The Nye Committee, officially known as the Special Committee on Investigation of the Munitions Industry, was a United States Senate committee chaired by U.S. Senator Gerald Nye. The committee investigated the financial and banking interests which underlaid the United States' involvement in World War I, and was a significant factor in public and political support for American neutrality in the early stages of World War II.
During the 1920s and 1930s, dozens of books and articles appeared which argued that arms manufacturers had tricked the United States into entering World War I. One of the best-known and deeply informed critics was Smedley D. Butler, a Major General in the U.S. Marine Corps, who published War is a Racket in 1935.
The push for the appointment of Senator Gerald Nye (R-ND) to the chairmanship of this committee came from Senator George Norris (R-NE). According to peace activist Dorothy Detzer, Norris said, "Nye's young, he has inexhaustible energy, and he has courage. Those are all important boons. He may be rash in his judgments at times, but it's the rashness of enthusiasm." Norris proposed Nye as "...the only one out of the 96 whom he deemed to have the competence, independence and stature for the task."
The committee was established on April 12, 1934. There were seven members: Nye, the committee chair; and Senators Homer T. Bone (D-WA), James P. Pope (D-ID), Bennett Champ Clark (D-MO), Walter F. George (D-GA), W. Warren Barbour (R-NJ), and Arthur H. Vandenberg (R-MI). Alger Hiss served as a legal assistant to the committee staff.
The Nye Committee conducted 93 hearings and questioned more than 200 witnesses. The first hearings were in September 1934 and the final hearings in February 1936. The hearings covered four topics:
- The munitions industry
- Bidding on Government contracts in the shipbuilding industry
- War profits
- The background leading up to U.S. entry into World War I.
Although the committee found scant hard evidence to support the widespread public belief that the profits of the arms industry had been a significant factor in America's decision to participate in the war, their reports did little to dispel the notion. The committee documented the huge profits that arms factories had made during the war. It found that bankers had pressured Wilson to intervene in the war in order to protect their loans abroad. Also, the arms industry was at fault for price fixing and held excessive influence on American foreign policy leading up to and during World War I.
According to the United States Senate website:
The investigation came to an abrupt end early in 1936. The Senate cut off committee funding after Chairman Nye blundered into an attack on the late Democratic President Woodrow Wilson. Nye suggested that Wilson had withheld essential information from Congress as it considered a declaration of war. Democratic leaders, including Appropriations Committee Chairman Carter Glass of Virginia, unleashed a furious response against Nye for 'dirtdaubing the sepulcher of Woodrow Wilson.' Standing before cheering colleagues in a packed Senate Chamber, Glass slammed his fist onto his desk until blood dripped from his knuckles.
Nye created headlines by drawing connections between the wartime profits of the banking and munitions industries to America's involvement in World War I. Many Americans felt betrayed and questioned that the war had been an epic battle between the forces of good (democracy) and evil (autocracy). This investigation of these "merchants of death" helped to bolster sentiments for non-interventionism.
The committee reported that between 1915 and January 1917, the United States lent Germany 27 million dollars, and in the same period, it lent to the United Kingdom and its allies 2.3 billion dollars, almost 100 times as much.
Because of these facts Senator Nye, many war critics, and members of the American public concluded that the US entered the war for reasons of profit, not policy — because it was in American commercial interest for the United Kingdom not to lose.
The committee's findings did not achieve the aim of nationalization of the arms industry, but gave momentum to the non-interventionist movement and sparked the passage of the Neutrality Acts of 1930s, in 1935, 1936, 1937, and 1939.
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