Interwar Foreign Policy, 1919-1941

By the end of this lesson, students will be able to:

• Account for why the Senate rejected the Treaty of Versailles and refused membership in the League of Nations between November 1919 and March 1920.
• Describe the 1920s pattern of unilateral economic and disarmament diplomacy, including the Washington Naval Conference, the Kellogg-Briand Pact, and the Dawes and Young plans.
• Compare U.S. policy toward Latin America under the Roosevelt Corollary, Hoover's Clark Memorandum, and Franklin Roosevelt's Good Neighbor Policy.
• Explain how the three Neutrality Acts of 1935, 1936, and 1937 attempted to insulate the United States from a future European war, and how Cash and Carry and Lend-Lease undermined that framework.
• Use Skill 1.B to provide a coherent account of the interwar foreign-policy process, including the developments that pushed the country toward war between 1937 and December 1941.

The label most often attached to U.S. foreign policy between the world wars is isolationism, but the term is misleading. Between November 1919, when the Senate first refused to ratify Woodrow Wilson's Treaty of Versailles, and December 7, 1941, when Japanese carrier aircraft struck the U.S. Pacific Fleet at Pearl Harbor, the United States declined binding collective-security commitments and rejected entry into the League of Nations. At the same time, it convened the largest disarmament conference of the twentieth century, signed a treaty renouncing war as an instrument of national policy, supplied the capital that propped up German reparations payments, recognized the Soviet Union, replaced gunboat diplomacy in Latin America with the Good Neighbor Policy, and ended the decade as the principal supplier of materiel to the Allied coalition. A more accurate description than isolationism is selective disengagement from European collective security combined with active unilateral engagement in finance, trade, and disarmament (KC-7.3.II.D).

The pattern began with the Senate fight over the Treaty of Versailles. Wilson had built the League of Nations Covenant directly into the treaty so that ratification would commit the United States to mutual defense under Article X. Senate Republicans led by Henry Cabot Lodge offered fourteen reservations meant to preserve congressional war-making power; a smaller bloc of irreconcilables led by William Borah and Hiram Johnson rejected the treaty in any form. Wilson refused to compromise. The Senate voted twice, in November 1919 and again in March 1920, and the treaty failed both times. The United States signed a separate peace with Germany in 1921 and never joined the League. The 1920 Republican landslide elected Warren Harding on a campaign for what he called a "return to normalcy," and the next twelve years of Republican administrations approached foreign policy through informal cooperation rather than treaty alliance (KC-7.3.II.D; Theme WOR).

Even outside the League, the new administration set the global disarmament agenda. The Washington Naval Conference, hosted by Secretary of State Charles Evans Hughes between November 1921 and February 1922, produced the Five-Power Treaty limiting capital-ship tonnage among the United States, Britain, Japan, France, and Italy at a ratio of five to five to three to one and seven-tenths to one and seven-tenths. A Four-Power Treaty among the United States, Britain, France, and Japan replaced the Anglo-Japanese alliance with mutual consultation in the Pacific, and a Nine-Power Treaty bound the major powers to respect Chinese territorial integrity and the Open Door. Naval disarmament was the closest the interwar order came to actual arms control until the Cold War nuclear treaties; it also placed an effective ceiling on the U.S. battleship fleet through the early 1930s (KC-7.3.II.D).

The disarmament impulse reached its rhetorical high point with the Kellogg-Briand Pact, drafted by Secretary of State Frank Kellogg and French Foreign Minister Aristide Briand and signed in Paris on August 27, 1928. Fifteen original signatories, joined eventually by sixty-two others, renounced war as an instrument of national policy and committed themselves to peaceful settlement of disputes. The treaty had no enforcement mechanism, no obligation to act against a violator, and no sanctions for noncompliance, and historians have called it toothless ever since. Japan invaded Manchuria three years later. Italy attacked Ethiopia in 1935. Germany annexed Austria in 1938. The pact's actual significance came after 1945, when its renunciation of wars of conquest became a foundation stone for the United Nations Charter and for the Nuremberg principle that aggressive war is a crime against the international order.

