But he could not keep up with this policy and soon sent a special envoy, Sumner Welles, to encourage Machado, the oppressive president of Cuba, to resign in 1933. Machado was replaced by Ramon Grau and later by Colonel Fulgencio Batista. His regime was immediately accepted by America leading to favorable trade agreement. In 1939 Mexico nationalize all foreign owned oil companies. This infuriated the American oil interest and demanded them back asking Roosevelt to use military force if necessary. In 1941 the issue was solved when Mexico and America agreed on a fixed amount of compensation.
While the relations with Latin America remained agreeable, the same was not true for Asia. In September 1931, the Japanese army stationed in Manchuria seized control of it. Following Japan’s success, America invoked the Stimson Doctrine. The idea of Greater East Asian Co-Prosperity sphere was also generated by Japan. A similar idea was also circulating in Europe, Germany, and Italy. Adolf Hitler came to power in 1933 based on the promise to improve the economy of Germany and to increase its role in the world. Benito Mussolini of Italy also expressed his wish to expand Italy.
In response to the increased tension in the world, in August 1935 the congress passed the Neutrality act of 1935 which prohibited the sales of arms and munitions to any nation at war. On October 3, 1935, Italy invaded Ethiopia. Roosevelt announced America’s neutrality on the issue and denied the sale of war supplies to either side. However, the non-war trade continued between Italy and America. On May 9, 1936, Italy annexed Ethiopia.
In March 1936, Germany occupied Rhineland and in July a civil war broke out in Spain. Roosevelt again proclaimed America’s neutrality on the issue. Congress passed the Second Neutrality Act forbidding loans to countries at war. Roosevelt easily defeated Landon