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a breach of the peace in violation of its interna-
tional obligations, provided that all nations, in
conference, determined that such nation was guilty
and this country concurred in their judgment."

The impetus toward the enactment of national
measures to regulate the trade and traffic in arms



"^ The following were among the books and publications
appearing on this subject : Engelbrect and Hiinighen, Mer-
chants of Death, New York, 1934; Fenner Brockway, The
Bloody Traffic, London, 1933 ; George ScUles, Iron, Blood
and Profits, New York, 19.'54 ; Philip Noel-Baker, The Pri-
vate Manufacture of Armaments, London, 1936.

"Cordell Hull, Memoirs, p. 728.



was further accelerated by the occurrence at this
time of several regional conflicts.

In addition to the Sino-Japanese war over Man-
churia and the Gran Chaco war, the impending
Italo-Ethiopian war promised to result in com-
plicated questions of the rights and security of
United States citizens and their property.

The First Neutrality Act

Because of the real need for legislative authority
to prohibit arms shipments and because of the
strong isolationist trend, the administration was
obliged to accept the first neutrality act, the joint
resolution approved August 31, 1935, with its in-
flexible provisions requiring the establishment of
an arms embargo against all belligerents upon the
outbreak of war without discrimination as between
aggressor nations and their victims. The First
Neutrality Act however had the virtue of provid-
ing a legal beginning for a national system of
regulating the traffic in arms. It was, further-
more, recognized that any embargo in the forth-
coming Italo-Ethiopian war would affect Italy,
the aggi-essor, much more adversely than Ethiopia
in as much as Ethiopia had no ships to carry arms
and no money with which to purchase arms and
munitions.

Since the 1935 Act was in the nature of stopgap
legislation which would expire after 6 months,
reliance was placed on the possibility that more
elastic provisions might be included in the more
permanent legislation scheduled for February
1936. Secretary of State Hull in a radio address
of November 6, 1935, pointed out that there were
many difficulties inherent in any effort to lay down
by legislative enactment inelastic rules or regula-
tions to be applied to every situation that may
arise. He said, "Our foreign policy would indeed
be a weak one if it began or ended with the an-
nouncement of a neutral position on the outbreak
of a foreign war. I conceive it to be our duty and
in the interest of our country and of humanity, not
only to remain aloof from disputes and conflicts
with which we have no direct concern, but also to
use our influence in any appropriate way to bring
about the peaceful settlement of international
differences." "

The Second Neutrality Act

The joint resolution of February 29, 1936, con-
tinued the same inflexible provisions of the first

" Press releases of Nov. 9, 1935, p. 369.



April 3, 1950



511



neutrality act with the single exception that it
permitted the President to determine the existence
of a state of war. Because of this change, the
neutrality act was not applied to the undeclared
Sino-Japanese war. It was apparent that such
an embargo would not be effective in restoring
peace and would affect China more adversely than
Japan, because Japan could supply her needs out
of her own industries whereas China was depend-
ent upon imports.

Constitutional Doubts Removed

On December 21, 1936, the Supreme Court in the
case of the United States vs. Curtis Wright Ex-
port Corporation et al. sustained the validity of
the joint resolution of May 28, 1934, otherwise
known as the "Chaco Embargo Act," and in so
doing pointed out that the doctrine of enumerated
and implied powers did not constitute any limita-
tion in the field of international relations where
the powers of the President, as the spokesman for
the nation, were implicit. "Moreover," said the
Court, "he, not Congress, has the better opportu-
nity of knowing the conditions which prevail in
foreign countries, and especially is this true in
time of war." "

Embargo on Arms for Spain

The First Neutrality Act had contained an em-
bargo section on the exports of arms, ammunition,
and implements of war designed for the Italo-
Ethiopean conflict. Its repeal on June 20, 1936,
left this country without any legal basis for action
to embargo arms shipments to Spain on the out-
break of the Spanish Civil War in July of 1936.
The assistance afforded the opposing sides by other
European powers threatened to broaden the con-
flict into a general European war. This develop-
ment resulted in a strong sentiment in the United
States favoring the curtailment of arms to Spain.

