Making smoke desperately and firing off all its antiaircraft, His Majesty's Ship Cumberland came charging down Shanghai's port on the muddy Whangpoo, throwing up a massive bow wave that threatened to swamp the river craft. The cruiser was being buzzed by a solitary plane with Chinese markings, like those that had bombed her a short time ago, and flying the plane, his own Curtis Hawk, a gift of Madame Chiang, was a former American Air Corps fighter pilot, Claire Chennault. He had no hostile intent. On this August Saturday of 1937, he was just trying to find out what had happened to the planes he had briefed to attack the Japanese cruisers on the river at Shanghai. He was surprised to find that the warship beneath the smoke spitting death at him was British and its behavior confirmed his suspicion that something had gone wrong. Once he saw the Union Jack displayed on the deck, he put the Hawk into a climb and got out of there.

Something had gone wrong. His inexperienced Chinese pilots had lobbed their bombs into downtown Shanghai, smashed up two of the leading hotels, the Palace and the Cathay, killed three Americans, not to speak of hundreds of their compatriots. Harry Yarnell's flagship Augusta, had just pulled in, having been summoned in haste from its regular summer cruise to the North China vacation beaches, and two bombs fell close aboard, rattled the dishes.. It was a bad start for Chiang Kai-shek's campaign, his riposte to the Japanese after the incident at the Marco Polo bridge at Peking. Cynics afterwards wondered if Chiang had elected to fight at Shanghai near the International Settlement in hopes that the western powers would intervene. If so, he was disappointed. Instead of filling the Whangpoo with warships as Stimson had done in 1932, Roosevelt didn't want to get involved. He felt that he had to send in more Marines, but he told the Cabinet that he wished there were no Marines at all in Shanghai. Nevertheless, he assured Americans in China that he would see them safely evacuated. Harry Yarnell was left to protest the bombing to the mayor of the Chinese city. The bungled attack took place on August 14th, 1937, "Bloody Saturday." Two weeks later Chinese planes mistook the Dollar Line's President Hoover for a Japanese transport and attacked her in the open sea.(1)

Lucky for Chennault he was a westerner, a mercenary. Chiang Kai-shek had a habit of executing officers whose operations didn't go as planned; he threatened to execute the pilot who attacked the President Hoover. Chennault confided to his diary that, oddly, Chiang awarded him a $10,000 bonus soon afterwards, which the airman didn't think he altogether deserved.

In the years since he had confessed his weakness for China to Harry Stimson that snowy day they laid Cal Coolidge to rest, FDR had limited his partisanship. He knew, in any case, that the fleet was in no shape to go adventuring west of Hawaii. Besides, someone might ask: why all the fuss? Japan was at least twice as good a customer as China for American businessmen.

China obviously meant different things to Americans. Many saw only the China they wanted to see. No one was surer of what he saw--he was never big on self-doubt--than Stimson, a former governor general of the Philippines and a member of the company of Americans who claimed to understand the Oriental mind. He believed that the values of Christian civilization could be instilled in the Chinese. Besides he was for action in any given situation: "waffling" and "wobbling" were his pet peeves. Although out of office, Stimson backed FDR up publicly whenever he showed signs of getting tough with Japan.(2)

éBut most Americans, including the president, were highly resistant to getting involved so far from home. There was even a school of thought that maintained that the Pacific was too vast for combatants to get at each other.  FDR wasn't happy about defending "extrality" --the system of concessions and privileges under which westerners did business in China, which was not only under attack by the Japanese but bitterly resented by the Chinese. The State Department counseled without much enthusiasm that Chiang Kai-shek should be supported to some degree, to preserve the "Open Door." Chiang, like his American-educated, capable wife, was nominally a Christian. But he was a fierce Chinese patriot. He was once a Russian protégé, and his one-party government was an exact copy of the Communist structure. His American friends might ascribe "democratic tendencies" to his régime, but he was what he was. A potentate forced willy-nilly to reckon with his former Communist associates whom he hoped to destroy. Not to mention a collection of warlords. Chiang could never resist trying to control military operations from his high perch as Generalissimo. Against the advice of his German advisers he persisted in fighting around Shanghai until the Japanese flanked him and virtually destroyed his forces.  Then he rejected peace negotiations sponsored by Oskar Trautmann, the German ambassador, and eventually took his government from Nanking to Chungking, behind the Yangtse gorges in remote and medieval Szechuan, more than a thousand river miles from the sea. There he operated behind a screen of propaganda aimed mostly at America, waiting for the big war everyone saw coming. One or other of the warring powers would come to his aid. If, as FDR told Ickes,  MacArthur had actually been offered the post of military adviser to Chiang, he was wise to have turned it down.(3)

