immediately preceding the renewal, or a fee of $100 in the case of persons who manufactured, exported, or imported arms, ammunition, and implements of war to a total sales value of less than $50,000 during the twelve months immediately preceding the renewal. The Secretary of the Treasury is hereby directed to refund, out of any moneys in the Treasury not otherwise appropriated, the sum of $400 to every person who shall have paid a registration fee of $500 pursuant to section 2 of the joint resolution (Public Resolution Numbered 67, Seventyfourth Congress) approved August 31, 1935, who manufactured, exported, or imported arms, ammunition, and implements of war to a total sales value of less than $50,000 during the twelve months immediately preceding his registration. All persons required to register under this section shall maintain, subject to the inspection of the Secretary of State, or any person or persons designated by him, such permanent records of manufacture for export, importation, and exportation of arms, ammunition, and implements of war as the Secretary of State shall prescribe.

(c) 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 this Act.

(d) 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 this Act 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 this Act without first having obtained a license therefor.

The provisions of the Act of August 29, 1916, relating to the sale of ordnance and stores to the Government of Cuba (39 Stat. 619, 643; U. S. C., title 50, sec. 72), are hereby repealed as of December 31, 1937.

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 would be in violation of this Act 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.

(e) 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.

(f) The Board shall make an annual report to Congress, copies of which shall be distributed as are other reports transmitted to Congress. Such reports shall contain such information and data 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 Act, and full information concerning the licenses issued hereunder.

EXCEPTIONS-AMERICAN REPUBLICS

SEC. 11. This Act shall not apply to an American republic or republics engaged in war against a non-American state or states, provided the American republic is not cooperating with a non-American state or states in such war.

REGULATIONS BY THE PRESIDENT

SEC. 12. The President may, from time to time, promulgate such rules and regulations, not inconsistent with law, as may be necessary and proper to carry out any of the provisions of this Act; and he may exercise any power or authority conferred on him by this Act through such officer or officers, or agency or agencies, as he shall direct.

PENALTIES

SEC. 13. Any arms, ammunition, or implements of war exported or attempted to be exported from the United States in violation of any of the provisions of this Act and any vessel or vehicle containing the same shall be subject to the provisions of sections 1 to 8, inclusive, title 6, chapter 30, of the Act approved June 15, 1917 (40 Stat. 223–225; U. S. C., title 22, secs. 238-245).

In the case of the forfeiture of any arms, ammunition, or implements of war by reason of a violation of this Act, no public or private sale shall be required; but such arms, ammunition, or implements of war shall be delivered to

the Secretary of War for such use or disposal thereof as shall be approved by the President of the United States.

SEC. 14. In every case of the violation of any of the provisions of this Act where a specific penalty is not herein provided, such violator or violators, upon conviction, shall be fined not more than $10,000 or imprisoned not more than five years, or both.

APPLICATION OF PROVISIONS OF THIS ACT

SEC. 15. If any of the provisions of this Act, or the application thereof to any person or circumstance, is held invalid, the remainder of the Act, and the application of such provision to other persons or circumstances, shall not be affected thereby.

AUTHORIZATION FOR APPROPRIATIONS

SEC. 16. There is hereby authorized to be appropriated from time to time, out of any money in the Treasury not otherwise appropriated, such amounts as may be necessary to carry out the provisions and accomplish the purposes of this Act.

REPEAL

SEC. 17. The joint resolution (Public Resolution Numbered 67, Seventy-fourth Congress) approved August 31, 1935, as amended and extended by the joint resolution (Public Resolution Numbered 74, Seventy-fourth Congress) approved February 29, 1936, is hereby repealed, but such repeal shall not affect the validity of any proclamation, rule, regulation, certificate of registration, or license, issued pursuant to that resolution.

[House of Representatives, Report No. 320, 75th Cong., 1st sess.]
NEUTRALITY ACT OF 1937

The Committee on Foreign Affairs, to whom was referred the resolution (H. J. Res. 242) to maintain the neutrality of the United States in the event of war between or among foreign nations, and for other purposes, having considered the same, submit the following report thereon, with the recommendation that it do pass with the following amendment:

Page 6, line 24, after the word "apply" insert the word "equally", which was an omission in the original print.

DEFINITIONS

Section 2: This section merely gives the definitions for the purpose of this act.

EXPORT OF ARMS, AMMUNITION, AND IMPLEMENTS OF WAR

Section 3: This section is the law at the present time with the limitation taken off, except subsection (c) is so worded as to include civil strife when it exists in a foreign state and whenever the President finds that such armed conflict is of such magnitude or is being conducted under such conditions that the export of arms, ammunition, or implements of war from the United States to said foreign state would threaten or endanger the peace of the United States. When such conditions arise the President shall proclaim such facts and thereafter it is made unlawful to export arms, ammunition, or implements of war, from any place in the United States, or possessions of the United States, to any such state or to any other state for transshipment to, or for use in, the state named in the proclamation.

