indies. He was distressed that Japan, already at war with China, "would not be content unless it extended itself three thousand miles beyond to modestly take in the great archipelago comprising the East Indies presumably with a view of shutting out all equality of trade opportunities among nations." Hull later declared, "If we had not adopted a firm attitude from the very outset . . . Japan might well have made a decisive move toward the East Indies in the summer of 1940."^[60]

In the face of such opposition, Japanese leaders held themselves to pointed rhetoric. On May 29 the minister of overseas affairs, Gen. Koiso Kuniaki, maintained that the "South Seas regions are very important in conjunction with the further expansion of Japan's economic strength. . . . In the light of the progress of the China affair and the increasingly tense international situation caused by the second European war, careful and appropriate measures are required for the execution of Japan's South Seas development policy."^[61] On June 3, Foreign Minister Arita spoke before the Pacific Society, an expansionist-oriented Japanese association. Grew summarized his speech for Hull: "Fundamental policy of Japanese Empire based upon mission as stabilizing force East Asia. Obviously Japan concerned not only with China continent but also with South Seas areas. . . . Japan has deep concern not only for political status Netherlands

East Indies but also for economic resources, trade, industry and development those islands. Can nations avoid conflict friction when there exist tariff walls, immigration restriction, other barriers preventing smooth interchange of goods between nations which are complementary in economic sense."^[62]

Grew would not let the issue drop. On June 10, he told Arita that Japan's desire to see trade barriers eliminated was indeed admirable but that "if the Japanese Government could associate itself with the American Government in bringing about a free flow of commodities between nations, substantial progress might be made toward removing the causes of unrest, reflected in the conflicts both in Europe and in the Far East." Grew ex-pounded at length on "the unsoundness of economic blocs and of the creation of barriers to trade, devices which can never constitute a permanent basis for a progressive world economy."^[63] Arita, of course, had heard such theories expressed innumerable times in the speeches of Cordell Hull.

As the position of the Western colonial powers deteriorated in Europe, it became increasingly clear to members of the administration that Japan could not be restrained by words alone. In response to this growing menace, the State Department's political adviser, Stanley Hornbeck, and his assistant Alger Hiss prepared a series of memoranda—the most extensive of their kind to that time—on the nature of U.S. interests in the Far East.^[64] These analyses, prepared in mid-June, were distributed to such top officials as Cordell Hull, Sumner Welles, and Assistant Secretary Adolf Berle. They demonstrated a deep, almost obsessive interest in strategic materials.

In their first report the two experts addressed "The Importance of the Far East as a Market for American Products." Whereas future trade prospects in Europe could "not be considered bright" and opportunities in Latin America were similarly limited, Asia was another matter altogether but as a source of raw materials, not as a market.

From the standpoint of world trade, the area of east Asia and Oceania is of tremendous importance. It supplies most of the world's tin, crude rubber, silk, jute, copra, and tea . . .

In addition to being the major source of raw materials consumed in large volume by the United States and other industrial nations, the Far East is the major source of other equally necessary products which are required in smaller volume. The Far East has a complete monopoly of the production of manila fiber and a practical monopoly of quinine ; it produces the bulk of the world's output of tungsten ; and normally supplies half or more of the world's output of antimony . It is also an important source of mica and spices . Its wool, sugar and tobacco enter largely into world trade and in regard to such commodities as rice , petroleum, butter, cheese, cotton, chrome ore, silver, and even coal, iron ore, nickel, aluminum and manganese , the important volume of the Far Eastern production offers additional supplies for the world market.

Hornbeck and Hiss concluded that "many of our most important raw material import desiderata are to be found in commercial quantities only in the Far East."^[65]

The next analysis, produced by Hornbeck on June 15, consisted of "Brief Notes on the Economic and Strategic Importance of the Dutch East Indies and Adjacent Regions." He began, "It is difficult to overestimate the economic importance, particularly to the United States, of South and East Asia and Oceania." Once again he ran down the laundry list of irreplaceable raw materials for which the region was "today practically the sole source of world supplies." Finally Hornbeck summed up the strategic implications:

Were the Dutch East Indies or French Indochina to be occupied by any major power hostile to Great Britain, the threat to Singapore and hence to the Malay States, to Thailand (Siam) and to Burma would be most serious. . . . Australia and New Zealand would be menaced and, in general, the availability to the British of the vital resources of the entire region of the western Pacific and southern Asia would be definitely lessened. . .

