The evil that men do lives after them; the good is oft interred with their bones
Act 3, scene II of Shakespeare’s Julius Caesar.
Inequality can generate fascism from either end of the political spectrum. Let me give you first fascism coming from the American right some eight decades ago and then a contemporary example from South Africa.
The 1930s in America
In a corporatocracy corporations have undue influence over politicians, but also on the media, as we will see in our discussion of an attempt by corporate interests to seize power in a 1930s putsch against the Franklin Delano Roosevelt (FDR) administration (Archer 2007).
This is a strange and little known case, a blatant attempt by corporate moguls to use their wealth to create two forms of corporate control. (1) After World War I big money set up the American Legion in 1919. (2) They tried to use the American Legion to form a shadow army not unlike Hitler’s Brown Shirts (The Sturmabteilung) to take over the American government.
At the end of First World War corporate leaders saw two threats to their dreams of grandeur looming on the horizon: (1) organized labor and (2) the Bolshevik Revolution. They used the American Legion and the power of the press in a full-scale assault to regain their power, which had been diminished by Teddy Roosevelt’s trust-busting efforts and the governmental hiatus placed on profit-making due to the war. Through the media, largely newspapers in those days, they fostered patriotism, the need for a religion-based nation and the fear of communism.
The American Legion was created, ostensibly to help veterans, but in fact the money men wanted a cadre of willing men who could be used as union busters, an army of ex-soldiers who could break the grip of strikes. The man who put up the $125,000 to start the American Legion was Grayson Mallet-Prevost Murphy (1878-1937). An ex-colonel, Murphy was a banker and a director of Anaconda Copper Mining Company, Guaranty Trust Company – a J. P. Morgan bank, New York Trust Company, Bethlehem Steel, Goodyear Tire & Rubber, New York Railways, Fifth Avenue Coach Co. and Chicago Motor Coach Company. He was also Founder and Head of G.M.-P. Murphy & Company. He was obviously a mover and shaker. A staunch conservative, Murphy had been decorated by Benito Mussolini, who made him a Commander of the Crown of Italy. He was also Treasurer of the American Liberty League, set up in 1934 to oppose the rise of FDR.
While the American Legion was allegedly an organization to help veterans, the moneyed class saw it as an instrument to oppress the unions and eventually to bring off a putsch against the government of the United States. One of the benefactors of the American Legion, Swift and Company, drummed up support from other firms writing, “We are all interested in the Legion, the results it will obtain, and the ultimate effect in helping to offset radicalism” (Archer 2007:12-13). To the moneyed class the “radicals” were union members but the average veteran who joined the American Legion was unaware of its conservative backers and their desire to use the Legion as a strikebreaking agency. Legion posts were simply and incorrectly informed that union members were communists who were attempting to create chaos so that the “Reds” could take over the government of the USA. Legionnaires were given baseball bats and told to break up strikes and civil rights demonstrations. To keep the Legionnaires in line, the wealthy backers of the Legion installed what became known as a “Royal Family” of leaders who ruled over the organization on behalf of its rich backers. Money was the power behind the throne of this carefully-managed line of Legion managers.
Enter Smedley Darlington Butler (1881-1940), nicknamed "The Fighting Quaker" and "Old Gimlet Eye"(Schmidt 1998, Thomas 1981). He achieved the rank of Major General in the U.S. Marine Corps. At his death he was the most decorated Marine in U.S. history. During his 34-year career as a Marine, he participated in military actions in the Philippines, China, in Central America and the Caribbean during the Banana Wars, and in France during World War I. By careers end he had received five medals for heroism, including 2 Medals of Honor. He was considered to be a general widely admired by the enlisted troops and was thought to be a straight-shooting man of courage and honor.
It was for his popularity with veterans and his impeccable character that he was approached by the money men to spearhead a putsch against the FDR administration. Nonetheless, they stayed in the background and sent lackeys to enter into direct negotiations with the retired Butler.
Smedley Butler was an odd choice to lead the American Legion members against the government because he believed the American Legion was controlled by banking interests and he was a patriot, par excellence. On December 8, 1933, explaining why he believed veterans' interests were better served by the VFW than the American Legion, he said: "I said I have never known one leader of the American Legion who had never sold them out–and I mean it” (New York Times 1933).
In the course of his contacts with an agent of the money men, Gerald C. MacGuire who was a bond salesman for Murphy & Co. and a member of the Massachusetts American Legion, Butler learned that the millionaire Grayson Mallet-Prevost Murphy, MacGuire’s boss, had financed the start-up American Legion and that the Legion’s “Royal Family” of bosses was backed by business tycoons. Many of these same backers, for example J. P. Morgan, Andrew W. Mellon, Wm. S. Knudsen of General Motors, the Pitcairn family of Pittsburgh Plate Glass, the Pew family of Sun Oil, members of Rockefeller Associates, E. F. Hutton Associates and the disgruntled Al Smith, who had lost a bid for the Presidency, became heavy contributors to the American Liberty League, which was a shell organization that harbored wealthy industrialists who wanted to overthrow the American government.