EXPORT OF OTHER ARTICLES AND MATERIALS

Section 4, subsection A: This section includes materials used for war purposes which are not covered by existing law, and provides that whenever the President shall have issued a proclamation or proclamations as provided in section 3 of this act, which is the arms-embargo section, and he shall thereafter find that the placing of restrictions on the shipment of certain articles or ma

terials in addition to arms, ammunition, and implements of war from the United States to said belligerents named in the proclamation issued under section 3, or to a state wherein civil strife has been proclaimed to exist, is deemed necessary to promote the security and preserve the peace or neutrality of the United States or to protect the lives and commerce of nationals of the United States, he shall so proclaim and it shall thereafter be unlawful, except under such limitations and exceptions as the President may prescribe, for any American vessel to carry such articles or materials to any belligerent state, or any state wherein civil strife exists, or to any other state for transshipment to or for the use of, such belligerent states or within such state where civil strife exists. In other words, whenever the President concludes it is necessary to protect out neutrality and our commerce, he has the authority to define such articles and materials as he may think necessary to protect our Government and prohibit American vessels transporting the same. There is an exception, however, to this section which gives the President the right to make these restrictions under such limitations or exceptions as he may prescribe.

Subsection B gives the President authority, after he has found that it is necessary to promote the security and preserve the peace or neutrality of the United States or to protect the lives or commerce of nationals of the United States, to issue such a proclamation and prohibit the exportation of commodities from the United States to the belligerents or to any state wherein civil strife exists, or to any other state for transshipment to, or for the use of, such belligerent state or such state wherein civil strife exists, until all right, title, and interest therein shall have been transferred to some foreign government, agency, institution, association, partnership, corporation, or national. This also contains the provision that he can issue such order under such limitations and exceptions as he may prescribe.

It also prohibits insurance written by American underwriters on any articles or materials the exportation of which is prohibited by this act, or on articles carried by an American vessel or aircraft contrary to subsection (a) of this section shall not be deemed an American interest therein, and no insurance policy issued on such articles or materials and no loss incurred thereunder shall be made a basis of any claim put forward by the Government of the United States.

Subsection C provides that the President shall from time to time by proclamation extend such restrictions as are imposed under this section to other States as and when they may be declared to become belligerents under proclamations issued under section 3 of this act.

war.

Subsection D: The President may from time to time change, modify, or revoke in whole or in part any proclamations issued by him under this section. Subsection E: Any proclamation issued by the President under this section shall apply equally to all belligerents. You will see that this is what is ordinarily called the cash-and-carry system. Your committee has felt, however, that neither subsection (a) nor (b) should be in effect by the President under such conditions as he feels that it is necessary to maintain our neutrality or to protect the lives or commerce of our nationals. The provisions placed in both of these subsections, to wit: "except under such limitations and exceptions as the President may prescribe", was for the purpose of protecting our trade as much as possible whenever there exists no danger of becoming involved in any foreign In other words, many wars in Europe may occur between small countries which have no navies, and in which there is no chance for us to become involved by the continuing of the shipment of our commodities. Hence the President should have the right to determine this fact and put in force both of these sections, or either of these sections whenever he deems it necessary to keep us out of war. Again, we feel that he should have the power to prescribe in his proclamation such limitations on the shipment of commodities of war, because war may be carried on in the Pacific when our trade would not be in danger in the Atlantic, or it might be carried on in the Atlantic when our trade would not be in danger in the Pacific; or it might be carried on in some islands in the possession of some European country where the war was not being fought. In other words, the purpose is to keep our trade, as much as possible, out of war zones, but not to deprive us of trade in those zones where we cannot be involved in such a war. While these two sections give the President this exception under such limitations and exceptions as the President may prescribe, yet subsection (e) provides that if he shall see fit to place these restrictions on our trade or vessels, it shall apply equally to all belligerents.

FINANCIAL TRANSACTIONS

Section 5: This section, with the subsections, is the law at the present time, with an amendment concerning civil strife and a further amendment under subsection (a) there are added these words: "or to solicit or receive any contribution for any such government, or political subdivision, or any person acting for or on behalf of such government or subdivision." Your committee feels that the necessity of this character of amendment has been demonstrated recently by the civil war that is going on in Spain, and that since that time numerous gatherings have been held soliciting funds for the use of certain parties engaged in that conflict. No war can be fought in Europe without many of our nationals taking part perhaps on both sides as this country has so many people of foreign birth living here as American citizens, but they are always interested in their mother country. Any gatherings, or such manifestations of interest, by our citizens naturally does not create a neutrality feeling in this country. In order to maintain our neutrality it is very necessary to keep our citizens as neutral as possible. Of course, this amendment does undertake to prohibit any donations made by any citizens, neither will it interfere with any collections made for the Red Cross. Your committee considers this section, which we are reenacting, a very important section because it deals with credits and the purchase and sale, and exchange, of bonds and securities, and so forth. We feel that under this section no foreign wars can be financed in this country.

AMERICAN VESSELS PROHIBITED FROM CARRYING ARMS

Section 6: This is the law at the present time, and there is no change made in this section.

