Provoking Japan, Prelude to Pearl Harbor
Deanna Spingola
December 7, 2016

On April 11, 1919, at the Paris Peace Conference, Japanese officials attempted to insert a “racial equality clause into the League of Nations Covenant but the Western Powers overruled it, which the Japanese viewed as an affront. On February 6, 1922, America and Britain created the Nine Power Treaty, apparently as a method for constraining the Japanese from developing the resources they had acquired from Russia in Manchuria, renamed Manchukuo. Japan saw this as commercial rivalry against them. China was Japan’s principle customer, as China had not developed her own resources and industries. That treaty, which Japan largely ignored, limited Japan’s activities in Manchuria and Mongolia while it allowed unlimited Chinese immigration into the area.

On June 6, 1932, President Herbert Hoover appointed Bostonian Joseph C. Grew, a member of the Council on Foreign Relations (CFR), a Morgan relative by marriage, as the U.S. Ambassador to Japan. His wife was also the great niece of Commodore Matthew C. Perry. Grew’s family were longtime bankers who helped finance the early opium trade into China. [1] Hoover and J. P. Morgan Partner, Thomas W. Lamont (CFR, later a member of the Bilderberg group, and Pilgrims Society chairman), and one of Hoover’s biggest financial supporters, mentored Joseph C. Grew when he was Under Secretary of State (1924-1927). Agents of the Institute of Pacific Relations (IPR), a ten-country association concerned with “affairs in the Pacific,” subtly induced the Japanese to consider militarily targeting the United States, an unimaginable objective, given the comparable power and size of each nation. The Rockefeller and Carnegie Foundations financially supported IPR and the elite Wall Street alliance of Morgan and Rockefeller industrial interests controlled IPR policies. The IPR party line and the Kremlin party line were essentially the same. [2]

Morgan and Rockefeller, former competitors, joined forces given their common ambitions, long before the official outbreak of World War II. The Rockefellers, who financed the IPR and its activities, simultaneously promoted American warfare against Japan, his competitors for the oil and rubber resources in Southeast Asia which threatened the Rockefeller dream of capturing the enormous China market for their innumerable petroleum products. [3] Foreign markets for American oil companies were shrinking as crude oil prices declined. China adapted cheaper vegetable oils causing Standard’s monopoly in China to dramatically dwindle. The Soviets now controlled a quarter of what remained. Besides, the Japanese, had preferential tariff agreements in their colony, Manchukuo, and undersold everyone. By 1933, the Soviets were selling gasoline and oil to Siam and Japan, underselling the Anglo-Dutch and the Americans. By August 1933, Japanese businessmen decided to do business with only two foreign companies, a Royal Dutch Shell subsidiary and Socony-Vacuum and the rest of the business would go to four Japanese firms, including Mitsui Bussan which received gasoline from Socony. [4]

The Japanese Ministry of Commerce and Industry sought “national control” and “petroleum self-sufficiency.” On September 11, 1933, the Ministry introduced comprehensive policies to strengthen control of refining and distribution, and encourage greater refining capacity by offering government-subsidies to private firms for oil exploration efforts. In 1934, Japanese officials enacted legislation that required licensing for refiners and importers and regulated them which really vexed western oil officials. To maintain their influence and profits, Socony and Shell offered to invest in those refineries but the Japanese rejected their proposals which the companies encumbered with stipulations only beneficial to them. [5]

Japanese firms, including Matsukata’s, were faltering and blamed it on the foreign oil companies. They evaluated other oil-rich areas to satisfy their needs. Standard’s local manager encouraged U.S. government intervention to compel Japan to accept a set quantity of gasoline if they expected a continuation of American crude oil imports. Ambassador Grew directed the State Department to persuade Shell and Standard to cooperate in order to retain the Japanese market. However, the American oil overproduction and enormous quantities of Russian oil threatened continued high profits. [6]

