The sinking of USS Panay in late 1937 provides the clearest earlier grievance, although Washington did not turn that incident into war. At the same time, American industry continues selling arms, oil, and other material to Japan while Franklin D. Roosevelt authorizes large loans to the Chinese Nationalists. Business ties therefore pull one way as political concern over Japan's war in China pulls another. This background shows how trade and informal support can run in opposite directions before open belligerency.
Notable Point · 6:40-7:37
American pressure before a declaration of war
The Panay incident, continuing American exports to Japan, and Roosevelt's loans to the Chinese Nationalists reveal the contradictory US position before the crisis.