Export Control Act
Encyclopedia
The Export Control Act of 1940 was one in a series of legislative efforts by the United States
government and initially the administration of President Franklin D. Roosevelt
to accomplish two tasks: to avoid scarcity of critical commodities in a likely pre-war environment and, more notably, to limit the exportation of materiel
to pre-World War II
Imperial Japan. The act originated as a presidential proclamation by Roosevelt forbidding the exporting of aircraft parts, chemicals, and minerals without a license, and was intended to induce Japan to curtail its occupation
of the Indo-Chinese
coast.
The text of the Act stated that whenever the President deemed it "necessary in the interest of national defense," he could prohibit or curtail the exportation of military equipment, munitions, tools and materials.
Although controls were first authorized in 1940 in regard to munitions and similar materials essential to the defense effort, its coverage was extended in 1942 to all commodities, and broader geographic coverage, following America's entry into World War II
. The law was extended, with modifications through 1948, and it was envisioned that remaining controls would soon disappear at the time of re-enactment in 1949. The scarcity of certain goods in the world markets however, made continuance of controls necessary in order to prevent a drain on such goods from plentiful American supplies with its consequential inflationary effects. National security and foreign policy concerns, especially following the outbreak of the Korean War
, were new and compelling reasons for passing the Export Control Act of 1949, and in extending it until (at least) 1958. The law included both domestic policies aimed primarily at conditions within the United States, as well as controls directed at conditions outside the country, as an instrument of American foreign policy. This is exemplified by the restrictions on export of certain strategic or military items to the Soviet bloc or to other countries which it felt, if permitted, would be detrimental to the foreign policy program of the US during the Cold War
. The foreign policy motive became so strong that it brought legislation directing the President to enlist the cooperation of other nations in enacting controls on trade with the Soviet block to parallel those of the United States. The benefits of the various economic and military aid programs were to be withheld from non-cooperating nations, as in the Mutual Defense Assistance Control Act of 1951
.
on June, 1938 condemned the slaughter and its "material encouragement". A month later, the Department of State notified aircraft manufacturers and exporters that the United States Government was "strongly opposed" to the sale of airplanes and related materiel to those nations using airplanes to attack civilian populations.
In 1939, the non-binding embargo was extended to materials essential to airplane manufacture and to plans, plants, and technical information for the production of high-quality aviation gasoline. These measures resulted in the suspension of the export to Japan of aircraft, aeronautical equipment, and other materials within the scope of the moral embargoes. As Japanese purchases of items other than aircraft and aeronautical equipment were minuscule, the moral embargo ultimately stopped the exportation of arms to Japan.
with Japan was not affording an appropriate level of protection to U.S. commerce in areas within or occupied by Japan. Simultaneously, Japan's position under the treaty as a most favoured nation
legally prevented the adoption of retaliatory measures against Japanese commerce. When the United States gave six-month notice of its withdrawal from the treaty in July, 1939, it removed the primary legal obstacle for embargo.
The Act was expanded in September of that year to include iron and steel scrap, an act that Japanese Ambassador Horinouchi warned Secretary Hull on October 8, 1940 might be considered an "unfriendly act".
Controls were first authorized in 1940 in regard to munitions and similar materials essential to the defense effort, and extended in 1942 to all commodities. Always intended to be only temporary, the 1940 act was successfully extended in 1944, 1945, 1946 and 1947.
, a key supply route of arms for China. Britain initially refused the request, but for a short period of time closed the road. The British and the Dutch followed suit in embargoing trade to Japan from their colonies in southeast Asia.
The ending of the commercial trade treaties further eroded the possibilities for dialogue between the two nations. Noted political economist Robert Higgs
points out:
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
government and initially the administration of President Franklin D. Roosevelt
Franklin D. Roosevelt
Franklin Delano Roosevelt , also known by his initials, FDR, was the 32nd President of the United States and a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war...
to accomplish two tasks: to avoid scarcity of critical commodities in a likely pre-war environment and, more notably, to limit the exportation of materiel
Materiel
Materiel is a term used in English to refer to the equipment and supplies in military and commercial supply chain management....
to pre-World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
Imperial Japan. The act originated as a presidential proclamation by Roosevelt forbidding the exporting of aircraft parts, chemicals, and minerals without a license, and was intended to induce Japan to curtail its occupation
Second Sino-Japanese War
The Second Sino-Japanese War was a military conflict fought primarily between the Republic of China and the Empire of Japan. From 1937 to 1941, China fought Japan with some economic help from Germany , the Soviet Union and the United States...
of the Indo-Chinese
Indochina
The Indochinese peninsula, is a region in Southeast Asia. It lies roughly southwest of China, and east of India. The name has its origins in the French, Indochine, as a combination of the names of "China" and "India", and was adopted when French colonizers in Vietnam began expanding their territory...
coast.