Japan and China erroneously assumed that they could extract and control oil within their own countries or protectorates. Beginning on February 1, 1934, the Chinese government levied an import tax on kerosene and gasoline to facilitate the future development of a national oil and gas industry in order to decrease dependence on foreign resources. American and British oil companies refused to do business under those conditions. Chinese officials relented but launched the Four Year Plan, a goal for domestic oil production in the Shensi and Szechuan provinces with a potential yield of eighty million gallons per year from 500 wells. Nanking officials arranged to work with the Benedum Tree Company of Pittsburgh, a private oil exploration company. The U.S. Minister to China, Nelson T. Johnson and the State Department disqualified the Benedum contract, claiming that the contract violated the United States policies against monopolies. The State Department, then and now, only protects selected American businesses while quashing others. [7]

On April 2, 1934, Walter C. Teagle, President of the Standard Oil of New Jersey, met with Interior Secretary and Oil Administrator, Harold Ickes, to enlist his help in enacting legislation to regulate crude oil production without affecting refinery productivity and marketing. Teagle also wanted the government to make the East Texas Oil field a reserve. To further restrict domestic oil production, he wanted the government to issue interest-bearing bonds to smaller, independent companies in exchange for their property. Standard, adept at controlling American policies, intended to use government power to maneuver the international market in the same way. Purging independent oil producers would limit oil exports to Japan and elsewhere and give exclusivity to Standard, Shell and Texaco. [8]

Johnson witnessed similar oil nationalization moves in China, and suggested that American oil companies hurry and negotiate with the Manchukuo monopoly for the sale of their crude oil and then liquidate their distribution apparatus in Manchukuo. Tokyo-based Ambassador Grew, friendly to Standard Oil, admitted futility in trying to influence the Japanese to abandon their self-sufficiency efforts and sent a dispatch to Washington suggesting an oil embargo against Japan. Teagle and Shell’s leadership conferred with Ickes and State Department officials on August 22 and 23, 1934. Oil companies refused to comply with Japan’s new regulations, because it would decrease their profits. They demanded an oil embargo and more representation to the Japanese government. Ickes could, if persuaded, authorize an embargo order against Japan. [9]

Erle R. Dickover of the U.S. Embassy in Japan told Kurusu Saburō that the U.S. government would impose an oil embargo if warranted, especially if Standard lost the Manchurian kerosene market. Kurusu emphasized that American oil companies accepted the loss of their vested interests in France and other countries with similar national oil objectives. The American oil companies asked Ambassador Grew to intervene in their behalf. Otherwise, as stated in Business Week, New York and London would force Japan into a showdown. Oil officials whined to Secretary Ickes, complaining about their financial losses. Henri Deterding claimed that the British and the Dutch governments would support American actions. Teagle wanted an oil embargo and a restriction of oil exports to Japan by all producers. If independents balked, he was certain that the State Department would sway them. Deterding went to Europe to sell the blockade proposal to the British and Dutch governments. [10]

Standard, Shell and Texaco mutually agreed to cut off all oil to Japan. Standard Oil of California and Union Oil of California were unwilling and instead gave a price quote to Japan. The independents received immediate pressure, capitulated and withdrew their bids. In September 1934, Teagle, back in Washington, complained about the Associated Oil group in California which owned fifty percent of a Japanese refinery and had a long-term contract to supply that refinery with crude oil. Teagle wanted Ickes and the Interior Department’s agencies to devise policies to alter the Associated Oil group’s arrangement. Standard and Shell officials maintained correspondence with the Japanese government officials. State Department officials wanted Standard to work with the British and Dutch oil producers and consider complying with the Japanese regulations. Teagle would not budge. Surely the US government could dictate terms to Japan. After all, Japan had no significant alternatives and inadequate natural resources to be self-sufficient. American oil firms could cut Japan from other markets and restrict her access to oil-bearing lands. [11]

By mid-autumn 1934, Japan’s oil situation was critical. On November 27, 1934, State Department representatives met with London’s Foreign Office to consider their options. Teagle and Deterding were unconcerned about Venezuela, Russia or Mexico obstructing the embargo. However, Ickes might get pressure from some American oil companies. They decided to embargo both Japan and Manchukuo. [12]

