A series of acts passed in 1935, 1936, 1937, and 1939 to limit U.S. involvement in possible future wars and that was created in response to the belief that U.S. involvement in World War I resulted from loans and trade with the Allies. The 1935 act banned the shipment of war materials to belligerents and forbade U.S. citizens to travel on belligerent vessels. The 1936 act banned loans to belligerents. The 1937 act extended these provisions to civil wars and allowed the president to restrict nonmunitions sales to a “cash-and-carry” basis. The 1939 act banned U.S. ships from carrying goods or passengers to belligerent ports but allowed U.S. sales of munitions on a “cash-and carry” basis. The Lend-Lease Act of 1941 diminished the laws, and they were repealed on November 13, 1941.
See the Introduction, Abbreviations and Pronunciation for further details.
The four Neutrality Acts of the late 1930s represented an effort to keep the United States out of "foreign" wars, an effort resulting in part from widespread questioning of the reasons for and results of America's participation in World War I. These laws, unlike U.S. policy in 1916-1917, limited the exercise of neutral rights as a way of protecting that neutrality. A characteristic of the acts was that they made no distinction between aggressor and victim; both sides were simply characterized as "belligerents."
The first Neutrality Act (August 1935), passed after Italy's attack on Ethiopia in May 1935, empowered the president, on finding a state of war, to declare an embargo on arms shipments to the belligerents and to announce that U.S. citizens traveling on belligerents' ships did so at their own risk. This act set no limits, however, on trade in materials useful for war, such as copper, steel, and oil. The 1935 act was replaced by the Neutrality Act of 1936 (February 29), which added a prohibition on extending loans or credits to belligerents.
The Spanish civil war, which broke out in July 1936, was not covered by existing neutrality legislation, which applied only to wars between nations; accordingly, Congress by joint resolution on January 6, 1937, forbade supplying arms to either side. When the 1936 law expired, the Neutrality Act of 1937 (May 1) included civil wars, empowered the president to add strategic materials to the embargo list, and made travel by U.S. citizens on belligerents' ships unlawful. The practical difficulties of maintaining neutrality became clear, however, when Japan's incursions into China led to the outbreak of fighting there on July 7, 1937. Since invoking the Neutrality Act would penalize China, which was more dependent than Japan on American assistance, President Franklin D. Roosevelt chose not to identify the fighting as a state of war.
The Neutrality Act of 1939 (November 4) contained a "cash and carry" formula devised by Bernard M. Baruch. Belligerents were again permitted to buy American arms and strategic materials, but they had to pay cash and to transport the goods in their own ships. This provision, it was believed, would prevent the United States from being drawn into war either by holding debt in some belligerent countries or by violating blockades while transporting supplies. In addition, the president was empowered to designate a "combat zone" in time of war, through which American citizens and ships were forbidden to travel.
On November 17, 1941, after repeated confrontations with German submarines in the North Atlantic and the torpedoing of the destroyer Reuben James, Congress amended the act to permit merchant vessels to arm themselves and to carry cargoes to belligerent ports. But three weeks later, Japan bombed Pearl Harbor and the United States was at war.
Neutrality Act, law passed by the U.S. Congress and signed by President Franklin Delano Roosevelt in Aug., 1935. It was designed to keep the United States out of a possible European war by banning shipment of war materiel to belligerents at the discretion of the President and by forbidding U.S. citizens from traveling on belligerent vessels except at their own risk. The demand for this legislation arose from the conviction of many Americans that U.S. entry into World War I had been a mistake. This conviction was strengthened by the well-publicized investigations by a Senate committee headed by Gerald P. Nye of American war loans to the Allies. The Neutrality Act was amended (Feb., 1936) to prohibit the granting of loans to belligerents, and later (Jan. and May, 1937) neutrality was extended to cover civil wars, a step inspired by the Spanish civil war. In Nov., 1939, the act was revised in favor of supplying warring nations on the "cash-and-carry" principle; but U.S. vessels were excluded from combat zones, and U.S. citizens were forbidden from sailing on belligerent vessels. These provisions were lifted by amendment in Nov., 1941, after the lend-lease policy had been established. The act was thus practically out of operation even before American neutrality ended with Pearl Harbor.
"Excerpt from Franklin D. Roosevelt's Quarantine Speech, October 5, 1937"
Without a declaration of war and without warning or justification of any kind, civilians, including vast numbers of women and children, are being ruthlessly murdered with bombs from the air. In times of so-called peace, ships are being attacked and sunk by submarines without cause or notice. Nations are fomenting and taking sides in civil war fare in nations that have never done them any harm. Nations claiming freedom for themselves deny it to others.
Innocent peoples, innocent nations are being cruelly sacrificed to a greed for power and supremacy which is devoid of all sense of justice and humane considerations. To paraphrase a recent author, "perhaps we foresee a time when men, exultant in the technique of homicide, will rage so hotly over the world that every precious thing will be in danger, every book, every picture, every harmony, every treasure garnered through two millenniums, the small, the delicate, the defenseless—all will be lost or wrecked or utterly destroyed."
