Evening star., 1936-01-12
SENATORS EXPECT
j. s. ARMS RULE
But Nye Predicts Split on
Naturalization or
Regulation. .
BY REX COLLIER.

BY REX COLLIER.
Four days Of testimony by j. p.
Morgan and his associates and the
prospects of further data regarding
World War financing at hearings this
week have convinced members Of the
Senate Munitions Committee OF the
need for some sort" of governmental
control Of the munitions industry.
Senator Nye. Republican, Of North
Dakota, chairman of the committee.
declared in an interview yesterday
that he favors complete "nationaliza-
tion" of the business of manufacturing
implements of war.
He expressed belief that when the
time comes for drawing up recommen-
dations to Congress the committee will
divide into two factions-one support
ing his naturalization view and the
other preferring Federal regulation OF
private manufacturers Of war mate
rials.
+ Intimate Relation Shown.
THE testimony so far brought out
at the hearing" Senator Nye said.
shows the intimate relation between
private commerce In war materials and
governmental neutrality policies.
when neutrality policy interfered
with the commercial interests during
the World War, the policy was
changed. II private profit in mate
rials Of war Is ended, such q condition
would never exist"
Nye said the committee would con-
tinue its interrogation of Morgan and
his partners, Thomas w. Lamont and
George Whitney. through next Friday
and also would call representatives OF
the National City Bank.
Much of the questioning, he said,
will center on facts obtained by the
committee from State Department
files covering Americas neutrality
program in the early days Of the con-
fiict in Europe. He said the further
data to be introduced will supply
missing parts" to the general picture
of official maneuvering prior to entry
of the United States into the war.
Holds Business to Blame.
Nye said he is convinced the power
full influences wrought by American
banking and commercial interests in
1914 and 1915 we're responsible for the
constant shifting" of our attitude
toward neutrality and played their
part in dragging America into the war.
"Yhe testimony has shown that very
plainly" the chairman asserted. with
Morgan & Co. handling "a per cent of
allied purchases in this country, 1t Is
apparent there was direct parallel
between such business interests and
public policy-and when there was
conflict between the two, public policy
was altered"
The Senator said he favors the man
ufacture exclusively by the Govern
ment of all war munitions of any kind
and of warshipS and equipment. A
line must be drawn, he said, between
essentially implements Of war and
other materials, such as clothing, food
and other articles of military equip
ment.
Present Spectacle Seen.
The less drastic view, he explained.
would place shipbuilding and NUM-
tions companies under control Of the
! Federal Governmental time Of peace
as well as In time Of war.
"Under the present system Of pri-
vate manufacture" he said. I'VE have
the spectacle Of American firms sup
plying our soldiers with gas masks to
protect them against American-made
poison gas, or with steel helmets to
protect them against American-made
shrapnel sold abroad"
The committee will not have time,
he said, to explore every avenue it has
opened in the inquiry into war profits.
but will canvass thoroughly during the
coming week the whole subject of
loans fioated in this country by the
Morgan firm, the National City Bank
and other bankers.
A further effort win be made to find
the reasons underlying President Will
sons change OF neutrality policy In
October, 1914, whereby American
bankers were allowed to make credit
loans" to France and England.
Pressure Is Claimed.
The committee has brought out that
this change in policy was conveyed
secretly to New York bankers by
Robert Lansing, hen counselor Of the
State Department, although Secretary
Of State Bryan two months previously
had ruled that loans to belligerents
ARE inconsistent with the true spirit
of neutrality"
The committee has sought to show
that this "about-face" was the result
of pressure on the administration by
New York bankers who wished to float
European loans, the proceeds of which
were to be used by England and France
to purchase war supplies in this coun-
try. Morgan & Co. a few months
later became purchasing agent for the
British and French governments and
placed orders in America for munitions
and other war materials totaling in
value about $4,000, ,000, 900, on which
commissions aggregating $4,000, 900
were paid.
Nye contended that had there been
no financial tie-ups and no sales of
American-made war materials to
Europe, the United States would have
remained neutral during the entire
war.
Morgan has denied this contention
repeatedly during the past week. ad-