Oliver Stone's Untold History of The United States (2012) s01e12 Episode Script
Prologue – Chapter B: 1920–1940: Roosevelt, Hitler, and Stalin: The Battle Of Ideas
1 [EXPLOSION.]
[PEOPLE CHEERING.]
NARRATOR".
As the troops returned from overseas following the war Republican presidential candidate Warren G.
Harding was promising a return to normalcy ushering in one of the most conservative eras in American history.
But the Teapot Dome scandal engulfed his administration and revealed the interior secretary to be in the pay of big oil which had been plundering public lands.
The 1920s would turn out to be a decade of bold cultural experimentation mixed with political conservatism.
An old culture of scarcity versus a new culture of abundance.
This would be baptized the Roaring Twenties.
[TRUMPETS.]
NARRATOR".
Moral reformers feared that the dough boys having discovered what some called the French way would foist their new appetite for oral sex as well as their diseases on innocent American girls.
The licentious French had, after all, offered to set up brothels for American soldiers like the ones that service their own fighting men with the idea that it would maintain health standards and morale.
But U.
S.
officials adamantly refused.
And back home moral crusaders had exploited wartime anxieties to shut down red light districts around the country driving prostitutes underground and forcing them to seek protection from gangsters and pimps.
In 1919, the 18th Amendment was ratified banning the manufacture and sale of alcohol in the United States.
The reform backed by women's temperance groups certain Protestant denominations, the reborn Ku Klux Klan and some progressives.
But as with the War on Drugs later in the century alcohol remained readily available for all who wanted it.
And the war on alcohol ended up producing fantastic profits for a new stratum of criminals dominated by Italian Irish and Jewish immigrant gangs.
Smedley Butler had seen some of the worst of the violence of World War I and the corruption that had ensued.
But now on sabbatical from the military he was assigned the streets of Philadelphia.
BUTLER: Cleaning up Philadelphia was harder than any battle I was ever in.
NARRATOR: Butler closed 600 speakeasies including two patronized by the city's elite, who had him fired.
Other repressive aspects of the new American life included immigration reform laws that imposed strict quotas on southern and eastern Europeans and entirely banned immigration from Japan, China, and East Asia.
Anti-Semitism infested post-war America.
Some associated Jews with Communism and radicalism.
Others thought Jews exerted too much influence in Hollywood business and academia.
Top universities like Harvard slashed admission of freshmen Jews from 28 percent in 1925 to 12 percent in 1933.
Other measures were taken to eliminate undesirables.
In 1911, as governor of New Jersey "eugenics enthusiast Woodrow Wilson had signed a law authorizing sterilization of convicts epileptics and the feeble-minded.
Over the following decade, some 60,000 Americans would be sterilized more than a third of them in California.
Sexually active women were particularly targeted.
Future German leader Adolf Hitler followed U.
S.
developments closely and claimed to model some of his own master race strategies on U.
S.
programs that he lauded, but criticized for only going halfway.
He would go further.
Much further.
Between 1920 and 1925, 3 to 6 million Americans joined the racist anti-Semitic, anti-Catholic Ku Klux Klan, which dominated politics in Indiana Colorado, Oregon, Oklahoma, and Alabama and sent hundreds of delegates to the 1924 Democratic convention.
It is astonishing to think that in 1925 a quarter million people watched 35,000 Klansmen march and rally through Washington, D.
C.
Hatred stalked the heartland.
14-year-old Henry Fonda later a movie star, recalled watching a lynching in Omaha, Nebraska from his father's printing plant.
Put them up.
FONDA: It was the most horrendous sight I'd ever seen.
We locked the plant, went downstairs and drove home in silence.
Finish him.
FONDA: All I could think of was that young black man dangling at the end of a rope.
NARRATOR".
Hundreds more African-Americans would suffer a similar fate.
Often advertised widely in advance and memorialized on postcards and in sound recordings lynchings became perverse rituals of desecration replete with dismemberment and castration and preserving body parts as souvenirs.
Backwoods Bible colleges proliferated.
Anti-intellectualism abounded.
In 1925, a Tennessee school teacher named John Thomas Scopes was prosecuted, convicted and fined for teaching Darwin's evolution theories in school.
World War I marked the ascendency of the U.
S.
and Japan the war's two real victors.
It had brought America an unprecedented collusion of bankers businessmen and government officials.
.
.
In an attempt to fix the economy and guarantee profits.
By 1925, the U.
S.
was producing over 70 percent of the world's oil which had powered the Allied wartime navies airplanes, tanks and other motorized vehicles.
New York had replaced London as the center of the world economy its size exceeding that of its next six rivals combined: Britain, France, Germany, Italy, the Soviet Union and Japan.
Cynical and disillusioned from a brutal war people were hungry to live at a level and experience life in a way they had never done before.
[SCATTING.]
A new materialism reigned, based on credit radios, movie palaces and a new golden age of advertising that perfected the capitalist art form of manipulating not only consumer hopes and fantasies, but also fears and insecurities.
Henry Ford sold 15 million Model Ts before switching in 1927 to the more fashionable Model A.
Jazz, with its roots in the African-American south, became wildly popular.
Flappers, petting, speakeasies, the Harlem Renaissance sports wild new movies with and without sound flourished.
Rebellious younger writers came on the scene.
New expressionism in the works of E.
E.
Cummings John Dos Pasos, T.
S.
Eliot, Ernest Hemingway, Ezra Pound William Faulkner, Laurence Stallings, Sinclair Lewis, Eugene O'Neill Willa Cather, Langston Hughes and Dalton Trumbo.
Many of them went to Europe.
F.
Scott Fitzgerald wrote in 1920: FITZGERALD: Here was a new generation grown up to find all gods dead all wars fought, all faiths in man shaken.
