Bankrupting the Enemy: The U.S. Financial Siege of Japan Before Pearl Harbor [Hardcover]

Edward S. Miller (Author)

Book Description

Publication Date: October 15, 2007

Award-winning author Edward S. Miller contends in this new work that the United States forced Japan into international bankruptcy to deter its aggression. While researching newly declassified records of the Treasury and Federal Reserve, Miller, a retired chief financial executive of a Fortune 500 resources corporation, uncovered just how much money mattered. Washington experts confidently predicted that the war in China would bankrupt Japan, not knowing that the Japanese government had a huge cache of dollars fraudulently hidden in New York. Once discovered, Japan scrambled to extract the money. But, Miller explains, in July 1941 President Roosevelt invoked a long-forgotten clause of the Trading with the Enemy Act of 1917 to freeze Japan s dollars and forbade it to sell its hoard of gold to the U.S. Treasury, the only open gold market after 1939. Roosevelt s temporary gambit to bring Japan to its senses, not its knees, was thwarted, however, by opportunistic bureaucrats. Dean Acheson, his handpicked administrator, slyly maneuvered to deny Japan the dollars needed to buy oil and other resources for war and for economic survival.

Miller's lucid writing and thorough understanding of the complexities of international finance enable readers unfamiliar with financial concepts and terminology to grasp his explanation of the impact of U.S. economic policies on Japan. His review of thirty-seven studies of Japan's resource deficiencies begs the question of why no U.S. agency calculated the impact of the freeze on Japan's overall economy. His analysis of a massive OSS-State Department study of prewar Japan clearly demonstrates that the deprivations facing the Japanese people were the country to remain in financial limbo buttressed its choice of war at Pearl Harbor. Such a well-documented study is certain to be recognized for its significant contributions to the historiography of the origins of the Pacific War.

Editorial Reviews

About the Author

EDWARD S. MILLER, a Phi Beta Kappa graduate in economics at Syracuse University and the Harvard Advanced Management Program, served as chief financial officer of a major international mining corporation and the U.S. Synthetic Fuels Corporation. His interest in business planning led to his first book, War Plan Orange: The U.S. Strategy to Defeat Japan, 1897 1941, winner of five distinguished history book awards. He lives in Washington, D.C.

Product Details

• Hardcover: 352 pages
• Publisher: United States Naval Inst. (October 15, 2007)
• Language: English
• ISBN-10: 1591145201
• ISBN-13: 978-1591145202
• Product Dimensions: 9.1 x 6 x 1.2 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 4.8 out of 5 stars  See all reviews (6 customer reviews)
• Amazon Best Sellers Rank: #107,983 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

17 of 18 people found the following review helpful:

5.0 out of 5 stars Wonderful Book - For Its Scope, July 27, 2008

By 

David M. Dougherty (Arkansas) - See all my reviews
(VINE VOICE)   

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This review is from: Bankrupting the Enemy: The U.S. Financial Siege of Japan Before Pearl Harbor (Hardcover)

Not much to say except that this book is a must read for everyone who is interested in the origins of the Pacific War or World War II.

Author Miller does an excellent job of depicting Japan's vulnerable economy, desperately needing foreign exchange but being dependent on silk as its mainstay in foreign trade. Japan possessed (& possesses) few natural resources and was forced to import its oil, iron ore, metal scrap, and almost all products needed to grow its economy or carry on a war.

The US played the role of spoiler, attempting to hold Japan's economic survival hostage to its international good behavior (as seen by Roosevelt), and the leaders of Japan could not allow that to continue for many reasons, not the least of which was the belief in Japan's destiny to rule the East. The activities of Acheson under Roosevelt's guidance are fascinating, and the reader is carried along as in a suspense novel leading toward a catastrophic conclusion. The author blends facts and figures with activities and policies with amazing ease.

My only criticism stems from the missing links to external events and the fears and attitudes of others. For example, the freeze of July, 1941, closely followed the invasion of the Soviet Union by Germany, and there is substantial evidence that Roosevelt sought open hostilities with Japan while the Russians were still in the field. By November, 1941, many in Roosevelt's administration felt that Moscow was imperiled and that the Russians could soon collapse, leaving Britain and the US to face Germany alone and the very distinct probability that Japan would then choose to honor the Tripartite Pact and enter the fray at the most opportune moment. Without going into a full discussion of Pearl Harbor, there is nonetheless much evidence that Roosevelt was aware that an attack was coming, but felt the US could weather the blows. This book records the tightening of the screws on Japan until Japan launched its attack before the Soviet Union was defeated (although, of course, it never was) because of economic reasons rather than political ones. One wonders if Roosevelt had not taken the tack he did and begun supplying the Soviet Union with critical items in the winter of 1941, would Germany have prevailed? I think not, but there is no arguing that the assistance of the US to Britain and Russia was vastly more helpful sooner than later.
At any rate, Acheson's activities are more understandable in this light, as is the ever-increasing economic and diplomatic pressure on Japan by the US up to Pearl Harbor.

So in the end, it was the economic situation that caused the Japanese to attack when they did, not the political attitudes or timing due to the other events in World War II. In effect, Roosevelt launched a spoiling attack against Japan using economics that was very effective in changing the timing of events more to the US's advantage. That is the reason this book is so important, and it is recommended to all serious students of World War II.

12 of 13 people found the following review helpful:

5.0 out of 5 stars Detailed and Extensive analysis of economic factors, December 27, 2007

By 

Ed B (Vancouver, BC) - See all my reviews

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This review is from: Bankrupting the Enemy: The U.S. Financial Siege of Japan Before Pearl Harbor (Hardcover)

This book covers in detail the economic relationship between Japan and the U.S. from the Meiji era to the eve of WW2. It shows how Japan used foreign trade to develop and strengthen its economy. As it moves into the 1930's, it clearly shows the devastating effect of Smoot-Hawley on Japan's efforts to diversify and expand trade with the U.S. Many histories gloss over the economic origins of war. Seeing how U.S. trade barriers imposed duties of up to 600% on Japanese products, you can better understand the reasoning behind military expansion of the Greater East Asia Co-prosperity Sphere to secure markets.

Although a complex topic, the book gives a very good explanation of the U.S. attempts to understand the weak points of the Japanese economy and how to leverage that into political pressure. It is particularly interesting to see how high level political objectives of graduated and flexible pressure were transformed by mid-level bureaucrats into a total embargo of crucial materials. This forced Japan to confront the stark choices of total submission or war, leading directly to Pearl Harbor.

This book is highly recommended for anyone who wishes to understand the economic factors that drove the political calculations for both Japan and the U.S. The question that one is left with (and it isn't in the scope of this book) is why the U.S. was so concerned about Japanese actions in China, given the trivial strategic interests of the U.S. in that country. Was it the hangover of Wilsonian moral rectitude, or some higher calculation of how best to get the U.S. into the Second World War?

11 of 12 people found the following review helpful:

5.0 out of 5 stars Optimal research, October 20, 2007

By 

Brigitte Muehlegger - See all my reviews
(REAL NAME)   

This review is from: Bankrupting the Enemy: The U.S. Financial Siege of Japan Before Pearl Harbor (Hardcover)

This book is extremely well researched. In fact it presents a prime example of how all books about history deserve to be researched, one of verry few authors todate that presents his case 'beyond reasonable doubt.'
I give this book a five star.