Chiang didn't lack for American friends. Henry Luce, a "mish-kid," son of a missionary, put him on the cover of Time magazine as 1937's Man of the Year. Hollywood discovered the Chinese in the novels of Pearl Buck as a nation of heroic, patient peasants. This was a switch. In the nineteenth century Americans viewed China as a sinkhole of heathen corruption, almost beyond redemption. Another influential figure was the State Department's Doctor Stanley Hornbeck who had taught in  Chinese universities.  A New York Dutchman like FDR, and like him very tight with the admirals, Hornbeck believed in the tonic effects of outbuilding the Japanese Navy. In June 1935 he hitched a ride to Hawaii with Admiral Standley aboard the cruiser Memphis. He went incognito, on vacation--Standley said to gather information on the Japanese-- only to be spotted by the Honolulu Advertiser, and accused of a secret mission by the Japanese press. Hornbeck had a pleasant cruise on the Memphis, accompanied the admiral and his wife to the races at Tijuana, and went on to Arizona where there had been some violence directed against  Japanese lettuce growers in the Salt river valley. Hornbeck saw Japan as weak, hopelessly outclassed in a war with the United States, but he was by no means convinced that the American stake in China was worth a war.(4)

To some extent it was a case of "localitis." Hornbeck, who had lived there, thought China was the key in the Far East. Not so, Joseph Grew, the ambassador to Japan and another Roosevelt crony, who was impressed with the importance of Japan. Grew generally advocated a different approach. Said he:" The simple fact is that we are here dealing not with a unified Japan but with a Japanese government which is endeavouring courageously ...to fight against a recalcitrant Japanese Army, a battle that happens to be our own battle. The government needs support in this fight."(5)

Harry Yarnell was disappointed when he got his four stars as commander of the Asiatic Fleet, rather than the U.S. Fleet, but he was to have  his fill of action evacuating Americans from the war zone in China, and he had to be warned against tangling  with the Japanese. On December 12th 1937, he lost touch with the gunboat Panay, which was evacuating Americans from Nanking, the doomed Chinese capital. Chiang Kai-shek and his wife had flown out of  Nanking four days previously  and were followed by the American ambassador. Second Secretary George Atcheson  closed the Nanking embassy  and was shepherding a group of refugees, including some bombed-out newsmen, aboard the Panay. It  struck one of the newsmen, an Italian named Luigi Barzini, as a poor thing, more like a Lake Como tourist boat than a man-of-war. The Panay was one of a fleet of river craft specially built in Shanghai to patrol Chinese rivers, under the terms of an eighty-year-old treaty. It carried three-inch guns fore and aft along with machine guns to discourage river pirates. These were the ships, together with the few destroyers and cruisers assigned to the Asiatic Fleet, which were considered to be casualties if caught in Chinese waters when war with Japan broke out. The question of when to withdraw them was a touchy one, argued between the State and Navy departments. It had figured in the 1913 war scare.(6)

