Time travel blogging: Congress investigates war profiteering!

Once upon a time, in a very different country called the United States of America, the New York Times was reporting on the speech of a Senator who had just been selected to head a special Senate Committee on war profiteering, "Nye Enumerates War Profit Rises" 09/02/1934:

Speaking over the Columbia Broadcasting System, [Senator Gerald Nye] asserted that annual average profits of the Atlas Powder Company moved from $485,000 in peace time to $2,374,000 in the World War years and gave increases for other concerns as follows:

Hercules Powder Company — by $6,000,000.
General Motors Corporation — from $6,954,000 to $21,700,000.
Anaconda Copper Company — by $24,000,000.
United States Steel Corporation — from $105,331,000 to $238,653,000.
Bethlehem Steel Company - from $6,840,000 to $49,427,000.
Du Pont - from $6,092,000 to $58,076,000.

For some perspective, $24 million per year was really big bucks for a large corporation back during the First World War.

Gerald Nye has not gone down in history as one of our great statesmen. Far from it. In the years when the international threats from Germany and Japan were becoming more painfully obvious by the month, he was a hardline rightwing isolationist. The term "isolationist" is bandied about a lot, usually to condemn someone who opposes one's own interventionist inclinations. But Nye's brand of what we now know as Old Right isolationism has really not had a significant influence on US foreign policy in decades, though it's kissing cousins with Cheney-Bush style unilateralism.

But in 1934, Nye's Committee began its work with the tacit blessings of the Roosevelt Administration. And the administration cooperated with the Committee in providing and even volunteering documents for its work, which focused on the shady lobbying of lenders and armaments makers during the years before and during the First World War. Though the Democrats controlled Congress, Republican Senator Nye was chosen to head the special committee.

Historians tend to see the Nye Committee's work through the prism of the later bitter fights between the Roosevelt administration and the America Firsters as Roosevelt had to fight tooth and nail to bolster US defenses in the face of Axis aggression against the intense opposition of Republicans like Nye.

But it's a healthy reminder that there was a time, before the living memory of most people now but not hopelessly far away either, where Democrats and Republicans in Congress were willing to openly challenge the titans of industry and finance over war profiteering. The inquiry made a big impression on the public as it produced a number of impressive tales of dubious dealings by the wealth and powerful that could well have put the lives of Americans at stake needlessly. Though the First World War improved its reputation in the US considerably after the experiences of the Second, in the 1920s and 1930s, it was widely held in the US as well as Europe that the war had been a gigantic waste, waged in no small part for venal purposes. And there was a considerable amount of truth in that view.

The Times report also said:

The list of over 100 witnesses, those called for next week to be made public tomorrow, would be a "Who's Who" of the industry, he added, and the inquiry would involve every angle of the war implements industry in this country and much of it that functions under other flags. ...

Witnesses will be asked to disclose their past and present profits from manufacture of explosives, poison gas, airplanes, armor plate, heavy and light artillery, anti-aircraft ordnance, rifles, tanks and all implements of modern warfare.

They will also be called on to state what interest, understanding, or other relations exist between themselves, their firms or corporations and the manufacturers of arms and munitions in England, France, Germany or other foreign countries in which the industry is of major proportions.

Finally, the inquiry will take up alleged "lobbying" by agents of the industry in Washington and their role, if any, in disarmament conferences [after the war]. (my emphasis)

Yes, the times they have 'a changed.

If Barack Obama gets elected, he might want to take a look at Roosevelt's strategy in that matter. Exposing the callous dealings of the "economic royalists" (as FDR came to call them) was a good way to further reduce the glow of economic brilliance around them even more than the Great Depression had done. In addition, this was the time when reactionary business interests were organizing the Liberty League to oppose FDR's New Deal measures.

And what our latter-day Churchills take for granted, that the US should have armed itself like mad after the First World War, was by no means self-evident to everyone in 1934. Close observers of Hitler and his Nazi movement could see even at that point that his policies were directed towards war. But the idea that a massive American military program was an answer to that growing but still distant threat was scarcely obvious in 1934, even in retrospect.

David Kennedy includes this story about FDR in his Freedom From Fear: The American People in Depression and War, 1929-1945 (1999):

In keeping with the temper of the times and with his own budget-cutting agenda, Roosevelt also moved swiftly after his inauguration [in 1932 1933] to shrink the already skeletal 140,000-man army. Army Chief of Staff Douglas MacArthur remonstrated vehemently. Meeting with Roosevelt at the White House, MacArthur later recalled, "I spoke recklessly and said something to the effect that when we lost the next war, and an American boy, lying in the mud with an enemy bayonet through his belly and an enemy foot on his dying throat, spat out his last curse, I want the name be be not MacArthur, but Roosevelt." A livid president shouted that MacArthur could not talk that way to the commander-in-chief. MacArthur, choked with emotion, hurried outside and vomited on the White House steps. The army's budget stayed cut.

Obama could take a lesson about Roosevelt's refusal to be intimidated by some military blowhard spouting purple prose, too. MacArthur's vomiting afterwards makes me wonder what caused it. I suppose it could have been food poisoning. But it could also have been MacArthur, arrogant and used to people deferring to him because of his position, was stunned to be put into place by someone who wasn't afraid of him and his bluster. He later underestimated Harry Truman, as well. I can picture Dick Cheney reacting in a similar way if he were arrested and charged with war crimes.

Tags: douglas macarthur, fdr, franklin roosevelt, gerald nye, war profiteering