In the roiling ’30s, the United States Government passed several Neutrality Acts with a view to not being drawn into foreign wars. The impetus was a growing sense in the American psyche that it had entered the First World War on behalf of bankers’ interests, rather than democracy. Critics at the time charged that bankers and munitions traders had driven the nation to war to safeguard their business interests in Europe.
The first Neutrality Act, signed into law on August 31, 1935, banned exporting “arms, ammunition, and implements of war” to belligerent nations and required export licenses for American manufacturers of armaments. This act also served as a warning to American tourists and travelers that crossing through war zones was at their own risk. President Franklin D. Roosevelt opposed the passage of the act but later gave in to persistent pressure from Congress and public opinion. In 1936, the Act was renewed and extended to cover an embargo on all loans to warring nations.
The Spanish Civil War and the rise of fascism in Europe led to the Neutrality Act of 1937, which further restricted U.S. involvement in foreign conflicts. The act forbade U.S. citizens from traveling on belligerent ships and barred American merchant ships from transporting arms to belligerents, even if those arms were produced outside the United States. By its terms, the President was authorized to exclude all belligerent ships from U.S. waters and to extend the export embargo to include more materials. The Act also treated civil wars as falling within the definition of a “war.”.
But the 1937 Act did contain one important concession to Roosevelt: the “cash-and-carry” provision. That permitted the belligerent nations to buy non-military goods from the United States, provided they paid cash for those goods and carried them on non-American ships. The obvious intent was to aid Great Britain and France, for they alone had the currency and shipping to take full advantage of this provision.
When Germany invaded Czechoslovakia in 1939, Roosevelt experienced a defeat as Congress refused to renew and extend the “cash-and-carry” provision to include sales of arms. As conditions continued to deteriorate in Europe, Congress approved a final Neutrality Act in November 1939. The act lifted the arms embargo, placing all trade with belligerent nations under the terms of “cash-and-carry,” while still forbidding loans and prohibiting American ships from carrying goods to belligerent ports.
By October 1941, America had committed to supporting the Allies through the Lend-Lease program. After Germany initiated more U-boat attacks, Congress repealed the sections of the Neutrality Acts that prohibited the arming of U.S. merchant ships and prevented American ships from entering belligerent ports or war zones.
The Neutrality Acts were something of a compromise, a balance between the isolationism of the American public and the need of the United States to be involved in some respect internationally. Ultimately, the terms of these Acts became moot when the United States entered World War II in December 1941, joining the Allies against Nazi Germany and Japan.