Thousands of Chinese, soldiers and civilians alike, desperately seeking a way out of Nanking, were struggling to escape via a miscellaneous collection of river craft on the Yangtse as. skipper James Hughes took the Panay twenty miles upriver from Nanking and anchored in midstream, where he was joined by three Standard Oil barges. He radioed Yarnell's flagship at Shanghai, asking that the Panay's new location be notified to the Japanese staff which routinely kept track of all foreign vessels. December 12th was sunny and clear. The Chinese mess boys had finished serving Sunday dinner when highflying Japanese aircraft droned over and suddenly the gunboat was being bombed. Later, Japanese aircraft came down and strafed. Three men were killed, including an Italian newsman, and the survivors were shot up as they struggled to hide the wounded in the reeds on the cold muddy river bank. The Panay was clearly marked, the Stars and Stripes displayed topside but indistinguishable from the altitude of the initial attack. Earlier in the day, a little farther up the river, an antiwestern fanatic, Kingoro Hashimoto, had ordered a Japanese army unit to fire on a British gunboat. But the attack on the Panay and the nearby barges was the work of naval aviators  who had been given the shipping in the river as  targets by the local army. The Americans long suspected that Hashimoto was somehow involved. But Japanese naval headquarters at Shanghai readily admitted a mistake had been made and sent help. The admiral responsible for the offending planes was subsequently  removed and Grew in Tokyo received prompt and profuse apologies and offers to make amends. On the 14th, the American papers featured FDR's curt demand for apologies and damages. He wanted the Emperor informed. At the next Cabinet meeting Navy Secretary Claude Swanson showed up. He seldom came. He was desperately ill and sometimes used the occasion for a nap, but this time he had himself brought in by wheelchair and called for war in a hoarse croak. The Chief of Naval Operations, Bill Leahy, thought that since Japan was involved in China this was the time to take her on. FDR commented that the incident was probably part of a campaign to drive the western nations out of the Yangtse, and eventually out of China, but he rejoined that he was still a "pacifist."Neither FDR nor the State Department would consent to joint démarches with the British.(7)

The president had  been casting about for a formula to rally public opinion against the aggressive policies of Germany, Italy, and Japan. He came up with an idea for a "quarantine" of aggressors, but when he had aired the phrase in a speech the previous October without explaining what it meant, he came in for some criticism. Another option attracted him, an old idea, an alternative to subduing Japan in a naval slugfest. This was a distant Anglo-American blockade, an idea that Yarnell talked up, and FDR thought could cause a revolution in Japan. It wouldn't  involve using the American army. But neither Roosevelt, Yarnell nor anyone else could explain  how a blockade could be maintained without destroying the Japanese fleet in a naval slugfest. Another FDR initiative, a conference of Pacific powers at Brussels, turned out to be  useless because Japan refused to attend and no nation showed any inclination to bell the Tokyo cat. The day before Swanson's macabre appearance at the Cabinet, Roosevelt tried out the "distant blockade" on the British ambassador, who commented to London that it was the notion of a "hare-brained statesman."

Despite the unprovoked attack on one of its warships, the American public remained generally passive. Some people questioned what American warships were doing anyway, a hundred miles up some Chinese river. In Congress, the attack on the Panay caused a number of representatives to call for the enactment of the Ludlow Resolution, requiring a national referendum on declaring war unless the U.S. was attacked. On Christmas Day the Japanese government presented a formal apology and offered to pay damages. The crisis was over, much to the president's relief.(8)

All the same, there were consequences.

A news cameraman aboard the Panay had stood his ground during the attack and came up with dramatic shots of American sailors fighting back, one firing a machine gun minus his pants. He took the precaution of burying the film when he reached the shore. It was rushed across to Manila on a destroyer, and flown to the States on the Pan-American Clipper. The president screened it at the White House, and asked the Universal News people to cut some scenes as too inflammatory. But then, after New Years, the film was shown at theaters across America. And, two days before Christmas, the president had dispatched Captain Royal Ingersoll of the Navy's War Plans Division to London, where he was to negotiate agreements on distant blockade plans, exchange of codes and signals, and other matters. The British weren't hopeful about moving warships to the Far East, in view of Germany's resurgence, and the government of the day was leaning over backwards to avoid  giving offense to Germany, Italy, or Japan. FDR's reactions were different. Where he had been dismissive when stern measures were suggested at Cabinet, after the Panay attack he showed increasing irritation at foreign "aggressors."(9) Besides, the naval limitation treaties expired on the last day of 1937, and Britain, the U.S., and Japan began  feverishly to build battleships; the Japanese in fact, jumped the gun in their eagerness to construct super-battleships bigger than anything the Americans could squeeze through the Panama Canal.

