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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.