Were the Dutch East Indies or French Indochina to be occupied by any major power hostile to the United States, our position in the Philippines would be threatened. In

addition, and ultimately of far more importance to our national well-being, our access to the tin, the rubber, the vegetable oils and other indispensable resources of the entire western Pacific area would be jeopardized.^[66]

Hornbeck's final memorandum, an examination of the "Economic and Strategic Importance of the Far Eastern Area," simply reprinted an article by the distinguished geographer and Far East expert Robert Burnett Hall in the April 1940 Geographical Review on "American Raw Material Deficiencies and Regional Dependence." Hornbeck called it "the most interesting, incisive and concise exposition that I have seen anywhere of the tremendous economic importance, especially to the United States, of the Far Eastern area." The article declared:

By "a pyramidal error of geography" the United States finds itself so vitally and overwhelmingly dependent on southeastern Asia that our entire foreign policy must be adjusted to that fact. . . . It is not an exaggeration to say that the United States would be compelled, for its existence as a major industrial state, to wage war against any power or powers that might threaten to sever our trade lines with this part of the world. . . . Only on the lands west of the Pacific, and especially on southeastern Asia, is our dependence so vital and complete that our very existence as a great industrial power, and perhaps even as an independent state, is threatened if the sources should be cut off.^[67]

Hornbeck's emphatic and detailed analyses of U.S. interests in the Pacific could hardly have failed to influence Hull's thinking. As the secretary's political adviser, with years of experience and unquestioned expertise on the Far East, Hornbeck exercised great influence in the department, even if Hull occasionally had disagreements with him over tactics.^[68] And Hornbeck was writing to the converted: Hull and Welles had already displayed personal great concern over precisely the issues that Hornbeck stressed—U.S. dependence on Southeast Asia's raw materials.

Meanwhile, the administration's worst fears were being realized, as German successes in Europe incited Japanese lead-

ers to press into the heart of Western colonial power in Asia. On June 17 Japan took its first major step toward dominating French Indochina. Suing for peace after their defeat by the German Army, French authorities were in no position to resist Japanese demands. Japan threatened to "wean Indo-China away from hostility to Japan" unless the French halted all supply shipments to China along the strategic Yunnan-Indochina railroad. And while the Japanese Army maneuvered near the Indochina border, Japan's vice minister for foreign affairs insisted that his nation be allowed to station observers along the railroad to ensure that all military traffic did stop. The French were forced to accept these conditions. On June 20 they announced an agreement allowing the Japanese free rein in southern China (formerly influenced by the French) and a measure of control in Indochina.^[69]

The rapidity of Japan's moves left the United States in a weak position. Hull instructed Ambassador Grew simply to inform Arita, through an exchange of notes, that the United States desired to come to an understanding with Japan as to the future of the South Pacific. "In the proposed notes," he told Grew, "there would be expressed the agreement between the Government of the United States and the Japanese Government that they have a common desire that the status quo, except as it may be modified by peaceful means, be maintained with regard to the possession and territories of belligerent European powers in the Pacific area." He stressed to Grew that such an agreement would be "intended as a preventive rather than a curative measure."^[70] Clearly, Hull wanted to buy time for the United States and keep Japan out of Southeast Asia as long as possible.

