CANADA HISTORY - DOCUMENTS WAR

1937 The Neutrality Act

Analysis of the Document - (The Document follows below the Analysis)

The 1937 Neutrality Act was a significant piece of U.S. legislation that sought to prevent the United States from becoming entangled in foreign wars. While its direct implications on Canada may seem peripheral at first, the act played a crucial role in shaping North American geopolitics and indirectly influenced Canada's foreign policy, economic position, and military preparedness leading up to World War II.

Designed in the aftermath of World War I, the Neutrality Act was rooted in the desire to avoid the entanglements that had dragged the U.S. into the Great War. This isolationist sentiment was deeply popular in the U.S. at the time, and the act was meant to limit American involvement in the increasingly volatile political situation in Europe and Asia. It prohibited the export of arms and munitions to belligerents, restricted American ships from transporting goods to warring nations, and sought to protect the country from becoming a target by severing economic and military ties to conflicts overseas.

For Canada, the implications of the U.S. adopting a stance of strict neutrality were complex. By 1937, tensions were rising across Europe and the Pacific, with Canada maintaining close diplomatic and military ties to Britain and the Commonwealth. Unlike its southern neighbor, Canada was poised to participate in any British-led war effort, and the enactment of the Neutrality Act presented a challenge to Canada’s role within the Allied framework. While Canada was not directly restricted by the U.S. legislation, the act complicated the relationship between the two countries, particularly in terms of defense and military collaboration.

In the years leading up to World War II, Canada found itself walking a fine line between its obligations to the British Empire and its geographic and economic interdependence with the United States. The Neutrality Act meant that, at least initially, Canada could not rely on its powerful neighbor for military or material support, as the U.S. was bound to avoid engagement in any overseas conflicts. As a result, Canada was forced to rely heavily on Britain for military supplies and strategy, and had to make difficult decisions about how best to defend its own borders in the event of a conflict.

Economically, the Neutrality Act had a significant impact on Canadian-American trade. The prohibition on arms sales to belligerent nations meant that American manufacturers were unable to export to Britain or other Allied nations, and Canada had to assume a greater role in supplying Britain with war material. This led to a period of rapid industrial expansion in Canada, as the nation ramped up its manufacturing capacity to meet the growing demands of the British war effort. At the same time, Canadian companies were able to capitalize on the vacuum left by the American arms embargo, positioning Canada as an essential supplier of munitions, ships, and aircraft to the Allies.

The eventual repeal of the Neutrality Act in 1941, following the outbreak of World War II and the attack on Pearl Harbor, marked a turning point in Canadian-American relations. With the United States finally entering the war, Canada and the U.S. forged a new, more robust defense partnership, culminating in joint operations in both the Atlantic and Pacific theaters. The initial period of U.S. neutrality, however, forced Canada to build a more self-sufficient military and industrial base, which had lasting effects on its postwar economy and global standing.

In retrospect, the 1937 Neutrality Act served as a defining moment in the evolution of Canadian-American relations. It underscored the challenges Canada faced as a middle power, tied to the British Empire yet geographically linked to the United States. The act influenced Canada's diplomatic strategies, economic policies, and military decisions, shaping its role in the international order during the critical prelude to World War II.

May 1, 1937

JOINT RESOLUTION

To amend the joint resolution, approved August 31, 1935, as amended.

Resolved...

EXPORT OF ARMS, AMMUNITION, AND IMPLEMENTS OF WAR

Section 1. (a) Whenever the President shall find that there exists a state of war between, or among, two or more foreign states, the President shall proclaim such fact, and it shall thereafter be unlawful to export, or attempt to export, or cause to be exported, arms, ammunition, or implements of war from any place in the United States to any belligerent state named in such proclamation, or to any neutral state for transshipment to, or for the use of, any such belligerent state. (b) The President shall, from time to time, by proclamation, extend such embargo upon the export of arms, ammunition, or implements of war to other states as and when they may become involved in such war. (c) Whenever the President shall find that such a state of civil strife exists in a foreign state and that such civil strife is of a magnitude or is being conducted under such conditions that the export of arms, ammunition, or implements of war from the United States to such foreign state would threaten or endanger the peace of the United States, the President shall proclaim such fact, and it shall thereafter be unlawful to export, or attempt to export, or cause to be exported, arms, ammunition, or implements of war from any place in the United States to such foreign state, or to any neutral state for transshipment to, or for use of, such foreign state. (d) The President shall, from time to time by proclamation, definitely enumerate the arms, ammunition, and implements of war, the export of which is prohibited by this section. The arms, ammunition, and implements of war so enumerated shall include those enumerated in the President's proclamation Numbered 2163, of April 10, 1936, but shall not include raw materials or any other articles or materials not of the same general character as those enumerated in the said proclamation, and in the Convention for the Supervision for the International Trade in Arms and Ammunition and in Implements of War, signed at Geneva June, 17, 1925. (e) Whoever, in violation of any of the provisions of this Act, shall export, or attempt to export, or cause to be exported, arms, ammunition, or implements of war from the United States shall be fined not more than $10,000, or imprisoned not more than five years, or both... (f) In the case of the forfeiture of any arms, ammunition, or implements of war by reason of a violation of this Act, ... such arms, ammunition, or implements of war shall be delivered to the Secretary of War for such use or disposal thereof as shall be approved by the President of the United States. (g) Whenever, in the judgment of the President, the conditions which have caused him to issue any proclamation under the authority of this section have ceased to exist, he shall revoke the same, and the provisions of this section shall thereupon cease to apply with respect to the state or states named in such proclamation, except with respect to offenses committed, or forfeiture incurred, prior to such revocation.

