811.04418/91a

The Chief of the Office of Arms and Munitions Control ( Green ) to the Secretary of the Special Committee of the Senate Investigating the Munitions Industry ( Rausenbush )

Dear Mr. Raushenbush: In compliance with your suggestion I enclose a text of a suggested amendment to Section 2 of the Neutrality Act.

If, instead of amending the Neutrality Act, it is desired to rewrite it entirely as a new Act, the only changes necessary in the enclosed text would be the following:

1.
Omit: “That Section 2 of the Joint Resolution of Congress (S. J. Res. 173) approved August 31, 1935, be and the same is hereby amended to read as follows:”
2.
Change the first sentence of paragraph (a) to read: “The term ‘Board’ means the National Munitions Control Board which was established pursuant to Section 2 of the Joint Resolution approved August 31, 1935 (Pub. Res.—No. 67—74th Congress.)”
3.
Add to paragraph (e): “Provided, however, that persons who have registered pursuant to Section 2 of the Joint Resolution of Congress approved August 31, 1935 (Pub. Res.—No. 67—74th Congress), shall not be required, during the period that such registration remains valid, to register under this Act.”

Very sincerely yours,

Joseph C. Green
[Enclosure]

Suggested Amendment to Section 2 of the Neutrality Act

That Section 2 of the Joint Resolution of Congress (S. J. Res. 173) approved August 31, 1935, be and the same is hereby amended to read as follows:

(a)
The term “Board” means the National Munitions Control Board which is hereby established. 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 Section or by other law, the administration of this Section is vested in the Department of State;
(b)
The term “United States” when used in a geographical sense includes the several States and Territories, the insular posessions of [Page 357] the United States (including the Philippine Islands), the Canal Zone, and the District of Columbia;
(c)
The term “person” includes a partnership, company, association, or corporation, as well as a natural person.
(d)
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.
(e)
Every person who engages in the business of manufacturing for export, exporting or importing any of the arms, ammunition, and implements of war referred to in Paragraph (d) whether as an exporter, importer, manufacturer, or dealer, shall register with the Secretary of State his name, or style, principal place of business, and places of business in the United States, and a list of the arms, ammunition, and implements of war, which he exports, imports, or manufactures for export.
(f)
Every person required to register under the provisions of this section shall pay a registration fee of $500 and upon receipt of such fee the Secretary of State shall issue a registration certificate valid for five years, which shall be renewable for further periods of five years upon the payment for each renewal of a fee of $500.
(g)
Every person required to register under this section shall notify the Secretary of State of any change in the arms, ammunition, and implements of war which he exports, imports, or manufactures for export; and upon such notification the Secretary of State shall issue to such person an amended certificate of registration, free of charge, which shall remain valid until the date of expiration of the original certificate.
(h)
It shall be unlawful for any person required to register under the provisions of this section to import or export any of the arms, ammunition, or implements of war referred to in Paragraph (d) without having registered in accordance with the provisions of this section.
(i)
It shall be unlawful for any person to export, or attempt to export, from the United States any of the arms, ammunition, or implements of war referred to in Paragraph (d) to any other country or to import, or attempt to import, to the United States from any other country any of the arms, ammunition, or implements of war referred to in Paragraph (d) without first having obtained a license therefor from the Department of State for each shipment.
(k)
[sic] Export and import licenses shall be issued to persons who have registered as provided for, except in cases of export or import licenses where exportation of arms, ammunition, or implements of war [Page 358] would be in violation of this Section or any other law of the United States, or of a treaty to which the United States is a party, in which cases such licenses shall not be issued: Provided, however, That after the ninetieth day following the effective date of this Act, no export licenses shall be issued unless the government of the country to which such arms are to be exported has indicated to the satisfaction of the Secretary of State that permission for the importation has been accorded: and Provided, further, That after the ninetieth day following the effective date of this Act, no licenses shall be issued for the export of appliances and substances exclusively intended for chemical warfare.
(l)
Any arms, ammunition, or implements of war which have been exported or imported or which it has been attempted to export or import in violation of the provisions of this Section shall be subject to seizure and forfeiture in accordance with the provisions of the Espionage Act of June 15, 1917 (ch. 30, title VI, 40 Stat. 217; 22 U. S. C. A., sees. 238–245).
(m)
In the case of the forfeiture of any arms, ammunition, or implements of war by reason of a violation of this Section no notice of public sale shall be required; no such arms, ammunition, or implements of war shall be sold at public sale, but they shall be delivered to the Secretary of War and the Secretary of War may order such arms, ammunition, or implements of war destroyed or may retain them for the use of the armed forces of the United States.
(n)
The Secretary of State shall issue regulations for carrying out the provisions of this Section.
(o)
The Board shall be called by the chairman and shall hold at least one meeting a year.
(p)
No purchase of arms, ammunition, and implements of war shall be made on behalf of the United States by any officer, executive department, or independent establishment of the Government from any person who shall have failed to register under the provisions of Paragraph (4) of this Section.
(q)
Any contract in violation of the provisions of Paragraph (p) is hereby declared to be contrary to the public policy of the United States, shall not be enforceable in any court of the United States, and shall not afford any basis for the granting of legal or equitable relief of any such court.
(r)
No sale of the arms, ammunition, or implements of war referred to in Paragraph (d) shall be made on behalf of the United States by any officer, executive department, or independent establishment of the Government to any foreign government on or after November 29, 1936. [Page 359] The Act of August 39, [29] 1916,46 relating to the sale of ordnance and stores to the Government of Cuba, is hereby abrogated as of November 29, 1936.
(s)
All persons required to register under this Section shall maintain, subject to the inspection of the Secretary of State, such permanent records of manufacture for export, importation, and exportation of arms, ammunition, and implements of war as he shall prescribe.
(t)
Any person who violates or fails to comply with any of the requirements of this Section or any regulations under this Section shall, on conviction, be fined not more than $10,000 or be imprisoned for not more than five years, or both, in the discretion of the court.
(u)
The Board shall make an annual report to Congress, copies of which shall be distributed as are other reports transmitted to Congress. Such report shall contain such information and data collection [collected] by the Board as may be considered of value in the determination of questions connected with the control of trade in arms, ammunition, and implements of war. It shall include a list of all persons required to register under the provisions of this Section and full information concerning the licenses issued under the provisions of this Section.
(v)
If any person [provision] of this Section, or the application thereof to any person or circumstance, is held invalid, the remainder of the Section and the application of such provision to other persons or circumstances shall not be affected thereby.
(w)
Such amount as may from time to time be deemed necessary is hereby authorized to be appropriated out of any money in the Treasury not otherwise appropriated to be expended by the Secretary of State in carrying out the duties as aforesaid and in defraying the expenses of the Board in discharging the duties placed upon it by this section.

  1. 39 Stat. 643.