U.S. economic diplomacy mattered more in the 1920s than the disarmament treaties. The Dawes Plan of 1924, drafted by the Chicago banker Charles Dawes, restructured German reparations on a sliding scale and routed roughly two hundred million dollars in private American capital into the Reichsbank to stabilize the mark. The Young Plan of 1929, written by General Electric chairman Owen Young, reduced the total reparations bill, stretched payments out to 1988, and set up the Bank for International Settlements. The two plans together produced a triangular flow of capital: American banks lent to Germany, Germany paid reparations to Britain and France, and the Allies repaid wartime loans to the United States. The arrangement collapsed when the 1929 stock-market crash dried up American lending, and Herbert Hoover's 1931 reparations moratorium was an effort to stop the bleeding that came too late.

Trade policy moved in the opposite direction. The Smoot-Hawley Tariff of June 1930 raised average duties on dutiable imports to roughly fifty-nine percent, the highest rate in U.S. history. More than one thousand economists signed a letter urging Hoover to veto it; he signed it anyway. Trading partners retaliated with their own tariff increases, world trade contracted by roughly two-thirds between 1929 and 1933, and the depression deepened across every industrial economy. Smoot-Hawley is the textbook example for AP US History students of how a domestic political response to economic distress can amplify a global downturn, and it set the lesson that Cordell Hull would apply when he negotiated reciprocal trade agreements after 1934 (KC-7.3.II.D; Theme WXT).

Latin America furnished the second arena where U.S. policy shifted across the decade. From the 1904 Roosevelt Corollary through the early 1920s the United States had stationed marines in Cuba, Haiti, the Dominican Republic, and Nicaragua, sometimes for years at a time. Hoover's 1928 Clark Memorandum repudiated the Roosevelt Corollary as a basis for intervention, and Franklin Roosevelt extended that turn into a doctrine. In his First Inaugural in March 1933 he committed the United States to "the policy of the good neighbor." The Good Neighbor Policy abrogated the Platt Amendment with Cuba in May 1934, withdrew the marines from Haiti in 1934 and from Nicaragua in 1933, refused to intervene when Mexico nationalized U.S. oil holdings in 1938, and signaled that the United States would treat Western Hemisphere states as sovereign partners rather than wards. The policy was also a security calculation: as Europe and Asia destabilized, the administration wanted a friendly hemispheric backyard. Roosevelt also extended diplomatic recognition to the Soviet Union in November 1933, ending sixteen years of nonrecognition and producing modest trade ties (KC-7.3.II.D).

The rise of the fascist powers tested every premise of the 1920s order. Italy invaded Ethiopia in October 1935. Germany remilitarized the Rhineland in March 1936 in defiance of Versailles and Locarno. Japan invaded China in July 1937 in what would become an eight-year war. Germany annexed Austria in March 1938 in the Anschluss, then took the Sudetenland in October 1938 with British and French acquiescence at Munich, then occupied the rest of Czechoslovakia in March 1939. On September 1, 1939, Germany invaded Poland, and Britain and France declared war two days later. Through the early stages of these crises Congress responded by tightening neutrality, not by deterring aggression (KC-7.3.II.E).

The three Neutrality Acts were the legal expression of that response. The 1935 act banned arms sales to belligerents and warned U.S. citizens that they traveled on belligerent vessels at their own risk. The 1936 act extended the ban and prohibited loans to belligerents. The 1937 act added a Cash and Carry provision for nonmilitary goods, requiring belligerents to pay cash and to transport purchases on their own ships. The acts were drafted in conscious response to the conclusions of the 1934 Nye Committee, which had argued that arms manufacturers and bankers had pulled the United States into the First World War. They reflected a popular consensus that the country had been duped in 1917 and would not be duped again. They also tied Roosevelt's hands as he watched the European order collapse (KC-7.3.II.E).

Roosevelt began to push back rhetorically in the fall of 1937. In Chicago on October 5 he delivered the Quarantine Speech, comparing aggressor states to carriers of an "epidemic of world lawlessness" and proposing that peace-loving nations join in quarantining them. The reaction at home was swift and largely hostile, and Roosevelt retreated. The political space for an interventionist policy did not open until after the fall of France in June 1940, when the prospect of a Nazi-controlled Atlantic forced an American reassessment. In September 1940 Roosevelt traded fifty aging destroyers to Britain for ninety-nine-year leases on bases in the Caribbean and Newfoundland; the same month he signed the Selective Training and Service Act, the country's first peacetime draft.