If those things come to pass in other parts of the world, let no one imagine that America will escape, that America may expect mercy, that this Western hemisphere will not be attacked and that it will continue tranquilly and peacefully to carry on the ethics and the arts of civilization....
If those days are not to come to pass—if we are to have a world in which we can breathe freely and live in amity with out fear—then the peace-loving nations must make a con certed effort to uphold laws and principles on which alone peace can rest secure.
Between 1935 and 1939 Congress passed four neutrality acts to limit America's involvement in foreign conflicts. The political debate surrounding the neutrality acts reflected the evolving view of America's role in the world. Public opinion was shifting away from isolationism toward interventionism and collective security and the belief that America's best defense lay in cooperative efforts with other nations and international organizations. The acts also signify a power shift from the legislative to the executive branch in international affairs. Whereas Congress previously controlled the details of foreign policy programs, the acts increasingly granted the presidency and executive agencies leeway to implement new laws.
President Franklin D. Roosevelt signed the Neutrality Act of 1935 (P.L. 74-76, 49 Stat. 1081) into law on August 31. The act banned all arms and ammunition shipments to belligerent nations and placed America's armaments industry under federal control for six months. Following Italy's invasion of Ethiopia on October 3, 1935, Roosevelt declared the United States neutral and invoked the act to place a blanket ban on all weapons shipments to both countries and to prohibit Americans from traveling on ships registered in either nation.
The policy of American neutrality was ineffective in shaping the outcome of that conflict. Also, it disfavored Ethiopia because the act did not prohibit the significant trade in raw materials that Americans conducted with Italy. The State Department drafted broader neutrality legislation to address this imbalance, giving the president authority to implement embargoes selectively. Such authority would better reflect the administration's position toward warring countries. However, congressional isolationists rejected the measure as giving the president too much control over American trade. In the Neutrality Act of 1936, Congress simply extended the 1935 act by fourteen months and added a provision to prohibit private loans to belligerents.
Continuity and Change in the 1937 Act
The Neutrality Act of 1937 made the 1936 act permanent and included the basic provisions of its predecessors:
Whenever the President, or the Congress by concurrent resolution, shall find that there exists a state of war between foreign states, and that it is necessary to promote the security or preserve the peace of the United States or to protect the lives of citizens of the United States, the President shall issue a proclamation naming the states involved.... It shall thereafter be unlawful for any American vessel to carry any passengers or any article or materials to any state named in such proclamation ... [and] it shall be unlawful for any person to export, or attempt to export, from the United States to any other state, any arms, ammunition, or implements of war....
But the 1937 act also added a two-year "cash-and-carry" provision permitting Americans to trade with belligerents who paid cash and transported the goods on non-U.S. vessels following a declaration of neutrality:
It shall thereafter be unlawful to export or transport, or attempt to export or transport, or cause to be exported or transported, from the United States to any state named in such proclamation, any articles or materials (except copyrighted articles or materials) until all right, title, and interest therein shall have been transferred to some foreign government, agency, institution, association, partnership, corporation, or national.
Cash-and-carry gave the president the authority he had sought in 1935 to declare limited rather than blanket embargoes. The plan permitted the president to tailor the U.S. approach to the circumstances of unique conflicts and perhaps better reflect America's interests. However, critics noted that cash-and-carry would unequally benefit nations like Japan, England, and France, capable of paying cash and protecting their ships with strong navies.
The Shift Away from Neutrality
In response to the Sino-Japanese War of August 1937, Roosevelt avoided the issue of cash-and-carry altogether by not invoking the Neutrality Act. U.S. trade would therefore continue unrestrained with China and Japan. This decision and the president's Quarantine Speech on October 5, 1937, are perhaps the earliest outward signs that the Roosevelt administration viewed neutrality legislation as unrealistic, ineffective prescriptions for America's involvement in closely inter-connected issues of international politics, trade, and law. If anything, neutrality legislation had encouraged Germany and Italy to pursue their political interests knowing that the United States would likely not act to stop them.
In March 1939, after Germany marched into Czechoslovakia, Roosevelt sought to revise or eliminate neutrality legislation. In response to Germany's September 1, 1939, invasion of Poland, the president declared neutrality under the 1937 act but lobbied Congress to repeal the mandatory arms embargo. Over continued isolationist opposition from Senators William E. Borah, Arthur H. Vandendurg, Gerald P. Nye, and Robert M. La Follette, Jr., the Neutrality Act of 1939 gave the president this authority and laid the groundwork for the future Lend-Lease Act.
The neutrality acts had failed to achieve their primary goal of keeping the United States out of war, but they evolved into less restrictive measures that authorized the executive branch to respond to rapidly changing global events. Following World War II, Congress largely rejected the isolationism that had spawned neutrality legislation. The United States would thereafter play a leading role in international organizations like the United Nations and the North Atlantic Treaty Organization and the nation's foreign and defense policy would embrace an international outlook.