The text of the Act stated that whenever the President deemed it "necessary in the interest of national defense," he could prohibit or curtail the exportation of military equipment, munitions, tools and materials.
Although controls were first authorized in 1940 in regard to munitions and similar materials essential to the defense effort, its coverage was extended in 1942 to all commodities, and broader geographic coverage, following America's entry into World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
. The law was extended, with modifications through 1948, and it was envisioned that remaining controls would soon disappear at the time of re-enactment in 1949. The scarcity of certain goods in the world markets however, made continuance of controls necessary in order to prevent a drain on such goods from plentiful American supplies with its consequential inflationary effects. National security and foreign policy concerns, especially following the outbreak of the Korean War
Korean War
The Korean War was a conventional war between South Korea, supported by the United Nations, and North Korea, supported by the People's Republic of China , with military material aid from the Soviet Union...
, were new and compelling reasons for passing the Export Control Act of 1949, and in extending it until (at least) 1958. The law included both domestic policies aimed primarily at conditions within the United States, as well as controls directed at conditions outside the country, as an instrument of American foreign policy. This is exemplified by the restrictions on export of certain strategic or military items to the Soviet bloc or to other countries which it felt, if permitted, would be detrimental to the foreign policy program of the US during the Cold War
Cold War
The Cold War was the continuing state from roughly 1946 to 1991 of political conflict, military tension, proxy wars, and economic competition between the Communist World—primarily the Soviet Union and its satellite states and allies—and the powers of the Western world, primarily the United States...
. The foreign policy motive became so strong that it brought legislation directing the President to enlist the cooperation of other nations in enacting controls on trade with the Soviet block to parallel those of the United States. The benefits of the various economic and military aid programs were to be withheld from non-cooperating nations, as in the Mutual Defense Assistance Control Act of 1951
Mutual Defense Assistance Act
The Mutual Defense Assistance Act was a United States Act of Congress signed by President Harry S. Truman on 6 October 1949. For US Foreign policy, it was the first U.S. military foreign aid legislation of the Cold War era, and initially to Europe...
.
"Moral embargo"
The Act was seen as a codified "moral embargo", in that it was an expression of moral outrage, in this instance, stemming from the Japanese bombing of civilians in mainland China in the late 1930s. In June 1938, the U.S. Secretary of State, Cordell HullCordell Hull
Cordell Hull was an American politician from the U.S. state of Tennessee. He is best known as the longest-serving Secretary of State, holding the position for 11 years in the administration of President Franklin Delano Roosevelt during much of World War II...
on June, 1938 condemned the slaughter and its "material encouragement". A month later, the Department of State notified aircraft manufacturers and exporters that the United States Government was "strongly opposed" to the sale of airplanes and related materiel to those nations using airplanes to attack civilian populations.
In 1939, the non-binding embargo was extended to materials essential to airplane manufacture and to plans, plants, and technical information for the production of high-quality aviation gasoline. These measures resulted in the suspension of the export to Japan of aircraft, aeronautical equipment, and other materials within the scope of the moral embargoes. As Japanese purchases of items other than aircraft and aeronautical equipment were minuscule, the moral embargo ultimately stopped the exportation of arms to Japan.
End of commercial treaties
Following the failure of diplomatic efforts to protect endangered American lives, rights and economic interests in China, America considered commercial retaliation against Japan. by Japanese authorities or Japanese-sponsored agents in China. The American government felt that its 1911 commercial treatyAnglo-Japanese Alliance
The first was signed in London at what is now the Lansdowne Club, on January 30, 1902, by Lord Lansdowne and Hayashi Tadasu . A diplomatic milestone for its ending of Britain's splendid isolation, the alliance was renewed and extended in scope twice, in 1905 and 1911, before its demise in 1921...
with Japan was not affording an appropriate level of protection to U.S. commerce in areas within or occupied by Japan. Simultaneously, Japan's position under the treaty as a most favoured nation
Most favoured nation
In international economic relations and international politics, most favoured nation is a status or level of treatment accorded by one state to another in international trade. The term means the country which is the recipient of this treatment must, nominally, receive equal trade advantages as the...
legally prevented the adoption of retaliatory measures against Japanese commerce. When the United States gave six-month notice of its withdrawal from the treaty in July, 1939, it removed the primary legal obstacle for embargo.