In confidential talks, desperate Japanese gas company representatives agreed to almost every demand after negotiations ended on April 13, 1935. However, that did not persuade the officials to rescind the Japanese law. On April 18, 1935, a Standard-Vacuum official, Kersey F. Coe, asked the State Department to notify the company’s Tokyo agent to reiterate that in as much as it was contractually impossible to stop sales of crude from California, Standard-Vacuum intended to add an extra premium of twenty-five cents on Manchukuo exports. Coe warned of other obstacles and extra supply costs. In addition, Standard, Shell, or Texaco refused to ship any more oil to the Manchuria Oil Company. [13]

On May 18, 1935, Standard Oil billed the Manchukuo government for damages and loss of business, a total of $1,781,880.59 including property and equipment. Then in late September, the Japanese government stated that they had deferred the decision about reserve supplies until June 30, 1936. The oil companies objected as other countries might follow suit. The oil companies finally accepted the storage regulations but asked Mitsui to capitalize the storage facilities. The storage issue remained a problem throughout the summer of 1936. Meanwhile, the Japanese government obtained a petroleum concession in Mexico. [14]

However, East Asian prospects worsened. Ambassador Grew warned the State Department that the Japanese insisted on self-sufficiency. They passed additional laws, the Synthetic Petroleum Production Law, the Imperial Fuel Development Company Law and the Petroleum Resources Exploitation Law. The American oil companies experienced discrimination in Korea and Japanese-controlled China with no hopes of recovering their investments. Influential Anglo-American oil companies preferred profits over peace. They waged economic warfare against Japan throughout the 1930s. Their egregious actions against Japan, China, Thailand and other countries throughout Asia reveal their priorities, all backed by the State Department. Ambassador Grew wrote, the “application of economic pressure against Japan would inevitably start our relations on a downward course unless or until we were prepared to face eventual war.” Grew, understanding the oil interests wrote, “Economic pressures in the form of embargoes and other similar steps are a form of warfare and they definitely constitute threats.” [15]

On August 14, 1936, at Chautauqua, New York, President Franklin D. Roosevelt said, “We shun political commitments which might entangle us in foreign wars; we avoid connection with the political activities of the League of Nations…We are not isolationists except in so far as we seek to isolate ourselves completely from war…I have seen war…I hate war. I have passed unnumbered hours, I shall pass unnumbered hours, thinking and planning how war can be kept from this nation…I wish I could keep war from all nations, but that is beyond my power. I can at least make certain that no act of the United States helps to produce or promote war.” [16]

While Roosevelt was plotting on getting America involved in warfare in Germany by provoking a Japanese attack against the United States, those who initiated the economic war against Germany in 1933 devised a way of not jeopardizing their own lives in warfare, even before the war erupted in 1939. Obviously, they already knew who the participants would be.

The Central Committee of the American Jews at the 47^th Annual Conference, Anti-Defamation League, held in New York on June 26, 1937, sent out a circular declaring an “Exemption of Jews from military service in accordance with the highest interpretation of Judaism.” The circular stated, “Why should we, the only truly international people, be concerned with the mutable interests of stupid Goyim nations? We must do everything in our power to help the great president who has helped us so greatly in establishing control. Support the draft law when it is presented to the American people. Support England and France, for they are fighting Judah’s greatest enemy, the Goyim German State. You are urged to support United States participation in this Holy war of Judah, without reservation and without fear. We can repeat our triumphs of 1918 if we maintain our united front and the dumb goyim will fight while we profit, with the aid of our friend in Washington. Powerful Jews will be on all Draft Boards, and Jewish physicians will protect you from military service. Arrangements are already made to exempt you, in case religious exemption cannot be prepared in time. You are warned to renounce, abjure, repudiate and deny any of this information if questioned by Gentiles, even under oath, as outlined in the Talmud and justified for the preservation of our race.” [17]

In 1937, Roosevelt planned to blockade Japan but American citizens responded negatively to his quarantine speech of October 5, so he temporarily scrapped his plan. In 1938, his war planners created a new preliminary plot for a naval war against Japan. [18] Both Germany and the Soviet Union invaded Poland in September 1939. Britain and France ignored the Soviet invasion but quickly declared war on Germany. American politicians, especially Roosevelt, intended on getting the country embroiled in warfare against Germany, despite what American citizens wanted. He promised neutrality if re-elected but insiders knew better. If an opportunity did not present itself, he would manufacture one.

