At first America's emergence as a major arms supplier was lauded as a significant contribution to the Allied war effort. Once the war ended, however, many Americans became fearful of U.S. participation in future European conflicts, and therefore opposed any activities—including arms transfers—that conceivably might increase the risk of such involvement. The most significant expression of this stance, known as isolationism, was the Senate's 1920 rejection of the Treaty of Versailles, which established the League of Nations. The United States also refused to participate in other arrangements associated with the league, including the St. Germain Convention for the Control of the Trade in Arms and Ammunition (1919) and the Geneva Convention for the Supervision of the International Trade in Arms and Ammunition and in Implements of War (1925).
Although leery of international arrangements like the League of Nations, the United States was prepared to support disarmament efforts aimed at the prevention of great-power conflict. Most notable in this regard was U.S. participation in the Washington Naval Conference of 1921–1922, which aimed at setting limits on the naval capabilities of the major powers. Under the resulting Washington Naval Arms Limitation Treaty, ceilings were set on the total allowable tonnage of battleships and aircraft carriers in the fleets of the United States, Great Britain, Japan, France, and Italy. A follow-on treaty, signed at London in 1930, extended the tonnage restrictions to the cruisers, destroyers, and submarines of the United States, Great Britain, and Japan. Although not bearing directly on the issue of arms transfers, these measures represented a significant effort to reduce the risk of war by constraining the arms procurement policies of the major powers.
The American public's antipathy to involvement in overseas conflicts was also reflected in calls for prosecution of U.S. arms firms for their alleged role in fomenting World War I. Antiwar crusaders like Dorothy Detzer of the Women's International League for Peace and Freedom traveled the country, demanding a congressional investigation of the domestic weapons industry. Critical books and articles—most notably The Merchants of Death (1934) by Helmuth Engel-brecht and Frank Hanighen—further aroused public opinion. "Arms makers engineer 'war scares,'" Engelbrecht and Hanighen wrote in their widely popular exposé. "They excite governments and peoples to fear their neighbors and rivals, so that they may sell more armaments." In addition, "bribery is frequently associated with war scares" of this sort.
In response to these and other such charges, the U.S. Senate voted to establish the Special Committee Investigating the Munitions Industry in 1934. This body, headed by Senator Gerald P. Nye of North Dakota, was empowered to pursue allegations that American and European weapons producers had conspired to instigate World War I and other conflicts in order to stimulate the demand for weapons. The Nye Committee (as it was called) was also authorized to investigate other charges of wrongdoing by the international arms industry.
After conducting numerous hearings, the Nye Committee concluded that U.S. arms firms had, in fact, employed bribery to clinch overseas sales and had spread tales of imminent hostilities in order to play one prospective buyer off another; it did not, however, find that they had conspired to ignite World War I. In the end, the Senate investigation did not result in any legal action against American arms companies. It did, however, lead to the establishment of the U.S. Munitions Control Board, the first governmental agency charged with regulating the arms traffic. It also sustained the national mood of isolationism and helped ensure passage of the Neutrality Act of 1935, which compelled the president to impose an arms embargo on nations at war.
The Neutrality Act of 1935 was followed by the adoption of similar measures in 1936, 1937, and 1939. The 1936 statute banned U.S. loans to belligerents, and the 1937 measure extended the provisions of the two earlier statutes to civil wars—a step that effectively precluded the sale of arms to the Republican government in Spain, then under attack from right-wing forces led by General Francisco Franco (and backed by the fascist governments in Germany and Italy). The 1939 act, passed at a time of growing tension in Europe, banned U.S. ships from carrying goods or passengers to belligerent ports, but allowed the United States to sell arms to friendly powers on a cash-and-carry basis.
Although they enjoyed strong support from Congress and the American public, the Neutrality Acts and related expressions of isolationism appeared increasingly constrictive to President Franklin D. Roosevelt at a time when the Hitler regime in Germany was accelerating its rearmament effort and pursuing a strategy of regional domination. While Roosevelt argued against repeal of the ban on arms transfers to belligerents in March 1939, when Hitler's armies overran Czechoslovakia, he changed his stance in September of that year, when Germany invaded Poland. Two months later, after Congress finally repealed the Neutrality Acts, Roosevelt authorized a series of cash-and-carry sales of U.S. arms to the European democracies.
A year later, following the fall of France, Roosevelt proposed a much more ambitious program of arms transfers, under which the U.S. government would lend, lease, or donate military equipment to the nations fighting Adolf Hitler. The new U.S. goal, Roosevelt told the nation on 29 December 1940, was to convert the United States into the "great arsenal of democracy," and thereby provide America's allies with the arms needed to defeat Hitler's armies. To fulfill this pledge, Roosevelt asked Congress to approve the Lend-Lease Act, which allowed the transfer of U.S. arms to friendly powers that lacked the funds to pay for them.
Although opposed by isolationists in Congress, the Lend-Lease Act was finally passed by a vote of 60 to 31 in the Senate and 317 to 71 in the House. Signed into law on 11 March 1941, it empowered the president to "sell, transfer title to, exchange, lease, lend, or otherwise dispose of" military articles to "any country whose defense the President deems vital to the defense of the United States." Congress initially appropriated $7 billion for this purpose, and later authorized total expenditures (by war's end) of more than $50 billion—the largest amount ever committed for arms aid until that time. The lion's share of this bounty, totaling $31.6 billion, went to Great Britain; the second largest share, worth some $11 billion, to the Soviet Union.
Ultimately, it was the direct involvement of U.S. soldiers and sailors, rather than the delivery of American weapons, that turned the tide in Europe and the Pacific. But U.S. arms transfers under the lend-lease program enabled America's allies—especially Great Britain and the Soviet Union—to hold out through two years of unrelenting warfare until the full weight of American combat strength could be brought to bear. The lend-lease program also established the principle—adhered to by all American presidents since World War II—that arms transfers can play a significant role in enhancing U.S. national security.