EXPORT OF OTHER ARTICLES AND MATERIALS

Section 2. (a) Whenever the President shall have issued a proclamation under the authority of section 1 of this Act and he shall thereafter find that the placing of restrictions on the shipment of certain articles or materials in addition to arms, ammunition, and implements of war from the United States to belligerent states, or to a state wherein civil strife exists, is necessary to promote the security or preserve the peace of the United States or to protect the lives of citizens of the United States, he shall so proclaim, and it shall thereafter be unlawful, for any American vessel to carry such articles or materials to any belligerent state, or to any state wherein civil strife exists, named in such proclamation issued under the authority of section 1 of this Act, or to any neutral state for transshipment to, or for the use of, any such belligerent states or any such state wherein civil strife exists. The President shall by proclamation from time to time definitely enumerate the articles and materials which is shall be unlawful for American vessels to so transport... (c) The President shall from time to time by proclamation extend such restrictions as are imposed under the authority of this section to other states as and when they may be declared to become belligerent states under the authority of section 1 of this Act. (d) The President may from time to time change, modify, or revoke in whole or in part any proclamations issued by him under the authority of this section. (e) Except with respect to offenses committed, or forfeitures incurred, prior to May 1, 1939, this section and all proclamations issued thereunder shall not be effective after May 1, 1939.

FINANCIAL TRANSACTIONS

Section 3. (a) Whenever the President shall have issued a proclamation under the authority of section 1 of this Act, it shall thereafter be unlawful for any person within the United States to purchase, sell, or exchange bonds, securities, or other obligations of the government of any belligerent state or of any state wherein civil strife exists, named in such proclamation, or of any political subdivision of any such state, or of any person acting for or on behalf of the government of any such state, or of any faction or asserted government within any such state wherein civil strife exists, or of any person acting for or on behalf of any faction or asserted government within any such state wherein civil strife exists, issued after the date of such proclamation, or to make any load or extend any credit to any such government, political subdivision, faction, asserted government, or person, or to solicit or receive any contribution for any such government, political subdivision, faction, asserted government, or person: PROVIDED, That if the President shall find that such action will serve to protect the commercial or other interest of the United States or its citizens, he may, in his discretion, and to such extent and under such regulations as he may prescribe, except from the operation of this section ordinary commercial credits and short-time obligations in aid of legal transactions and of a character customarily used in normal peacetime commercial transactions. Nothing in this subsection shall be construed to prohibit the solicitation or collection of funds to be used for medical aid and assistance, or for food and clothing to relieve human suffering, when such solicitation or collection of funds is made on behalf of and for use by any person or organization which is not acting for or on behalf of any such government, political subdivision, faction, or asserted government, but all such solicitations and collections of funds shall be subject to the approval of the President and shall be made under such rules and regulations as he shall prescribe.... (c) Whoever shall violate the provisions of this section or of any regulations issued hereunder shall, upon conviction thereof, be fined not more than $50,000 or imprisoned for not more than five years, or both. Should the violation be by a corporation, organization, or association, each officer or agent thereof participating in the violation may be liable to the penalty herein prescribed....

EXCEPTIONS - AMERICAN REPUBLICS

Section 4. This Act shall not apply to an American republic or republics engaged in war against a non-American state or states, provide the American republic is no cooperating with an non-American state or states in such a war

NATIONAL MUNITIONS CONTROL BOARD

Section 5. (a) There is hereby established a National Munitions Control Board (herein after referred to as the 'Board') to carry out the provisions of this Act. The board shall consist of the Secretary of State, who shall be chairman and executive officer of the Board, the Secretary of the Treasury, the Secretary of War, the Secretary of the Navy, and the Secretary of Commerce. Except as otherwise provided in this Act, or by other law,. the administration of this Act is vested in the Department of State. The Secretary of State shall promulgate such rules and regulations with regard to the enforcement of this section as he may deem necessary to carry out its provisions. The Board shall be convened by the chairman and shall hold at least one meeting a year. (b) Every person who engages in the business of manufacturing, exporting, or importing any of the arms, ammunition, or implements of war referred to in this Act, whether as an exporter, importer, manufacturer, or dealer, shall register with the Secretary of States his name, place of business, and places of business in the United States, and a list of the arms, ammunition, and implements of war which he manufactures, imports, or exports. (c) Every person required to register under this section shall notify the Secretary of State of any change in the arms, ammunition, or implements of war which he exports, imports, or manufactures;... (d) It shall be unlawful for any person to export, or attempt to export, from the United States to any other state, any of the arms, ammunition, or implements of war referred to in this Act, or to import, or attempt to import, to the United States from any other state, any of the arms, ammunition, or implements of war referred to in this Act, without first having obtained a license therefor. ... (k) The President is hereby authorized to proclaim upon recommendation of the Board from time to time a list of articles which shall be considered arms, ammunition, and implements of war for the purposes of this section.