Bibliography
Divine, Robert A. The Reluctant Belligerent: American Entry into World War II, 2d ed. New York: Knopf, 1979.
The Neutrality Acts were laws that were passed by the United States Congress in the 1930s, in response to the growing turmoil in Europe and Asia. They were spurred by the growth in isolationism.
Democratic President Roosevelt and especially his Secretary of State Cordell Hull were critical of the Neutrality Acts, fearing that they would restrict the administration's options to support the country's allies. Even though both House and Senate had large Democratic majorities throughout these years, Roosevelt could not prevent passage of the acts, and reluctantly signed them, in the face of strong Congressional and public opinion.[1]
Roosevelt's State Department had lobbied for embargo provisions that would allow the President to impose sanctions selectively. This was rejected by Congress. The 1935 act, signed on August 31, 1935, imposed a general embargo on trading in arms and war materials with all parties in a war. It also declared that American citizens traveling on warring ships traveled at their own risk. The act was set to expire after six months.
Roosevelt invoked the act after Italy's invasion of Ethiopia in October 1935, preventing all arms and ammunition shipments to both countries. He also declared a "moral embargo" against the belligerents, covering trade not falling under the Neutrality Act.[2]
Neutrality Act of 1936
The Neutrality Act of 1936, passed in February of that year, renewed the provisions of the 1935 act for another 14 months. It also forbade all loans or credits to belligerents.
However, this act did not cover "civil wars," such as that in Spain (1936-1939), nor did it cover materials such as trucks and oil. U.S. companies such as Texaco, Standard Oil, Ford, General Motors, and Studebaker used this loophole to sell such items to Franco on credit. By 1939, Franco owed these and other companies more than $100,000,000.[3]
Neutrality Acts of 1937
In January 1937, the Congress passed a joint resolution outlawing the arms trade with Spain. The Neutrality Act of 1937, passed in May, included the provisions of the earlier acts, this time without expiration date, and extended them to cover civil wars as well. Further, U.S. ships were prohibited from transporting any passengers or articles to belligerents, and U.S. citizens were forbidden from traveling on ships of belligerent nations.
In a concession to Roosevelt, a "cash and carry" provision that had been devised by his advisor Bernard Baruch was added: the President could permit the sale of materials and supplies to belligerents in Europe as long as the recipients arranged for the transport and paid immediately in cash, with the argument that this would not draw the U.S. into the conflict. Roosevelt believed that cash and carry would aid France and Great Britain in the event of a war with Germany, since they were the only countries that controlled the seas and were able to take advantage of the provision.[1] The cash and carry clause was set to expire after two years.
Japan invaded China in July 1937, starting the Sino-Japanese War (1937-1945). President Roosevelt, who supported the Chinese side, chose not to invoke the Neutrality Acts since the parties had not formally declared war. In so doing, he ensured that China's efforts to defend itself would not be hindered by the legislation: China was dependent on arms imports and only Japan would have been able to take advantage of cash and carry. This outraged the isolationists in Congress who claimed that the spirit of the law was being undermined. Roosevelt stated that he would prohibit American ships from transporting arms to the belligerents, but he allowed British ships to transport American arms to China.[4] Roosevelt gave his Quarantine Speech in October 1937, outlining a move away from neutrality and towards "quarantining" all aggressors. He then imposed a "moral embargo" on exports of aircraft to Japan. [2]
Neutrality Act of 1939
Early in 1939, after Nazi Germany had invaded Czechoslovakia, Roosevelt lobbied Congress to have the cash and carry provision renewed. He was rebuffed, the provision lapsed, and the mandatory arms embargo remained in place. In September, after Germany had invaded Poland and Great Britain and France had subsequently declared war on Germany, Roosevelt invoked the provisions of the Neutrality Act but came before Congress and lamented that the Neutrality Acts may give passive aid to an aggressor.[5] He prevailed over the isolationists and on November 4th the Neutrality Act of 1939 was passed, allowing for arms trade with belligerent nations on a cash and carry basis, thus in effect ending the arms embargo. Furthermore, American ships were barred from entering war zones designated by the President.
End of neutrality policy
The end of neutrality policy came with the Lend-Lease Act of March 1941, which allowed the U.S. to sell, lend or give war materials to allied nations.
After repeated attacks by German submarines on U.S. ships, Roosevelt announced on 11 September 1941 that he had ordered the U.S. Navy to attack German and Italian war vessels in the "waters which we deem necessary for our defense". Following the sinking of the U.S. destroyer Reuben James on October 31, much of the provisions of the Neutrality Acts were repealed on November 17, 1941: merchant vessels were allowed to be armed and to carry any cargoes to belligerent nations. The U.S. formally declared war on Japan on 8 December 1941 following the attack on Pearl Harbor of the previous day; Germany and Italy declared war on the U.S. on 11 December 1941, and the U.S. responded with a declaration of war on the same day.
US History Companion. The Reader's Companion to American History, Eric Foner and John A. Garraty, Editors, published by Houghton Mifflin Company. All rights reserved. Read more
