The Charlotte News

Wednesday, September 24, 1941


Site Ed. Note: "War Profiteering: 1941" was the first by-lined piece by Cash replacement Stuart Rabb since he joined The News as the new Associate Editor at the end of May.

He appears to suggest first the naivete of the argument of Senator Gerald P. Nye, that since war profiteering was the source of war, taking the profits out of war industry would take away from big business the economic incentive for war, leaving it for the most part consequently to disappear. This argument, as Rabb recounts its gleeful reception by the UNC students in 1935--an appearance by Nye at which apparently Rabb was present, perhaps while a reporter for The Daily Tar Heel as an undergraduate--has been made by many over time--including, to some extent, Dwight D Eisenhower in the closing days of his presidency when he made the fateful warning, echoing through history, about the military-industrial complex and its economic grip on the country, that the profits to be made from war machinery produce inevitably an inertia to engage in war so that more machinery will have to be produced at greater and greater profit, necessitating more war to consume them, ad infinitum.

Rabb, however, first argues that the notion of such excess profits inducing war had been discredited, that formerly wealthy families in Great Britain were being wiped out by the war, not made richer.

But then he appears to do an about-face in the latter half of the piece and, to some extent, tacitly confirms Nye's contention by arguing that profiteering was taking place on a large scale, profiteering which he argues should and could be eliminated by more diligent oversight by the government of major defense contractors, including regularly assigned on-site auditors, and the cutting of loopholes from the then current excess profits tax structure to insure government recapture of all excess profits obtained from defense contracts.

Rabb also gives us a cryptic and problematic comment at one point on how the students naively had believed that Hitler would do as he said he would in Mein Kampf. Just what Rabb meant by this statement, and what the students had believed Hitler would do that he wasn't doing and hadn't done in the previous six years, remains a mystery. For, as Cash pointed out many times, Mein Kampf laid out, pretty close to the reality which came to be, what Hitler intended to do with respect to Central Europe, Russia, and the Jews residing in Central Europe. It set forth the plan for conquering North Africa, to afford the geopolitical goals of the Macklinder-Haushofer World Island theory to afford adequate food and material to support the grand scheme of conquest and empire. It fairly predicted the alliance with Italy to enable Axis access to the Mediterranean. It fairly predicted therefore also the alliance with Japan to accomplish the Asian leg of the World Island theory, no doubt with the idea ultimately in Hitler's mind of doing to Japan what he had done to other allies, notably Poland and Russia. It would have been only a matter of time, the time necessary to develop an atom bomb to go with his V-2 rockets, to take over the conquests of Japan--that is, had he ever conquered Russia to enable a launching point in the west against Japan not dissimilar to that which he had from France in the east against Great Britain.

Even if seemingly a bit thusly thorny and inconsistent at times, the piece is intriguing nevertheless, especially for its frankness with regard to how university students saw some of these issues six years earlier, before the aggression of Hitler became manifest, how Nye and his coterie of isolationists preached to the nation the appealing notions of disarmament and neutrality without foreign entanglements, and thereby obtained a large following for these overly simplified pacifist guideposts obscuring as a fata morgana the dense hedgerows and Dragon's Teeth of an increasingly complex world where continents separated by formerly insuperable oceans had been drawn closer together by the airplane in the previous decade than ever before--delivering the great irony, as we have pointed out before, that the very lighthouse who had pointed the way with respect to transoceanic crossing by air, Charles Lindbergh, was the most visible citizen proposing essentially a passive alliance with Hitler, as if any such thing could obviously for long endure without war or submission.

So the question remains, however, whether war profiteering by business breeds more war, whether the tether thus constructed between prosperity at the top of the heap, trickling down to the masses, and wartime industry breeds a custom of comfort found in war which in turn breeds more war to feed greater wartime industry. And if the question is answered over time in the affirmative, how is it that we might break the linkage and do so without so weakening defenses that rogue elements in the world will see an opportunity and take advantage while the cat's away? It is a fine line which the country must ever walk. It is the very issue at stake in Washington's warning against standing armies as being unduly nurturing of war and despotism.

Just last night in the first presidential debate of 2008, we heard Senator McCain indicate his desire to insure greater accountability in defense contracts to cut government waste--this at a time when, as Senator Obama pointed out, the United States is spending ten billion dollars a month, seven hundred billion since 2003, on the war in Iraq and the rebuilding of Iraq, when Iraq itself has a 79 billion dollar surplus in its budget; this at a time when both parties' leaders are meeting with the President to bail out a corrupt, greedy and loathsome banking and mortgage industry, probably more than half of which ought be in prison for various forms of bank fraud against consumers, charging 12% interest on mortgages, for instance, continuing 18-19% credit card interest, when the cost of the money during the last decade to the lender has been at the lowest rate since the 1950's, a bailout of 700 billion dollars, the same amount, coincidentally, spent on Iraq in the past five years.

Well, we shall reserve further comment on that until someone bothers to explain, in terms more specific than to "prevent financial meltdown", just why such a bailout should be made. We trust at least that there are no weapons of mass destruction involved in this particular emergency.

Incidentally, just what the little piece from Winston-Salem tells us of the character and ability accurately of some of that city's wealthy tobacco and hosiery tycoons at the time to assess character, at least insofar as the assessment went beyond the cut of a man's coat and fingernails and the slick of his hair, we don't know. But there it is. Nowadays, of course, they just entertain Hussein-era Iraqis to arrange illegal sales of cigarettes.

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