But the Japanese government did not bite.^[71] Instead, War Minister Hata Shunroku declared to his staff on June 25, "We must not indulge in pedantic words and miss this rare opportunity. Every action must be based on the great spirit of the Imperial Way and, if necessary, Japan must act drastically against the Powers who obstruct our policy."^[72] In a June 29 radio broadcast, Arita said: "Japan, while carrying on vigorously her task of constructing a new order in East Asia, is paying serious

attention to developments in the European war and to its repercussions in the various quarters of East Asia, including the South Seas region. I desire to declare that the destiny of these regions in any development therein, and any disposal thereto, is a matter for grave concern to Japan in view of her mission and responsibility as the stabilizing force in East Asia."^[73]

Hornbeck, citing these events, characteristically insisted that "nothing short of or less than the language of force, either military or economic or both, will exercise effectively restraining influence upon Japan's present leadership.^[74] Impressed by his adviser's fighting mood, as well as Japan's aggressive rhetoric, Hull was reluctant to humor the Japanese further in return for a paper agreement to respect the status quo. Thus, when British Ambassador Lord Lothian came to the secretary on June 27 to propose a compromise by which the United States would offer economic assistance and other concessions to Japan in return for an agreement to stabilize the situation in Southeast Asia, Hull refused. He saw no reason to trust the Japanese. Tokyo, he believed, was simply hiding its time, seeking to exploit any signs of Western weakness to expand further. Offering concessions to Japan, Hull believed, would only encourage its militarism.^[75]

Hull and other Washington policymakers did not know it, but in late June the Japanese Army was busy making its first formal commitment to an aggressive southward advance. At a series of general staff and division chief conferences prompted by Hitler's rapid march through France and the Low Countries, Japanese military leaders drafted an outline of major foreign policy principles. The army believed Japan must take the Netherlands East Indies as part of its program to "free itself from its dependence upon Britain and the United States . . . through the establishment of a self-sufficient economic sphere." Sentiment was strong in the army for pursuing the southward advance even at the risk of sacrificing opportunities in China. Dazzled by German victories in Europe, Japan's military leaders believed they could seize the European colonies of Southeast Asia in a lightning strike without drawing the United States into war. The navy, less san-

guine about the consequences of aggression, was firmly resolved to wage war against Britain "or even against the United States" for these objectives but demanded vast resources to prepare for a large and costly conflict with the Western powers.^[76]

Serious as the Japanese threat was, however, the Nazi onslaught commanded even more attention from Washington. A debate now opened within the administration over the disposition of the fleet, pitting those whose priority was Europe against Asia-firsters. On June 16, Assistant Secretary Long described the basic conflict in his diary: "Our fleet is at Hawaii. I propose it be sent to the Atlantic seaboard—at least half of it—even if the movement is piece-meal and clandestine. Berle and Grady are now in and Hackworth and Horn-beck are sent for. The last named opposes the transfer. He has a private war on with Japan and argues that to divide the fleet is to announce we do not mean business anywhere and to transfer it to the Atlantic is to turn the Pacific over to Japan and invite occupation by Japan of the Dutch East Indies. Welles agrees with me."^[77]

As he did so often, Hornbeck won out. On June 22 Admiral Stark wrote Richardson at Pearl Harbor to explain that "tentatively decision has been made for the fleet to remain for the present where it is"—at Pearl Harbor.^[78] As Hornbeck had hoped, the Japanese were highly conscious of, and concerned by, its continued presence there.^[79]

On July 9 Richardson traveled to Washington to press his case for a removal of the fleet from its inadequate and exposed harbor in Hawaii. He discussed the matter with Hull, who again stressed the diplomatic importance of a forward-positioned fleet. "He felt that we should take a very strong position with respect to Japan and that the retention of the fleet in Hawaii was a reflection of that strong attitude."^[80] Two days later Richardson talked with Hull's political adviser and finally located the source of his troubles. "I was distinctly of the impression that Dr. Hornbeck was exercising a greater influence over the disposition of the fleet than I was," he later recalled. The admiral recorded in his diary that day that Hornbeck "was the strong

man on the Far East and the cause of our staying in Hawaii where he will hold us as long as he can.^[81]