The American Liberty League also had two affiliated organizes that were openly fascist and anti-labor, the Sentinels of the Republic and the Southern Committee to Uphold the Constitution. Members of the Sentinels of the Republic labeled FDR’s New Deal “Jewish Communism” (Archer 2007:31). Also implicated in the plot was Robert Sterling Clark, heir to the Singer Sewing Machine fortune.
In November 1934, Smedley Butler told a the McCormack-Dickstein Congressional Committee that representatives of powerful industrial interests and the American Legion were trying to persuade him to lead the Legion in a crusade to preserve the gold standard, which would have been beneficial to those holding vast sums of dollars, and to engineer a coup d'état against President Roosevelt. He indicated that he was being recruited to aid in marshaling the support of Legionnaires in this treasonous act.
Everyone implicated denied involvement and the media gave the story little credence, although the Congressional Committee believed Butler. Nevertheless, the establishment quickly moved to squelch any prosecution of the principals The New York Times went so far as to call the accusations a “gigantic hoax” (1934). Time Magazine and other publications also scoffed at the allegations. Even though the Congressmen felt that Butler was telling the truth no one was ever charged in the incident, let alone prosecuted, which became widely known as the Business Plot. The scheme was corroborated by Veterans of Foreign Wars commander James E. Van Zandt, later a Congressman, who stated to the press that, "Less than two months" after General Butler warned him, "he [Van Zandt] had been approached by 'agents of Wall Street' to lead a Fascist dictatorship in the United States under the guise of a 'Veterans Organization' " (Schlesinger 2003:85).
Some journalists smelled a cover up, for example John L. Spivak, a muckraker. Spivak wondered why the Congressional report on the affair had deleted some of the testimony of those who came before the McCormack-Dickstein Committee when there was no national security reason to do so. When Spivak questioned McCormack on the matter, the Congressman put him off saying that the reporter was “relying on gossip” (Archer 2007:205). But Spivak has also see the transcript of the hearings and when McCormack realized this, he canceled the interview. Later, in writing, he did not reply to Spivak’s queries. He claimed that the hearings had defeated the plotters and no more investigating was needed.
Then Spivak went to see Congressman Dickstein. Spivak asked him why Grayson Mallet-Prevost Murphy had not been called as a witness in that he was involved in the plot and “his men” were in the anti-Semetic espionage organization called the Order of ’76. This was an underground organization set up to fight the New Deal and to monitor the activities of communists in America (Spivak 1939). They later merged with the Silver Shirts of America, a hazy patriotic fraternity founded on the same day Hitler took power (January 30, 1933) by William Dudley Pelly, a mystic who believed this to be an auspicious date was the fulfillment of the Pyramid Prophesy, a belief system that measurements of the Great Pyramid of Giza can predict the future (Beekman 2005). By his detractors Pelly was known as the Star-Spangled Fascist. During the Great Depression Pelly, an unwavering supporter of Hitler, ran for President on a platform calling for placing American Jews in ghettos.
Congressman Dickstein evaded the question by saying that they didn’t have time and that was the case with others who should have been called. Imagine, a Congressional Committee did not have time to thoroughly investigate a plot to overthrow the government of the United States. Tiring of Spivak’s persistent questions, he referred him back to McCormack. The reporter was getting the runaround. The cover up was underway and no mainstream journalists were pursuing the facts about the plot. Because the establishment considered Spivak to be a communist sympathizer, his investigation was not given much credence. His publications in what establishment types called a “commie rag-sheet,” The New Masses, were not taken seriously because it was the principal organ of the American cultural left from 1926 onwards (Folly 1993).
When General Butler found out that major portions of his testimony had been deleted from the official transcript, he was livid. The committee, he raged, had “stopped dead in its tracks when it got near the top” (Archer 2007:209). He angrily continued: “Like most committees, it has slaughtered the little and allowed the big to escape. The big shots weren’t even called to testify.” In a radio broadcast he lashed out at the American Legion:
Belgrano was firmly against the New Deal, FDR and was in a cadre of bankers who supported the fascists in Europe. In an anti-Red speech, he said:
We are facing a new and more dangerous foe today. It has seeped quietly into our country and whispered into the ears of our workers and our people everywhere that our ideals of government are out of date. We of the Legion are mobilized to meet that enemy and we are calling upon loyal Americans everywhere to join us in ridding our country of this menace (Archer 2007:135).
