Export Control Act

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,^[1] and 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.^[2]

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.^[3][4]

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 United States 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.

Background

"Moral embargo"

The Act was seen as a codified "moral embargo", in that it was an expression of moral outrage,^[5] 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 Hull 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"^[5] 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 treaty 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.^[5][6]

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.^[7]

The Act was expanded in September of that year to include iron and steel scrap,^[8] an act that Japanese Ambassador Kensuke Horinouchi warned Secretary Hull on October 8, 1940, might be considered an "unfriendly act".^[9]

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.^[10] Always intended to be only temporary, the 1940 act was successfully extended in 1944, 1945, 1946 and 1947.^[11]

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 Road, a key supply route of arms for China. Britain initially refused the request, but for a short period of time closed the road.^[2] The British and the Dutch followed suit in embargoing trade to Japan from their colonies in southeast Asia.^[12]

The ending of the commercial trade treaties further eroded the possibilities for dialogue between the two nations.^[13] Noted political economist Robert Higgs points out:

Robert Stinnett notes in his book, Day Of Deceit: The Truth About FDR and Pearl Harbor, 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 Toyoda and Ambassador Kichisaburō Nomura 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."^[12][14]

Post World War II 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.^[1] 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,^[15] but national security and foreign policy, especially following the outbreak of the Korean War, were new and compelling reasons for extending the Export Control Act of 1949^[16] in 1951, 1953, 1956 and again in 1958.^[17]

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—autarchy 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 United States.^[18] 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.^[19]

See also

• Foreign Economic Administration: Statutory History
• Causes of World War II: Competition for Resources

References

External links

• "Peace and War: United States Foreign Policy"