Supposedly such an action would cause massive turmoil in their domestic markets, cause exchange rates to rise, inflation to rise, and thus prevent them from engaging in meaningful trade. Why did Allied countries not try this in WWII? Was the world simply not as connected then?

  • 2
    $\begingroup$ 1. Who is we? This is an international site. $\endgroup$
    – Giskard
    Commented Feb 27, 2022 at 5:46
  • $\begingroup$ 2. Can you please back up your claim that this did not happen? $\endgroup$
    – Giskard
    Commented Feb 27, 2022 at 5:46
  • 1
    $\begingroup$ My bad -- edited $\endgroup$
    – Daycent
    Commented Feb 27, 2022 at 19:10
  • $\begingroup$ re: 2. your response indicates that it did happen. I just was not able to find such sources. $\endgroup$
    – Daycent
    Commented Feb 27, 2022 at 19:11

1 Answer 1


You mean something like this?

Freezing Foreign-owned Assets

Germany invaded Denmark and Norway on April 8, 1940, and the United States quickly responded to the aggression. In an attempt to keep the Germans from taking control of Danish and Norwegian assets held in the United States, Executive Order 8389 "froze" all financial transactions involving Danes and Norwegians. The freezing order prohibited [...]

The U.S. government had first considered the use of such economic weapons in 1937. In response to the Japanese bombing and sinking of the American gunboat Panay in Chinese waters, Herman Oliphant, General Counsel in the Treasury Department, suggested to Treasury Secretary Henry Morgenthau that foreign exchange controls and a system of licenses for financial transactions could be instituted against the Japanese. Tensions with Japan subsequently eased and Oliphant's proposals were shelved. [...]

As Germany continued its invasions, the U.S. government successively froze assets, country by country, over the European continent. Thus, on May 10, 1940, FFC extended freezing controls to cover the Netherlands, Belgium, and Luxembourg. The assets of France and Monaco (June 17), Latvia, Estonia, and Lithuania (July 10), and Romania (October 9) were subsequently frozen that year.8 By the end of April 1941, the United States added Bulgaria, Hungary, Yugoslavia, and Greece to the list.

The further extension of controls to belligerents and neutrals remained controversial. While Treasury favored a rapid extension of controls, the State Department, concerned about maintaining America's status as a neutral as well as U.S. diplomatic privileges, objected. Assistant Secretary of State for Economic Affairs Dean Acheson noted that "from top to bottom our [State] Department, except for our corner of it, was against Henry Morgenthau's campaign to apply freezing controls to Axis countries and their victims."

Eventually, the course of the war dictated a shift in U.S. policy. On June 14, 1941, through Executive Order 8785, the United States extended freezing controls to cover all of continental Europe, including "aggressor" nations and annexed or invaded territories (Germany and Italy; Danzig, Austria, and Poland) as well as neutral nations, small principalities, and countries not previously included (Spain, Sweden, Portugal, and Switzerland; Andorra, San Marino, and Liechtenstein; Albania and Finland). Turkish assets were never blocked, and Soviet assets were only blocked for a relatively short time until Germany invaded Russia in June 1941. As the United States moved from being a neutral to a belligerent, the role of FFC, an administrative agency within the Treasury Department, expanded.

From "Plunder and Restitution: Chapter III"

But you also asked why the US did not freeze Japanese assets?

On July 26, 1941, President Franklin Roosevelt seizes all Japanese assets in the United States in retaliation for the Japanese occupation of French Indo-China.


President Roosevelt last night issued an order freezing Japanese funds in this country. Thus again was emphasized the fact, if at this stage further emphasis be necessary, that this world of ours has become an inextricably bound-up entity.



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