Neutrality Act

The Neutrality Act was an Act of Congress providing for the prohibition of the export of arms, ammunition, and implements of war to belligerent countries; the prohibition of the transportation of arms, ammunition, and implements of war by vessels of the United States for the use of belligerent states; for the registration and licensing of persons engaged in the business of manufacturing, exporting, or importing arms, ammunition, or implements of war; and restricting travel by American citizens on belligerent ships during war.

Background

At the White House on March 20, 1935, President Franklin Roosevelt told members of the Nye Committee that an Act should be prepared which would guarantee, in the event of a European war, the absolute neutrality of the American people. The Neutrality Act was introduced in the Senate and House and passed by very large majorities. It had a time limit of two years and at the expiration of the time limit it was passed again by enormous majorities in both houses.

President Roosevelt promptly applied the law when Italian Premier Benito Mussolini invaded Ethiopia in October 1935. When the Spanish Civil War broke out in July of 1936 Roosevelt discovered the Neutrality Act did not apply to civil wars, but only to wars between countries, Roosevelt requested of Congress to have the law amended immediately to apply to civil war, which Congress did and Roosevelt promptly declared the Neutrality Act in force as to Spain.

During the Presidential Election of 1936 Roosevelt said that "the effective maintenance of American neutrality depends today as in the past on the wisdom and determination of whoever at the moment occupies the office of President of the United States and Secretary of State." And he had warned that in the event of war abroad the United States would have to be on guard against those seeking "fool's gold," or war profits from the arms trade, those who would find it hard to look beyond, "to realize the inevitable penalties, the inevitable day of reckoning that comes from a false prosperity." America could keep out of war, "if those who watch and desire have a sufficiently detailed understanding of international affairs to make certain that the small decisions of today do not lead toward war and if at the same time they possess the courage to say no to those who selfishly or unwisely would lead us into war." This is what was called isolationism.

In 1937, when Japan invaded the Chinese mainland, 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 needed the arms trade 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 should get a little of that "fool's gold" from Japan.