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In 1937, when Japan invaded the Chinese mainland in the [[Second Sino-Japanese War]], the United States economy had relapsed into a depression and Roosevelt refused to apply the Neutrality Act but rather permitted arms shipments to China and Japan from United States arms manufacturers. The Neutrality Act did not require a declaration of war by an aggressor; it merely required the fact of war. The United States was the [[Nationalist Chinese]] government's only source of defense materials, while at the same time the United States was shipping six times as much to Japan as to China. The [[New Deal]] social programs needed the arms trafficing with Japan to keep people from becoming unemployed.  As one commentator observed, President Roosevelt defied the mandatory provisions of the Neutrality Act because his administration required that at this moment America needed some of that "fool's gold" from Japan.

In 1937, when Japan invaded the Chinese mainland in the [[Second Sino-Japanese War]], the United States economy had relapsed into a depression and Roosevelt refused to apply the Neutrality Act but rather permitted arms shipments to China and Japan from United States arms manufacturers. The Neutrality Act did not require a declaration of war by an aggressor; it merely required the fact of war. The United States was the [[Nationalist Chinese]] government's only source of defense materials, while at the same time the United States was shipping six times as much to Japan as to China. The [[New Deal]] social programs needed the arms trafficing with Japan to keep people from becoming unemployed.  As one commentator observed, President Roosevelt defied the mandatory provisions of the Neutrality Act because his administration required that at this moment America needed some of that "fool's gold" from Japan.

In December 1937 an American gunboat, the ''Panay'', was bombed in the Yangtse River in China in the heart of the Sino­-Japanese war area. Japan immediately apologized and agreed to pay full damages and to punish the guilty officers. Critics have observed, had the President taken care that the laws be faithfully executed under the Neutrality Act, ­ the ''Panay'' would not have been protecting American oil tankers delivering oil in the midst of two warring armies in China.  The purpose of the Neutrality Act was to avoid precisely an incident of this nature.  

In December 1937 an American gunboat, the ''Panay'', was bombed in the Yangtse River in China in the heart of the Sino­-Japanese war area. Japan immediately apologized and agreed to pay full damages and to punish the guilty officers. Critics have observed, had the President taken care that the laws be faithfully executed under the Neutrality Act, ­ the ''Panay'' would not have been protecting American oil tankers delivering oil in the midst of two warring armies in China.  The purpose of the Neutrality Act was to avoid precisely an incident of this nature.

 

 

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