Evening star., 1934-09-18
Senate Probers Are In
formed Foreign Sums Go
to Aid Own Makers.
u. S. COMPANIES WARNED
OF TREATY PROVISIONS
United Aircraft Export Corp.
Shown to Have Sold Germany
Million in Equip e.lt in 1884.
By the Associated Press.

BY the Associated Press.
A report that Germany was using
impounded foreign funds to subsidize
German aircraft manufacturers was
read today before the Senate Num-
tions Committee.
A letter written December 1, 1888,
by the International Engineering Co..
Inc, to the United Aircraft Exports,
Inc, was put into the record. 1t said
the German government was subsidiz-
ing German manufacturers to the ex-
tent Of 20 per cent against non Ger
man competition in all lines.
This fact should be known to
American firms, as we have recently
noted that the foreign funds impound-
ed In Germany are now used in
financing such subsidies" it said.
Foreign Funds Used"
did you know that foreign funds
impounded in Germany were being
used for the purchase of military
equipment?" Chairman Nye asked c.
w. Deeds, treasurer of United Air
craft.
I'VE had only this report" the wit
ness replied.
Other evidence was presented to
show the State Department on August
5, 1888, took cognizance of sales of
airplanes by American manufacturers
to the German government and took
steps to warn exporters that the
American Government was opposed
to such exports.
Treaty Provisions Cited.
The State Department, investiga-
tors heard, moved to prevent any cir
cumvention by American concerns of
Versailles treaty provisions designed
to restrict the rearmament of the
Reich. The department circulated to
all American aircraft companies doing
foreign business q definition of the
treaty provisions.
This was interpreted as an attempt
to prevent violations of the World
War peace pact to which the United
States Is not signatory.
The disclosure came after revela-
tions that the United Aircraft Export
Corp. has sold more than q million
dollars worth of airplanes, engines
and equipment to the Reich so far
in 1884. Against the contentious
Of committeeman that the materials
were designed for a place in the vast
rearmament plans attributed to the
Hiler regime, company officials In
sisted the equipment was sold for
commercial purposes.
Chairman Nye asserted:
There was proof offered IN evi-
dence here yesterday in the form Of
letters found in the files of the COM
pany that these people knew their
engines were going for military pur-
poses"
A new development today was an
announcement that the armament
business of United States Steel and
Bethlehem Steel Corp. will be scruti-
nized by the Senate committee. Of
f1cials of these firms will be sum-
moned to testify late in the Fall.
Gas Bombs Are Exhibited.
Two tear gas bombs and a ma
chine gun were brought in later as
evidence in examination of Federal
Laboratories Co. officials.
Committee members refused to ham
die the exhibits until it was explained
the bombs were unloaded, and the
machine gun a dummy
John w. Young, president Of the
concern, told the committee the busi-
af hir hnYpE ord r1aiy,a
gun maxine company had jumped
from S to 10 per cent during the
textile strike
Young said individual purchasers
must have the approval of their local
police or sheriff before they could
buy the gas bombs.
Then, if there is a strike in town
and the police happen to be on the
side of the industrialists, the strikers
couldn't get it?" asked Senator Clark,
Democrat, of Missouri. Did you ever
sell any to labor organizations?"
mo, but we were never asked TO-"
responded Young.
Senator Bone, Democrat, Of Wash
ington, asked Young what effect his
gas would have on hungry, physically
weak strikers.
Far less than lead bullets" Young
replied.
II understand that" Bone responded
dryly.
Young said shipments of gas con-
stantly were being made to National
Guard units all'over the United States.
Before today's hearing opened Brig.
Gen. William E. Mitchell, former chief
Of the Army Air Corps, conferred with
members Of the committee in closed
session. The subject was not disclosed.
Served as Adviser.
Chairman Nye said Mitchell has
served the committee in an advisory
capacity during its study Of aircraft
matters.
Before the session opened members
Of the committee also expressed in
terest in Argentina's newest protest
against disclosures.
Argentina, Nye said, "and her
aggrieved citizens have evidently not
discovered that their battle is with the
munitions makers, not with our Gov
eminent, or even the Senate Commit
tee"
Another said Argentina's reported
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