The Neutrality Acts were a series of laws enacted by the United States government between 1935 and 1939 that were intended to prevent the United States from becoming involved in foreign wars. They more-or-less succeeded until the imminent threat of World War II spurred passage of the 1941 Lend-Lease Act (H.R. 1776), which repealed several key provisions of the Neutrality Acts.
Key Takeaways: Neutrality Acts and Lend-Lease
- The Neutrality Acts, enacted between 1935 and 1939, were intended to prevent the United States from becoming involved in foreign wars.
- In 1941, the threat of World War II drove passage of the Lend-Lease Act repealing key provisions of the Neutrality Acts.
- Championed by President Franklin D. Roosevelt, the Lend-Lease Act authorized the transfer of U.S. arms or other war materials to Britain, France, China, the Soviet Union, and other nations threatened by the Axis powers without the requirement of monetary repayment.
Isolationism Spurred the Neutrality Acts
Although many Americans had supported President Woodrow Wilson’s 1917 demand that Congress help create a world “made safe for democracy” by declaring war on Germany in World War I, the Great Depression of the 1930s spurred a period of American isolationism that would persist until the nation entered World War II in 1942.
Many people continued to believe that World War I had involved mainly foreign issues and that America’s entry into the bloodiest conflict in human history had mainly benefited U.S. bankers and arms dealers. These beliefs, combined with the people’s ongoing struggle to recover from the Great Depression, fueled an isolationist movement that opposed the nation’s involvement in future foreign wars and financial involvement with the countries fighting in them.
The Neutrality Act of 1935
By the mid-1930s, with a war in Europe and Asia imminent, the U.S. Congress took action to ensure U.S. neutrality in foreign conflicts. On August 31, 1935, Congress passed the first Neutrality Act. The primary provisions of the law banned the export of “arms, ammunition, and implements of war” from the United States to any foreign nations at war and required U.S. arms makers to apply for export licenses. “Whoever, in violation of any of the provisions of this section, shall export, or attempt to export, or cause to be exported, arms, ammunition, or implements of war from the United States, or any of its possessions, shall be fined not more than $10,000 or imprisoned not more than five years, or both …,” stated the law.
The law also specified that all arms and war materials found being transported from the U.S. to any foreign nations at war, along with the “vessel, or vehicle” carrying them would be confiscated.
In addition, the law placed American citizens on notice that if they attempted to travel to any foreign nation in a war zone, they did so at their own risk and should not expect any protection or intervention on their behalf from the U.S. government.
On February 29, 1936, Congress amended the Neutrality Act of 1935 to prohibit individual Americans or financial institutions from loaning money to foreign nations involved in wars.
While President Franklin D. Roosevelt initially opposed and considered vetoing the Neutrality Act of 1935, he signed it in the face of strong public opinion and congressional support for it.
The Neutrality Act of 1937
In 1936, the Spanish Civil War and the growing threat of fascism in Germany and Italy boosted support for further expanding the scope of the Neutrality Act. On May 1, 1937, Congress passed a joint resolution known as the Neutrality Act of 1937, which amended and made the Neutrality Act of 1935 permanent.
Under the 1937 Act, U.S. Citizens were barred from traveling on any ship registered to or owned by any foreign nation involved in awar. In addition, American merchant ships were forbidden from carrying arms to such “belligerent” nations, even if those arms were made outside of the United States.The president was given the authority to ban all ships of any sort belonging to nations at war from sailing in U.S. waters. The Act also extended its prohibitions to apply to nations involved in civil wars, like the Spanish Civil War.
In one concession to President Roosevelt, who had opposed the first Neutrality Act, the 1937 Neutrality Act gave the president the authority to allow nations at war to acquire materials not considered “implements of war,” such as oil and food, from the United States, provided the material was immediately paid for – in cash – and that the material was carried only on foreign ships. The so-called “cash-and-carry” provision had been promoted by Roosevelt as a way to Help Great Britain and France in their looming war against the Axis Powers. Roosevelt reasoned that only Britain and France had enough cash and cargo ships to take advantage of the “cash-and-carry” plan. Unlike other provisions of the Act, which were permanent, Congress specified that that “cash-and-carry” provision would expire in two years.
The Neutrality Act of 1939
After Germany occupied Czechoslovakia in March of 1939, President Roosevelt asked Congress to renew the “cash-and-carry” provision and expand it to include arms and other materials of war. In a stinging rebuke, Congress refused to do either.
As the war in Europe expanded and the Axis nations’ sphere of control spread, Roosevelt persisted, citing the Axis threat to the freedom of America’s European allies. At last, and only after lengthy debate, Congress relented and in November of 1939, enacted a final Neutrality Act, which repealed the embargo against the sale of arms and placed all trade with nations at war under the terms of “cash-and-carry.” However, the prohibition of U.S. monetary loans to belligerent nations remained in effect and U.S. ships were still prohibited from delivering goods of any kind to countries at war.