Meanwhile, disturbing reports by western newsmen had begun to come out of China about events at Nanking after the Japanese captured it: Japanese soldiers out of control, raping and murdering. There had been atrocities, and on a fearsome scale.

The Navy never forgot the Panay..

FDR had originally been very conservative, not to say passive, in his approach to issues in the Far East. He had stopped sending nasty notes to the Japanese about Manchuria: what some saw as international nagging. He wanted to preserve the 10:10:6 ratio for the American, British and Japanese navies, and avoid a new arms race. He also wanted to build American warship tonnage to one-hundred percent of the treaty limits; Hoover's economy moves had resulted in a fleet that was probably weaker than Japan's. But FDR thought he needed the twelve votes in the Senate represented by silver mining states, and followed a silver purchase program that was injurious to China's economy . Nor did he always encourage Morgenthau, who wanted to extend credits to China, as against the State Department, which feared to provoke Japan. The Japanese had demanded parity at the naval limitation talks, and the president was enraged at any suggestion that the British, who wanted more cruiser tonnage, might make common cause with Tokyo. He threatened to raise the Dominions against Whitehall. It was hard to predict his moves in naval matters, but there was no doubt that he wanted to be his own secretary of the navy.(10)

Swanson was an invalid, and assistant secretary Harry Roosevelt died in 1936,  leaving Bill Standley to deal warily with his old golfing partner. While Standley was absent in London for the talks on fleet tonnage, it annoyed him that FDR reappointed Joseph M. Reeves as Commander, U.S. Fleet. Photos of Reeves show him with a beard and goatee that made him look like a stage Lucifer.  Otherwise, he was the epitome of an old salt; he once called for a surprise fleet sortie from San Pedro on a Saturday afternoon. A recurrent nightmare for the Navy was the possibility that sabotage would close the Panama Canal while the fleet, normally on the West Coast, was in transit. Reeves tested how fast the fleet could get through the Canal in April 1934, and that October conducted a fleet exercise off Panama that assumed that a hostile transpacific force had sneaked across and managed to catch the U.S. fleet halfway between the oceans. Reeves claimed that the scenario was realistic, seeing that the fleet's  whereabouts on maneuvers were announced months in advance. The notion that Japan would suddenly attack, absent some diplomatic crisis, was somewhat paranoid, but it may have earned Reeves a place on the Roberts Commission,  the first investigation into the Pearl Harbor disaster, during which he was very hard on Husband Kummel. FDR read the admiral's account of the exercises with attention.(11)

However nasty the international situation, it got infinitely worse after the Panay incident. In May 1938, Hitler annexed Austria, riding triumphantly into Vienna, where he had spent bitter poverty-stricken years. Traumatized by the senseless slaughter of World War I, France and Britain tried to ward off a new round of slaughter by concessions to Germany. They connived at the destruction of Czechoslovakia, only to be presented in August 1939 with a German-Soviet agreement to carve up Poland. At this point they declared war, reluctantly.

Roosevelt hadn't at first been unhappy with the British government's attempts to"appease" Hitler. But after Hitler's betrayal of the agreement on Czechoslovakia, he told his ambassador to try to put some iron up the backside of Prime Minister Chamberlain. On the other hand the British felt that FDR was long on wind and short on deeds. But during the lull in the European war in the winter of 1939--the Phoney War--FDR  established contact with the leading hard-liner in London, the pugnacious Winston Churchill. He would eventually support Churchill through thick and thin.(12)

Viewed from Tokyo, a new European war presented an opportunity to expand Japanese influence. But the situation wasn't without its perils. Twice the Soviet army had badly mauled Japanese forces in border wars, and whole squadrons of Russian aviators had been sent to help out Chiang Kai-shek. The British were plainly in retreat in China, but the Americans, with much less in investments, had their backs up. Would the USSR ally itself once more with China? Or would both the USSR and China combine with the U.S.? The Americans had denounced their trade treaty with Tokyo, a prelude perhaps to shutting off imports of oil and raw materials.

