Evening star., 1935-06-24
CHECK ON WARSH|P
FIRMS AND PROFITS
URGED IN REPORT
Nye Committee Demands
Curb on Influence to
Promote Strife.
Sc PER CENT NET ON
ONE CRUISER CHARGED
Lobbyists Would Be Forced to
Report Income and Expendi-
lures Under Law Asked.
BY the Associated Press.

BY the Associated Press.
Demanding a big stick policy to
police" builders of warships and pre-
vent them from confusing public de-
Tense needs with their private pockets, i"
the Senate Munitions Committee today
urged a four-point legislative pro-
gram to:
/. Prevent "collusion" in bidding
for Navy construction jobs.
2. Prevent American patents from
getting into the hands of foreign
powers.
8. Limit profits to 5 per cent Of the
total cost to the Government, in cases
where the Government assumes the
risks of the enterprise, or to 10 per
cent where the Government does not.
4. Require that shipbuilders' lobby
lists" register with the Government
and disclose their income and ex-
penditures
Flag Waving Hit.
Some shipbuilders. said the COM
mittee, headed by Senator Nye, Re-
publican, of North Dakota, ARE Ger
tainly not above suspicion of willing
ness to wave the flag or to circulate
war scares in the plain and simple
interest of their own pocketbooks, re-
gardless of results"
The committee. making prelim-
mary report on an investigation to
determine whether "collusion" existed.
held that there was "telepathy''
among shipyard officials in dealing
with each other SO that each got the
ship contracts 1t wanted at profits
ranging as high as 36 per cent.
The private shipbuilders," the re-
port said, should very definitely be
policed In any and all moves made by
them or through them to confuse pub
lic-defense needs with their private
pockets, or should be cut off entirely
from the building of ships for the
Navy"
Helpless on Price.
It declared the Navy was "at the
mercy" of the yards in preparing
plans for war ships and equally help
less at determining what prices were
fair.
"A series Of bids are put before the
Navy" the report recited, and the
Navy has to take the low one, and the
taxpayers have to hope and pray that
the low one is somewhere within a few
million dollars of being reasonable"
Continuing, the report said:
sfTo s,thvaffffnp $h;~
port, the committee wishes to empha-
size that it is interested mainly in two
things:
"The first of these is that the naval
defense shall be provided for without
prof1teering or collusion.
THE second of these is that the
national necessity for a purely de-
fensive Navy shall not be confused
with the private necessity of the ship
builders for continuing profits as a
consequence of the present close inter-
dependence of the Navy Department
and these private shipbuilders. ."
Recommends Legislation.
"The growth of the Navy contains
within 1t the seeds of armament races
and wars as well as the legitimate
seeds of a purely defensive national
life insurance"
AS q first corrective effort, the COM
mittee made its recommendation the
legislation which already has been
introduced into Congress.
Asserting that private interests
could incite nations to armament
races, the committee declared they
were not "the right parties" to
be left "close to the powder keg of
international relations"
Construction of naval vessels was
declared to be more costly in private
yards than in Government yards.
While the evidence is not all in"
the report said, "the indications are
that the private yards cost the Gov
ernment from one to two million
dollars more per cruiser than the
navy yards"
Charges Wreck of Farley.
The committee charged big ship
builders with breaking up the Geneva
Nayal Limitations Conference in 1927
and Immediately launching a price
increasing campaign that made
profits Of IS and 25.4 and 36.9 per
cent on the cruisers"
The committee said there was
danger in allowing self-interested
groups such as the shipbuilders" to
be in 'the close position Of influence,
as they are at present. to such an
important instrument of national
policy as the Navy is"