USE OF AMERICAN PORTS AS BASE OF SUPPLY

Section 7: This is the law at the present time, passed during the last Congress. In fact, this section has been rewritten from the law that was passed from an act approved on June 15, 1917, and is very similar.

SUBMARINES AND ARMED MERCHANT VESSELS

Section 8: This is the law at the present time, with only one amendment. It not only applies to submarines but now will apply under this act to armed merchant vessels. The amendment consists of the four words, to wit: "or armed merchant vessels."

TRAVEL BY AMERICAN NATIONALS ON BELLIGERENT VESSELS

Section 9: The statute heretofore passed provided that after the President had issued a proclamation that a war exists between two belligerent countries, any American traveling on any such belligerent boat would do so at his own risk. This section provides that after such proclamation is issued by the President, and he shall find that the maintenance of peace between the United States and foreign states, or the protection of the lives of citizens of the United States, or the protection of the commercial interests of the United States and its citizens, or the security of the United States requires that American citizens should refrain from traveling on the vessels of the state of states named in the said proclamation or proclamations, he shall so proclaim, and thereafter it shall be unlawful for any citizen of the United States to travel on any such vessel named in the proclamation or proclamations, except under such limitations and in accordance with such rules and regulations that the President shall prescribe. The reason for giving the President the right to make these exceptions is from the fact that many of our American citizens are living on European islands and would have no way of getting off of such island if they so desired unless by foreign vessels. Another reason is that we may have to send diplomatic courier on belligerent vessels. Another, the right may be given to war correspondents under certain conditions to travel on these vessels. There is a provision in this act that it shall not apply to citizens traveling on a vessel whose voyage was begun in advance of the President's proclamation, and who had no opportunity to discontinue his Voyage after that date. There is another provision that it shall not apply under 90 days after the date of the President's proclamation to a citizen returning from a foreign state to the United States or to any of its possessions.

NATIONAL MUNITIONS CONTROL BOARD

Section 10: This is merely a reenactment of the National Munitions Control Board established by section 2 of the joint resolution (Public Res. 67, 74th Cong.) approved August 31, 1935, and it is placed in this bill on account of some two or three amendments that your committee has seen fit to add to this act, and which are recommended by the National Munitions Control Board.

Subsection (b). An amendment changing the registration fee, which was required under this act, of $500 to $100, under certain conditions. This act provides that the registration fee of all persons who engage in the business of manufacturing, exporting, or importing any of the arms, ammunition, or implements of war referred to in this act, shall continue to pay a registration fee of $500, unless he manufactured, exported, or imported arms, ammunition, and implements of war to a total sales value of less than $50,000 during the 12 months immediately preceding his registration, in which case the fee shall bechanged and he shall pay a registration fee of $100, and it also provides that whenever any of these manufacturers, or exporters, or importers, have paid a fee of $500, and their business did not exceed $50,000 a year, then a refund: shall be made to such party or parties in the sum of $400. The evidence before your committee shows that there are 155 exporters who paid this $500 registration fee, and that all of these parties except 10 or 12 have done a business of over $50,000 and only this limited fee would be entitled to a refund. The Munitions Board further sets forth the fact that some small manufacturers who perhaps are only engaged in the manufacture of propellers or similar accessories, and whose business probably would not run over $1,000 a year, that it would be a great injustice to them to have to pay such an enormous fee, so we have made these recommendations in this bill.

There is another amendment added in line 18, on page 14, under subsection (b) changing the word "Board" so as to make that line read, after the comma, "subject to the inspection of the Secretary of State, or any person or persons designated by him." The reason for this change is from the fact that the Secretary of State had charge of these inspections.

Subsection (d) on page 15. Lines 10 to 13, inclusive, are eliminated from the present law. This provision reads as follows: "The provisions of the act of August 29, 1916, relating to the sale or ordnance and stores to the Government of Cuba are hereby repealed as of December 31, 1937". Since this act has been passed the House will remember that we are not exercising the same statutory control that we had prior to that time, and there is now no reason why the War Department should sell ordnance and stores, which consists of war materials, to the Government of Cuba.

These are all the amendments which have been added to the present law under that section.

EXCEPTIONS-AMERICAN REPUBLICS

Section 11. This section provides that this act shall not apply to an American republic or republics engaged in war against a non-American state or states, provided the American republic is not cooperating with a non-American state or states in such war. This is the law at the present time and was passed during the last Congress.

REGULATIONS BY THE PRESIDENT

Section 12: This merely gives the President the right to promulgate such rules and regulations, not inconsistent with the law, as may be necessary and proper to carry out any of the provisions of this act; and, further, that he may exercise any power or authority conferred on him by this act through such officer or officers, or agency or agencies, as he shall direct.

PENALTIES

Sections 13 and 14: This is merely the penalty and forfeiture clause prescribed for the violation of the provisions of this act.

APPLICATION OF PROVISIONS OF THIS ACT

Section 15: This is merely a reenactment of the present statute, providing that if any part of this act is held unconstitutional, it shall not affect the balance of the act.

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