 The Japanese began by putting a lot of pressure on the British in North China. FDR responded as the United States had previously responded to Japanese moves--by sending fleet units to Hawaii. There was some uncertainty as to the practical effects of this gambit. Was it a futile gesture of American displeasure?(13)

It certainly incurred the displeasure of the admiral who took command of the U.S. Fleet in January 1940, James O. Richardson, affectionately known as J.O. He had to burrow into his  predecessor's correspondence to find out that the reason so many of his warships were in Hawaii was that Roosevelt was signaling his concern at the Japanese pressure on the British. Richardson had been around the block a few times as a budget and plans officer, and he thought that his insights might be helpful to his commander-in-chief. Especially since the boss fancied himself as a naval strategist, and liked to brainstorm. He loved to play admiral and send warships hither and yon. Like Old King Cole he would call for his maps, call for his globe, and call for his admirals. The current chief of naval operations was white-haired, pink-complexioned Harold Stark, who  had been tagged with an odd nickname when he was a plebe at Annapolis. They called him "Betty" Stark, after the wife of a Revolutionary war hero. But the midshipmen got the name wrong; the lady's name was Molly. He had a hard time standing up to Roosevelt. This is the advice Richardson wanted him to pass on: "I strongly feel that you should repeatedly emphasize to the boss that an Orange War would probably last some years and cost much money, my guess is five to ten years, 30 to 50 billion dollars. I have always thought that our Orange Plan was chiefly useful as an exercise in Planning, to train officers in War Planning and to serve as a guide in developing our Navy and its shore facilities. As to actually executing the O-1 plan, I hope we will never be called upon to do that unless the Administration fully realizes the probable cost and duration of such a war."(14)

The letter created a stir in Main Navy.

Hawaii happened to be  the area scheduled for the 1940 maneuvers and Richardson brought the rest of the fleet out in April. Pearl Harbor was always respectfully referred to as a mighty base, and the strategic value of the Hawaiian Islands was beyond question, but a lengthy sojourn raised problems for the fleet. Honolulu was a smallish city without much in the way of amenities, a "lousy liberty port." The anchorage at Pearl was cramped and in no way developed to accommodate the whole fleet, and the single narrow entrance was a standing invitation to the Japanese to try to block it. One flag officer labeled the base as a "goddam mousetrap." But mousetrap or no, it was the only good protected base in the Islands. Lahaina Roads, the old whalers' anchorage, couldn't be protected by mines or nets or easily by antiaircraft. Richardson expected to take the fleet back to the Coast at the conclusion of maneuvers. When FDR overruled him, he complained, and Stark backed him up, that orderly and efficient preparation of the fleet, was impossible at a small advanced base.(15)

The explanation for FDR's order was that the Phoney War had suddenly turned real. The Germans overran France and chased the British off the Continent. It was a massive shift in power and it dismayed FDR who, like the majority of Americans, disliked the brutal Nazi regime, and had hoped that the Allies would prevail. The American press had emphasized-- without much conviction, to be sure--the French Army, "the finest in the world," and the mighty British fleet, a safeguard in the Atlantic. Roosevelt told Richardson that he would withdraw the fleet from Pearl Harbor if the admiral could find a way to make it look like Washington wasn't backing down in the Pacific in response to the march of events in Europe.The admiral disagreed totally. He felt that the Japanese knew that the Fleet was far from prepared for action in the Pacific and couldn't be prepared in Hawaii. Roosevelt was running a thin bluff! The balance of naval power was such  that an American fleet sallying out for a general action against the Japanese might well be beaten.

Washington was in shock. The president worried so he scarcely slept at night. But the emergency also energized him. He had been discontented. He had been humiliated in the 1938 Congressional elections, and his string as president was playing out. He had lost his usual gay and breezy air. He moped. A third term was thought to be unthinkable, but FDR probably had always hankered to run. According to his son Elliott, the end of the Phoney War put an end to any  hesitations FDR had about 1940, and the third term. He would run!(16)

