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Neutrality Acts

Franklin D Roosevelt

Neutrality Acts: Franklin D Roosevelt was the 32nd American President who served in office from March 4, 1933 to April 12, 1945. One of the important events during his presidency was the passage of the Neutrality Acts in response to the growing turmoil in Europe and Asia.

Definition and Summary of the Neutrality Acts
Summary and definition:
The Neutrality Acts of the mid-1930's were a series of laws that were passed in response to the growing turmoil in Europe and Asia. The Neutrality Acts were designed to prevent the United States of America from being entangled in a possible foreign war.

The demand for this type of legislation arose from American's support of the policy of Isolationism and the conviction, fuelled by the Nye Committee report, that the U.S. entry into World War I had been a mistake.

The series of Neutrality Acts imposed embargoes on trading in arms and war materials to any countries at war. American ships and citizens were then barred from traveling on belligerent ships or entering war zones. The Neutrality Act of 1939 was revised in favor of supplying warring nations (Great Britain and France) on the "cash-and-carry" principle, ending the arms embargo. The provisions made under the Neutrality Acts were lifted by amendment in November 1941 after the Lend-Lease Act was passed by Congress.

Neutrality Acts: Background History - The Effects of Great Depression spread Worldwide
The year of 1929 saw the Stock Market Crash and the United States was plunged into the Great Depression (1929 to 1939). By 1933 12 million people (25% of the population) were unemployed and millions had become homeless. President Franklin D. Roosevelt and the American people were occupied with recovery from the economic crisis. The last thing the nation wanted, or needed, was to be dragged into another major international war. The devastating effects the Great Depression were felt in virtually every other country in the world and in June 1934 all of the debtor European countries, except Finland, announced that they would no longer pay the war debts that were still outstanding from World War One.

Neutrality Acts: Background History - The Aftermath of World War One
The American people watched in horror at the rise of the dictators and the emergence of Fascism and Nazism in Europe and began to wonder whether the deaths and sacrifices of WW1 had been worthwhile. Americans were expressing serious doubts as to the reasons they had become involved in WW1 in the first place and many believed that the money made by arms manufacturers had played a major role in the US involvement in the Great War.

Neutrality Acts: Background History - The Nye Committee Investigation
In 1934 the Nye Committee, aka the Special Committee on Investigation of the Munitions Industry, was established to investigate the financial interests behind the United States involvement in World War I. The Nye Committee was a seven man United States Senate committee chaired by U.S. Senator Gerald P. Nye that conducted hearings and investigations from September 1934 to February 1936. The Nye Committee investigations covered the background leading up to U.S. entry into WW1, the munitions industry, the bidding process on Government contracts in the shipbuilding industry and War profits. The Nye Committee Report documented the massive profits that arms factories had made during World War 1 and the excessive influence the munitions manufacturers had held on American foreign policy leading up to and during WW1.

Neutrality Acts: American Isolationism and Neutrality
The Nye Committee Report resulted in more Americans supporting the policies of American Isolationism and Neutrality. The situation in Europe during the 1930's, with the aggressive and expansionist polices of Germany and Italy, made the possibility of another international war likely. In August 1935 Italy invaded Ethiopia (Abyssinia). Congress therefore passed the first Neutrality Act in 1935 that made it illegal to sell arms to any countries at war. The Neutrality Act in 1935 was based on the belief that the sale of arms and munitions had helped bring the US into WW1.

FDR and the Neutrality Acts
President Roosevelt feared that Neutrality Acts would restrict the government's ability to help and support friendly nations. FDR preferred the policy of Internationalism in the belief that international trade increased prosperity and helped prevent war between nations. However, the president did not want to anger public opinion and did not exert a presidential veto. The first Neutrality Act of 1935 was therefore passed but additional Neutrality laws were enacted in reaction to more shocking events that unfolded in Europe. FDR later used a loophole in the Neutrality Acts to set up the Destroyers-for-Bases deal with Great Britain.

Facts about Neutrality Acts
The following fact sheet contains interesting facts and information on Neutrality Acts.

The first of the Neutrality Acts was prompted in August 1935 as a result of Italy's invasion of Ethiopia (Abyssinia).

The 1935 Neutrality Act prohibited Americans from selling arms to any country at war by banning the export of “arms, ammunition, and implements of war” from the United States to foreign nations at war.

The 1935 Neutrality Act also required that arms manufacturers in the United States had to apply for an export license

On February 29, 1936, Congress revised the Act prohibiting Americans from extending any loans to belligerent nations as European nations stated that they would no longer pay the war debts that were still outstanding from WW1.

The Neutrality Act of 1937 was passed as a result of the Spanish Civil War and ensured that civil wars would also fall under the terms of the Act. No mention of civil conflicts had been made in the previous act and a number of American companies such as Standard Oil, Texaco, General Motors and Ford had used the loophole to sell various items to Franco on credit. The law made it illegal for US citizens to sell arms to belligerents in Civil Wars.

The 1937 law prevented American merchant ships from transporting arms to belligerents, even if those arms were produced outside of the United States and forbade travel by U.S. citizens on ships of belligerents. The 1937 Act also gave the President the authority to bar all belligerent ships from U.S. waters

The Neutrality Act of 1937 included a "cash and carry" provision. The sale of arms was still banned to all nations at war but it also required that countries at war, who wanted to purchase non-military supplies from the US, could only buy on a "cash and carry" basis. If a country at war wanted to buy non-military items from the US, it had to pay cash and send its own ships to pick up the goods.

The "cash and carry" provision of May 1937 was seen as a means to aid Great Britain and France in the event of a war with Germany and Italy. Due to the geographic location of Britain and France and their considerable naval powers these were the only two nations that controlled the seas and would therefore by able to take advantage of the "cash and carry" transactions.

Japan invaded China in July of 1937 starting the Sino-Japanese War. The United States and Britain supported China against the action of the Japanese. Although the US  remained neutral, British ships were able to transport American arms to China.

In March 1939, after Germany marched into Czechoslovakia, Roosevelt tried to eliminate neutrality legislation. In response to Germany's invasion of Poland on September 1, 1939 Britain and France declared war on Germany on September 3, 1939.

The Neutrality Act of 1939 was passed in order to help Britain and France against Germany and Hitler. The 1939 law eliminated the ban on arms sales to nations at war but the "cash-and-carry" principle was left in place, making Britain and France the beneficiaries of the law.

The 1939 law also excluded U.S. vessels from combat zones, and U.S. citizens were forbidden from sailing on belligerent vessels.

In the spring of 1940 President Roosevelt used a loophole in the Neutrality Acts to set up the 'Destroyers for Bases' agreement in which the US sent 50 old American destroyers to Great Britain in exchange for the right to build American bases on British controlled islands in Bermuda, the Caribbean and Newfoundland. As the 'Destroyers for Bases' deal did not involve the actual sale of the destroyers the Neutrality Acts did not apply.

The provisions made under the Neutrality Acts were lifted by amendment in November 1941, after the Lend-Lease Act was passed by Congress enabled the US to lend, sell or give war supplies to allied nations. Refer to US Mobilization for WW2

US American History
1929-1945: Depression & WW2

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