How to be Neutral

War or peace in Europe hangs on the calculations and miscalculations of a few men in power, and there is a major unknown in their calculations: In case of war can they or can their enemies rely on the economic resources of the U. S.? If one of the men in power is tempted to take a bad gamble on that question, the U. S. may be indirectly responsible for launching a World War.

That would be a Tragedy of Errors. For the U. S. wants Peace. But the U. S. has spent nearly eight years trying to make up its mind what it will do to stay at peace. And still the U. S. does not know. Its quandary arose nearly eight years ago when the U. S. people discovered themselves Babes in a pre-war World.

The First Madness. In September 1931 the peace system which for twelve years had ruled the world--the system of Britain's ex-Socialist Prime Minister Ramsay MacDonald, of France's ex-Socialist Foreign Minister Aristide Briand, of the U. S.'s Secretary of State Frank B. Kellogg and of their peace pacts--was at its prime.

In the late evening of September 18, the whole imposing edifice collapsed like a circus tent assailed by impatient roustabouts. Japan had detected some reputed Chinese sabotage on the Japanese-controlled South-Manchuria Railroad and Japanese troops marched into Mukden. By the standards of the era which had passed, the world has been haywire ever since.

On January 4, 1932 out of the gloomy General Grant rococo of the State Department emerged the figure of an intense, chivalrous man, Colonel Henry L. Stimson, Secretary of State. He descended the long flight of steps, stalked across the street, entered the White House offices where he was closeted with President Herbert Hoover. Three days later a U. S. note went out to call Japan's attention to the Kellogg-Briand Peace pact. A copy of the note went to the other signatories of the Nine-Power Treaty in order to invite them to cooperate in putting pressure on Japan.

This move, whose object was not to preserve the peace (which was already shot full of holes) but to preserve the peace system, was received by Sir John Simon, Britain's cold, cautious, legalistic Foreign Secretary, with a yawn. Britain answered that she would be satisfied if Japan reaffirmed her pledge to maintain the Open Door, a polite way of saying that she did not care whose throat was cut.

Three weeks later Japanese bombs were falling on the flimsy wooden hovels of Chapei, a section of Shanghai and 24,000 Chinese were killed or wounded in the ensuing holocaust. Once again Colonel Stimson tried to rally Britain by suggesting that the Nine-Power Treaty, guaranteeing the territorial integrity of China, which Japan had signed at Washington in 1922, be invoked. Once again Sir John Simon turned his back. The Japanese, undisturbed, made mince meat of the heroic Chinese 19th Route Army.

Peace Passion. For a dozen years the U. S. had enjoyed peace with placid satisfaction. In this new pre-war world peace became an emotional issue. As the anti-war chorus swelled, Senator Gerald P. Nye of North Dakota, emerging from nine years of obscurity as a minor radical in Congress, led the shouting. The Senate gave him carte blanche and $50,000 to investigate the part which munitions makers and their bankers had played in implicating the U. S. in World War I.

Just then, Paraguay and Bolivia renewed their brawl over the tropical swamp known as the Chaco. In the spirit of the hour both Senate and House hastily authorized President Roosevelt to place an embargo on shipments of arms to both sides in the minor squabble. The League of Nations joined the U. S. in this first attempt to discourage a war by refusing to sell lethal weapons to both combatants. The arms embargo did not stop the fighting.

Meanwhile the Nye committee pumped J. P. Morgan, Thomas Lament and their partners, trying to prove that they had helped to grease the skids that plunged the U. S. into war. There was no evidence that they had tried to. It could not even be proved that they had done so unwittingly. Whatever the Nye committee did or did not prove, the new Peace Passion of the U. S. had to have an outlet. Its outlet was the Neutrality Act of August 31, 1935.

Act I. This first general Neutrality act was hastily patched up and put into effect for six months until a permanent act could be written. Its chief provision was to place a mandatory embargo on the shipment to warring countries of "arms, ammunition and implements of war," (which were later defined by the President to include airplanes, various chemicals, armored vehicles but not cotton, oil, scrap iron, trucks, etc.). It also forbade U. S. citizens to travel on vessels of warring nations except at their own risk.

