Evening star., 1939-09-24
LeeisIoted Neutrality
of Doubtful Value
By O1Den L. Scott.

| down to the business OF deciding.
But Mr. Roosevelt at the same time is
almost equally assured that any neu-
| trality law will little affect the forces
that are eventually to determine the
American policy in event Of long Euro
| pean war.
Argument over neutrality has taken on
| a distinct air of unreality in what other
wise is dangerously realistic world.
The President and Secretary Hull recog-
nize this fact. Yet they recognize also
that the country is convinced that law,
| If called a neutrality law, can keep the
United States out Of war.
Two theories underie this countrys
neutrality law.
One theory is that wars grow out of the
desire of munitions makers to develop big
markets in order that they can sell more
munitions and thereby grow rich. So,
If Government will just shut of the
chance Of munitions makers to get rich
by closing their markets abroad in event
of war, those munitions makers will see
that there is no war. A full-dress inves-
tigation of the munitions industry pre-
/
ity law in 1896
The other theory is that, with nations
abroad in war, the United States will be
drawn into that war If it builds up a war
trade that must be lost-with resulting
depression-once the nations to which it
sells face defeat or run out of money.
This theory figures prominently in the
present debate
Congress rested its case on combina-
ton of both theories when it enacted the
present neutrality law.
1t did so by imposing an automatic
embargo on the sale of arms, amnuni-
ton and munitions of war" to nations
engaged in war, and by barring loans to
nations at war for any but ordinary COM
mercial purposes.
| President Roosevelt is convinced that
the embargo on shipment of arms is
unwise and should be repealed Repeal
would open the American market to
British and French governments that are
badly in need of airplanes. 1t is chiefly to
fill this need that the present change is
sought
Obviously, since there now is a war in
| spite of Americas neutrality law, it is
clear that American munitions makers
| did not start that war in order to in
crease their business. The first theory
| on which the neutrality law rests is not
supported by the evidence of what really
has happened.
Tho Sepnnd thoor1, lie tol o,,
| the existing law.
| This theory is that economic involve
ment can lead the United States into a
| foreign war. But nobodv-neither Sem
! ator Borah nor Nye nor Vanbenberg nor
Clark nor any of the others-is proposing
that this Nation refuse to accept war
business. The only business they object
! to is business in arms and ammunition
and munitions. This business is not 10
| per cent of the business that will grow
out of war
A consistent adherence to the neutral
ity principle will require that the isola-
zionist group support law-an embargo
law such as imposed by Thomas Jeffer-
son back in 1803-that would bar any
trade, or at least any increase in trade
of any kind, with belligerent nations
Only in this way can the United States
escape economic involvement in the war.
Economic involvement later can be "a
powerful factor leading to involvement
on military and naval basis
The reason is that great Britain and
France hold about $1,000 900 900 in gold
| and in American securities and bank
| balances
This $1,000 900 900 is about half of what
those nations spent in the United States
during the last war. The spending of
these billions and of any added funds
that can be raised through sale of other
assets is sure to give boost to Ameri-
can business. Spending will help agri-
culture and industry and finance and
will result in what readily can become a
general American recovery
But, if the war keeps up, one day Brit
ain and France will run out of cash.
Both President Roosevelt and the iso-
lationist group in the Senate are in
favor of a section of the neutrality law
that bars new credits to nations at war
The johnson Act also bars new loans to
governments of nations that have de-
faulted on debts to the American Gov
ernment. Britain and France thus find
the door to American money markets
doubly locked.
This means that, if those warning ma
tions run out of cash-and if the law is
observed and unchanged-orders auto
matically will stop. An automatic stop
to orders would automatically bring on
depression inasmuch as any new recov-
cry will rest on war orders. Rather than
face depression, the United States might
decide that loans really are cheaper than
loss of business or-if the theory is right
the United States might move into the
fight
To avoid any such eventuality Senator
Borah and the isolationist group will
need to propose that American business
abroad cannot increase and that pay
ment for business done during wartime
must be in goods, not in gold or in credits.
However, they are prepared to make no
such proposal and appear as interested
as any one else in orders from abroad
for the farmers and industries of their
States.
Then there are other points that are
very important.
The presents neutrality law permits
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