Contractionary Fiscal Policy Is Contractionary Watch: Great Britain Edition
Liveblogging World War II: July 27, 1941

Dean Acheson, FDR's Wishes, and the Origins of World War ii

I am always intrigued by Dean Acheson's account in Present at the Creation of how the U.S. escalated the Pacific crisis in 1941 by embargoing the export of oil from the U.S. (and Indonesia) to Japan. Roosevelt, it appears, had decided against embargoing oil exports as too provocative. Roosevelt, however, was willing to freeze Japanese assets--so that Japanese assets could be used only for purposes of which the U.S. approved.

Dean Acheson as Assistant Secretary of State responsible for implementing this policy decided that Japan should buy its oil not with frozen funds but with either (a) funds from Latin America not covered by the freeze, or (b) funds in the U.S. that had evaded the freeze. The Japanese government refused to admit the existence of any such funds. So no oil.

As Acheson said at the time, it was not that the policy of the United States was to embargo exports of oil. There was no such policy. But there was a state of affairs: oil was embargoed unless Japan wished to pay for oil with non-frozen resources, which it did not. And that state of affairs continued. Did Roosevelt know about this state of affairs? That has never been clear to me.

Acheson always claimed not to know what situation the "state of affairs" caused by his implementation of the asset freezing policy was creating:

Present at the creation my years in   Google Books 11