After WWI, Belgrano worked in a bank merged with Amadeo Peter Giannini’s Bank of America and became its vice president, staying in that position until 1940. Belgrano worked closely with Giannini whose banking empire rivaled that of Rockerfeller and Morgan. Giannini, a friend and admirer of Mussolini, handled some of the dictator’s business accounts, though J. P. Morgan was his main foreign banker, supplying a $100 million loan to the fascist dictator in 1926. Giannini was the prime financial supporter of L’Italia, a newspaper that promoted the idea that America would do well to adopt the new fascist model of government set down by Mussolini. He also created New York City’s East National Bank (1919) and a parent company, Transamerica Corp., for his Bank of America in New York (1928). Its CEO was Elisha Walker, a partner of the Kuhn, Loeb Co., whose head banker was Otto Kahn. In 1924, a year into Mussolini’s rule, Kahn spoke to Toronto’s Empire Club:
To anyone who knew Italy...18 months ago, with its constant strikes, class animosities, political confusion and social tremors, the change... is almost unbelievable…. Credit belongs to a great man, beloved and revered in his own country... much misunderstood abroad, a self-made man…, setting out with nothing but the genius of his brain, the force of his character and the ardor of patriotism, Benito Mussolini.... a natural born and genuinely great leader, a tremendous and most impressive personality (Sanders nd).
This is the atmosphere in which the commander of the American Legion operated. And there were some well-known names in the mix. In 1928, Elisha Walker was also a director of the American International Corp. Created in 1915 by J. P. Morgan, the Rockefellers and National City Bank, its directors included Pierre du Pont, Otto Kahn, George Herbert Walker (great grandfather of former President George W. Bush), the Director of the Federal Reserve Bank, New York William Woodward and Percy Rockefeller.
After the stock market crash of 1930 Giannini withdrew $2.4 million from his Bank of Italy and sailed to Italy to be near his friend Mussolini. The fascist connection was palpable in this tight-knit group
Clearly, many in the moneyed class wanted a top-down government that would cater to their interests and not those of the people, as in the New Deal. In that historical period, Roosevelt was the target. In ours, it is Obama.
The Specter of Fascism in the
Republic of South Africa
We just read about how right-wing, conservative, fascist sympathizers used inequality and their great wealth and station to take over the democratically elected government of FDR. We now turn to a potential takeover of the South African government by a man of the African National Conference (ANC), the political party in power at present in the republic. While the ANC would generally fall on the left-wing of the political spectrum in South Africa, Julius Malema has some scary heroes – Robert Mugabe, Fidel Castro and Muammar Qaddafi. Malema is considered a rising star in the political scene in South Africa.
First the inequality: 350 years of oppression by the European settlers in the region, a time when the much of the land and human rights of the African people there were taken away, has led to reactionaries like Julius Malema, a firebrand who demands that land and those rights be returned, which would mean than the 9% of the population, mostly Whites, would have to give up their vast landholdings. In a land where the great Nelson Mandela should be the hero of ANC leaders, and is for most, Malema chooses to revere fascist dictators like Zimbabwe’s Mugabe.
Such fascist leanings in Malema have been generated by the inequality established by the European settlers and its zenith in the Apartheid Era (1948-1994). He is reacting, rightly or wrongly, to the fact that Africans were robbed of their land, pushed onto Homeland ghettos and were largely unable to benefit from the prosperity generated by the European population of South Africa.
Malema is believed to be preparing to topple President Zuma (The Economist 2011). This is not the same as the planned putsch in the 1930s in America, but inequality as a generating force is evident in both.
On the conservative right inequality may be seen as “natural” and unavoidable in the real world. Those at the top are likely to be self-defined to be rightly there because of their innate abilities. Given those assumptions one would suspect that the wealthy and powerful would not be out of character in attempting to take more power and wealth, especially when a corollary assumption held by the moneyed class is that in so doing they would be raising all boats, helping the masses.
In the case of Julius Malema he has a history behind him in which the landed class holds their land (and industrial wealth) illegitimately, in his perspective. Furthermore, the ANC government has been unable to redress much of the inequality created in the past and more than 25% of the indigenous African youth are unemployed. Many of the Black Africans in South Africa are living in shantytowns in poverty. It is an explosive situation, not unlike that climate in Germany when Hitler came on the scene with his absolutist ideas.
Archer, Jules. 2007 . The Plot to Seize the White House. New York: Skyhorse Publishing.
Beekman, Scott. 2005. William Dudley Pelley: A Life in Right-wing Extremism and the Occult. New York: Syracuse University Press.
New York Times. 1933. Butler for Bonus Out of Wall Street. (December 10).
New York Times. 1934. Credibility Unlimited. (November 22).
Sanders, Richard. Nd. Frank N. Belgrano, Jr. (1895-1959). http://coat.ncf.ca/our_magazine/links/53/belgrano.html
Schlesinger, Jr., Arthur M. 2003. The Politics of Upheaval: 1935–1936, The Age of Roosevelt. (Volume III –The Age of Roosevelt). New York: Mariner Books.
Schmidt, Hans. 1998. Maverick Marine: General Smedley D. Butler and the Contradictions of American Military History. Louisville, KY: The University Press of Kentucky.
Spivak John L. 1939. Secret Armies: The New Technique of Nazi Warfare. New York: Modern Age Books.
The Economist. 2011 (July 2). The rise of Juius Malema. Page 40.
Thomas, Lowell. 1981. Old Gimlet Eye: Adventures of Smedley D. Butler. Camp Lejeune, NC: Marine Corp Assn Bookstore.