Although the Second Neutrality Act was due
to be replaced by new neutrality legislation, the
urgency created by the Spanish Civil War called
for special emergency legislation; such legisla-
tion was enacted on January 8, 1937. The De-
partment of State, at that time, had one of its
early experiences with concerted action by arms
traffickers to circumvent the arms embargo by var-
ious means, including the use of false destinations
and consignees. In some instances, forged requests
for licenses were presented ostensibly on behalf

" 22!) U.S. 304, 57 Sup. Ct. 216 (1936) .



of governments who, upon inquiry, disclaimed any
knowledge of the matter.

The Third Neutrality Act

The joint resolution of May 1, 1937, contained a
provision designed to take care of cases such as
the Spanish Civil War, and granted permissive
authority to the President in regard to some new
provisions while retaining most of the mandatory
provisions of the 1936 Act ; consequently, like the
previous neutrality acts, the issuance or nonissu-
ance of export licenses was extremely limited by
the inflexible provisions of the act.

The Fourth Neutrality Act

The joint resolution of November 4, 1939,
omitted the arms-embargo provisions and substi-
tuted therefor so-called cash and carry provisions,
requiring materials to be paid for before delivery
and carried in foreign vessels. By subsequent
action. Congress eliminated the cash and carry
provisions of the act. The authority to deny
licenses, however, was limited to the instances in
which the exportation would violate a law of the
United States or a treaty to which the United
States is a party.

The removal of the embargo provisions from
the Neutrality Act eliminated certain disabilities
which stood in the way of the desire of the ad-
ministration to make its material resources, manu-
facturing facilities, and military equipment avail-
able to the Western European nations.

Informal or "Moral" Embargoes

The use of aircraft by the armies of Japan and
certain other countries for attack upon civilian
populations and the absence of legal authority to
impose an embargo as a sanction against aggressor
states caused the Administration to resort to the
informal or "moral" embargo. The term referred
to a policy of discouraging American exporters
from exporting aircraft equipment and aircraft
armaments to certain countries. In essence, it
consisted of an appeal to the exporter on grounds
of patriotism and ethical conduct to refrain from
applying for a license or insisting upon the issu-
ance of a license to export aircraft and aircraft
equipment to those countries. Though without
legal basis, "moral" embargoes were observed by
most established expoi-ters. However, as a result
of the declaration of a moral embargo, there were



512



Department of State Bulletin



no exports of aircraft to Japan after January
1939.

Tliis type of embargo was used to prevent air-
craft equipment from going to Japan as an indi-
cation of the indignation of the American people
at the indiscriminate bombing of Chinese cities
and as a means of preventing American arms from
adding to Japan's military strength. The em-
bargo provisions of the Neutrality Act were not
applied to Japan and China because neither of
these countries had formally declared war on each
other and because the President, fearing that an
embargo would hurt China more than Japan,
never found a war to exist. In December 1939
following the invasion of Finland by the Russian
army, a "moral" embargo was instituted on air-
craft shipments to the Soviet Union. This em-
bargo was continued in effect until January 21,
1941.

The National Defense Act

The enactment of the act of July 2, 1940, pro-
vided the President with the authority he had
lacked in effectuating his arms policies.^^ In im-
plementation of this act, the President on July 2,
1940, issued a proclamation empowering the Sec-
retary of State to issue or refuse to issue licenses
in accordance with such rules or regulations as the
President should prescribe in the interest of the
national defense. The act was extended by
amendments to 1949. Pursuant to the authority
conferred by this act, the Government was able to
restrict the export of arms to the Middle East in
support of the United Nations resolutions of May
29 and July 15, 1948.

Lend Lease and Reciprocal Aid

On March 11, 1941, Congress enacted the Lend
Lease Act authorizing the United States Govern-
ment to ship war supplies to Great Britain and
her allies. When this country entered the war
the reciprocal aspects of lend lease became increas-
inglj' apparent, each government cooperated in
making its resources and productive capacity
available for the efficient prosecution of the war.
Essential supplies and combat items were fur-
nished as mutual aid to the armed forces of other
nations united in fighting the common enemy.