Hornbeck's motives for taking such an uncompromising stand on the fleet's disposition came through in a fifty-page memorandum dated July 4, entitled "Reflections on Certain Features of the Far Eastern Situation and Certain Problems of U. S. Far Eastern Policy."^[82] He opened with several fundamental assumptions: the "notorious" fact that "a strong element in Japan's leadership" was advocating seizure of the Dutch East Indies; that "the presence of the U.S. Battle Fleet at Pearl Harbor" was a major deterrent to such a thrust against the Indies; and that continued Chinese resistance was the best defense against further Japanese "imperialistic expansion." Withdrawing the fleet from Pearl Harbor, he maintained, might disastrously weaken Chinese morale, give the Japanese Navy a free hand, and encourage Japan's leaders to think seriously "even of closing in upon Singapore and of stirring up trouble in India" making their nation "the one and only great power exercising effective influence in the area of the Pacific and the Indian Ocean." The result would give Japan "full possession of vastly important natural resources" and sea lanes at the expense of the United States and its West European friends.

Finally, Hornbeck argued against wasting too much effort trying to change the course of events in Europe: "The United States can do little today toward preventing Hitler from becoming supreme in Europe. The United States could do much today toward preventing Japan from becoming supreme in eastern Asia. The United States can (may), of course, fall back upon and fortify its position within the Western Hemisphere. If it chooses to do this, and only this, the probability will be that, before long, weakened economically and cut off from valuable markets, especially those from which essential raw materials are derived (in the Far East), the United States will be confronted by material pressures, including those of armed force . . . by Germany and Japan."

With Horneck's logic guiding it, the administration kept its naval pressure on Japan. The Japanese, in turn, were still wag-

ing their war of nerves against the Netherlands East Indies. Japan's Foreign Office released to the press on June 28 a statement calling for "further promotion of close commercial relations" between Japan and the Indies and demanding that the Netherlands and its colony "actively take appropriate measures in order to definitely assure the exports of the desired quantity of required goods of the Netherlands East Indies, and also dispose promptly [of] the questions regarding the Japanese enterprises and the entry of Japanese."^[83] Secretary Hull responded on July 4 through the embassy in Tokyo. In a telegram to Ambassador Grew he cited detailed trade statistics to demonstrate why the Netherlands East Indies were of even greater economic importance to the United States than to Japan.^[84] When Grew spoke with Arita on July 11, he delivered much of Hull's message almost verbatim, stressing the importance of exports from the Indies "in the economy of many countries." Later he warned the Japanese not to commit themselves to "policy of acquiring territory by force."^[85]

A new crisis for U.S. leaders arose that month when the British government, hoping to appease Japan and blunt its ambitions to the south, signed an agreement with the Japanese government temporarily halting the flow of certain war materiel over the Burma Road into China. Secretary Hull quickly protested the British decision, which appeared to invite more Japanese pressure on the weakened European powers, in a press conference on July 16. Claiming that "this Government has a legitimate interest in the keeping open of arteries of commerce in every part of the world," Hull decried the closing of the Burma Road and the Yunnan-Indochina railroad as "unwarranted interpositions of obstacles to world trade." His real concerns were to keep alive China's resistance to Japan, a struggle vital to the United States' effort to keep Japan out of Southeast Asia, and to prevent any halt in the flow of U.S. imports of tungsten and other strategic materials from China—imports already delayed by the closing of the Yunnan-Indochina railroad.^[86]

On July 17 a Japanese faction led by War Minister Hata Shunroku overthrew the cabinet of Adm. Yonai Mitsumasa,

marking the beginning of a more militant policy for Japan. Prince Konoe Fumimaro, who had led Japan when it invaded southern China in 1937, became premier on July 22; the pro-Axis Matsuoka Yosuke took over as foreign minister, replacing Arita, whom the army deemed too indecisive. Within days, Matsuoka had prepared a draft policy paper, "On Strengthening Cooperation Between Japan, Germany, and Italy," for the Konoe cabinet. Appendix 3 specified: "The sphere to be envisaged in the course of negotiations with Germany and Italy as Japan's living sphere for the construction of a New Order in East Asia will comprise: The former German islands under mandate, French Indochina, the Pacific islands, Thailand, British Malaya, British North Borneo, the Dutch East Indies, Burma, Australia, New Zealand, and India, with Japan, Manchuria, and China as the backbone."^[87]

Hull did not need to see that document to be convinced by recent events that on top of "driving us out of business in the area of China she occupied," Japan was "obviously preparing other moves, this time southward, toward French Indo-China, British Malaya, or the Dutch East Indies, possibly even the Philippines."^[88] The U.S. government determined to act against the threat.