Behind all this were two American ideas. One was the simple humanitarian idea that U. S. hands should not be bloodied by making guns and bullets by which men anywhere were killed and maimed. The other was that the U. S. could be kept out of war if it did not become financially interested in selling arms, and its ships and citizens were made to keep away from the shooting.

A month following this Neutrality Act Italy invaded Ethiopia. There was no declaration of hostilities, but three days after fighting began, the President called it a war. He invoked the Act and solemnly warned U. S. citizens not to travel on either Italian or Ethiopian liners. No arms were shipped to either side.

In February 1936, the temporary neutrality law was extended with two major changes. Belligerents were denied the privilege of floating loans in the U. S. and exceptions were made for wars in Latin America. The Italians, undisturbed, destroyed the Ethiopians, and the U. S. was never sucked into the holocaust.

Then Spaniards went to war with one another, egged on by Italy and Germany. In January 1937 a special resolution was rushed to Congress to take care of this unforeseen situation, for the Neutrality Act had no provision covering Civil Wars. It was passed at the behest of the State Department which was anxious to support British and French "nonintervention" policy. One lone Representative, Bernard of Minnesota, voted against it.

Soon this addendum cut off most U. S. arms and ammunition, including airplane parts, from the Loyalists while Generalissimo Franco continued to get most of what he wanted from the Axis. So the Spanish war went on to its bitter end and the U. S. was not involved.

Cash & Carry. But fear of war still stirred in Congress. So in May 1937 another Neutrality Act was passed. At the instigation of Bernard M. Baruch, wise old chairman of the onetime War Industries Board, it added to the provisions of the earlier acts, authority for the President to forbid the export of any goods to a warring nation except on a cash & carry basis. He never used this power and two months ago it expired.

Three months after this third Neutrality Act, Japanese bombs were again bursting in Shanghai. Far from declaring war, however, the Japanese insisted they were waging peace. So far as the Neutrality Act was concerned, there was no war in China unless President Roosevelt proclaimed it. To date he has not done so, and Congress in general has not been disposed to criticize him for his failure.

Since there is "peace," China has been able to obtain U. S. loans (notably $25,000,000 last December from the Export-Import Bank), and to buy U. S. munitions, motor trucks, airplanes. Some economists and humanitarians maintain that Japan has gained more than China by being able to buy at will in the U. S., but Chiang Kai-shek presumably thinks otherwise for he could invoke the Neutrality Act by simply declaring war on Japan. Meanwhile, some two million people have been killed in China, and the U. S. has not been involved.

Three Schools. Thus, while the world warred, the U. S. grew wise in the ways of neutrality, but its wisdom is not yet ripe. The New York Herald Tribune dismissed the 1937 neutrality law as "an Act to preserve the U. S. from intervention in the War of 191418." Congress still writes neutrality laws by hindsight, but it is still stirred to write them.

During the past six years of the neutrality seesaw, three schools have fought to control U. S. peace policy: 1) the "sanctionist" school, led by former Secretary of State Stimson, aims to keep the U. S. out of war by penalizing aggressor nations which start wars--depriving them, but not their victims of access to U. S. resources and credits; 2) the isolationist school, headed by some 40 Senators, argues that it is not the business of the U. S. to act as judge of international morals--let the U. S. keep out of war by having nothing to do with any nation that gets involved in war; 3) the school of the "historic" neutrals, believes in standing pat on the pre-914 international law which gives a neutral nation certain "rights" in the matter of trading with belligerents.

Sanctionists. All through the Italian-Ethiopian fight Colonel Stimson and his fellow-sanctionists--among them President Nicholas Murray Butler of Columbia University, Professor James T. Shotwell of the Carnegie Peace Foundation, Bishop William T. Manning--lived in hope that the League of Nations would invoke effective economic penalties against Italy. In November 1935 the League imposed sanctions (on arms, credit, raw materials) but omitted oil, asserting that no oil embargo would prove effective that did not include the U. S. Any latent U. S. desire to do something drastic about joining in oil sanctions evaporated when Britain's Sir Samuel Hoare and France's Premier Laval made a tentative agreement in 1935 to let Mussolini get away with part of his Ethiopian swag. League sanctions did Italy no serious harm; were just strong enough to unite hitherto lukewarm Italians behind their dictator.

