The Neutrality Act

On 31 August 1935 President Franklin Delano Roosevelt signed a joint resolution of Congress known as the first Neutrality Act. It required the president, upon the outbreak of war between other states, to proclaim an embargo on the export from the United States of “arms, ammunition, or implements of war” to all belligerents, without distinguishing between aggressor and victim. Arms manufacturers and exporters had to register and obtain licences, American ships were forbidden to carry arms for belligerents, and the president could warn citizens that they travelled on the ships of warring nations at their own risk. The act was in force for six months, but it began a series of laws that until 1939 tied the hands of American policy towards Italian, German and Japanese aggression.

The “general ban on trade in arms and war materials” mentioned in many chronologies needs qualifying: the act covered only the arms, ammunition and implements of war listed in the presidential proclamation. Oil, steel, lorries and cotton were not subject to the embargo, which soon proved significant. The date of 31 August is the day of the president’s signature. Both houses of Congress had passed the resolution a few days earlier, in the closing days of the session.

Disillusionment with war

The act grew out of a conviction shared by most Americans in the mid-1930s: that the United States’ entry into the First World War in 1917 had been a mistake. More than 116,000 soldiers killed or dead of disease had brought neither lasting peace nor Europe’s gratitude. The Senate had rejected the Treaty of Versailles and membership of the League of Nations, and during the Great Depression the European debtors stopped repaying their war debts. An act sponsored by Senator Hiram Johnson and passed in April 1934 prohibited loans to governments in default on their obligations to the United States.

The thesis that America had been dragged into the war by bankers and arms manufacturers who had made fortunes from it was gaining ground. In 1934 Merchants of Death, a book about the international arms industry, became a bestseller. In April that year the Senate set up a special committee to investigate the munitions industry, chaired by Gerald Nye, a Republican senator from North Dakota. From September 1934 the Nye Committee questioned representatives of the DuPont company, the shipyards and the bank of J.P. Morgan, which in 1915–1917 had financed Entente purchases in America. The committee exposed high war profits, bribery in arms sales abroad and industry lobbying, although it did not prove that the bankers had decided on war. Public opinion nevertheless settled on the belief that cutting off the arms trade and credit to belligerents would be enough to keep America from being drawn into the next war.

An embargo for everyone

By the summer of 1935 a new war was in the air. Since the Walwal incident in December 1934 Benito Mussolini’s Italy had been openly preparing to attack Ethiopia, and in March 1935 Hitler had announced the reintroduction of universal conscription in Germany. The administration wanted the power to impose an embargo selectively, on the aggressor alone, and so to act in concert with the League of Nations. The Secretary of State, Cordell Hull, argued that a rigid law treating both sides in a war alike would weaken the victims of aggression.

Congress would not agree. Isolationists of both parties, among them Nye, Johnson and William Borah, the Republican senator from Idaho, believed that the right to choose whom to punish would allow the president to lead America towards war, as in their view Woodrow Wilson had done. The chairman of the Senate Foreign Relations Committee, the Democrat Key Pittman, drafted a compromise resolution with a mandatory, impartial embargo. Roosevelt did not veto it. He needed the support of Congress, including conservative Southern Democrats, for his New Deal legislation, and he faced an election in 1936. All he obtained was that the act would expire after six months, on 29 February 1936. On signing it he warned that its wholly inflexible provisions might have the opposite effect to that intended and “drag us into war instead of keeping us out”.

What the act contained

The first section obliged the president, upon the outbreak of war between two or more states, to proclaim an embargo on the export of arms, ammunition and implements of war to belligerent states or to neutral states for transshipment to belligerents. The president determined what fell into this category and could extend the embargo to states that later joined the war. The act established a National Munitions Control Board chaired by the Secretary of State. All manufacturers, exporters and importers of arms had to register with it, and every export required a licence. An Office of Arms and Munitions Control was set up in the State Department for the purpose. Other sections forbade American ships to carry arms for belligerents, allowed the president to close ports to belligerent submarines and to proclaim that Americans travelling on belligerent ships did so at their own risk. This last provision was a direct response to the memory of the sinking of the Lusitania in 1915, which had pushed America towards war with Germany.

The test in Ethiopia

Five weeks later, on 3 October 1935, Italy attacked Ethiopia. On 5 October Roosevelt proclaimed an arms embargo on both sides, even though neither had declared war. The law’s victim turned out to be the country attacked. Italy had its own arms industry; Ethiopia, poor and landlocked, could rely only on purchases abroad. American firms, on the other hand, were free to sell Italy oil, lorries and metals, and their exports to Italy and the Italian colonies in Africa rose markedly in the following months. Hull and the Secretary of the Interior, Harold Ickes, called on businessmen to observe a “moral embargo” – a voluntary restriction of sales – but without legal sanctions the appeals achieved little. The League of Nations, having imposed sanctions on Italy, did not extend them to oil. One of the arguments against an oil embargo was precisely that America would supply the fuel anyway.

The later acts

The first act set the course for the whole decade. On 29 February 1936 Congress extended it to 1 May 1937 and added a ban on loans and credits to belligerents. When civil war broke out in Spain in the summer of 1936, a conflict the act did not cover, the administration declared a “moral embargo”, and in January 1937 Congress passed a separate resolution banning arms exports to Spain. This struck at the legitimate government of the Republic, since General Franco’s Nationalists were receiving arms from Germany and Italy. On 1 May 1937 a third, permanent act came into force. It extended the provisions to civil wars, forbade Americans to travel on belligerent ships and introduced, for two years, the “cash and carry” principle: belligerents could buy goods other than arms in the United States provided they paid in cash and carried them away in their own ships. The principle favoured Britain and France, which commanded the seas.

When Japan began its war with China in July 1937, Roosevelt did not invoke the act, taking advantage of the fact that neither side had declared war. An embargo would have hit China, which had to buy its arms abroad. In January 1938 the House of Representatives, by a narrow majority of 209 to 188, refused to bring to the floor a proposed constitutional amendment by the Democrat Louis Ludlow that would have required a nationwide referendum before any declaration of war, except in the case of an attack on the United States.

Significance

The Neutrality Acts were the American version of appeasement. They were meant to keep America out of war, but in practice they told aggressors that they had no need to fear American help for their victims. Hitler and Mussolini, as well as the Japanese military, followed the debates in Congress closely and drew conclusions about the weakness of democracy. In the spring of 1939, after Germany’s seizure of the Czech lands, Roosevelt tried to have the arms embargo lifted, but Congress refused, and the “cash and carry” principle, which lapsed in May, was not renewed.

When Germany invaded Poland on 1 September 1939 and Britain and France declared war on it on 3 September, Roosevelt was obliged on 5 September to proclaim an arms embargo on all the belligerents, including Poland and its allies. Only on 4 November 1939, after Poland’s defeat in September, did a new Neutrality Act lift the embargo and permit arms sales for cash and on foreign ships, which in practice served the British and French. In 1940 came the destroyers-for-bases deal, in March 1941 the Lend-Lease Act, and in November 1941, after clashes with German submarines in the Atlantic, Congress repealed the key provisions of the neutrality legislation. A month later the attack on Pearl Harbor brought to an end the era that the act of 31 August 1935 had begun.