Thanks for all the replies.
Couple of things to add.
Restricting Neutrals to Coastal areas seems very harsh. Italy and the USA being the major powers most affected, USSR to a much lesser degree.
The game does have Diplomatic events to serve as a kind of balance.
But once the diplomatic measures have resulted in a nation picking a side, the gloves are off.
Italy with a commanding posistion in the Med. can get away with Blocades of Med travel.
The USA coastlines are not continuous. They are overseas, especially in the Pacific. Sending ships to the Islands would not be possible with this kind of rule.
What i would suggest is the following.
Italy be allowed 1 naval unit to cruise the med at will, all others sit in ports. When Italy is at 90% or greater Diplomatic influence, they can move the fleet at will.
For the USA 1 naval unit allowed to cruise the Atlantic at will. When LL starts with the CW, increase to 2 in Atlantic.
2 in the Pacific, until USA cuts Oil with Japan then increase to 3 and any number to base around Hawaii.
At 90% or greater Diplomatic influence, All ships move at will.
USSR can move 1 ship all the time, until 90% diplomatic influence, then all can move.
What are your thoughts about a house rule like this?