Effects
The embargo, which halted the shipment of material such as airplanes, parts, machine tools, and aviation gasoline, was designed to be an unfriendly act, but expanding it to include oil was specifically avoided. Japan was dependent on U.S. oil, and it was thought at the time that such would be a provocative step.The Act was expanded in September of that year to include iron and steel scrap, an act that Japanese Ambassador Horinouchi warned Secretary Hull on October 8, 1940 might be considered an "unfriendly act".
Controls were first authorized in 1940 in regard to munitions and similar materials essential to the defense effort, and extended in 1942 to all commodities. Always intended to be only temporary, the 1940 act was successfully extended in 1944, 1945, 1946 and 1947.
Retaliation
The United States was not alone in its concern. Great Britain, which maintained colonies in the Far East also feared an aggressive Japan. Immediately following the enactment of the Act, the British ambassador would be asked by Japan to close the Burma RoadBurma Road
The Burma Road is a road linking Burma with the southwest of China. Its terminals are Kunming, Yunnan, and Lashio, Burma. When it was built, Burma was a British colony.The road is long and runs through rough mountain country...
, a key supply route of arms for China. Britain initially refused the request, but for a short period of time closed the road. The British and the Dutch followed suit in embargoing trade to Japan from their colonies in southeast Asia.
The ending of the commercial trade treaties further eroded the possibilities for dialogue between the two nations. Noted political economist Robert Higgs
Robert Higgs
Robert Higgs is an American economic historian, economist combining the insights from the Public Choice, Institutional and Austrian schools of economics, and a classical liberal or libertarian in political and legal theory and public policy...
points out:
-
Robert StinnettRobert StinnettRobert B. Stinnett is a former American sailor who earned ten battle stars and a Presidential Unit Citation. He is the author of Day of Deceit, regarding U.S. government advance knowledge of the World War II Pearl Harbor attack.-Biography:...
notes in his book, Day Of Deceit: The Truth About FDR and Pearl HarborDay of DeceitDay of Deceit: The Truth About FDR and Pearl Harbor is a book by Robert Stinnett alleging that the Roosevelt administration deliberately provoked and allowed the Japanese attack on Pearl Harbor in order to bring the United States into World War II...
, that America had broken the Japanese diplomatic code and knew that due to the pressure exerted by the Export Control Act, war was quickly becoming an inevitable outcome. He points to a deciphered communiqué between Foreign Minister Teijiro ToyodaTeijiro Toyoda, was a career naval officer who served as Minister for Foreign Affairs in 1941, and admiral in the Imperial Japanese Navy during World War II.- Early life :...
and Ambassador Kichisaburō NomuraKichisaburō Nomura-External links:...
on July 31: “Commercial and economic relations between Japan and third countries, led by England and the United States, are gradually becoming so horribly strained that we cannot endure it much longer. Consequently, our Empire, to save its very life, must take measures to secure the raw materials of the South Seas.”
Post WWII use
After World War II, the Export Control Act was expanded to prevent the diversion of advanced technology to the Soviet bloc and China and, in later years, to alter the behavior of foreign countries. Scarcity of certain goods in the world markets made continuance of controls necessary in order to prevent a drain on such goods from plentiful American supplies, with its consequential inflationary influence. It was envisioned that remaining controls would soon disappear at the time of re-enactment in 1949, but national security and foreign policy, especially following the outbreak of the Korean WarKorean WarThe Korean War was a conventional war between South Korea, supported by the United Nations, and North Korea, supported by the People's Republic of China , with military material aid from the Soviet Union...
, were new and compelling reasons for extending the Export Control Act of 1949 in 1951, 1953, 1956 and again in 1958. The Export Control Act of 1949 is an example of the type of legislation that it renders, subject to the regulations promulgated under it, all persons wherever situated. Under its provisions exports of scarce materials are controlled both from an economic standpoint—short supply and consequent inflationary effect on foreign demand; and the security standpoint-- autarchyAutarchismAutarchism is a political philosophy that upholds the principle of individual liberty, rejects compulsory government, and supports the elimination of government in favor of ruling oneself and no other...
and self-sufficiency in strategic resources not available in sufficiently large quantities. These are both domestic policies aimed primarily at conditions within the United States, but controls are also directed at conditions outside the country as an instrument of foreign policy. This is exemplified by the restrictions on export of certain strategic or military items to the Soviet bloc or to other countries which it felt, if permitted, would be detrimental to the foreign policy program of the US. This latter motive became so strong that it brought legislation directing the President to enlist the cooperation of other nations in enacting controls on trade with the Soviet block to parallel those of the United States. The benefits of the various economic and military aid programs were to be withheld from non-cooperating nations.
See also
- Foreign Economic Administration: Statutory History
- Causes of WWII: Competition for Resources
External links