The Gripsholm WWII Exchanges
The M.S. Gripsholm was a Swedish cruise ship chartered by the U.S. government to transport civilians and POWs caught behind enemy lines during World War II. Between 1942 and 1946, the "Mercy Ship" participated in a dozen exchanges between the U.S. and its wartime enemies; Germany, Italy and Japan.  There were just two exchanges of civilians with Japan in June 1942 and September 1943. Approximately 3,000 men, women and children of Japanese ancestry took part in those exchanges, some of whom were seized in Latin America and brought to the United States before being sent to Japan. That injustice is still being challenged in an international forum today.
Built in 1925, the M.S. Gripsholm was the first diesel-powered cruise ship to cross the Atlantic and its luxurious interiors were modeled after one of Sweden's most famous castles. Though seafaring vessels were in high demand during WWII, the U.S. government was able to charter the Gripsholm and its sister ship, the S.S. Drottningholm , to use as repatriation vessels. The ships were painted white and lit up with bright lights at night to broadcast their protected status. Enemy governments agreed to give the ships safe passage. The Drottningholm was used in exchanges between the U.S. and Germany and Italy.
Wartime Prisoner Exchanges and Japanese Americans
World War II was the first modern war in which large numbers of civilians were captured, imprisoned and, in some cases, exchanged, under a set of international rules designed to ensure the humane treatment of internees. When Japan attacked Pearl Harbor on December 7, 1941 , thousands of American and Japanese civilians were caught on the wrong side of the battlefield. Within days, diplomats from the U.S. State Department and Japan's Foreign Ministry began negotiating the safe return of their people. Representatives of neutral Spain (for Japan) and Switzerland (for the U.S.) were hired as emissaries. The governments eventually agreed to put their hostages on ships and send them to a neutral port in an isolated part of the world, where they would be traded. 
Both sides drew up lists of the people it wanted back, starting with high-value hostages such as diplomats, journalists, influential business leaders and their families. The U.S. asked its Swiss representatives in Asia to compile passenger lists with priority for extra space given to women and children, people who were ill and people charged with crimes and imprisoned. The Japanese list included both Japanese nationals who were short-term visitors as well as immigrant community leaders who had been in the U.S. for decades. Most of these Issei leaders had deep roots in America, including families with U.S.-born children and businesses. Many had been arrested and imprisoned in Justice Department camps after Pearl Harbor, and many of their families ended up in separate War Relocation Authority (WRA) camps after the mass roundup of West Coast Japanese Americans.
Some would-be Issei repatriates held strong feelings of loyalty towards Japan, particularly those who had suffered the most under discriminatory anti-Japanese laws. Others considered themselves Americans and didn't want to leave.  Some agreed to repatriation because they believed it was the only sure way for them to be reunited with their families, often over the objections of their Nisei children.
A key part of the repatriation negotiations was reciprocity, the notion that the two governments were trading equal numbers of people of equivalent value. But the U.S. was at a disadvantage. At the start of the war, there were at least 10,000 Americans scattered across what would become Japanese-held territory. The U.S. had far fewer bodies to offer in trade. In addition, U.S. military leaders adamantly opposed repatriating anyone who might have information they deemed valuable to the war effort, such as knowledge of the U.S. coastline or port facilities.
The U.S. government decided that it did not want to force anyone legally in the country to return to Japan and conducted a survey of all the detainees held in WRA camps. Thousands signed up for repatriation but most of them were not on Japan's list. To the surprise of both governments, less than 10 percent of the people on Japan's list wanted to be repatriated. 
But America had a backup plan. To protect its southern flank, the U.S. government forged an agreement with 15 Latin American governments to remove potentially dangerous Axis sympathizers from the Western Hemisphere. This ill-conceived plan led to 2,264 Japanese from Latin America, mostly Peruvians, being seized and shipped to America. Upon arrival, they were declared "illegal aliens" and sent to camps run by the Immigration and Naturalization Service where they were used to expand the hostage pool. 
