851.248/55
The Chief of the Office of Arms and Munitions Control (Green) to Baron Amaury de La Grange
My Dear Baron: I acknowledge the receipt of your letter of March 16, 1938, in regard to the interpretation of Section 5, paragraph g, of the Neutrality Act of May 1, 1937.
This provision merely reenforces the prohibition on the export of arms, ammunition, and implements of war provided by Section 1 of the Neutrality Act in cases where the President has issued a proclamation finding that a state of war exists. The issuance of such a proclamation under Section 1 of the Act would immediately prohibit all exports of the arms, ammunition, and implements of war listed in the proclamation to the belligerent countries named therein regardless of whether the exports were to be made by American citizens or citizens of foreign countries, and regardless of whether they were to be exported on American ships or on foreign ships. The prohibition on the export of the arms listed in the proclamation to the belligerent countries would therefore be absolute, and, under the provisions of paragraph (g) of Section 5 of the Act, which you quote, any licenses which had been issued before the proclamation authorizing such exportations would be automatically revoked as soon as the proclamation was issued.
The distinction between American ships and foreign ships to which you refer is drawn by Section 2 of the Act, which provides that the President may, after he has issued a proclamation under Section 1, [Page 306] issue an additional proclamation prohibiting American ships from carrying to belligerent states certain articles which he shall name, in addition to the arms, ammunition, and implements of war listed in his proclamation issued under Section 1. Foreign vessels might continue to carry to belligerents the additional articles listed in the proclamation issued under Section 2 of the Act, but they could not, of course, carry arms, ammunition, and implements of war, the export of which would be prohibited under all circumstances. In other words, the so-called “cash and carry” provisions of the Neutrality Act apply to articles other than arms, ammunition, and implements of war, the export of arms, ammunition, and implements of war to belligerents being totally prohibited as soon as the President issues a proclamation finding that a state of war exists.
I trust that you will find that this explanation answers your question fully. For convenient reference, I enclose a copy of the Neutrality Act and a copy of the latest edition of the pamphlet International Traffic in Arms.
I am interested to note that you are pursuing the plan of which you told me in our conversation when you were in Washington. Please do not hesitate to communicate with me again should you desire any further clarification of the existing laws and regulations relating to these matters.
Sincerely yours,