The decisive break came with Lend-Lease. Signed on March 11, 1941, the Lend-Lease Act authorized the president to sell, transfer, lease, or lend defense articles to any government whose defense he deemed vital to the security of the United States. Roosevelt described the program in a December 1940 fireside chat by analogy to lending a garden hose to a neighbor whose house was on fire. By the end of the war, Lend-Lease aid would total more than fifty billion dollars in 1941 dollars, going first to Britain, then after June 1941 to the Soviet Union following Germany's invasion, and to the Republic of China and roughly thirty other Allied governments. Lend-Lease ended the legal fiction of strict neutrality. Combined with the Atlantic Charter that Roosevelt and Winston Churchill issued in August 1941, it tied U.S. economic capacity directly to the war's outcome (KC-7.3.II.E; Theme WOR).

The Pacific arena moved on a separate timetable. Japan's war in China deepened after 1937, and in September 1940 Japan signed the Tripartite Pact with Germany and Italy and occupied northern French Indochina. The Roosevelt administration responded with progressively tighter economic measures: scrap-iron and steel embargoes in 1940, the freezing of Japanese assets in July 1941, and a de facto oil embargo that cut off roughly four-fifths of Japanese petroleum imports. Negotiations between Tokyo and Washington through the autumn of 1941 produced no agreement on Japanese withdrawal from China. On December 7, 1941, six Japanese carriers struck Pearl Harbor, sinking or damaging eight battleships and killing roughly twenty-four hundred Americans. Roosevelt addressed Congress the next day, calling December 7 "a date which will live in infamy," and Congress declared war on Japan within an hour. Germany and Italy declared war on the United States on December 11. The interwar pattern of selective engagement was over.

The reasoning process most useful for Topic 7.11 is Comparison. Productive pairs include: the U.S. response to the rise of fascist powers in the 1930s versus the U.S. response to the European war of 1914 to 1917; the Roosevelt Corollary versus the Good Neighbor Policy in Latin America; the Kellogg-Briand commitment to renounce war versus the Lend-Lease commitment to supply a war; and the 1935 Neutrality Act, which banned arms sales to all belligerents, versus the 1941 Lend-Lease Act, which supplied arms to the Allied coalition. Each comparison surfaces the same underlying tension. The United States in the 1920s and early 1930s tried to remain a great economic power without acting as a great political power, and that posture proved unsustainable once aggression in Europe and Asia began to threaten the international order on which American prosperity depended.

The four excerpts below trace the arc of interwar foreign policy from the high point of liberal internationalism in 1928 through the Neutrality Acts of the mid-1930s to the break with neutrality in 1941.

1. (Comparison) Compare the U.S. response to aggression by Italy, Japan, and Germany between 1931 and 1939 with the U.S. response to the European war of 1914 to 1917. Identify two similarities and two significant differences. What does the comparison suggest about the lessons that policymakers had drawn from the First World War?
2. (Causation) Account for the Senate's 1919 and 1920 rejection of the Treaty of Versailles. Identify three contributing factors and rank them by what you regard as their relative weight in the outcome.
3. (Continuity and Change) Compare the Roosevelt Corollary to the Monroe Doctrine with the Good Neighbor Policy. What does the contrast reveal about the changing premises of U.S. policy toward Latin America between 1904 and 1934?
4. (Causation) Explain how the 1924 Dawes Plan and the 1930 Smoot-Hawley Tariff together helped destabilize the international economic order between the wars. Account for the connections between American banking, German reparations, and Allied loan repayment.
5. (Comparison) Compare the 1935 Neutrality Act with the 1941 Lend-Lease Act. What changed in U.S. foreign-policy doctrine in the six years between them, and what events drove the change?

Draft alignment — pending educator review. AP USH codes correspond to the official College Board Course and Exam Description (Effective Fall 2023, Version 1). Statements below are paraphrased in the CountryReports voice; refer to the College Board's published CED for verbatim wording.