Evening star., 1935-03-28
Federal Control of Munitions
Proposed at Senate
Hearing.
VANDENBERG QUESTIONS
WITNESS ON SECURITIES
Chairman Nye Informs Finan.
cier Committee Is Not Critical
of War Record.
BY the Associated Press.

Elimination of tax-eXempt bonds to
insure 'fairer" taxing and peace-time
manufacture of war-making imple-
ments under Government license or
by the Government itself were ad-
vocated today before the Senate
Munitions Committee by Bernard M.
Baruch, chairman Of the World War
Industries Board.
If we had no tax-exempt bonds,
he asserted, taxing would be fairer.
This statement was in response to a
question by Senator Vandenberg, Re-
publican, Of Michigan, as to means of
preventing evasion OF taxes in war or
peace.
You can't carry out a tax policy
except after eliminating tax-exempt
bonds, can you?" the Michigan Sena-
tor asked.
Urges Elimination i'm Future.
You can't eliminate those issued
in the past" the witness replied, ris-
ing to his feet.
You can eliminate those issued in
the future" he added.
The financier said he had some OF
the taX-exempt bonds himself.
But would you favor eliminating
tax-eXempt bonds?" Vandenberg in
sisted.
Yes, sir" Baruch replied, emphat-
ically
Earlier. the New York financier lis
tened with pleasure to an assertion
by Chairman Nye, Republican, Of
noL that hn
not criticizing Baruch's wartime rec
ORD but sought only to gain the ad-
vantage of his experience in forlnulat-
ing a plan to take the profit out of
war.
Other members made similar state
ments after Senator Byrnes. Democrat,
of South Carolina had declared "un-
fair" any insinuations against Baruch's
record which may have grown out Of
the committees investigation.
Colt Case Enters Hearing.
The statement about manufacturing
munitions was made after Nye had
referred to the removal of the Blue
Eagle from the Colt Manufacturing
Co. He said he was told the War
Department still would give the firm
orders.
do you see a way of meeting a
condition like that?" Nye asked.
"Yes. the Government will have to
do that kind of manufacturing ITSELF"
Baruch said
Manufacture would give us yard
stick on COSTS" he added.
Appearing as a surprise witness as
today's hearing opened. Byrnes said
he was chairman of a special De-
ficiency Committee of the House APP
preparations Committee during the
war and knew in detail all the trans
actions concerning Baruch.
Tells of Baruch's Service.
He related that Bsruch had financed
mission going to Europe to learn If
any American goods were being d.
verted by the allies from military
purposes to commercial purposes.
"Baruch paid expenses of the COM
mission out of his own pocket,
amounting to s85,OO0." Byrnes said,
adding that the financier declined re-
endorsement from the Treasury. al
though the act saved the United
States many millions of dollars
In turn, the Senator continued. when
the war ended and many wartime
functions. including the War Indus
tries Board. were terminated, Baruch
saw that many young girls who had
come to Washington would be thrown
out on the streets.
He employed a matron to visit all
the girls in his department and en-
courage them to go home rather than
to walk the streets in Washington
trying to find work.
Paid Girls Fares Home.
Gas inducement he paid their fare
home, together with Pullman and ex-
penses. Most of them went home"
Immediately members of the COM
mittee Joined in assuring that no re-
Election against Baruch's record was
intended.
With many demands being voiced
on Capitol Hill that the United States
keep clear of the European crisis. the
subject of neutrality is being pom
dered by many legislators. The Sem
ate committee was expected to ask
Baruch to elaborate on his brief COM
ment yesterday on the subject.
First, however, the financier was to
go on with his story of how the World
War Industries Board. of which he
was chairman, sought to curb the ris-
ing price of copper, vital military
metal.
Baruch, testifying yesterday, agreed
in general with the plan of the NUM-
tions Committee to set up a taxing
system to pay as you fight" But. he
was not enthusiastic about the idea
of conscripting industrialists as pro-
posed by John T. Flynn, economist
adviser to the committee.
Opposes Drafting Of Industry.
In a press conference he expressed
the view that conscription of indus
try was not necessary and that pri-
vate control was best-with war profits
stripped OF by taxes.
II do not favor the naturalization
Of industry for reasons that I should
be glad to go into" he also told the
committee. To reporters he expressed
the opinion it was unnecessary to
clothe industrialists with Army au-
thority.
He also told newspaper men that
the winning Of war demanded that
subjection Of industry be not carried
so far as to strangle cooperation.
Woman Killed in Stampede.
PUEBLA, Mex, March % Dr.
A young woman was trampled to
death last night and at least six