At the same time, American military planning went into high gear: the problem, prevent Germany from gaining footholds threatening the Western Hemisphere while restraining Japan with an inadequate fleet. When Britain showed that it would resist, aid to its forces became FDR's overriding priority. Suddenly the Fifth Column became an issue. The embarrassing failures of the French and British forces, which weren't inferior to the Germans in numbers or equipment, encouraged the idea that Allied defeat was largely due to treachery within the gates. This of course was a timeworn alibi for officials and warriors alike, and a favorite theme of Hitler's. But it was useful in another way. Churchill used it to discredit the "appeasers" in his Conservative party who were inclined to an accommodation with Hitler. He threw some of the prominent pro-fascists in England into stir and rounded up thousands of refugees from Hitler's Europe who had previously been thought to be harmless. It was also a stick to beat the isolationists in the United States, whose ranks included a fringe of admirers of fascist regimes. FDR had sent millionaire Joseph P. Kennedy as ambassador to London, so it was said, partly because it amused him to appoint the son of an Irish immigrant to the stuffy Court of St. James. He found that Kennedy absorbed so much of the defeatism of aristocratic English circles that he had to maneuver around him to help Churchill, and eventually let the ambassador go. He also let go two cabinet members: Edison at Navy, who went on to be elected Democratic governor of New Jersey, and Woodring, the violent isolationist at the War Department. Stimson came on at the War Department after FDR checked to see that the septuagenarian had lost little of his grasp, and would be backed up by competent assistants. Like Stimson, Frank Knox was appointed as Navy secretary for his political ties to interventionist Republicans, and in a vain attempt to "get real control" of the Navy. He was feisty in the Bull Moose tradition, sympathetic to Britain, jumped to conclusions and a firm believer in Fifth Columns, especially Japanese. FDR apparently hoped that he would be more independent of the admirals than had been Edison.These Republicans gave the Third Term a nonpartisan veneer. FDR had tried to recruit the entire 1936 Republican ticket of Landon and Knox, and  even offered to set up a Cabinet post--"secretary for air"-- for Charles Lindbergh, presumably to muffle his isolationism.(17)

On June 17th, when the French were giving up the struggle, the new Army Chief of Staff George Marshall ordered a practice alert in Hawaii against a transpacific raid by Japan and the USSR, an unlikely combination, to be sure. He may have called it in part to flush any subversive Japanese in Hawaii.(18) Two weeks later, High Commissioner Sayre sent a message from Manila urging that in the event of "subversive activities," he and the commander of the Philippine Department be authorized to set up a military government and call the Commonwealth army into federal service. FDR bought the idea, which was authorized by Tydings-MacDuffie, but took care to keep the decision for himself. He had Admiral Stark prepare orders which were stashed in the White House ready for use.(19)

 In succeeding weeks the Congress, thoroughly alarmed, passed huge naval appropriations and provided generously for the Army. It authorized a peacetime draft. Unfortunately, funds were one thing.  Time was another. It would be three or four years before the weapons were ready, when rearmament would reach flood.   .

By any measure, the most important strategic call FDR made in that scary summer of 1940 was a decision to support Churchill in his determination to resist, very important at the time because it wasn't easy for the Prime Minister to rally Britain against the weight of his Conservative colleagues. The experts at the War and Navy departments across the Ellipse from the White House were pessimistic about Britain's chances. All sorts of scary reports were flooding in. Josephus Daniels, FDR's one-time boss at the Navy Department, and now his ambassador in Mexico, had come to Washington in May reassuring the president of the friendly attitude of the Mexican authorities. While they were talking, the president took a call from Governor Lehman of New York. Lehman was unhinged by a rumor that a coalition of blacks, Germans, Italians, and Jews had afoot a plot to seize New York City!  FDR had to calm Lehman down, but Daniels had to calm the president down about Mexico.(21)  The Mexicans had resumed the revolution they had begun in Woodrow Wilson's time, expropriating American properties and shedding innocent blood, arousing resentment in the States. Roosevelt was committed to a "Good Neighbor" policy of avoiding intervention in Latin America, and resisted suggestions that he support conservative candidates in the Mexican elections held in 1940. This didn't prevent him being upset by rumors of Japanese mischief. Apparently, some of the rumors were passed along by naval intelligence which had recruited sources from American businessmen in Mexico. But when the president had gone fishing along the desert coast of Baja California in 1935, the officers aboard his cruiser could detect little in the way of Japanese activities. Nor were they aware that the local Mexicans didn't particularly like the few Japanese that came their way.(22)