Isolationists. All the major neutrality law battles since 1933 have been won by the isolationists. They include Bennett Champ Clark, Senator-son of the eminent "Little American" who lost out to Internationalist Woodrow Wilson at Baltimore in 1912 ; Young Bob La Follette, Senator-son of the leader of that "little group of wilful men" which fought ineffectively to keep the U. S. out of war in 1917; Michigan's Senator Vandenberg; Minnesota's Shipstead; Kansas' Capper; North Carolina's "Our Bob" Reynolds. Leader of the group is Nye of North Dakota, father of U. S. neutrality laws.

In general sentiment Borah, the old lion of Idaho, and Hiram Johnson of California belong to the isolationist group. But Borah and Johnson differ with Ny in their feeling that mandatory neutrality legislation is likely to prove too inflexible when confronted with unique circumstances.

Classicists. The school of classical neutrals has few famed adherents in Congress but when the present Neutrality bill was before the House 68 Representatives were in favor of outright repeal and a return to historical neutrality. Chief public advocate of this school is the venerable John Bassett Moore, famed authority on international law. He is seconded by Professor Edwin Borchard, of the Yale Law School, co-author with William Lage of Neutrality for the United States.

The Moore-Borchard school do not believe in fighting other folks' wars and do not believe in trade embargoes. They point to Thomas Jefferson's Embargo Act of 1807 which drove the merchants and shipowners of New England to threaten secession.

Fence Jumpers. Americans have frequently made sarcastic cracks at Sir John Simon's refusal to act in the Manchurian crisis of 1931, at Neville Chamberlain's "appeasement" policy. But Britain's foreign policy, which is never to fight a war now that can by some devious maneuver be postponed to the morrow, is, in many respects, very similar to the U. S. feeling. (Said Neville Chamberlain of Czechoslovakia: "How horrible ... it is that we should be digging trenches here . . . because of a quarrel in a far-away country between people of whom we know nothing.") U. S. schools--"sanctionist," isolationist and historic neutral--all share this feeling (each is sure it has the one method to keep the U. S. out of war). So individuals easily jump from one to the other depending on tactical circumstances.

Biggest jumper of them all is Franklin D. Roosevelt, who was apparently on the isolationist side during his first administration when many of his advisers were planning to lick the depression with nationalist economic measures. Roosevelt had been a strong Wilsonian during the war years; but in some of his 1932 campaign speeches he ruminated on the folly of trying to finance wars and post-war reconstruction for European nations. After the Nye Munitions investigation he denounced the armament makers as wartime traffickers in "blood money." His Chautauqua speech of August 14, 1936 ("I hate war") was a ringing statement of a position more or less acceptable both to isolationists of the Nye school and the historic neutrals of the Moore-Borchard school.

A year later, however, the President abruptly reversed himself; at Chicago, on October 5, 1937, he spoke of "quarantining" aggressors. Cynics commented that he was creating a diversion to get the public's mind off the fact that Mr. Justice Hugo Black had once been a Ku Kluxer. More important probably was Administration sympathy for China in the new Sino-Japanese war, which had broken out in July.

The State Department. Never at any time was Franklin Roosevelt's State Department interested in mandatory arms embargoes. When London wiseacres were singing "Moley, Moley, Moley, Lord God Almighty" at the abortive World Economic Conference of 1933, the patient, sad-eyed Mr. Hull was biding his internationalist time. Hull of Tennessee has an oldtime cotton-Stater's interest in a low-tariff world. He is therefore for a world organization that will respect treaties and contracts, refrain from economic nationalism; against Hitler and Mussolini. So he would not willingly refuse to sell arms to Britain and France should war come.

Curiously, Cordell Hull has very close relations with his predecessor, Herbert Hoover's Stimson. Colonel Stimson testified for Mr. Hull's own proposed neutrality bill when the Senate Committee began its hearings. Cordell Hull has privately said to Congressmen: "Hitler will march in September--unless we pass this legislation."

Hull's assistant and Lima Conference companion, fox-faced Adolf Berle, now occupies the Stimson Washington mansion of Woodley, where Mr. Hull plays croquet weekly. The mild-mannered Secretary, one of the world's most fluent monotone cussers, addresses his opponent's croquet balls (if people have heard him right), saying: "Hitler, you son-of-a-bitch," and "Mussolini, damn you!" before whanging them into Coventry.