On July 2, President Roosevelt had signed into law H.R. 9850, the National Defense Act, which gave him legal authority to control exports of certain strategic materials, semifinished products, and vital machine tools. All such exports were placed under a licensing system, giving the president great flexibility in regulating foreign trade. The act provided Roosevelt with the increased leverage he desired against Japan, a nation heavily dependent upon the United States for petroleum, scrap metal, and machine tools.^[89]

Now came the time to use that authority, although the administration divided on the question of just how severe the restrictions against Japan should be. On July 18, British Ambassador Lothian, upset by Hull's attack on his government's decision to close the Burma Road, suggested to Secretaries Stimson, Knox, and Morgenthau, all hard-liners, that the

United States embargo petroleum exports to Japan; for their part, the British would destroy the Indonesian oil wells. These steps, he suggested, would quickly bring Japan to its knees. Lothian may simply have intended to call Washington's bluff, but Morgenthau enthusiastically carried the proposal to Roosevelt, who showed interest in its promise for preventing further Japanese expansion. He called a meeting of Stimson, Knox, and Acting Secretary Welles to discuss the possibility of an embargo, and on July 25 he placed petroleum and scrap metals under licensing restrictions.

Welles, following the State Department line, vigorously opposed sanctions on the grounds that they could provoke the very thing the United States most wanted to avoid: an attack on the Netherlands East Indies, Japan's major alternative source of oil. Admiral Stark and Gen. George Marshall, the chief of staff, supported Welles on the grounds that the U.S. military was not yet prepared to come to the defense of the Dutch or British colonies. These arguments impressed Roosevelt, who reversed his decision on July 26, limiting his embargo only to the highest grades of aviation gasoline and iron and steel scrap. Interior Secretary Harold Ickes commented bitterly: "In other words, we are pretending to be holding back on exports of gasoline for Japanese planes while we are doing nothing of the sort." Roosevelt had limited his sanctions in order to prevent a new Japanese drive to the south; Japan could still buy and refine lower-grade petroleum products and function with other grades of scrap metal.^[90]

But the Japanese government now saw that Roosevelt had a powerful economic weapon at his disposal, one he could bring into action at any time. When the president, citing "the interests of national defense," actually applied the export embargo on high-octane aviation gasoline to all areas outside the Western Hemisphere on July 31, the Japanese embassy protested: "As a country whose imports of American aviation gasoline is of immense volume, Japan would bear the brunt of the virtual embargo. The resultant impression would be that Japan had been singled out for and subjected to discriminatory treat-

ment." Japan had learned that it could not keep advancing with total impunity.^[91]

While the White House tersely announced the news to Japan, Netherlands Minister of Embassy A. Loudon lobbied Joseph Ballantine, assistant chief of the Division of Far Eastern Affairs, for a promise of assistance from the United States to help prevent a Japanese invasion of the Indies. Appealing to racial solidarity as well as the pocketbook, Loudon said:

[T]he situation of the Netherlands East Indies was critical in that the future now lay between two alternatives. The Islands must either become absorbed in the East Asiatic economic bloc or be retained as a source of wealth for the white race. He suggested that the Dutch Government could do much to increase its value for American trade. Although Americans knew of the Indies as a source of rubber and tin he felt that they did not realize its potential importance as a market for American manufactured products. He said that Java was already partially industrialized but if the Indies continued to remain in Dutch hands they could be further developed in the interests of the white race.^[92]

Loudon's urgent appeal for help acquired special relevance a few days later when General Koiso, the newly appointed Japanese delegate to the Netherlands East Indies, spoke of incorporating the islands into Japan's Co-Prosperity Sphere. On August 3 Tokyo's representative summarized his country's policy toward the Dutch colony: "Japan-Manchukuo-China insufficient, construction economic zone great East Asia necessary [including] South Seas. Netherlands Indies long exploited as colony and placed under administrative pressure. From moral viewpoint, freeing Oriental races necessary and destined to be realized. Friction with the United States may be unavoidable, Japan's resolute determination necessary."