NARRATOR".
Gertrude Stein, a lesbian writer living in Paris, famously commented: "All of you young people who served in the war, you are a lost generation.
" As the 1920s progressed prosperity came to rest increasingly on the shakiest of foundations: Unprecedented borrowing, massive speculation and German war reparations.
Agriculture was depressed throughout the decade.
Auto manufacturing and road building slowed.
Housing investment declined and the gap between rich and poor grew sharply.
Capital scrambled for profitable speculative outlets.
To help pay Germany's war reparations German Foreign Minister Walther Rathenau a prominent Jewish industrialist expanded economic, diplomatic and even military ties with communist Russia forging a bridge between the two nations that had been left out of Versailles in order to rebuild their war-ravaged societies.
This infuriated not only England and France but members of Germany's thuggish right wing Freikorps who were already up in arms about Germany paying its reparations.
They assassinated Rathenau in 1922.
Germany's economy suffered an inflation unlike any ever experienced in history.
Wheelbarrows full of worthless German marks were burned for firewood.
By 1923, a bankrupt Germany could no longer pay reparations to France and Britain who in turn asked for relief on the billions in war debts they owed the U.
S.
government.
"Absolutely not," replied the Spartan new Republican president Calvin Coolidge.
By 1924, Europe's economies teetered on the edge of collapse.
Then, and again four years later commissions of bankers and businessmen led by Morgan and his allies and his allies drew up plans for German economic recovery that would guarantee continued, though more manageable, reparations payments.
In essence, the U.
S.
was loaning money to Germany so it could pay reparations to France and Britain who then used the money to service their war debts to the U.
S.
The bankers got rich, the people stayed poor.
By 1933, Germany, though paying enormous reparations owed even more money to the Allies than it had in 1924.
It was in this climate of economic crisis in the West and Communist revolution in the East, that a new monster was born.
It was called Nazism.
Separate and apart from Germany in Italy in 1922 Benito Mussolini and his fascisti took power and decimated the Communists in bloody street battles.
And as 1925 came to an end it was the Morgan bank that loaned Mussolini's government $100 million.
.
.
to repay its war debts to Britain and the U.
S.
Morgan was very pleased with Mussolini's repressive labor policies.
Nazis stormed the city of Munich in 1923 led by World War I corporal Adolf Hitler.
His followers included war veterans unable to adjust to civilian life who clamored for the chance to put down communist uprisings and later formed the backbone of his storm troopers.
For his part in the failed coup Hitler spent nine months in jail refining his views.
His shrill assertion that the German military had won the war only to be stabbed in the back by politicians at home was gaining more and more adherence.
Hitler's cause would be greatly advanced when, in 1929, the central bankers walked head on into an unforeseen disaster: The Great Depression.
Montagu Norman, who ruled the private Bank of England from 1920 to 1944 and a paranoid anti-Communist anti-Semite who traveled incognito to avoid assassination asked the governor of the New York Federal Reserve Bank to raise interest rates to slow Wall Street's soaring stock speculation.
Ironically, Norman had been instrumental in convincing the previous governor to lower the rates two years earlier which fueled the orgy of speculation that now rattled the system.
Morgan's senior partner, Thomas Lamont considered Norman the wisest man he had ever met.
But the U.
S.
stock market, as it would in 2008 had diverted its money and credit away from production into speculation borrowing to the hilt in order to loot the economy for huge profit.
When the English and American banks raised their rates the credit of the world tightened quickly and too-big-to-fail American banks went into a panic.
Huge banks in Austria and Germany followed.
The crash ended American loans to Germany and Germany's industry collapsed entirely in the winter of 1931-1932.
Unemployment soared to over 30 percent putting millions of angry young men in the streets.
Capitalists and conservative politicians feared an imminent Communist coup and Hitler, Germany's most virulent anti-Communist was thus invited by the ruling classes into the government.
Although still representing a radical minority party in January, 1933, Hitler became chancellor of Germany.
[ALL CHEERING.]
[m GERMAN.]
NARRATOR".
In speeches like this Hitler touched a deep chord with many Germans promising them something they could barely remember: pride.
[ALL YELLING.]
But disorder followed Hitler's rise to power when the Reichstag, the national parliament, mysteriously burned down.
Hitler readily blamed the Communists and many were thrown in concentration camps.
He quickly began a massive program of rearmament, which he made public in 1935.
And once Hjalmar Schacht became his Minister of Economics he received vital bank credits from Montagu Norman who in 1934 told a Morgan partner: NORMAN: Hitler and Schacht are the bulwarks of civilization in Germany.
They're fighting the war of our system of society against Communism.
NARRATOR".
Many American bankers agreed, trusting their friend Schacht and hoping that Hitler would repay at least some of the reparations and also crush the German communists.
America was in deep crisis as well.
Republican Herbert Hoover struggled ineffectively to quell the Great Depression.
More than 20,000, possibly as many as 40,000 angry American veterans known as the Bonus Army descended on Washington demanding war service bonuses not due to be paid until the year 1945.
I came to Washington to get my bonus.
And I'm going to wait for it till I get it if I have to wait till 1945.
NARRATOR".
They set up a tent city on the Anacostia Flats in Washington.
They brought their wives and children.
They lived by military discipline with a daily parade and a strict no-drinking rule.
General Smedley Butler arrived to lend moral support.
BUTLER: No.
[ALL CHEERING.]
NARRATOR".
He was mobbed by veterans wanting to speak to him.
Until late that morning, he sat with them in their tents listening to their tales of lost jobs and families in distress and old battle wounds.
After demonstrators clashed with district police President Hoover ordered General Douglas MacArthur to restore order.