Fourth Try. Congress is now fretting over a fourth Neutrality bill, a fourth attempt to make sense of the U. S. desire for peace. The bill sponsored in the House of Representatives by the Administration called for repeal of the mandatory embargo on arms exports. But isolationist Congressmen amended it to read very much like the 1935-36 Nye legislation. This palpable defeat for Roosevelt and Hull was hailed by verbal fireworks in Rome and Berlin. Fascist glee provoked a tart "I-told-you-so" from the President, who promptly called upon the Senate to reverse the House.

The Administration wants to amend the embargo provision out of the bill--possibly by a cash & carry clause (not to be confused with the last law's cash & carry provision which applied to "nonlethal weapons"--cotton, oil, steel, etc.; this would apply to actual arms). If this should happen Britain and France would be able to count in the event of war on the armament and powder factories of the U. S. as long as they had money with which to buy. They would have enough money for a time. Together, the British and French have about $2,000,000,000 invested in U. S. securities or deposited in U. S. banks.

An embargo limited merely to lethal weapons, would not close U. S. ports to shipments of cotton, copper, steel, wheat to Britain and France. In the last war most of pre-1917 U. S. trade with the Allies was in raw materials. They did most of their own fabrication of guns & powder. There is always Canada, where a vast system of U. S.-owned branch factories would most likely spring up to manufacture armament and airplanes for an anti-Hitler coalition. But an embargo on raw materials would mean the obsolescence of the American merchant marine, or at least its diversion to trade between neutrals in the western hemisphere.

In the event of European war the effect of a mandatory embargo is not difficult to predict. It would improve Hitler's chances for victory in a Blitzkrieg, or lightning war. It might not appreciably hurt the long-term chances of England and France, both of which have rich empires of their own.

Neutrality legislation of the 1936-37 type might have curious effects in the event of a war involving, say, Brazil and the Argentine. If the U.S. were to embargo the shipments of lethal weapons to these countries in the event of war, any interested European nation--say. Germany --could step in and subsidize the sort of victory that seemed best calculated to damage the Monroe Doctrine. The U. S. would thus find its neutrality policy contravening an even older policy and threatening the safety of the Panama Canal, which is vital to the two-ocean effectiveness of the U. S. fleet. For this reason the present bill provides exceptions virtually excusing the U. S. from mandatory neutrality in any Latin-American war.

The weakness of even-handed embargoes is that in practice they are quite capable of working to the long term disadvantage and danger of the U. S. The weakness of embargoes against aggressor nations only is that they may lead to near-term difficulties and dangers. If the U. S. were to apply economic sanctions against Japan as an "aggressor" without first enlisting the cooperation of the British fleet and fortified Singapore Base, it would probably find itself hard put to it to keep its trade lanes open to the Malayan Archipelago, whence comes most U. S. rubber and tin. The Japanese might be provoked to raids on American shipping in the Celebes and Java seas and would probably attack the Philippines. In the event of a war along 1914-18 lines in Europe, there would be little sense in applying sanctions against Germany, which is effectively cut off from U. S. markets by British control of the sea.

Power Politics. Should Congress shut up shop and go home without passing any new neutrality legislation this summer, the previous legislation--minus "cash & carry"--will still stand. If the fight over neutrality laws is too long and too futile, a growing disgust may lead Congress and the people to wash their hands of the whole business and fall back on old-fashioned international law.

The historic neutrals might thus win a victory by default. If so, they would have to reckon with the possibility of the victory being hollow--for, as 1917 proved, no nation can be neutral if its Administration chooses to take sides, or if its people take sides. In the present pre-war world there are few conflicts in which the U. S. people are neutral at heart. Their special neutrality is a basic disinclination to commit mass murder and be its victim. But there can be no guarantee of neutrality in any words, whether of mandatory legislation or of traditional international law. Real neutrality exists in the hearts of men--and if men take sides they may fight.

In any case, the U. S. cannot make a decision of any sort that will not profoundly alter the balance of world power. With half the steel capacity of the world, with immense reserves of cotton, oil and wheat, any U. S. decision that materially limits war-time shipments would in effect alter world geography as much as if Hitler seized the Ukraine. Lesser embargoes would amount to lesser geographical rearrangement. So regardless of intention, the U. S. plays a part in power politics--with the responsibilities and the risks of a world power.

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