Evening star., 1934-12-15
PLAN TO MOBILIZE
INDUSTRY IN WAR
STUDIED At PROBE
Senators May Publish De-
tails of U. S. Business
Pact.
MILITARY MEN DECLARE
EXPOSURE WOULD HURT
Committee Members Doubt Firms
Agreement Would End Large
Profits in Wartime.
BY the Associated Press.

A secret plan in the possession OF
the United States Army, designed to
mobilize industry in the event OF an
other war. engaged the attention OF
the Senate Munitions Committee to-
day.
A contention has been made to the
committee that, under this plan, in
dustry already has arranged to forego
any inflated war profits. Members
OF the committee dispute this, and
the investigators called an executive
meeting for today to decide whether
public disclosure of the plans details
would jeopardize national defense.
Military strategists contend 1t
would. There were indications that
Secretary Dern had promised the
committee complete access to the
War Departments secret plans, but
declined to accept responsibility for
their disclosure. Some foreign gov
ernments are said to have shown in
terest in this phase of the investiga-
ton on the possibility something OF
military value to them might come
to light.
Committee members say the Army
plans would not take profits out OF
war, but would make large profits for
industrial organizations possible.
Denied by Probers.
The contention of investigators is
that, under these plans, each major
industrial plant knows what proper
ton of business it would receive, and
that Reserve officers, who in private
life are connected with manufactur-
ing concerns, would be drawn into the
Army's purchasing departments to
allot contracts in wartime.
The committee expected to spend
most of next week developing this
phase. The week will conclude the
present series of public hearings.
Later the committee will summarize
its findings in an attempt to show
Congress it should be given more
funds to inquire into banking, ship
building and steel in connection with
Its munitions inquiry.
Next week will be a mighty in
teresting one" Senator Vandenberg.
Republican, of Michigan, said today.
Anticipating more funds to con-
tinue the inquiry, the committee al
ready has asked Patrick j. Hurley,
former Secretary of War and chair
man Of the War Policies Commission,
to tell in January about the Policy
Boards recommendations for moves
against war profits.
The committee also considered 60
Ing into the connection of the banks
to the munitions manufacturers, in
which case J. P. Morgan & Co.,
would be subjected to another Senate
grilling. The bank acted as purchas-
ing agents for the allies in the pro-
curement Of war supplies here.
Auditive Testimony.
Late yesterday the committee heard
Arthur G. Carnduff, former special
attorney in the Justice Department,
testify the Government failed to
audit properly powder plant ac-
count of the Du Points, munitions
makers. He said Attorney General
Daugherty in 1923 removed him from
the case at a time when he believed
the company owed the Government
at least 100000.
The Du Points, disputing this sharp
iy, said Government auditors exam
lned everything minutely, at one time
turning thumbs down on 50 for a
fountain pen because the pen was
lost.
The testimony indicated the Du
he
ing, disputedly made profit of ST.
961. 900 at no financial risk to them
selves.
The Du Points termed ridiculous
q statement that the profit" figure
represented a 39,231 per cent return
on investment and contended that.
after deducting taxes and other out
lays, the figure dwindled to $286, ,346
In an ultimate settlement, they
told the committee, the 100000 of
which Carnduff spoke was reduced to
about 100000 by the deduction OF
sums later found to be due the COM
pany from the Government. They
denied, too, Carnduf statement that
when he left the case they had con-
ceded his claim to be correct and
were ready to settle for 100000 in
return for receipt in FULL
Carnduff said that what he wanted
more than anything else was an audit
of the company's books covering the
contract for the famous Old Hickory
powder plant in Tennessee.
He reiterated there had been NJ
thorough audit by the Government
The only complete audit that he knew
~ hoI hu
themselves, he asserted.
Hiss Asks Records.
Alger Hiss, alert young committee
investigator, who conducted the exam.
ination, asked Lieut. Col. c. r. Harris
OF the War Department to bring te
Mondays hearing all the War De-
partment records concerning the au-
diting Of the Du Pont account. This
he said later was for the purpose OF
establishing that no complete audit
had been made and no records could
be found.
The signing of the Old Hickory con-
tract was preceded by several months
of negotiations, and the cancellation
of several previously signed contracts
one Of which, testimony brought out
would have netted the company more
than $40,000O00. Harris said this
was . critical period of the war.
Nye termed the negotiations "hag-
Cling" for profits by the Du Points, and
asserted the disclosure was the most
important revelation of the inquiry
The Du Points repeatedly denied re-
sponsibility for the delay, which COM
mittee members charged impeded the
Government In the prosecution of the
war.