Where trade was concerned why was it difficult for the United States to be neutral?

During World War II, the United States began to provide significant military supplies and other assistance to the Allies in September 1940, even though the United States did not enter the war until December 1941. Much of this aid flowed to the United Kingdom and other nations already at war with Germany and Japan through an innovative program known as Lend-Lease.

When war broke out in Europe in September 1939, President Franklin D. Roosevelt declared that while the United States would remain neutral in law, he could “not ask that every American remain neutral in thought as well.” Roosevelt himself made significant efforts to help nations engaged in the struggle against Nazi Germany and wanted to extend a helping hand to those countries that lacked the supplies necessary to fight against the Germans. The United Kingdom, in particular, desperately needed help, as it was short of hard currency to pay for the military goods, food, and raw materials it needed from the United States.

Though President Roosevelt wanted to provide assistance to the British, both American law and public fears that the United States would be drawn into the conflict blocked his plans. The Neutrality Act of 1939 allowed belligerents to purchase war materiel from the United States, but only on a “cash and carry” basis. The Johnson Act of 1934 also prohibited the extension of credit to countries that had not repaid U.S. loans made to them during World War I—which included Great Britain. The American military opposed the diversion of military supplies to the United Kingdom. The Army’s Chief of Staff, General George C. Marshall, anticipated that Britain would surrender following the collapse of France, and thus American supplies sent to the British would fall into German hands. Marshall and others therefore argued that U.S. national security would be better served by reserving military supplies for the defense of the Western Hemisphere. American public opinion also limited Roosevelt’s options. Many Americans opposed involving the United States in another war. Even though American public opinion generally supported the British rather than the Germans, President Roosevelt had to develop an initiative that was consistent with the legal prohibition against the granting of credit, satisfactory to military leadership, and acceptable to an American public that generally resisted involving the United States in the European conflict.

On September 2, 1940, President Roosevelt signed a “Destroyers for Bases” agreement. Under the terms of the agreement, the United States gave the British more than 50 obsolete destroyers, in exchange for 99-year leases to territory in Newfoundland and the Caribbean, which would be used as U.S. air and naval bases. British Prime Minister Winston Churchill had originally requested that Roosevelt provide the destroyers as a gift, but the President knew that the American public and Congress would oppose such a deal. He therefore decided that a deal that gave the United States long-term access to British bases could be justified as essential to the security of the Western Hemisphere—thereby assuaging the concerns of the public and the U.S. military

In December 1940, Churchill warned Roosevelt that the British were no longer able to pay for supplies. On December 17, President Roosevelt proposed a new initiative that would be known as Lend-Lease. The United States would provide Great Britain with the supplies it needed to fight Germany, but would not insist upon being paid immediately

Instead, the United States would “lend” the supplies to the British, deferring payment. When payment eventually did take place, the emphasis would not be on payment in dollars. The tensions and instability engendered by inter-allied war debts in the 1920s and 1930s had demonstrated that it was unreasonable to expect that virtually bankrupt European nations would be able to pay for every item they had purchased from the United States. Instead, payment would primarily take the form of a “consideration” granted by Britain to the United States. After many months of negotiation, the United States and Britain agreed, in Article VII of the Lend-Lease agreement they signed, that this consideration would primarily consist of joint action directed towards the creation of a liberalized international economic order in the postwar world.

The United Kingdom was not the only nation to strike such a deal with the United States. Over the course of the war, the United States contracted Lend-Lease agreements with more than 30 countries, dispensing some $50 billion in assistance. Although British Prime Minister Winston Churchill later referred to the initiative as “the most unsordid act” one nation had ever done for another, Roosevelt’s primary motivation was not altruism or disinterested generosity. Rather, Lend-Lease was designed to serve America’s interest in defeating Nazi Germany without entering the war until the American military and public was prepared to fight. At a time when the majority of Americans opposed direct participation in the war, Lend-Lease represented a vital U.S. contribution to the fight against Nazi Germany. Moreover, the joint action called for under Article VII of the Lend-Lease agreements signed by the United States and the recipient nations laid the foundation for the creation of a new international economic order in the postwar world.

On April 22, 1793, President George Washington issued a Neutrality Proclamation to define the policy of the United States in response to the spreading war in Europe. “The duty and interest of the United States require,” the Proclamation stated, “that they [the United States] should with sincerity and good faith adopt and pursue a conduct friendly and impartial toward the belligerent Powers.” The Proclamation warned Americans that the federal government would prosecute any violations of this policy by its citizens, and would not protect them should they be tried by a belligerent nation. This statement of policy triggered a fierce reaction from those who considered it a sellout of the nation’s revolutionary soul for the financial gain of the merchant class. “The cause of France is the cause of man, and neutrality is desertion,” one anonymous correspondent wrote the president. Critics believed that the Proclamation marked a dishonorable betrayal of our oldest and dearest ally and to a sacred alliance made in the darkest hours of the American Revolution. The Proclamation was important for the constitutional precedent it established in the exertion of executive authority in the realm of foreign policy, as well as for exciting partisan passions that were formative to the creation of political parties in the first party system.  