The Lend-Lease Act of 1941
By the summer of 1940, Nazi forces under Adolf Hitler had taken France, leaving Britain standing virtually alone against seemingly invincible Germany. After incoming British Prime Minister, Winston Churchill personally asked the United States for help, President Roosevelt agreed to exchange more than 50 outdated American naval destroyers for 99-year leases on British bases in the Caribbean and Newfoundland, which the U.S. would use as air and naval bases.
In December 1940, with Britain’s cash and gold reserves rapidly dwindling, Churchill informed Roosevelt that Britain would soon be unable to pay cash for military supplies or shipping. Though he promised to keep America out of World War II in his recent reelection campaign, Roosevelt wanted to support Great Britain against Germany. After hearing Churchill’s appeal, he began working to convince Congress—and the American people—that providing more direct aid to Britain was in the nation’s best interest.
Roosevelt’s Great Arsenal of Democracy
In mid-December 1940, Roosevelt introduced a new policy initiative whereby the United States would lend, rather than sell, military supplies to Great Britain for use in the fight against Germany. Payment for the supplies would be deferred and could come in any form Roosevelt deemed satisfactory.
“We must be the great arsenal of democracy,” Roosevelt declared in one of his signature “fireside chats” on December 29, 1940. “For us, this is an emergency as serious as war itself. We must apply ourselves to our task with the same resolution, the same sense of urgency, the same spirit of patriotism and sacrifice as we would show were we at war.”
By late 1940, it had become unavoidably apparent to Congress that the growth of the Axis powers in Europe could eventually threaten the lives and freedom of Americans. In an effort to help the nations fighting the Axis, Congress enacted the Lend-Lease Act (H.R. 1776) in March 1941.
The Lend-Lease Act authorized the President of the United States to transfer arms or other defense-related materials – subject to theapproval of funding by Congress – to the “government of any country whose defense the President deems vital to the defense of the United States” at no cost to those countries.
Permitting the President to send arms and war materials to Britain, France, China, the Soviet Union, and other threatened nations without payment, the Lend-Lease plan allowed the United States to support the war effort against the Axis without becoming engaged in battle.
Viewing the plan as drawing America closer to war, Lend-Lease was opposed by influential isolationists, including Republican Senator Robert Taft. In debate before the Senate, Taft stated that the Act would “give the president power to carry on a kind of undeclared war all over the world, in which America would do everything except actually put soldiers in the front-line trenches where the fighting is.” Among the public, opposition to Lend-Lease was led by the America First Committee. With a membership of over 800,000, including national hero Charles A. Lindbergh, America First challenged Roosevelt’s every move.
Roosevelt took complete control of the program, quietly sending Sec. of Commerce Harry Hopkins, Sec. of State Edward Stettinius Jr., and diplomat W. Averell Harriman on frequent special missions to London and Moscow to coordinate Lend-Lease overseas. Still acutely aware of public sentiment for neutrality, Roosevelt saw to it that details of Lend-Lease expenditures were hidden away in the overall military budget and not allowed to become public until after the war.
It is now known that a total of $50.1 billion—about $681 billion today—or about 11% of the total U.S. war expenditures went to Lend-Lease. On a country-by-country basis, U.S. expenditures broke down as follows:
- British Empire: $31.4 billion (about $427 billion today)
- Soviet Union: $11.3 billion (about $154 billion today)
- France: $3.2 billion (about $43.5 billion today)
- China: $1.6 billion (about to $21.7 billion today)
By October 1941, the overall success of the Lend-Lease plan in assisting the allied nations prompted President Roosevelt to seek the repeal of other sections of the Neutrality Act of 1939. On October 17, 1941, the House of Representatives overwhelmingly voted to repeal the section of the Act prohibiting the arming of U.S. merchant ships. A month later, following a series of deadly German submarine attacks on U.S. Navy and merchant ships in international waters, Congress repealed the provision that had barred U.S. ships from delivering arms to belligerent seaports or “combat zones.”
In retrospect, the Neutrality Acts of the 1930s allowed the U.S. Government to accommodate the isolationist sentiment held by a majority of the American people while still protecting America’s security and interests in a foreign war.
The Lend-Lease agreements provided that the countries involved would repay the United States not with money or returned goods, but with “joint action directed towards the creation of a liberalized international economic order in the postwar world.” Meaning the U.S. would be repaid when the recipient country helped the U.S. fight common enemies and agreed to join new world trade and diplomatic agencies, such as the United Nations.
Of course, the isolationists’ hopes of America maintaining any pretense of neutrality in World War II ended on the morning of December 7, 1942, when the Japanese Navy attacked the U.S. naval base at Pearl Harbor, Hawaii.