Executive agreements were negotiated with the
respective governments setting forth the prin-

" The Act of July 2, 1940, has also been referred to as
the Export Control Act of 1940.



ciples which would govern the arrangements by
which joint resources could be utilized most effec-
tively. Although each government retained the
right of final decision in the light of its own poten-
tialities and responsibilities, it was agreed that
decisions as to the most effective use of resources
should, as far as po.ssible, be made in common,
pursuant to the common plans for winning the
war.''

The Export Control Act of 1949

The Act of July 2, 1940 which had been contin-
ued in effect by amendments until 1949 in that year
was replaced by the enactment of the Export Con-
trol Act of 1949. This act authorized the Presi-
dent to restrict exports if required to further the
foreign policy of the United States, to aid in ful-
filling its international responsibilities, and to
protect its national security.^'

The National Defense Act of 1940 and the Ex-
port Control Act of 1949 provided a firm legal
basis for effectuating the Administration's policies
pertaining to aircraft exports as well as other arms
export without reliance on such measures as the
"moral" embargo.



COMPARISON OF PRESENT
AND PREWAR CONTROLS

Under the neutrality acts, the National Muni-
tions Control Board has had the responsibility of
recommending to the President the specific items
to be included within the definition of arms, am-
munition, and implements of war. Since World
War II, there has been a division of responsibility
with respect to exports. As discussed earlier in
these articles, the export control of arms, am-
munition, and implements of war, because of their
peculiar nature and because of their immediate im-
portance to national and international security
and the critical relationship of such exports to

" Twenty-second report on lend-lease operations, Ex-
change of Notes, dated September 3, 1942, between tlie
British Ambassador, Viscount Halifax and the American
Secretary of State, Cordell C. Hull.

"Public Law 11 вАФ 81st Cong., 1st sess., sec. 2 of the act
provides "The Congress hereby declares that it is the
policy of the United States to use export controls to the
extent necessary (a) to protect the domestic economy from
the excessive drain of scarce materials and to reduce the
inflationary impact of abnormal foreign demand; (b) to
further the foreign policy of the United States and to aid in
fuifllling its international responsibilities; and (c) to
exercise the necessary vigilance over exports from the
standpoint of their signiflcance to the national security."



April 3, 1950



513



foreign relations, has remained in the Department
of State. The Department of Commerce has
jurisdiction with respect to certain other com-
modities whose exportation is usually controlled
for strategic and economic reasons.

The demands of total war and new technological
developments have, furthermore, brought about a
separation in the administrative exercise of con-
trol for two types of items. First, the National
Defense Act of July 2, 1940, extended the export-
control authority to a great many additional
items. Although not considered as appropriately
in the munitions list, some of these were related to
munitions and implements of war, and others
were controlled under the act because they were
in short supply or for other strategic reasons.
The control function with respect to these items
was first assigned to the Board of Economic War-
ware, operating under the policy direction of the
Secretary of State, from October 11, 1911, to June
24, 1943. Tlirough subsequent administrative re-
organizations, the administration of such export
controls came to be placed under the Secretary of
Commerce.

Second, the development of atomic energy and
atomic weapons has resulted in the separate ad-
ministrative operation of such controls under the
Atomic Energy Commission. The complex scien-
tific and technical aspects of atomic materials and
the secrecy necessary to prevent unauthorized dis-
closure of information were amone the reasons
which led to the establisliment of separate adminis-
trative operations under the Atomic Energy Com-
mission of Controls on fissionable or related mate-
rials.

Presidential Proclamation 2776, eflFective April
15, 1948, defining arms, ammunition, and imple-
ments of war, included two new categories, thereby
increasing the number of categories from 9 to 11.
One of the new categories included fire-control
equipment and the other miscellaneous military
items, such as military radar and recently de-
veloped articles used in warfare.

The articles listed in these categories were in-
cluded in the Proclamation because it was realized
that they were essentially noncommercial or be-
cause they had been especially adapted for mili-
tary use during the war.