Several important recent developments in both American and Europe led to Washington’s Neutrality Proclamation. The French Revolution turned more radical when it beheaded King Louis XVI in January 1793. Ten days later, revolutionary France, already fighting Austria and Prussia, declared war on England, Holland, and Spain, embroiling the entire European continent in conflict. Lastly, on April 8, 1793 the new French minister, Edmond Genet, arrived in Charleston, South Carolina. Genet was an instant hit with the American people who flocked in large numbers to greet the ebullient Frenchmen as he made his way north to the capital in Philadelphia. More ominous, however, was the fact that Genet, armed with commissions and letters of marque from his government, actively recruited Americans to fight for revolutionary France.

Deeply concerned with Genet’s infectious popularity and his direct appeals to the American people to aid France, and unsure of the boundaries of his own constitutional powers, Washington called his cabinet together on April 19, 1793 to solicit their advice. Despite some disagreement between Secretary of State Thomas Jefferson and Secretary of Treasury Alexander Hamilton on other related issues, the four members of the cabinet unanimously agreed that the president could and should issue a statement affirming the neutrality of the United States in the European-wide war, and that his government should receive Genet as the French minister, despite his hostility to the authority of the federal government. Attorney General Edmund Randolph wrote the 293-word Proclamation for the president’s signature.

The Proclamation ignited a fire storm of criticism. Much of the American population sympathized with the cause of revolutionary France. In a series of letters written under the pseudonym of Pacificus, Alexander Hamilton took up the task of defending the administration in the press by arguing that neutrality was in the best interest of the United States. Furthermore, Hamilton asserted that the 1778 Treaty of Alliance was a defensive arrangement that was not applicable in 1793 because France had declared war on its enemies, an offensive act. Aggravated by Hamilton’s claims of broad executive power and frustrated by the language of Randolph’s final draft of the Proclamation, Thomas Jefferson organized a response to Pacificus. At the pleading of his friend and secretary of state, Hamilton’s former Federalist Papers collaborator Congressman James Madison took up the cause of the opposition in a series of letters under the pen name of Helivicus that countered the arguments of Pacificus. Madison and Hamilton provided each side of the growing partisan chasm between the Federalists and the Democratic-Republicans with powerful talking points.  

The controversy moved from the pages of newspapers to the courts when the federal government charged Gideon Henfield, an American citizen who joined a French privateer crew, for violating the Neutrality Proclamation when he sailed a captured British prize vessel into port at Philadelphia.  Minister Genet championed Henfield’s cause and funded a highly talented legal team to defend him. The jury ruled that Henfield was not guilty because the defendant had violated no statute. In other words, the jury considered the Proclamation as a statement of policy that failed to carry the weight of law. Attorney General Randolph wasted no time in voicing the administration position that despite the embarrassing outcome of the trial, the increasingly unpopular policy of neutrality still stood.

The tide of public opinion shifted dramatically in July 1793 when Genet refused to recognize the authority of the federal government by converting a captured British vessel into a French warship in the United States. In a meeting with secretary of state Genet even threatened to appeal directly to the American people to act against Washington. Hamilton leaked this damaging information to political allies in New York who published it. Genet had gone too far. Popular sentiment rallied around in favor of the president.   

Congress remedied the situation of the Proclamation’s legal limbo in 1794 by passing the Neutrality Act, which gave President Washington’s policy the force of law. The Act marked an acknowledgment by the legislative branch that foreign policy resided largely in the constitutional domain of the executive. With the legal and constitutional questions settled, the partisan contentions over the French Revolution and foreign policy channeled into other issues, such as the even more bitter debate over Jay’s Treaty the following year. On July 7, 1798, during the Quasi-War crisis in the presidency of John Adams, Congress formerly annulled the twenty-year-old Treaty of Alliance with France.

Gregory J. Dehler
Front Range Community College

Sources

Hamilton, Alexander and James Madison. The Letters of Pacificus and Helvidius on the Proclamation of Neutrality of 1793. Washington, D.C.: J & G.S. Gideon, 1845.

McDonald, Forest. The Presidency of George Washington. Lawrence: University Press of Kansas, 1974.

Patrick, Christine S. and John C. Pinheiro, eds. The Papers of George Washington: The Presidential Series. Vol 12. Charlottesville: University of Virginia Press, 2005.

Young, Christopher J. “Connecting the President and the People: Washington’s Neutrality, Genet’s Challenge, and Hamilton’s Fight for Public Support.” Journal of the Early Republic 31 (Fall 2011): 436-466.

Wood, Gordon S. Empire of Liberty: A History of the Early Republic, 1789-1815. New York: Oxford University Press, 2009.