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
Background History - The Aftermath of World War One
Background History - The Nye Committee Investigation
Neutrality Acts: American
Isolationism and Neutrality
FDR and the 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
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