Arms Traffic Controls

Since there is now adequate legal basis for
administrative action to implement the Govern-



ment's arms-export policies, it is no longer neces-
sary, in the great majority of cases, to resort to
informal or moral suasion techniques. Also, plans
of a broad and firm basis for handling export
applications places this Government in a better
position to cooperate with other governments in
preventing clandestine and illegal shipments.
The existence of a legal obligation, moreover,
tends to equalize the situation as between the
reputable exporter and the unscrupulous arms
trafficker so that the exporter abiding by the an-
nounced policy of this Government no longer is
placed at a competitive disadvantage by so doing.
With the establisliment of a firm legal basis for
arms-export controls, it also has become possible
to formulate definite policies and procedures to
reduce the incentives and opportimities to violate
the export-control laws. For instance, the scrap
warranty policy adopted by this Government
with regard to the sale of surplus military equip-
ment prevented such equipment from being pur-
chased by speculators for the export trade.^^ The
operations of the speculator in export licenses
which flourished in the prewar period, are now
severely restricted by rigid requirements of the
Munitions Division in the Department of State.
As a prerequisite to the issuance of a license, the
exporter must show the seller in possession of a
firm order from the prospective purchaser. He
must also show that the goods are immediately
available for export.



Statutory Authority in Relation

to Our International Responsibilities

In the prewar period, the neutrality laws were
the principal legislative authority for the system
of arms-export controls. The law compelled the
issuance of export licenses unless the shipment
violated a law of the land or a treaty to which the
United States was a party. The rigidity of the
neutrality acts prevented the system of licensing
arms-export shipments from serving eflFectively as
an instrument of our foreign policy at a time when
careful discrimination was required in the appli-
cation of export controls over arms shipments to
discourage armed aggression and encourage con-
ditions of international stability.

Today, the added authority goes far toward
enabling this Government to implement its obli-

" See (iisonssion of sci-ap wanauty provisions in the
second article, Bulletin, Mar. C, 1950, p. 3")!).



514



Deparfmenf of State Bulletin



gations as a member of the United Nations as well
as its arms export policy in general.

The membership of the ITnited States in regional
pacts such as the Kio and Atlantic pacts and the
passage by Congress of military assistance pro-
grams such as tlie Greek-Turkisli Aid Program
and the Mutual Defense Assistance Program pro-
vides a new framework for the consideration of
the requests of foreign governments for military
assistance from the United States Goverimient.
It is obvious that the changed world outlook has
an important bearing on the consideration given
these requests. For this reason also, arms exports
have been subject to more careful review than was
necessary in the prewar situation.

As presently drawn, the Export Control Act of
1949 is limited in duration to June 30, 1951.
Studies are being undertaken to endeavor to obtain
permanent legislation for export controls on arms,
ammunition, and implements of war reflecting the
general interest of the United States in interna-
tional order and stability rather than in the limited
concept of neutrality.

Current Arms Export Policies

The current criteria of arms-export policies were
set forth briefly in the first article of this series.
It was pointed out that it is consistent with the
long-range policy of the United States to permit
other nations friendly to the United States to ob-
tain militar}' equipment in the United States not
required by this Government when needed by those
nations for their legitimate self-defense purposes.
Conversely, the United States does not favor the
export of arms, ammunition, and implements of
war to countries whose actions appear likely to
endanger international peace and security either
universally or with respect to particular regions.
For this reason, the Government of the United
States has taken positive action to prevent the
diversion of arms shipments to destinations in
Eastern Europe where they could conceivably be-
come available to the guerrilla forces operating on
borders of Greece. Furthermore, the Govern-
ment of the United States is prepared to control
the exports of arms in such a way as to support, in
cooperation with otlier member nations, any pre-
ventive or enforcement action taken by the United
Nations. It is of interest to note that actions by
the United States with respect to exports of arms
to the Near East or India and Pakistan were
directly linked to actions by the United Nations



concerning disputes in those areas.

