Nye Committee Begins Investigation of War Profiteering and Munitions Industry "Merchants of Death"

The U.S. Senate Special Committee on Investigation of the Munitions Industry, chaired by Senator Gerald Nye (R-ND), begins operations on April 12, 1934, to investigate the financial and banking interests underlying American involvement in World War I and the enormous profits reaped by industrial and commercial firms supplying munitions. The committee emerges from widespread public concern that armaments manufacturers—dubbed “merchants of death”—had unduly influenced the American decision to enter the war in 1917, profiting enormously while more than 53,000 Americans died in battle.

Over 18 months, the Nye Committee holds 93 hearings and questions more than 200 witnesses, including J.P. Morgan Jr. and Pierre du Pont, documenting the arms industry’s massive wartime profits, price-fixing schemes, and excessive influence on American foreign policy. The committee finds that bankers had pressured President Woodrow Wilson to intervene in the war to protect their loans to Allied powers, and that munitions makers had engaged in bribery and influence peddling. The investigation uncovers how the armaments industry profited handsomely from World War I, though it finds limited evidence of an active conspiracy to drag the nation into war.

In all, the Nye Committee issues seven reports proposing new approaches to wartime mobilization to eliminate profit, recommending permanent neutrality legislation, detailing J.P. Morgan and Company’s activities, and advocating government ownership of the munitions industry. The panel’s reports fuel popular prejudice against “greedy munitions interests” and become a significant factor in public and political support for American neutrality legislation during the 1930s. The resulting Neutrality Acts, designed to prevent American entanglement in foreign wars driven by corporate profit, are later regarded as having inadvertently aided Nazi Germany’s rise by limiting U.S. support for countries resisting fascist aggression. The laws are repealed in 1941.

The investigation comes to an abrupt end early in 1936 when the Senate cuts off committee funding after Chairman Nye blunders into an attack on the late Democratic president Woodrow Wilson, alienating Democratic senators whose support was essential to continued funding. Despite the investigation’s premature termination, the Nye Committee establishes the historical record of how corporate war profiteering shaped U.S. entry into World War I, prefiguring later investigations into the military-industrial complex. The committee’s work demonstrates both the power of congressional investigation to expose corporate influence over foreign policy and the political limits on such investigations when they threaten powerful interests or cross partisan boundaries.