Convinced that the Bonus Army was the vanguard of a communist coup Macarthur, not for the only time in his storied career disobeyed presidential orders and rousted the veterans with tanks, bayonets and tear gas.
MacArthur, whose aides included later generals Dwight Eisenhower and George Patton, pursued the fleeing veterans across the river and set their makeshift city aflame.
But when the Bonus Army marched again the next year into Washington there was a new president in the White House who sent his wife, Eleanor to help serve the veterans three hot meals a day with coffee.
One veteran remarked, "Hoover sent the army.
Roosevelt sent his wife.
" Several days later, the Bonus Army voted to disband.
The new president put many of the veterans to work in the civilian conservation corps.
It was in his famous inaugural address in March, 1933 that Franklin Delano Roosevelt rallied the nation with his declaration: That the only we thing we have to fear is fear itself.
NARRATOR".
It was the signature line of his extraordinary life.
In truth, he was facing a disaster.
Unemployment stood at 25 percent.
The gross national product had fallen 50 percent.
Farmers lost 60 percent of their income.
Industrial production dropped over 50 percent.
Between 1930 and '32, 20 percent of U.
S.
banks had failed.
Bread lines formed in every town to feed the starving.
Homeless walked the streets and slept in vast shanty towns known as Hoovervilles.
There was no safety net to assist the desperate.
Misery was everywhere.
Roosevelt united Americans around a message of inclusion the opposite of Hitler's.
ROOSEVELT: The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.
NARRATOR".
In this vein he called for strict supervision of all banking and credits and investments and an end to speculation with other people's money.
He proclaimed a New Deal.
And although he could've nationalized the banks with hardly a word of protest he chose a much more conservative course of action.
He declared a four-day national bank holiday conferred with the nation's top bankers on his first full day in office and signed the emergency banking act which was written largely by the bankers themselves.
The banking system was essentially restored without radical change.
And despite being accused of betraying his class Roosevelt would ironically save capitalism from the capitalists themselves.
Recognizing the failures of unfettered capitalism Roosevelt unleashed the powers of the federal government.
In his first 100 day in office, he passed legislation that established the Agricultural Adjustment Administration to save farming the Civilian Conservation Corps to put young men to work in the forests and parks the Federal Emergency Relief Administration to provide federal assistance to the states the Public Works Administration to coordinate large scale public works projects the National Recovery Administration, NRA, to promote economic recovery.
And he passed the Glass-Steagall banking act which separated investment and commercial banking and instituted federal insurance of bank deposits.
He also repealed Prohibition and stated, "Now would be a good time to have a beer.
" Roosevelt assembled a team of visionaries.
Among them were Harry Hopkins, Roosevelt's chief aide National Youth administrator Aubrey Williams Rexford Tugwell, Adolf Berle and Secretary of the Interior Harold lckes.
There was also the formidable Frances Perkins the U.
S.
Secretary of Labor and the first woman ever appointed to the cabinet.
They became known as the New Dealers.
Henry A.
Wallace, the young Iowa geneticist would become one of their leading lights.
He was from a Republican farming clan that had worked the land since it was frontier.
His father, Harry, had served presidents Warren Harding and Calvin Coolidge as secretary of agriculture.
Roosevelt told Wallace to take whatever actions necessary to repair the nation's devastated rural sector.
His solutions were controversial.
To stop overproduction, he paid farmers to destroy 25 percent of the cotton crop that was in the ground.
He also ordered the slaughter of 6 million baby pigs although he made sure the Agriculture Department distributed much of the pork lard and soap to needy Americans.
Condemned by critics, Wallace took to the radio to defend his program.
He called it a declaration of interdependence.
WALLACE: The ungoverned push of rugged individualism perhaps had an economic justification in the days when we had all the west to surge upon and conquer.
But this country has filled up now and grown up.
There are no more Indians to fight.
We must blaze new trails in the direction of a controlled economy, common sense and social decency.
NARRATOR".
In the end, Wallace's plan worked brilliantly.
Cotton prices doubled.
Farm income jumped 65 percent from 1932 to '36.
Corn, wheat, and pig prices stabilized and the farmers became Wallace's staunchest supporters.
For a man who had spent years perfecting a strain of hybrid corn and who believed that abundant food supplies were essential for a peaceful world, Wallace was horrified by the unfortunate message such policies sent.
WALLACE: The plowing under of 10 million acres of cotton and the slaughter of 6 million little pigs in 1933 were not acts of idealism in any sane society.
They were emergency acts made necessary by the almost insane lack of world statesmanship during the period from 1920 to 1932.
NARRATOR".
The public, which blamed business for causing the Depression welcomed Roosevelt with great enthusiasm hoping he could spark a recovery.
But he was an enigma campaigning at times as a big government liberal spinning out one new government program after another and at other times as a budget-balancing conservative.
Some thought him a socialist in the Eugene Debbs Norman Thomas tradition others, a fascist or a corporatist supporting the merger of state and corporate power.
His industrial recovery program, the NRA, regulated production competition and minimum wage rates some of which smacked of Italian fascism.
In reality, Roosevelt was actually more pragmatic than ideological.
Nonetheless, he was misunderstood by big business.
Openly opposing Wall Street made for smart politics but it won the everlasting enmity of conservative Republicans who attacked his inflationary policies as unconstitutional.
Printing press money, they called it.
And worse yet, F.
D.
R.
took the U.
S.
off the gold standard.
He sacrificed foreign trade and its profits in order to stimulate domestic recovery.
He also took steps to reduce the country's small 140,000-man Army.
The plan as outlined to me was to form an organization of veterans.
NARRATOR".
In 1934, retired general Smedley Butler reentered the picture presenting shocking information to the House Special Committee on Un-American Activities.
