Bankrupting the Enemy by Edward S. Miller

Author:Edward S. Miller
Language: eng
Format: mobi, epub
ISBN: 9781612511184
Publisher: Naval Institute Press
Published: 2013-05-11T23:39:07+00:00

Desperate Flight of Funds

That day, Friday, 25 July, rumors swirled through immigrant communities on the West Coast. Business callers bombarded the Japanese consulate with questions. In San Francisco anxious depositors waited in long lines to withdraw funds from the local branch of the Yokohama Specie Bank. Aliens sought out naturalized citizens to act on their behalf in case their funds were blocked. A big tanker, the Ogura Maru, hastily departed, after a brief delay in getting a sailing permit, with a cargo of about 650,000 barrels of crude oil, leaving behind an assurance bond. A remaining tanker, the Nissin Maru, having taken on 120,000 barrels of diesel at San Pedro, prepared for a scheduled sailing the next day. Offshore hovered the luxury liner Tatsuta Maru, with a $2.5 million cargo of raw silk, lacking fuel to return home. Its captain was uncertain of what to do. The U.S. Coast Guard awaited instructions.37

In New York Japanese bankers had grown desperate as the probability of a freeze loomed. In the week ending 16 July the Yokohama Specie Bank agency disbursed $7.4 million, and another $2.9 million from occupied China accounts. Nakano said the spending was for routine purchases, but he appeared to be dissembling again. The National City Bank told the Federal Reserve that its office in the Shanghai International Settlement, where foreign banks and traders still operated somewhat freely, had learned that the puppet China Central Bank liquidated $7 million of U.S. funds to purchase Chinese yuan there. The Chase National and Guaranty Banks reported a $3.5 million outflow of Japanese-owned dollars from New York, some for buying yuan, and a further $2 million to Brazil.38 On 23 July E. J. Mulligan, an American employee of the YSBNY, personally withdrew from the Chase and Guaranty banks $400,000 in $50 and $100 bills.39 The next day the Specie Bank agency deposited a $5 million check drawn on another bank into the French American Bank’s New York branch office for credit to the Bank of Indochina, an institution that Japan influenced if not controlled. The French American bankers were bewildered because transactions of French and colonial accounts in the United States were subject to license by the Treasury. The check was drawn against uncollected funds, however, and was returned without deposit.40 On 26 July, the day of the freeze, the FBI suspected that Specie Bank agents in San Francisco were smuggling $5 million of Japanese government bonds from the basement of their office onto a ship. Japanese bank officials claimed they were worthless cancelled securities. After Pearl Harbor U.S. bank liquidators found $3.85 million of Japanese government bonds of a 1924 issue, payable in dollars, in the bank’s San Francisco branch.41

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