was a global movement to solve these problems. In 1921, the new League of Nations resolved that “the manufacture by private enterprise of munitions and implements of war is open to grave objections.”94
In the United States, which had not joined the league, there was a political consensus that in the event of a future conflict, the sacrifice must be shared more broadly. As President Harding put it, the next time around, there should be “no swollen fortunes.” The two leading veterans’ organizations, the American Legion and the Veterans of Foreign Wars (VFW), both called for increased control of profits in wartime, possibly via a coercive “draft” of capital that would match the conscription of soldiers. In 1924, the Republican and Democratic party platforms both promised that in the event of a future conflict, there would be something closer to a “universal mobilization.” All this sober activity did not prevent readers from chuckling at Harold Gray’s “Little Orphan Annie” comic, which in 1924 introduced a sympathetic character named Daddy Warbucks.95 But to a large number of Americans, the record of the radically inegalitarian distribution of war bucks in the late 1910s was really no laughing matter.
After 1929, as the nation slid into the Great Depression, Congress and the White House began to consider more concrete proposals for profit control in a future war. During the tenure of the Hoover administration, the most important work in this field was done by a presidentially appointed War Policies Commission, which held hearings in 1931. In its final report, which was influenced by the continuing lobbying efforts of the American Legion, the commission recommended that profit control in a future war go well beyond what had been achieved during the Great War. It called for broad price controls, as well as a new EPT that would capture 95 percent of any profits above prewar averages. Although Congress did not act immediately to institute these recommendations, it was clear that there was a broad consensus that in the event of a future war, the nation should use stricter controls than the ones applied in 1917–18.96
As the Depression worsened, there was an upsurge all around the world in calls for stricter regulation of the munitions business. The economic crisis, which naturally led to more questioning of the beneficence of largescale capitalist enterprises of all kinds, seems to have further heightened interest in the sins of arms suppliers, in particular.97 In 1933–34, books and articles about the “merchants of death” abounded in Europe and the United States. The public attention led to new action by governments. In Britain, where the Labour Party was calling for more nationalization of arms production, a Royal Commission was appointed to investigate the issue. Its report, issued in 1936, came out against full nationalization, but it did call for more regulation of production and profits. In France, a partial nationalization did occur, following the electoral victories of the Popular Front, in 1936. Not surprisingly, this move led to clashes between the government and executives at French companies that had been serving as military suppliers, including Renault and Schneider.98
In the United States, the largest and best-publicized of the efforts at defense-sector reform in the mid-1930s was the Senate’s munitions inquiry, chaired by Gerald Nye. A populist Republican from North Dakota, Senator Nye had done some work in the late 1920s in the later stages of the Teapot Dome investigations. His munitions investigation originated with the efforts of the Women’s International League for Peace and Freedom, which in 1919—when it was still led by the celebrated American progressive and pacifist Jane Addams—had pushed for a global ban on the private production of munitions. In 1932, a new president of the Women’s International League, Dorothy Detzer, pushed Congress to investigate the issue. At first, Detzer hoped that the investigation would be led by Senator George Norris, the patron of the TVA. In the end, Norris helped her to enlist Nye.99
From the beginning, Nye made it clear that he wanted to use the hearings to persuade Congress to enact strict controls on the defense sector. In August 1934, just before the hearings started, Nye gave well-publicized speeches, one at the World’s Fair in Chicago, and one on the CBS radio network. In these talks, Nye called attention to the enormous profits that had been collected during the Great War by Du Pont, among other companies. He also suggested that Congress should consider imposing a “government monopoly” over munitions manufacture. Two months later, after the hearings had started, Nye went back on the radio with more specific proposals. In the event of war, he declared, any incomes over $10,000 should be taxed at a rate of 98 percent. In addition, Nye said, the United States should nationalize its peacetime defense sector, so that private contractors had no role in making munitions.100 These proposals went beyond what the War Policies Commission had suggested three years earlier; they were also more radical than the reforms demanded by the American Legion, which was still calling for a 95 percent EPT.101
Although the Nye Committee criticized a wide range of arms traders and military contractors, it was especially hostile to Du Pont. Senator Nye’s speeches portrayed the Du Pont brothers as the greatest of the Great War profiteers. In the early hearings, which focused on collusion and bribery in the international arms trade, the committee criticized Du Pont for its cozy relationship with its British counterpart, Imperial Chemical Industries (ICI). Later, Nye used the investigation to publicize the Du Ponts’ generous political contributions to conservative groups, including the American Liberty League—which had been founded just as the Nye investigation got under way.102
For their part, the Du Pont brothers regarded the Nye Committee as the creation of irresponsible radicals who knew nothing about the economics of defense.103 But they realized that the attacks threatened the company’s reputation and its future. Certainly, Congress and the Justice Department might try to cancel Du Pont’s recent acquisition of Remington, an important American manufacturer of rifles and ammunition. More broadly, the Nye Committee’s assault seemed to require an energetic public-relations counteroffensive. Du Pont prepared one, with the help of Bruce Barton, a top consultant in the field. In August 1934, Barton assured Du Pont executives that “most of the reckless charges against munitions makers have originated not with the great body of unselfish peace-lovers but with muckraking journalists.”104 But Barton and Du Pont still needed to prepare a careful rebuttal to educate Congress and the public. They prepared talking points for the executives called before the Nye Committee. These stressed that although some economic regulation in wartime was necessary, the country also needed to remember that “the profit motive,” as “one of the strongest incentives to endeavor,” should be understood as “a powerful weapon” in its own right, “which should not be tossed away.” And in an open letter to stockholders, the company stressed its great contributions to national security in the Great War, the overwhelmingly commercial character of its business since 1919, and its interest in promoting peace.105
As Nye and the Du Ponts battled over public relations, the Nye Committee worked on formal recommendations. These did not depart much from the suggestions that Nye had made in his early speeches. Even before the majority of the committee issued its final report, in 1936, Nye and his colleagues had urged Congress to create steep wartime price and profit controls. Many of these details were written up by John T. Flynn, a journalist and sometime congressional staffer who became an important part of Nye’s team. Flynn’s plan went well beyond the recommendations of Bernard Baruch, the former WIB chief, who testified regularly in Washington about the need to impose heavy price controls in wartime. The Nye Committee also wanted strict price control but added to this the Flynn plan for ultrahigh wartime income taxes and EPT, which would impose rates of 98 percent or 100 percent. These proposals became part of several bills that circulated in Congress in 1935. Meanwhile, President Roosevelt, who angered veterans in May 1935 by vetoing a bill that would have paid them a cash bonus a few years ahead of schedule, promised in more vague terms that in any future conflict, there must be strict profit controls.106
The other element of the Nye Committee’s call for radical reform in the defense sector was its recommendation that the national state monopolize peacetime—if not wartime—munitions production. A minority of the committee’s members, who issued their own final report, disagreed. According to the minority, there should be “rigid and conclusive munitions control” but not “complete