I was supposed to lead an organization of 500,000 men which would be able to take over the functions of government.
NARRATOR".
Butler charged the anti-Roosevelt oligarchs including J.
P.
Morgan's son Jack and the wealthy Du Pom' business clan with trying to recruit him to lead an uprising of desperate veterans to force Roosevelt from office.
This is what I found.
The key to Robert Forest's fascist organization.
They didn't call it fascism.
They painted it red, white and blue and called it Americanism.
In here are the funds to see it through.
Fantastic amounts subscribed by a few private individuals to whom money didn't mean anything but who wanted political power.
They could never get it by democratic means.
In there are the names and addresses of the men who were designated to be America's first storm troopers.
NARRATOR".
The press dismissed it as the business plot, a paranoid conspiracy.
Henry Luce 's TIME magazine led the charge.
But after hearing the testimony, the House Committee chaired by future Speaker of the House John McCormack of Massachusetts reported that it had been able to verify all the pertinent statements made by General Butler and concluded that attempts to establish a fascist organization in the United States were discussed, were planned and might have been placed in execution when and if the financial backers deemed it expedient.
The committee strangely chose not to call many of those implicated to testify including failed 1928 Catholic presidential candidate AI Smith Thomas Lamont of Morgan, Army General Douglas MacArthur various high placed corporate executives as well as the former American Legion commander and the head of the National Recovery Administration.
The tumultuous, frightening prospect of a fascist coup was popularized in the bestselling novel by Nobel Prize-winner Sinclair Lewis it Can't Happen Here which depicted a similar series of events to those alleged by Butler.
And later, a similar plot emerged in the very popular Frank Capra film Meet John Doe.
All right, now supposing a certain unmentionable worm whose initials are D.
B was trying to use that to shove his way into the White House so he could put the screws on.
You sit there back at your big cigars and think of deliberately killing an idea that's made millions of people a little bit happier.
An idea that's brought thousands of them here from all over the country by bus and by freight, in jalopies and on foot so they could pass onto each other their own simple little experiences.
Why look, I'm just a mug and I know it.
But I'm beginning to understand a lot of things.
Why, your type's as old as history.
If you can't lay your dirty fingers on a decent idea and twist it and squeeze it and stuff it into your own pocket you slap it down.
Like dogs, if you can't eat something, you bury it.
NARRATOR".
AI Smith, who became a spokesman for the right wing American Liberty League scorched Roosevelt.
SMITH: There can be only one capital, Washington or Moscow.
There can be only the clear, pure, fresh air of free America or the foul breath of Communistic Russia.
There can be only one flag the Stars and Stripes or the flag of the godless union of the Soviets.
NARRATOR".
Although the Smedley Butler hearings could be soft-pedaled by the media the House of Morgan and the four Du Pont brothers were actually called to testify by one of the most remarkable congressional hearings in U.
S.
history that of the senate committee investigating the munitions industry under North Dakota's Gerald Nye, a progressive Republican.
The target: war profiteering on an unimaginable scale and collusion with the German enemy in World War I.
Nye, sensing another war was coming supported nationalizing the arms industry and increasing taxes on incomes over $10,000 to 98 percent on the day a war began.
The investigations reached their zenith in early 1936 when the House of Morgan and other Wall Street firms were called in.
Was it true that Morgan and other firms had pushed the U.
S.
to war in order to recoup the enormous sums they had lent the Allies? Morgan Jr.
along with Thomas Lamont and other partners dismissed this as a fantastic theory claiming there was no material advantage to having the U.
S.
enter the First World War because the U.
S.
businesses were already thriving from supplying the Allies.
One skeptical senator asked the bankers: SENATOR: Do you think Great Britain would have paid her debts if she had lost the war? NARRATOR".
A banker replied: BANKER'.
Y es even if she'd lost the war, she would have paid.
" NARRATOR".
But we must ask would a broken and bankrupt Britain really have repaid those debts? Although Nye and his committee failed to stop war profiteering they did succeed in educating the public and also raised another disturbing issue that continues to rankle historians.
What to say about U.
S.
businesses' contributions to German economic and military revitalization? World War ll continues to be one of the most heroic periods in American history and myth.
Thirty seconds.
NARRATOR".
A modern media industry of books, television and movies have applauded America's contribution to the defeat of Hitler's Nazi regime.
But they ignore, forget, or overlook that many prominent American businessmen and citizens driven by greed but sometimes by fascist sympathies, knowingly aided the Third Reich.
IBM, headed by Thomas Watson had purchased a controlling interest in the German firm Dehomag in the early 1920s and held on once the Nazis seized power.
On his 75th birthday, in 1937 Watson accepted the Grand Cross of the German Eagle given him for the assistance IBM's German subsidiary provided the government in tabulating its census with its punch card machines.
This later proved very effective in, among other things, identifying Jews and later still, in helping make the trains to Auschwitz run on time.
On an even larger scale, General Motors' Alfred Sloan through his German subsidiary Adam Opel built cars and transport vehicles for the German army.
Sloan, on the eve of Germany's invasion of Poland said his company was too big to be affected by a petty international squabble.
Henry Ford's German subsidiary manufactured an arsenal of military vehicles throughout the war with the consent of the parent company in Michigan.
Ford himself had earlier published a series of articles later a book, titled The International Jew: The World's Foremost Problem.
Hitler hung a portrait of Ford in his Munich office and told the Detroit News in 1931 regard Heinrich Ford as my inspiration.
" When the European war was declared in 1939 Ford and GM, despite subsequent disclaimers refused to divest themselves of their German holdings and even complied with German government orders to retool for war production while resisting similar demands from the U.
S.
government.
