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The Paradox of War for Profits

William T. Stone

Foreign Policy Association Bureau, Washington, DC

March 1935

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MILITARY and naval missions with gold braid and cocked hats are another useful institution frequently employed by the great powers to promote their arms industries. For many years they have been visiting those smaller countries which lack the military trappings of modern civilization. Along about 1920, at the request of the Peruvian government, an American naval mission was sent to Peru to advise on a new naval program. Its distinguished personnel included an admiral and several ranking officers.

During the World War, it appeared that Peru's neighbor Chile had "upset the balance of power" in South America by purchasing six submarines manufactured by the Electric Boat Company, an American concern. Before leaving for Peru "to practically take charge of the Peruvian Navy" two members of the mission visited the plant of this firm at Groton, Conn. The mission, which remained in Lima for nearly ten years, drew up a naval program calling for the purchase of warships from American concerns, including of course, the submarines built by the Electric Boat Company, the superiority of whose products was widely known. The Peruvian loans floated in the United States to finance this national defense program have long since gone into default.

A further sequel to this story is no less pertinent. A few years after Peru had received her four new submarines from the Electric Boat Company, that country became embroiled in a controversy with its northern neighbor, Colombia, over the Leticia affair. And Colombia, like Peru, turned to the United States Navy for aid in preparing its defense program. At the request of the Colombia government the Navy Department in 1932 loaned the services of Lieutenant Commander Strong to prepare plans for the defense of Colombia against Peru. In this case, the American adviser drew up elaborate plans (drafted, by the way, with the help of an American arms firm) which took into account the possibility of a Peruvian submarine attack on the Pacific ports of Colombia with the very vessels recommended by the earlier American mission to Peru.

At the same moment the US State Department, in cooperation with the League of Nations, was using its good offices to bring the Leticia controversy to a peaceful solution!

Nor are the Army and Navy the only agencies of government which have done their bit to promote this traffic. Until quite recently the enterprising commercial attaches of our Commerce Department regarded promotion of arms sales as one of their routine jobs. Beginning about 1931 the Department's Bureau of Aeronautics helped the big American airplane companies to recruit former US Army and Navy pilots to organize a military training school for the Nanking goyernment in China. This school has been turning out scores of Chinese aviators who have formed the flying squadrons of Chiang Kai-shek's armed forces in the anti-Communist campaigns in central China.

The business of war departments is war, and preparations for war. From the day when the guns ceased fire in France, every general staff of every military power has been preparing for the next warãor perhaps for the last warãon a vaster scale. They assume that in the world today the only assurance of security is that "adequate national defense" which they are asked to provide. And once that principle is accepted every thing else follows logically and inevitably. To the general state national defense means the mobilization of the manpower and industrial resources of the nation. It means "the Nation in Arms." To talk of abolishing the private manufacture of arms and ammunition is hailed as fantastic in a world which is arming for war, which is still using force as an instrument of national policy. And to talk of taking the profits out of war is just as fantastic to a war department which must depend upon private industry to meet the enormous procurement needs of mass armies geared to wage modern war.

For fifteen years, as the Nye Committee is now beginning to discover, our own War Department has been perfecting the intricate details of a mobilization plan based on the needs of a wartime army of some four million men. The military organization laid down in the National Defense Act of 1920 is not primarily concerned with the defense of the continental United States or even defense of American territories and possessions. It envisages the defense needs of the nation in terms of the manpower which would be required in a war waged on the same scale and fought with the same tactics as the last World War. And as applied by the War Department, it means that the general staff is preparing, not for defense of American soil, but for participation in the next World War, whether in Europe or Asia.

As long as we continue to prepare for this next war, there is not much that can be done about the munitions makers. And if the war comes and these plans hold, the munitions maker will embrace all industry; there will be confiscation of men's lives and there will be war profits and profiteering. For as the Nye Committee has been told, the only way to stimulate production to meet the needs of modern war on such a scale is to guarantee a profit. The unsigned contracts worked out by the war department and waiting for the declaration of war to become effective, guarantee industry a profit of 6 percent on the valuation of plant and capital.

Bills which have already been drafted for Congress seek to "equalize the burdens of war" by price-control measures which proved ineffective in the last war. There will be "bonus" provisions to stimulate production. There will be control of the press and public opinion. There will be labor boards without representation for organized or unorganized labor. In short, as Irenee du Pont truthfully observed, "If we are going to have war, we are going to have a hell of a time, no matter what route we take." To which he added as his own opinion that there is "only one way really to wage war, and that is to have an absolute monarch at the head."

The seven senators are still searching for an answer. They have certainly discovered that there is no easy solution, and no simple remedy. International regulation by a system of licenses and controls may end the more flagrant abuses—but it will not alter the war policies of great powers or materially lessen the danger of another world conflagration. Nationalization of the munitions industry is possible, but only when nations are willing to scrap their National Defense Acts and their mobilization plans. And, so far as I can see, taking the profit out of war can be accomplished only by scrapping the profit systemãor by scrapping war.

The munitions problem extends far beyond the munitions makers, and its solution can be found only in the solution of the problem of peace. When we decide to overhaul those outworn institutions and policies which lead inevitably to war, then we can begin to deal effectively with the arms merchant. Perhaps we shall not have to; he may vanish with the need for him.

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