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Under the American Neutrality Act of 1937 the US was forbidden from supplying weapons to any country involved in a war. "Cash and Carry" is the term applied to an amendment to the Neutrality Act in 1939 that allowed countries to purchase weapons and war materials from the US provided they were paid for in cash and were transported in the purchasers own ships.

Initially, the system worked to advantage of both buyer and seller by allowing the US to remain neutral (by not delivering the goods themselves) and providing Britain and France with the weapons they urgently needed (both Britain and France had large shipping fleets able to transport the goods themselves).

However, the system soon stumbled when France was defeated less than a year later leaving Britain to fight on alone. As cash was required for the purchases Britain was rapidly approaching bankruptcy. To overcome this problem the "Lend-Lease" act was passed by Congress in 1941, under which the US was able to lend, lease or exchange war materials with other nations - namely Britain. In effect, Britain was then able to buy now and pay later.

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12y ago

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