Ford, GM, Standard Oil, Alcoa, ITT, General Electric the munitions maker Dupont, Eastman Kodak Westinghouse, Prat & Whitney, Douglas Aircraft, United Fruit Singer and International Harvester continued to trade with Germany up to 1941.
Although the United States declared many of these business activities illegal under the Trading with the Enemy Act several corporations still received special licenses to continue operations in Germany.
Profits piled up in blocked bank accounts as Americans were dying on the battlefield.
German coal and steel magnate Fritz Thyssen had been one of Hitler's early backers and much of his wealth was protected overseas by the Brown Brothers Harriman investment firm through the holding company Union Banking Corporation in an account managed by Prescott Bush father of future president George H.
W.
Bush and grandfather to W.
Bush.
In 1942, the U.
S.
government seized Union Banking Corp along with four other Thyssen-linked accounts managed by Bush.
Then, after the war, the shares were returned to the American shareholders, including Bush.
By 1943, half of the German workforce was slave labor or as the Nazis called them, foreign workers.
Despite having lost direct control, Ford profited from these people earning millions in sequestered funds after the war.
Ford also benefitted from its alliance with IG Farben a chemical cartel that built the Buna rubber plant at Auschwitz which manufactured Zyklon-B, the poison gas that killed so many.
Farben employed 83,000 forced laborers from Auschwitz and held a 15-percent share of the subsidiary Ford Werke.
American authorities knew of the death camps by August of '42 but until this could be clarified, said nothing to the public.
Rabbi Stephen Wise finally broke the silence in late '42.
The story was carried on page 10 in the New York Times and not much was made of it.
IBM fought and succeeded in recovering all of their sequestered profits.
And Ford and GM both reabsorbed their German subsidiaries even having the audacity to sue and win reparations for those European factories that had been destroyed or damaged in Allied bombing raids up to $33 million in the case of GM.
Then, after the war, these corporations took steps to obscure their involvement.
Documents were suddenly burned or went missing especially in former Nazi-occupied areas.
The subject of collaboration is highly taboo.
To facilitate such dealings, of course, banks and law firms were needed.
The corporate powerhouse law firm Sullivan & Cromwell whose managing director was future Secretary of State John Foster Dulles, with his brother, Allen Dulles as a partner had, as clients, many of these powerful institutions including the very important Bank for International Settlements which was set up in Switzerland in 1930 to channel World War I reparations between the U.
S.
and Germany.
After the war was declared, the bank continued to offer financial services to the Third Reich and the majority of gold looted during the Nazi conquests of Europe ended up in BIS vaults which allowed the Nazis access to money that would have normally been trapped in blocked accounts.
Several Nazis and supporters were involved at high levels including Hjalmar Schacht and Walther Funk who both ended up in the dock at the Nuremberg trials.
Schacht was acquitted.
American lawyer and chairman of the bank Thomas McKittrick claiming neutrality in Switzerland, managed this process.
Roosevelt's Secretary of the Treasury Henry Morgenthau âunsuccessfully tried to close the bank down after the war claiming it had acted as an agent of the Nazis.
The Chase Bank continued to work with Vichy France a client state and intermediary of the Third Reich.
Its deposits doubled during the war years.
In 1998, the bank was sued by Holocaust survivors claiming it held blocked accounts from this era.
Morgan Bank, Chase Bank, Union Banking Corporation and BIS were the four dominant banks who succeeded in obfuscating their collaborations with the Nazis.
William Randolph Hearst, the newspaper baron who was proud to have provoked the Spanish-American war, was still alive and went to Germany to meet with Hitler, whom he admired.
Throughout the '30s his papers demonized the Soviet Union and ran stories depicting the Nazis in a friendly light.
American hero Charles Lindbergh one of the most celebrated Americans of the 1920s, alongside Jack Dempsey Babe Ruth and Charlie Chaplin became the poster boy for the America First movement.
The future of this nation, and of our American ideals NARRATOR".
Although Hitler had just smashed France Lindbergh feared Germany's ultimate defeat and implored the American public.
Hitler's destruction would lay Europe open to the rape, loot and barbarism of Soviet Russia's forces causing possibly the fatal wounding of Western civilization.
NARRATOR".
Lindbergh was enthralled with Hitler and almost moved to Germany.
Roosevelt suspected a darker reality than simple pacifism, and remarked in 1940: ROOSEVELT: If I should die tomorrow, I want you to know this: I'm absolutely convinced Lindbergh is a Nazi.
NARRATOR".
Many Americans abhorred fascism and repudiated Lindbergh's right-wing views.
But they remembered the horrors of World War I and wanted the U.
S.
to keep out of Europe's wars.
Even General Smedley Butler would join the ranks of the isolationists although he would die in 1940 before the U.
S.
entered the war.
Mr.
Roosevelt will be reelected unless he makes some false step and involves us in a foreign war which is surely coming.
Do you mind if I ask you a few questions? - Unofficially, of course.
- Make it official if you like.
- What is your nationality? - I am a drunkard.
[ALL LAUGH.]
And that makes Rick a citizen of the world.
I was born in New York City, if that will help you any.
I understand that you came here from Paris at the time of the occupation.
There seems to be no secret about that.
Are you one of those who cannot imagine Germans in their beloved Paris? It's not particularly my beloved Paris.
Can you imagine us in London? - When you get there, ask me.
- Oh, diplomatist, heh.
How about New York? There are certain sections of New York that I wouldn't advise you to try to invade.
- Uh-huh, who do you think will win the war? - I haven't the slightest idea.
Rick is completely neutral about everything.
And that takes in the field of women too.
NARRATOR".