Koiso expressed similar views in greater detail the next day.^[93] But events were forcing the State Department for the moment to turn its attention back to Indochina, where Japanese encroachments continued. Early in August, the United States learned that during a secret discussion with the Vichy French

government, Japan had demanded the right to pass troops through Indochina and to use air bases in the French colony. It claimed only to want to fight China, not to occupy Indochina.^[94] But the implications of Japan's demands were obvious. On August 6 Welles instructed Grew to reemphasize to Tokyo the United States' commitment to the status quo in the entire Pacific. "The same belief and the same observation naturally apply to French Indochina likewise," he reminded Grew. "This Government is seriously perturbed, therefore, over the demarche which it is reported that the Government of Japan has made to the French authorities." Grew met with the Japanese foreign minister the next day and gave him the essence of Welles's message.^[95]

In order to strengthen the resolve of the Vichy government to resist future Japanese demands, James Dunn, Hull's adviser on political relations (Europe), called on the French ambassador on the morning of August 6. He told the ambassador that the United States was "doing everything possible . . . to keep the situation in the Far East stabilized" by exerting "economic pressure on Japan," basing the fleet in Hawaii, and steadfastly asserting its interests through diplomatic channels. But when asked by Dunn to delay talks with the Japanese, the French ambassador, the Count de Saint-Quentin, replied that the current level of support from the United States was inadequate "to enable them to withstand the pressing demands made by the Japanese Government for the establishment of certain rights in In-dochina." The ambassador "did not think it would be practicable for the French Government to delay the negotiations because the Japanese themselves stated at the time of making the demands that if the French Government did not acquiesce in the granting of these rights, the Japanese Government had every intention of taking the necessary action to acquire them."^[96]

Partly as a result of U.S. pressure, however, the French did begin to stiffen their attitude toward Japan, particularly over the continuation of shipments to China, still beleaguered by Britain's refusal to open the Burma Road.^[97] By holding out for a guarantee of the territorial integrity of Indochina during dis-

cussions with Japan, the Vichy colonial government managed to keep Japanese troops out of Indochina—for the time being.^[98] The French, bargaining from a position of weakness, could only hope to delay the inevitable.

In late August, the French and the Japanese worked out a tentative agreement granting the Japanese various military privileges in Indochina, subject to further discussions. On September 2, however, the Japanese demanded that the French immediately allow all Japanese troops the right of free passage through the colony. French authorities resisted this ultimatum, but they recognized the hopelessness of their situation.^[99] The United States provided what diplomatic support it could. On September 3, Hull wired Grew instructions to meet with the Japanese foreign minister and castigate Japan for aggravating the Indochina situation. Grew spoke with the vice foreign minister the next day, to little avail.^[100]

The international situation grew extremely tense as the major Pacific powers parried and thrusted. On September 4, U.S. officials announced that the U.S. fleet would remain in the Pacific instead of being transferred to the Atlantic.^[101] They also informed the press that an Anglo-American exchange of destroyers for naval bases had been worked out. Hull told Japan in a press conference to keep its hands out of Indochina. These moves, along with militant statements by representatives of Britain and Australia, served to put increasing pressure on Japan.^[102]

But the State Department now learned just what the August 30 agreement between France and Japan entailed. The French had given Japanese troops free passage through Indochina, allowed the establishment of military bases in the north, and recognized the predominance of Japan's rights and interests in the Far East—in effect leaving Indochina ripe for the picking. Further negotiations between the French and the Japanese soon began.^[103]