AMERICAN VESSELS PROHIBITED FROM CARRYING ARMS TO BELLIGERENT STATES

Section 6. (a) Whenever the President shall have issued a proclamation under the authority of section 1 of this Act, it shall thereafter be unlawful, until such proclamation is revoked, for any American vessel to carry any arms, ammunition, or implements of war to any belligerent state, or to any state wherein civil strife exists, named in such proclamation, or to any neutral state for transshipment to, or for the use of, any such belligerent state or any such state wherein civil strife exists. (b) Whoever, in violation of the provisions of this section, shall take, or attempt to take, or shall authorize, hire, or solicit another to take, any American vessel carrying such cargo out of port or from the jurisdiction of the United States shall be fined not more than $10,000, or imprisoned not more than five years, or both; and in addition, such vessel, and her tackle, apparel, furniture, and equipment, and the arms, ammunition, and implements of war on board, shall be forfeited to the United States.

USE OF AMERICAN PORTS AS BASE OF SUPPLY

Section 7. (a) Whenever, during any war in which the United States is neutral, the President, or any person thereunto authorized by him, shall have cause to believe that nay vessel, domestic or foreign, whether requiring clearance or not, is about to carry out of a port of the Untied States, fuel, men, arms, ammunition, implements of war, or other supplies to any warship, tender, or supply ship of a belligerent state, but the evidence is not deemed sufficient to justify forbidding the departure of the vessel as provided for by section 1, title V, chapter 30, of the Act approved June 15, 1917, and if, in the President's judgment, such action will serve to maintain peace between the United States and foreign states, or to protect the commercial interests of the United States and its citizens, or to promote the security or neutrality of the United States, he shall have the power and it shall be his duty to require the owner, master, or person in command thereof, before departing from a port of the United States, to give a bond to the United States, with sufficient sureties, in such amount as he shall deem proper, conditioned that the vessel will not deliver the men, or any part of the cargo, to any warship, tender, or supply ship of the belligerent state. (b) If the President, or any person thereunto authorized by him, shall find that a vessel, domestic or foreign, in a port of the United States, has previously cleared from a port of the United States during such war and delivered its cargo or any part thereof to a warship, tender, or supply ship of a belligerent state, he may prohibit the departure of such vessel during the duration of the war.

SUBMARINES AND ARMED MERCHANT VESSELS

Section 8. Whenever, during any war in which the United States is neutral, the President shall find that special restrictions placed on the use of the ports and territorial waters of the United States by the submarines or armed merchant vessels of a foreign state, will serve to maintain peace between the United States and foreign states, or to protect the commercial interests of the United States and its citizens, or to promote the security of the United States, and shall make proclamation therefore, it shall thereafter be unlawful for any such submarine or armed merchant vessel to enter a port or the territorial waters of the United States or to depart therefrom, except under such conditions and subject to such limitations as the President may prescribe. Whenever, in his judgment, the conditions which have caused him to issue his proclamation have ceased to exist, he shall revoke his proclamation and the provisions of this section shall thereupon cease to apply.

TRAVEL ON VESSELS OF BELLIGERENT STATES

Section 9. Whenever the President shall have issued a proclamation under the authority of section 1 of this Act it shall thereafter be unlawful for any citizen of the United States to travel on any vessel of the state or states named in such proclamation, except in accordance with such rules and regulations as the President shall prescribe:...

ARMING OF AMERICAN MERCHANT VESSELS PROHIBITED

Section 10. Whenever the President shall have issued a proclamation under the authority of section 1, it shall thereafter be unlawful, until such proclamation is revoked, for any American vessel engaged in commerce with any belligerent state, or any state wherein civil strife exists, named in such proclamation, to be armed or to carry any armament, arms, ammunition, or implements of war, except small arms and ammunition therefor which the President may deem necessary and shall publicly designate for the preservation of discipline aboard such vessels.

REGULATIONS

Section 11. The President may, from time to time, promulgate such rules and regulations, not inconsistent with law, as may be necessary and proper to carry out any of the provisions of this Act; and he may exercise any power or authority conferred on him by this Act through such officer or officers, or agency or agencies, as he shall direct....