The Neutrality Act of 1937

Instructor: Flint Johnson

Flint has tutored mathematics through precalculus, science, and English and has taught college history. He has a Ph.D. from the University of Glasgow

Learn about the U.S.'s Neutrality Act of 1937, which was supposed to keep the U.S. out of any more foreign wars. When you finish take the quiz and see what you've learned.

What Was the U.S. Like in 1937?

When the U.S. created the Neutrality Act of 1937 it was partly because the U.S. had always tried to stay away from wars that didn't have American interests and creating a neutrality act was a way of reminding the world that the country was keeping to that philosophy.

Gerald Nye, who chaired the Nye Committee
Gerald Nye

Another reason was because of what had happened in World War I. The common thinking was that wealthy businessmen had gotten the U.S. into the war so that they could make more money. The Nye Committee had investigated the munitions industry and came to the same conclusion. Several bestselling books of the time supported that thinking, too. Major General Butler's War is a Racket was a major influence on public opinion. The Neutrality Act of 1937, like the neutrality acts of 1935 and 1936, was designed to keep the U.S. out of another war.

Major General Smedley Butler, two-time Medal of Honor winner who wrote War is a Racket
Major General Butler

Neutrality Acts

In World War I, the sinking of the Lusitania had brought the U.S. into the war. The Lusitania had been a cruise ship that had been carrying arms and ammunition for the Allies. By the rules of war, it had been a legitimate target, but neutral U.S. citizens had been killed in the process.

The neutrality acts were an attempt to keep the U.S. out of the war by restricting what and how U.S. goods could be purchased and shipped. The act also restricted which countries could buy from the U.S and said that no U.S. business could sell war materials to any warring nation, regardless of whether they were the attacking or defending nation. U.S. citizens were cautioned not to travel on any ship whose country was at war. U.S. businesses were also forbidden from making loans or giving credit to any warring nation.

President Roosevelt didn't like how the acts controlled how much he could help friendly countries, like Britain against the Germans, but felt that he couldn't veto them because he needed to retain Congressional support in order to continue his domestic policies.

What Made 1937 Different?

The Neutrality Act of 1937 was different for several reasons. Previous acts had only lasted for a year to two years. This one had no expiration date. Before, the acts only covered two nations warring against each other. Because of the Spanish Civil War, the 1937 act also included nations involved in internal conflicts. U.S. citizens were now forbidden to sail on the ships of warring countries, too.

Since Roosevelt couldn't veto the bill, he managed to add an important clause to it called the cash and carry policy. At his discretion, he could allow a warring country to purchase war materials as long as it paid on the spot and arranged for its transportation without using U.S. ships. Roosevelt knew that Britain controlled the Atlantic Ocean, so that the act really only helped them and their allies. You see the U.S. was still neutral, but he had already sided with them long before the war had started.

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