The Gripsholm Voyages
On June 18, 1942, the Gripsholm set sail carrying approximately 1,097 people, mostly Japanese officials and businessmen and their families. The ship made a brief stop in Rio de Janeiro to load another 403 passengers. (Note: Passenger numbers for both exchanges vary between official and unofficial sources.)
It took more than a month for the Gripsholm to reach Lourenco Marques, a Portuguese-controlled port now known as Maputo, the capital of Mozambique. There, the passengers were traded for 1,554 Allied civilians, mostly American officials and their families, who had arrived on the Asamu Maru and Conte Verde . They had been picked up in Japan, Hong Kong, Singapore and Vietnam. 
It took more than a year to negotiate the second exchange, due to problems related to security, legal issues, logistics and the growing enmity between the two governments. On Sept. 2, 1943, the Gripsholm left Jersey City, making brief stops in Brazil and Uruguay to pick up additional diplomats and businesspeople and their families. Among the 1,513 passengers on board the Gripsholm were more than 100 Japanese American children and 737 Japanese from Latin America. 
On October 16, the Gripsholm sailed into the harbor at Mormugao, India, where the Teia Maru , a Japanese troop ship, was waiting. On board were 1,516 passengers, mostly Americans and Canadians who had been interned in Japanese-held Asia. It took several days for the cargo to be moved from one ship to another and just a few hours for the passengers to trade places for the voyage back to New York and Yokohoma. For the ecstatic Americans on the Gripsholm , ahead lay hot and cold running water, bountiful food and freedom. For the Japanese on board the Teia Maru , the future was far more uncertain. They were sailing to a country on the losing end of the war. On its return to Japan, the Teia Maru stopped in Singapore and the Philippines, where the Japanese military recruited people to serve as interpreters, translators and other support positions.
As the war continued to turn in the Allies' favor, the U.S. government's hopes of rescuing the thousands of Americans still imprisoned by the Japanese faded. Negotiations for another trade were derailed, in part because of Japanese ire over the U.S. attacks on Japanese hospital ships including the 1945 sinking of the Awa Maru .  There would be no third exchange.
Postwar and Legacy
America may have forsaken them, but the Gripsholm's children refused to give up on their homeland. After the war ended, many of the older Japanese American youth were hired by the Occupation forces as translators or support staff. Some enlisted in the U.S. military, eventually finding their way back to America. Most of the Issei stayed in Japan because of their advancing age and the legal barriers to returning to the U.S. in the years immediately after the war.
The 1988 Civil Liberties Act provided an apology and reparations to Japanese Americans interned during World War II, but did not compensate those who were sent to Japan during the war. A group of Gripsholm repatriates succeeded in getting the law amended to include those people who were U.S. citizens and minors when they were sent to Japan. Of the 124 who filed for redress, all but 16 had returned to the United States after the war. 
The Japanese Latin Americans brought to the United States during the war were excluded from the Civil Liberties Act because they were technically illegal aliens. But in 1996, a coalition of civil rights groups filed a class action lawsuit, Carmen Mochizuki et.al. v the United States , demanding redress. Two years later, the U.S. government agreed to provide Japanese Latin Americans with an apology and individual payments of $5,000.
Some Japanese Peruvians refused the settlement. Having exhausted their options under U.S. law, they filed a petition with the Inter-American Commission on Human Rights seeking redress from the U.S. government for war crimes and crimes against humanity. That petition is still pending. 
For More Information
Connell, Thomas. America's Japanese Hostages: the World War II Plan for a Japanese Free Latin America . Westport, Conn: Praeger, 2002. https://archive.org/details/americasjapanese00conn
Corbett, P. Scott. Quiet Passages: The Exchange of Civilians between the United State and Japan During the Second World War . Kent, Ohio: Kent State University Press, 1987.
Daniels, Roger. Concentration Camps USA: Japanese Americans and World War II . New York: Holt, Rinehart and Winston, 1970.
