Evening star., 1935-12-27
Quiz Opening January 7 May
Pave Way for New
Neutrality Law.
NYE AND CLARK CLAIM
LENDING PERILS PEACE
Cite Stand of Lansing and Sub.
sequent Entrance Of U. S.
Into World Conflict.


profits and practices OF munitions
makers. Considerable tront-pdge
testimony seemed likely to bring
little legislative result until wdr
scare hit country last Summer.
Late, but rigorous, drive by neu-
trdlity bloc then resulted in enact
ment Of temporary ldw, efectire
until February. 1886. By terms Of
act President is directed to declare
embargo OF tCar mdtertels exports
to all belligerents. President
Roosevelt applied ldw in October,
declared Italy and Ethiopia in
state of wdr.
Weakness of act rests In its
failure to define implements OF
iUdr: to erpldin Whether money,
toodstufs and other commodities
are implements.
BY the Associated Press.
j. P. Morgan and Thomas W. La
mont. partner in Morgan g. Co., will
be the first witnesses called by the
Senate Munitions Committee January
in its investigation of whether loans
to the allies helped lead America into
the World War.
This was announced today as COM
mittee members laid plans for hear
ings on which they will base their
drive for broader neutrality legisla-
ton.
At the same time. committee In
vestigations made public memoran-
dunn by two members of the commit
tee. Senators Clark, Democrat, Of
Missouri and Nye. Republican, Of
North Dakota, reviewing the part
played by the wartime Secretary of
State, Robert Lansing in advocating
that the Government permit the
allies to borrow money in this country
| for continued war purchases before
the United States entered the conflict.
See Menace in Loans.
Repeatedly, Nye and other commit
tee members have said such loans
helped swerve this country from its
neutrality path 1t Is argued that,
after the loans were made. the United
States had q vested interest In the
| allied cause.
Morgan e. Co. fiscal agent for Eng
land during the war, has emphatically
denied it played any part in inducing
the United States to enter the conflict.
The memorandum was made public
by Stephen Raushenbush, chief in
veStigator. Chairman Nye asserted he
and other members would press again
for bans against loans to any bel
| lgerentS.
At the last session Of Congress
committee members produced a let
ter written September 6, 1915. by
Lansing to President Wilson urging
authorize ton for loans to belligerents.
The letter was presented to the Sem
ate by Senator Bone, Democrat, OF
Washington in the committees vain
attempts to embargo loans to warning
nations.
Only part Of the legislation they
desired was enacted, that prohibiting
shipment of arms to belligerents.
Other legislation, including embargoeS
on loans and such war materials as
oil. cotton. coal and metals, will be
presented again next session.
The Lansing letter related that al.
lied purchasing power was nearing
exhaustion late in 1915. 1t argued
that failure of this country to change
a nonlending policy inaugurated by
Secretary of State William Jennings
Bryan, who had resigned would bring
industrial depression. idle capital
and idle labor. numerous failures,
financial Generalization, and general
unrest and suffering among the la
boring classes"
The Nye-Clark memorandum COM
menting on this letter said:
Secretary Lansing, who was prob
ably one of the Nations ablest OFF,
Gals, describes in this letter the
mushroom growth Of war purchases
by belligerents with the consequence
that the European governments would
60 bankrupt if they tried to pay for
those purchases in gold.
Bryan's Policy Cited.
"Any demand to make them pay in
gold would result in an industrial de-
preston in this country. The alterna-
tive to this foreign-made depression
was for us to loan money to the
belligerents. This had previously been
declared to be inconsistent with the
true spirit of neutrality by the Sec
retary of State (Bryan).
I'm view of our financial entangle-
ment with Europe, this policy Of neu-
trality was now a source of emhar-
rassment' Neutrality could no longer
stand in the way of economic inter-
ests. President Wilson acquiesced in
this analysis.
| "One month after this letter, the
first great Anglo French loan Of $780,
100000 was fioated by syndicate
headed by ]. P. Morgan g. Co. Other
loans followed. Andre Tardieu, former
premier of France, commented that
after these foreign loans had been
fioated, from that time on, whether
desired or not, the victory of the allies
became essential to the United
States"