Illustrative of the sweeping steps recently taken
by this country to bring about conditions which
can preserve tlic independence of nations friendly
to the United States are the ratification of the
North Atlantic pact and the enactment of the
Mutual Defense Assistance Act. In the Western
Hemisphere also, the United States has partici-
pated with the nations signatory to the Rio pact
to organize and lend vitality to such institutions
as the Council on the Organization of American
States and Inter-American Peace Committee, in-
stitutions which were organized to facilitate
friendly consultations between states with respect
to mutual problems and disputes and to counter
the disrujitive influences of the activities of revolu-
tionary groups.

Arms-export policies are constantly reevaluated
and modified as required by the changing world
situation. Many basic principles of arms-export
policies are however, continued, essentially as they
have been consistently practiced by the United
States over the past several decades. Thus, the
existence of domestic violence in any country may
result in certain limitations on the export of arms
to that country, depending on the surrounding cir-
cumstances and the proximity of the foreign coun-
try to the United States. Arms needed by the
recognized government of a friendly nation to
maintain internal order in the reasonable and
legitimate exercise of constituted authority are
generally permitted to be exported, assuming that
they do not interfere with United States Govern-
ment procurement.

The arms involved in the illicit traflGic in arms is
usually destined for revolutionary factions or
groups. Therefore, as has already been set forth,
the activities of the irresponsible arms trafficker
are frowned upon, and every effort is made to close
illicit channels of arms exports.

In accordance with its established policy, this
country, moreover, seeks to encourage the habit of
peaceful and constitutional political changes in
friendly nations and, conversely, to discourage
revolutions by preventing the exportation of arms
destined for dissident groups within their borders
or operating from bases located in other countries.

CONCLUSION

Between "World War I and II, American
arms-export policies were influenced by the strong

(Continued on page 520)



April 3, 1950



515



Ambassador Jessup Answers Senator McCarthy's
Charges of "Unusual Affinity for Communist Causes"'



STATES INSINUATIONS REVEAL SHOCKING
DISREGARD FOR COUNTRY'S INTERESTS



Mr. Chairman, I greatly appreciate the oppor-
tunity that your Committee has given me to ap-
pear before you in connection with the charges
and insinuations which have been made against
me by Senator McCarthy. On March 8, Senator
McCartliy made the following statement to this
Committee, which I quote from pages 71 and 72
of the record :

Although I shall discuss the unusual affinity of Mr.
Philip C. Jessup of the State Department for Communist
causes later in this inquiry, I think it pertinent to note
that this gentleman now formulating top-flight policy in
the Far East affecting half the civilized world was also
a sponsor of the American-Russian Institute.

No one can be loyal to communism and also loyal
to the United States. This attack on me by Sena-
tor McCarthy is obviously intended to give the
impression that I am disloyal to the United States.
When Senator McCarthy made that statement, I
was in Pakistan completing an official mission
throughout the countries of Asia. This mission
was carried out as part of the effort this country
is making to strengthen the free and democratic
forces in Asia and the capacity of free Asia to
resist subversive or antidemocratic forces.

During the cour.se of this mission, it was my
duty to speak on behalf of the Government of
tlie United States to the Chiefs of State, Prime
]\Iinisters, Foreign Ministers, and other high offi-
cials of almost all of the countries of that area.
In the course of that mission, I also made various
public statements in an attempt to make clear to
the peoples of the East that the solution of their
problems does not lie in the false hopes dangled
before them by the agents of Communist greed and
imperialism.

For example, at New Delhi, on February 23,
1950, 1 issued this statement to the press :

Since the end of the Second World War, history has

' A statement made before a Subcommittee of the Senate
Committee on Foreign Relations on Mar. L'O, ]950, and
released to the press ou the same date.

516



recorded the extension of a new imperialism that has
brought more than a dozen countries under the domina-
tion of a single expanding power. The device used by
this expanding power in extending its imperialism is to
hold out the glittering promises of communism as a beacon
light for the rescue of peoples who are sufEering from
economic underdevelopment or who are trying to remove
the shackles of the old traditional kinds of colonialism.



Online LibraryUnited States. Dept. of State. Office of Public CoDepartment of State bulletin (Volume v. 22, Apr- Jun 1950) → online text (page 2 of 116)