Hull protested Vichy's concessions in a discussion with the new French ambassador, Gaston Henry-Haye. "[T]he French Government cannot imagine our surprise and disappointment when it took this step without any notice whatever to us," Hull

complained. He argued that Japan was bent on dominating the Far East "on the sole theory of enriching Japan . . . while all foreign nationals would be driven out and could only return to the Pacific area by paying sky-scraping preferences." For this reason, the secretary said, "the United States had contested in every way short of military activities every inch of the Japanese movement of aggression."^[104]

Yet U.S. efforts had failed to halt Japan. Mark Gayn, a journalist on special assignment for the Washington Post , summed up the situation. "Japan's victory in the last weeks' diplomatic poker game in Indochina was an event of world shaking importance," he wrote. Comparing it to the Battle of Britain, Gayn added, "The State and Navy Departments could not but regard Japan's entrenchment in Indo-China as a very definite threat to vital American interests in the Pacific." From Indochina, he concluded, "Japan would be able to heighten her intimidation of Thailand and the Dutch East Indies, as well as of Britain concerned for the safety of Malaya and Burma. Both the East Indies and Malaya are of tremendous importance to the United States, for there she secures the bulk of her tin, rubber and quinine."^[105]

With such considerations in mind, Grew fought for a harder policy against Japan that would deliver economic sanctions as well as diplomatic protests. In his famous "green light" telegram to the State Department on September 12, Grew insisted that the Konoe government was bent on its policy of southward expansion and now saw a "golden opportunity" to pursue its ambitions. Carefully imposed economic sanctions, he asserted, were the only means short of war to control Japan. "Japan is today one of the predatory powers," he wrote. "Her policy of southward expansion is a definite threat to American interests in the Pacific and is a thrust at the British Empire in the East."^[106]

The next day the White House announced that export licenses would be required for all equipment used in the production of tetraethyl lead or aviation gasoline and all technical information relating to aircraft and their engines.^[107] Grew's forcefully stated position definitely influenced this decision. As usual Hull and Welles, along with military leaders, fought against even

stiffer sanctions, proposed by Morgenthau, on the grounds that the United States was still unprepared to fight Japan in Southeast Asia. Their disagreement was over tactics—the balancing of threats and risks—not the broader national interest.^[108]

Similar tactical debates were unfolding in Japan, where secret negotiations for a military pact with Germany and Italy aroused the Imperial Navy's concern that Tokyo was forcing events faster than warranted by the country's military position. At a meeting of top military and political leaders on September 14, Kondo Nobutake, vice chief of the Navy General Staff, said, "The navy is not yet prepared for war against the United States, but preparations will be completed by April of next year. By that time we shall have equipped the vessels already in operation and shall have armed 2.5 million tons of merchant ships. After we have completed this, we will be able to defeat the United States, provided we carry on blitz warfare." But the navy did not block the negotiations, which Japanese leaders hoped would keep the United States from standing in the way of their advance into Southeast Asia.^[109]

And advance they did, undeterred by the administration's mild export controls. On September 19 Hull learned from the U.S. consul in Hanoi that the Japanese were demanding the right to station their troops in Hanoi, the port city of Haiphong, and five strategic airports. Japanese troops threatened to invade Indochina on September 22 unless the Vichy authorities agreed to Japan's demands. Hull asked Grew on the same day to make the Japanese government aware of his "great surprise" at the ultimatum in view of previous Japanese agreements to respect the status quo. The next day Grew spoke with Foreign Minister Matsuoka, who claimed that the ultimatum was necessary because the French had acted in bad faith during recent discussions.^[110]

Hull addressed the issue of Japanese encroachments in Indochina at a press conference held on September 23, but his words seemed worn and weak in the face of Japan's aggressive moves. "Events are transpiring so rapidly in the Indochina situation that it is impossible to get a clear picture of the minute-to-

minute developments," he said. "It seems obvious, however, that the status quo is being upset and that this is being achieved under duress. The position of the United States in disapproval and deprecation of such procedures has repeatedly been stated."^[111]