Elleman, Bruce. Japanese-American Civilian Prisoner Exchanges and Detention Camps, 1941-45 . London: Routledge, 2006.
Gardiner, C. Harvey. Pawns in a Triangle of Hate: the Peruvian Japanese and the United States . Seattle: University of Washington Press, 1981.
Innis, W. Joe, and Bill Bunton. In pursuit of the Awa Maru . New York: Bantam, 1981.
Knaefler, Tomi Kaizawa. Our House Divided: Seven Japanese American Families in World War II . Honolulu: University of Hawai'i Press, 1985.
Leck, Greg. Captives of Empire: the Japanese Internment of Allied Civilians in China, 1941-1945 . [Bangor, PA]: Shandy Press, 2006.
Miller, David. Mercy Ships: The Untold Story of Prisoner-of-War Exchanges in World War II . London; Continuum UK, 2008.
Miyamato, Atsushi Archie. The Gripsholm Exchanges (Manuscript), 2006. Revised, 2007.
Murakawa, Yōko, and Teruko Kumei. Nichi-Bei senji kōkansen sengo sōkansen "kikoku"sha ni kansuru kisoteki kenkyū: Nikkei Amerikajin no rekishi no shiten kara [A study on the "Japanese" repatriates and expatriates from the United States during and after World War II]. Tokyo: Toyota Zaidan, 1992.
Terasaki, Gwen. Bridge to the Sun . Chapel Hill: University of North Carolina Press, 1957.
Weglyn, Michi Nishiura. Years of Infamy: The Untold Story of America's Concentration Camps . Seattle and London: University of Washington Press. 1976, 1996.
- A Tribute to the SWEDISH AMERICAN LINE 1915-1975 , http://www.salship.se/mercy.php , accessed on November 25, 2014.
- Bruce Elleman, Japanese-American Civilian Prisoner Exchanges and Detention Camps, 1941-45 (London: Routledge, 2006), 17-19.
- Yōko Murakawa and Teruko Kumei, Nichi-Bei senji kōkansen sengo sōkansen "kikoku"sha ni kansuru kisoteki kenkyū: Nikkei Amerikajin no rekishi no shiten kara [A study on the "Japanese" repatriates and expatriates from the United States during and after World War II] (Tokyo: Toyota Zaidan, 1992), 95.
- "Says Few Japanese Agree to Return," New York Times , August 6, 1943.
- House Committee on the Judiciary House of Representatives, Subcommittee on Immigration, Citizenship, Refugees, Border Security, and International Law, Treatment of Latin Americans of Japanese Descent, European Americans, and Jewish Refugees During World War II , 111th Cong., 1st sess., March 19, 2009, 10-12.
- Graham H. Stuart, Special War Problems Division, Division of Research and Publication War Records File, CONFIDENTIAL, 81.
- Scott P. Corbett, Quiet Passages: The Exchange of Civilians between the United States and Japan During the Second World War (Kent, Ohio: the Kent State University Press, 1987), 93; Atsushi Archie Miyamato, The Gripsholm Exchanges (Manuscript) 2006, Revised 2007, 19.
- Tomi Kaizawa Knaefler, Our House Divided: Seven Japanese American Families in World War II (Honolulu: University of Hawai'i Press, 1995), 46-51; Ted T. Tsukiyama, "Eyewitness to History From Pearl to Hiroshima, Mitsuko Masaki Sumida Was Touched by the War," Hawaii Herald , Dec. 2, 2005.
- Department of Justice, Provisions for Persons of Japanese Ancestry: Guidelines for Individuals Who Relocated to Japan as Minors During World War II Federal Register Volume 61, Number 190, September 30, 1996.
- Inter-American Commission on Human Rights Report No 26/06, Petition 434-03 Admissibility Isamu Carlos Shibayama Et Al United States (*), March 16, 2006, http://www.cidh.oas.org/annualrep/2006eng/USA.434.03eng.htm , accessed on November 25, 2014.