<P> In January 1937, the Congress passed a joint resolution outlawing the arms trade with Spain . The Neutrality Act of 1937 was passed in May and included the provisions of the earlier acts, this time without expiration date, and extended them to cover civil wars as well . Furthermore, U.S. ships were prohibited from transporting any passengers or articles to belligerents, and U.S. citizens were forbidden from traveling on ships of belligerent nations . </P> <P> In a concession to Roosevelt, a "cash - and - carry" provision that had been devised by his advisor Bernard Baruch was added: the President could permit the sale of materials and supplies to belligerents in Europe as long as the recipients arranged for the transport and paid immediately with cash, with the argument that this would not draw the U.S. into the conflict . Roosevelt believed that cash - and - carry would aid France and Great Britain in the event of a war with Germany, since they were the only countries that controlled the seas and were able to take advantage of the provision . The cash - and - carry clause was set to expire after two years . </P> <P> Japan invaded China in July 1937, starting the Second Sino - Japanese War . President Roosevelt, who supported the Chinese side, chose not to invoke the Neutrality Acts since the parties had not formally declared war . In so doing, he ensured that China's efforts to defend itself would not be hindered by the legislation: China was dependent on arms imports and only Japan would have been able to take advantage of cash - and - carry . This outraged the isolationists in Congress who claimed that the spirit of the law was being undermined . Roosevelt stated that he would prohibit American ships from transporting arms to the belligerents, but he allowed British ships to transport American arms to China . Roosevelt gave his Quarantine Speech in October 1937, outlining a move away from neutrality and toward "quarantining" all aggressors . He then imposed a "moral embargo" on exports of aircraft to Japan . </P> <P> Early in 1939, after Nazi Germany had invaded Czechoslovakia, Roosevelt lobbied Congress to have the cash - and - carry provision renewed . He was rebuffed, the provision lapsed, and the mandatory arms embargo remained in place . </P>

Which of the following spelled the end of the neutrality act