"Vicious Circle" Sirs: . . . There are certain facts at considerable variance with declarations which were presented in TIME, July 17 article on "How to be Neutral. . . ." May I call attention first to the following contention. . . .
"Meanwhile the Nye committee pumped J. P. Morgan, Thomas Lament and their partners, trying to prove that they had helped to grease the skids that plunged the U. S. into war. There was no evidence that they had tried to. It could not even be proved that they had done so unwittingly." Very definite is the evidence recorded by the Committee that the Morgan firm did operate in a way to circumvent American neutrality and steps that were intended to help us keep out of Europe's war.
For example: In November of 1916 the Federal Reserve Board warned American investors against taking the unsecured paper obligations of foreign governments. Virtually the only governments whose paper of that kind was involved were England and France, whose American agent, in their pay, was J. P. Morgan & Co. ... It was Morgan & Co. who suggested the way to destroy it [the warning] was for England to threaten to cease purchasing American goods. . . .
In our examination of the J. P. Morgan & Co., purchasing agents of Great Britain during the World War, we developed documentary evidence which explains the in evitable cablegram of Ambassador Page of March 5, 1917, which stated that ". . . I think that the pressure of this approaching crisis has gone beyond the ability of the Morgan financial agency for the British and French governments. Perhaps our going to war is the only way in which our present prominent trade position can be maintained and panic averted." Documents that explain why our Ambassador in London was placed in the position of extending that advice to our President, will be found in Report 944, part 6, of the Special Committee on Investigation of Muni tions Industry, U. S. Senate, issued June 16, 1936. That evidence fortified the conclusions drawn on p. 96 of that report, namely, that the bankers were inextricably tied up in a vicious circle that included the British gov ernment, the rifle industry in the U. S. and the American Banking organization. . . .
The documentary evidence gathered and reported by the Senate Investigating Com mittee was evidently considered sufficiently convincing by Congress for beginning with the Neutrality Law of 1936, there has been adopted a ban on loans and credits to nations at war. There has been no move whatsoever to eliminate that provision from any neutrality legislation since 1936.
There ought to be less discounting of the part which American bankers played in helping America along that road to war preceding 1917. . .
GERALD P. NYE U. S. Senate Washington, D. C.