In August 1940, to prepare for war, Roosevelt assigned the National Guard to federal service for one year. He sent a peacetime draft, known as the Burke-Wadsworth Act to Congress, and then Congress passed the Selective Training and Service Act of 1940 on September 14, 1940. Roosevelt traded fifty old American Navy destroyers to England in exchange for leases in Bermuda, the Bahamas, Jamaica, St. Lucia, Trinidad and British Guiana. He signed legislation, worth $5 billion, to create a two-ocean navy that would ultimately incorporate 100 aircraft carriers. [19]

On September 27, 1940, Japan, Germany and Italy, comprising the Axis Powers, signed the Tripartite Treaty in Berlin, a military alliance, which stipulated that if the Allied nations, Britain, the United States and the Soviet Union attacked any one of the three Axis nations, then all three of those nations would automatically be at war. [20] The feasibility of Germany attacking America was zero, due to Germany’s lack of big planes. Germany was fortunate to be able to reach Britain with their lightweight planes. However, if America responded to a Japanese attack, then, according to the treaty, the United States would enter into the European War.

On October 7, 1940, Lieutenant Commander Arthur H. McCollum, the head of the Far East desk for U.S. Navy intelligence, devised an eight-step plan entitled, Estimate of the Situation in the Pacific and Recommendations for Action by the United States to provoke Japan to attack the United States, supposedly to avert Japan’s hegemony over East Asia. 1) use British bases in the Pacific, particularly Singapore; 2) use base facilities and acquisition of supplies in the Dutch East Indies; 3) Give all possible aid to the Chinese Government of Chiang-Kai-Shek; 4) Send a division of long-range heavy cruisers to the Orient, Philippines, or Singapore; 5) Send two divisions of submarines to the Orient; 6) Keep the main strength of the American Fleet now in the Pacific in the vicinity of the Hawaiian Islands; 7) Insist that the Dutch refuse to grant Japanese demands for undue economic concessions, particularly oil; and 8) embargo all American trade with Japan, in collaboration with a similar embargo imposed by Britain. McCollum wrote, “If by these means Japan could be led to commit an overt act of war, so much the better. At all events we must be fully prepared to accept the threat of war.” This document remained classified until 1994. Roosevelt immediately implemented McCollum’s plan. [21]

Accordingly, in October 1940, Roosevelt requested Navy Secretary Frank Knox to order Admiral James O. Richardson, Commander-in-Chief of the U.S. fleet in the Pacific, to position American naval ships across the Pacific Ocean in order to prevent Japan from obtaining crucial supplies. Richardson protested that this blockade was an obvious act of war. His fleet, inadequately prepared for war, had previously patrolled the West Coast. He requested that his fleet be withdrawn from Hawaii, where they were totally exposed and vulnerable. Washington ignored his requests. In January 1941, Admiral Husband E. Kimmel replaced Richardson and he quickly raised the same issues with President Roosevelt. On December 16, 1941, after Pearl Harbor, officials demoted Admiral Kimmel and relieved him of his command. [22]

For years, the United States had embargoed Japan, which wholly depended on imports, in order to provoke a military response. Churchill and Roosevelt, whose governments had already broken the Japanese communication codes, then monitored the entire progress of Japan’s military expedition all the way to Pearl Harbor. Japan’s attack, on December 7, 1941, killed unwary military personnel, more “live bait,” which totaled 2,402 people. Thereafter, the media predictably vilified and dehumanized the Japanese.