From the American point of view, in the heart of the 1930s Depression in a time of great moral confusion, when the world was upside down when even a maverick like General Smedley Butler would become isolationist where American business was not to be trusted by the workers there was a gigantic, unseen global struggle going on.
It was essentially between the left and the right between communism at one extreme and fascism at the other.
Between these poles America was a baby giant a nascent empire going through birthing pains confused, anxious, scared.
What would America become? It could be argued in hindsight that the non-intervention of the United States in the Spanish Civil War which Roosevelt later characterized as a grave mistake set the course for a numb neutrality between fascism and communism that would seriously confuse the stakes for the American public.
We've described the lurch towards fascism that would end with World War II.
But the wrestling match with Communism continued to haunt the American imagination for decades to come.
In 1931, as U.
S.
unemployment approached 25 percent desperate Americans stampeded Soviet offices looking for jobs.
In the eyes of the poor, there was this great hope that the world would be a better place.
The combination of a left-leaning Congress and energized progressive populace and a responsive president in Roosevelt now made possible the greatest period of social experimentation in American history.
It's there to be seen in the passionate works of Dos Passos and Clifford Odets in the iconic photos of Dorothea Lange in the riveting message of Mr.
Smith goes to Washington written by Sydney Buckman, who was a Communist Party member in the lyrics of "Over the Rainbow" and "This Land is Your Land" in one of the greatest novels of that era The Grapes oi Wrath by Nobel Prize-winning John Steinbeck in which can be found the dark optimism of the ordinary American.
We've sure taken a beating.
I know, heh.
That's what makes us tough.
Rich fellas come up and they die and their kids ain't no good and they die out, but we keep a-coming.
We're the people that live.
They can't wipe us out.
They can't lick us.
And we'll go on forever, Pa, because we're the people.
NARRATOR: Hundreds of thousands of people either joined the Communist Party itself or passed through the popular front groups during the period of 1935 to '39 when the Party appealed to progressive Democrats including Roosevelt, to unite with the Soviet Union against fascist aggression.
Not only did the Communists lead the fight against fascism they provided the foot soldiers to build the great industrial unions of the CIO and they battled for African-American civil rights decades ahead of their time.
To many, they seemed to represent the moral conscience of the nation.
Communist sympathizers included some of the nation's greatest writers such as Sherwood Anderson James Farrell, Richard Wright, Odets, Hughes, Hemingway Dos Passos, Steinbeck and Lewis.
Renowned writer and critic Edmund Wilson visited Russia, saying he felt as if he were at: WILSON: The moral top of the universe where the light never really goes out.
NARRATOR".
He wrote in 1932: WILSON: To the writers and artists of my generation who had grown up in the big business era and had always resented its barbarism these years were not depressing, but stimulating.
One couldn't help being exhilarated at the sudden and unexpected collapse of the stupid gigantic fraud, gave us a new sense of freedom to find ourselves still carrying on while the bankers, for a change, were taking a beating.
NARRATOR".
Was Communism the answer for America? The popular perception of Russia was still a forbidding one.
I have heard of the arrogant male in capitalistic society.
It is having a superior earning power that makes you that way.
A Russian.
I love Russians.
Comrade, I've been fascinated by your Five-Year Plan for the last 15 years.
Your type will soon be extinct.
NARRATOR".
Henry Wallace, a symbol of the New Deal's caring capitalism professed himself an admirer of Soviet social programs that offered its citizens universal health care free public education and subsidized housing.
Roosevelt's Republican opponents, however, were horrified.
Things grew worse when Wallace hit the cover of TIME magazine in 1938 as Roosevelt's logical successor.
Wallace, like many Americans was focusing more on the Soviet Union's achievements than on the ugly and still largely hidden brutality of Stalin's repression which he would later discover and renounce.
What they saw in the USSR was a thriving state-run full-employment economy.
It was based, starting in 1928 on a five-year plan that was building big, highly visible projects dams, steel mills, canals by unleashing science and technology.
Progressives had long favored this kind of intelligent planning over the dog-eat-dog ethic of capitalism in which individuals made decisions based on maximizing individual profit.
What a charming idea for Moscow to surprise us with a lady comrade.
If we had known, we would have greeted you with flowers.
Don't make an issue of my womanhood.
We are here for work, all of us.
Let's not waste any time.
Shall we go? Porter.
Here, please.
What do you want'? - May I have your bags, madame? - Why? - He is a porter, he wants to carry them.
- Why? - Why should you carry other people's bags? - That's my business, madame.
- That's no business.
That's social injustice.
- That depends on the tip.
- Allow me, comrade.
- No.
No, thank you.
- How are things in Moscow? - Very good.
The last mass trials were a great success.
There are going to be fewer but better Russians.
NARRATOR".
In the late 1920s, former Bolshevik enforcer Joseph Stalin had risen to prominence through a calculated course of murder and ruthlessness.
Some called him the Red Tsar.
In another century, Stalin would simply have declared himself divine as a king would and rule without protest.
In fact, he often behaved more like a traditional Czar using Communism as an authoritative weapon to rule.
[m RUSSIAN.]
NARRATOR".
During the 1930s, controversial reports often disbelieved b y American progressives, filtered out of the USSR telling of famines and starvation political trials and repression, secret police brutal prisons and ideological orthodoxy.
More than 13 million lives were terminated under Stalin's despotic resolve.
Kulaks were slaughtered or allowed to starve for resisting forced collectivization of agriculture.
Organized religion was stifled.
Scientists were arrested.
Military leaders loyal to the Russian revolution of 1917 were purged in huge phony showcase trials.
It was a backward police state having nothing in common with Karl Marx's vision.
Stalin believed that the West would ultimately combine to try to crush revolutionary Russia as they had in 1918.
