As far as a blockade goes---I have no information on that, but I have never heard that this was a viable option under consideration. One has to think the fanatical military leaders of Japan would not have been swayed by any blockade.
It is true that the "fanatical military leaders of Japan" wouldn't have been swayed by it. But they weren't the only decision makers in Japan, or even the only decision within the military. Here is an interesting view:
After the war, the world learned what U.S. leaders had known by early 1945: Japan was militarily defeated long before Hiroshima; it had been trying for months, if not for years, to surrender; and the U.S. had consistently rebuffed these overtures. A May 5 cable, intercepted and decoded by the U.S., dispelled any possible doubt that the Japanese were eager to sue for peace. Sent to Berlin by the German ambassador in Tokyo, after he talked to a ranking Japanese naval officer, it read: Since the situation is clearly recognized to be hopeless, large sections of the Japanese armed forces would not regard with disfavor an American request for capitulation even if the terms were hard.
As far as is known, Washington did nothing to pursue this opening. Later that month, Secretary of War Henry L. Stimson almost capriciously dismissed three separate high-level recommendations from within the administration to activate peace negotiations. The proposals advocated signaling Japan that the U.S. was willing to consider the all-important retention of the emperor system; i.e., the U.S. would not insist upon unconditional surrender.
Stimson, like other high U.S. officials, did not really care in principle whether or not the emperor was retained. The term unconditional surrender was always a propaganda measure; wars are always ended with some kind of conditions. To some extent the insistence was a domestic consideration not wanting to appear to appease the Japanese. More important, however, it reflected a desire that the Japanese not surrender before the bomb could be used. One of the few people who had been aware of the Manhattan Project from the beginning, Stimson had come to think of it as his bomb, my secret, as he called it in his diary. On June 6, he told President Truman he was fearful that before the A-bombs were ready to be delivered, the Air Force would have Japan so bombed out that the new weapon would not have a fair background to show its strength. In his later memoirs, Stimson admitted that no effort was made, and none was seriously considered, to achieve surrender merely in order not to have to use the bomb.
And that effort could have been minimal. In July, before the leaders of the U.S., Great Britain, and the Soviet Union met at Potsdam, the Japanese government sent several radio messages to its ambassador, Naotake Sato, in Moscow, asking him to request Soviet help in mediating a peace settlement. His Majesty is extremely anxious to terminate the war as soon as possible ..., said one communication. Should, however, the United States and Great Britain insist on unconditional surrender, Japan would be forced to fight to the bitter end.
On July 25, while the Potsdam meeting was taking place, Japan instructed Sato to keep meeting with Russian Foreign Minister Molotov to impress the Russians with the sincerity of our desire to end the war [and] have them understand that we are trying to end hostilities by asking for very reasonable terms in order to secure and maintain our national existence and honor (a reference to retention of the emperor).
Having broken the Japanese code years earlier, Washington did not have to wait to be informed by the Soviets of these peace overtures; it knew immediately, and did nothing. Indeed, the National Archives in Washington contains U.S. government documents reporting similarly ill-fated Japanese peace overtures as far back as 1943.
Thus, it was with full knowledge that Japan was frantically trying to end the war, that President Truman and his hardline secretary of state, James Byrnes, included the term unconditional surrender in the July 26 Potsdam Declaration. This final warning and expression of surrender terms to Japan was in any case a charade. The day before it was issued, Harry Truman had al- ready approved the order to release a 15 kiloton atomic bomb over the city of Hiroshima.
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