But although he defended Soviet interests abroad he was primarily concerned with maintaining control at home.
His war was not with the world, but with his own people.
Unlike Hitler, who was devoted mystically to his Nazi ideology the highly paranoid Stalin was in comparison a poor student of the Communism preached by Marx and Lenin and that of his implacable enemy whom he exiled in 1929, Leon Trotsky.
Trotsky felt that the Soviet revolutions surrounded by hostile powers with its vast peasantry and small industrial base was way too backward economically and could not stand on its own.
He called for a worldwide permanent revolution to realize the Bolshevik's visionary transformation.
But Stalin's response was socialism in one country by which he meant the U.
S.
S.
R.
And when Stalin finally had the outspoken idealistic Trotsky silenced once and for all with a pick ax in his skull by agents in Mexico City in 1940 few in the West understood that this murder signified the end truly, not the beginning the end of a revolutionary movement towards international Communism.
Stalin, unlike Trotsky or Lenin was finally no more a true communist than Mao Tse Tung would ultimately become in China.
In pursuit of his nationalistic goal Stalin, encircled by hostile capitalist nations, and fearing this new war with Germany concluded the non-aggression pact with Hitler after desperately trying to forge an alliance to stop Hitler.
In hindsight, it was Stalin who was right about Germany not the United States.
He had to get ready for the bloodiest war in human history.
The West painted Stalin as not only a monster, which he was but added the fundamentally tragic misperception that Russia itself and Stalin's victims, the almost 200 million Soviet people were indeed an equally implacable monster bent upon global conquest.
But the facts revealed that, during the 1930s it turned out that it was the anti-Communist fascists who were spreading the world revolution we so feared not Stalin who was turning backward Russia into an industrial giant.
And out of this confusion and suspicion grew the basis of a severe and grievous future misunderstanding between the West, particularly the United States and the U.
S.
S.
R.
which would result, once World War ll ended in the equally dangerous Cold War.
In the cross-currents of the 1930s the U.
S.
stumbled between isolationism and engagement between hatred and fear of Communist Russia followed by friendship and alliance with it.
But then the curtain of hatred and fear descended once again.
And with the great brutality and soon-to-be- discovered horrors of World War II a new pessimism was about to enter the human consciousness with his hopes ground once more to dust under the boot of fascism war, and big business the common man would have to find his own one-eyed way to survive in the kingdom of the blind.
How am I gonna know about you, Tommy? Why, they could kill you and I'd never know.
I'll be all around in the dark.
I'll be everywhere.
Wherever you can look.
Wherever there's a fight so hungry people can eat, I'll be there.
Wherever there's a cop beating up a guy, I'll be there.
I'll be in the way guys yell when they're mad.
I'll be in the way kids laugh when they're hungry and they know supper's ready.
And when the people are eating the stuff they raised living in the houses they build I'll be there too.
[English - US - SDH.]
[PEOPLE CHEERING.]
NARRATOR".
As the troops returned from overseas following the war Republican presidential candidate Warren G.
Harding was promising a return to normalcy ushering in one of the most conservative eras in American history.
But the Teapot Dome scandal engulfed his administration and revealed the interior secretary to be in the pay of big oil which had been plundering public lands.
The 1920s would turn out to be a decade of bold cultural experimentation mixed with political conservatism.
An old culture of scarcity versus a new culture of abundance.
This would be baptized the Roaring Twenties.
[TRUMPETS.]
NARRATOR".
Moral reformers feared that the dough boys having discovered what some called the French way would foist their new appetite for oral sex as well as their diseases on innocent American girls.
The licentious French had, after all, offered to set up brothels for American soldiers like the ones that service their own fighting men with the idea that it would maintain health standards and morale.
But U.
S.
officials adamantly refused.
And back home moral crusaders had exploited wartime anxieties to shut down red light districts around the country driving prostitutes underground and forcing them to seek protection from gangsters and pimps.
In 1919, the 18th Amendment was ratified banning the manufacture and sale of alcohol in the United States.
The reform backed by women's temperance groups certain Protestant denominations, the reborn Ku Klux Klan and some progressives.
But as with the War on Drugs later in the century alcohol remained readily available for all who wanted it.
And the war on alcohol ended up producing fantastic profits for a new stratum of criminals dominated by Italian Irish and Jewish immigrant gangs.
Smedley Butler had seen some of the worst of the violence of World War I and the corruption that had ensued.
But now on sabbatical from the military he was assigned the streets of Philadelphia.
BUTLER: Cleaning up Philadelphia was harder than any battle I was ever in.
NARRATOR: Butler closed 600 speakeasies including two patronized by the city's elite, who had him fired.
Other repressive aspects of the new American life included immigration reform laws that imposed strict quotas on southern and eastern Europeans and entirely banned immigration from Japan, China, and East Asia.
Anti-Semitism infested post-war America.
Some associated Jews with Communism and radicalism.
Others thought Jews exerted too much influence in Hollywood business and academia.
Top universities like Harvard slashed admission of freshmen Jews from 28 percent in 1925 to 12 percent in 1933.
Other measures were taken to eliminate undesirables.
In 1911, as governor of New Jersey "eugenics enthusiast Woodrow Wilson had signed a law authorizing sterilization of convicts epileptics and the feeble-minded.
Over the following decade, some 60,000 Americans would be sterilized more than a third of them in California.
Sexually active women were particularly targeted.
Future German leader Adolf Hitler followed U.
S.
developments closely and claimed to model some of his own master race strategies on U.
S.
programs that he lauded, but criticized for only going halfway.
He would go further.
Much further.
Between 1920 and 1925, 3 to 6 million Americans joined the racist anti-Semitic, anti-Catholic Ku Klux Klan, which dominated politics in Indiana Colorado, Oregon, Oklahoma, and Alabama and sent hundreds of delegates to the 1924 Democratic convention.
It is astonishing to think that in 1925 a quarter million people watched 35,000 Klansmen march and rally through Washington, D.
C.
Hatred stalked the heartland.
14-year-old Henry Fonda later a movie star, recalled watching a lynching in Omaha, Nebraska from his father's printing plant.
Put them up.
FONDA: It was the most horrendous sight I'd ever seen.
We locked the plant, went downstairs and drove home in silence.
Finish him.
FONDA: All I could think of was that young black man dangling at the end of a rope.
NARRATOR".
Hundreds more African-Americans would suffer a similar fate.
Often advertised widely in advance and memorialized on postcards and in sound recordings lynchings became perverse rituals of desecration replete with dismemberment and castration and preserving body parts as souvenirs.
Backwoods Bible colleges proliferated.
Anti-intellectualism abounded.
In 1925, a Tennessee school teacher named John Thomas Scopes was prosecuted, convicted and fined for teaching Darwin's evolution theories in school.
World War I marked the ascendency of the U.
S.
and Japan the war's two real victors.
It had brought America an unprecedented collusion of bankers businessmen and government officials.
.
.
In an attempt to fix the economy and guarantee profits.
By 1925, the U.
S.
was producing over 70 percent of the world's oil which had powered the Allied wartime navies airplanes, tanks and other motorized vehicles.
New York had replaced London as the center of the world economy its size exceeding that of its next six rivals combined: Britain, France, Germany, Italy, the Soviet Union and Japan.
Cynical and disillusioned from a brutal war people were hungry to live at a level and experience life in a way they had never done before.
[SCATTING.]
A new materialism reigned, based on credit radios, movie palaces and a new golden age of advertising that perfected the capitalist art form of manipulating not only consumer hopes and fantasies, but also fears and insecurities.
Henry Ford sold 15 million Model Ts before switching in 1927 to the more fashionable Model A.
Jazz, with its roots in the African-American south, became wildly popular.
Flappers, petting, speakeasies, the Harlem Renaissance sports wild new movies with and without sound flourished.
Rebellious younger writers came on the scene.
New expressionism in the works of E.
E.
Cummings John Dos Pasos, T.
S.
Eliot, Ernest Hemingway, Ezra Pound William Faulkner, Laurence Stallings, Sinclair Lewis, Eugene O'Neill Willa Cather, Langston Hughes and Dalton Trumbo.
Many of them went to Europe.
F.
Scott Fitzgerald wrote in 1920: FITZGERALD: Here was a new generation grown up to find all gods dead all wars fought, all faiths in man shaken.
NARRATOR".
Gertrude Stein, a lesbian writer living in Paris, famously commented: "All of you young people who served in the war, you are a lost generation.
" As the 1920s progressed prosperity came to rest increasingly on the shakiest of foundations: Unprecedented borrowing, massive speculation and German war reparations.
Agriculture was depressed throughout the decade.
Auto manufacturing and road building slowed.
Housing investment declined and the gap between rich and poor grew sharply.
Capital scrambled for profitable speculative outlets.
To help pay Germany's war reparations German Foreign Minister Walther Rathenau a prominent Jewish industrialist expanded economic, diplomatic and even military ties with communist Russia forging a bridge between the two nations that had been left out of Versailles in order to rebuild their war-ravaged societies.
This infuriated not only England and France but members of Germany's thuggish right wing Freikorps who were already up in arms about Germany paying its reparations.
They assassinated Rathenau in 1922.
Germany's economy suffered an inflation unlike any ever experienced in history.
Wheelbarrows full of worthless German marks were burned for firewood.
By 1923, a bankrupt Germany could no longer pay reparations to France and Britain who in turn asked for relief on the billions in war debts they owed the U.
S.
government.
"Absolutely not," replied the Spartan new Republican president Calvin Coolidge.
By 1924, Europe's economies teetered on the edge of collapse.
Then, and again four years later commissions of bankers and businessmen led by Morgan and his allies and his allies drew up plans for German economic recovery that would guarantee continued, though more manageable, reparations payments.
In essence, the U.
S.
was loaning money to Germany so it could pay reparations to France and Britain who then used the money to service their war debts to the U.
S.
The bankers got rich, the people stayed poor.
By 1933, Germany, though paying enormous reparations owed even more money to the Allies than it had in 1924.
It was in this climate of economic crisis in the West and Communist revolution in the East, that a new monster was born.
It was called Nazism.
Separate and apart from Germany in Italy in 1922 Benito Mussolini and his fascisti took power and decimated the Communists in bloody street battles.
And as 1925 came to an end it was the Morgan bank that loaned Mussolini's government $100 million.
.
.
to repay its war debts to Britain and the U.
S.
Morgan was very pleased with Mussolini's repressive labor policies.
Nazis stormed the city of Munich in 1923 led by World War I corporal Adolf Hitler.
His followers included war veterans unable to adjust to civilian life who clamored for the chance to put down communist uprisings and later formed the backbone of his storm troopers.
For his part in the failed coup Hitler spent nine months in jail refining his views.
His shrill assertion that the German military had won the war only to be stabbed in the back by politicians at home was gaining more and more adherence.
Hitler's cause would be greatly advanced when, in 1929, the central bankers walked head on into an unforeseen disaster: The Great Depression.
Montagu Norman, who ruled the private Bank of England from 1920 to 1944 and a paranoid anti-Communist anti-Semite who traveled incognito to avoid assassination asked the governor of the New York Federal Reserve Bank to raise interest rates to slow Wall Street's soaring stock speculation.
Ironically, Norman had been instrumental in convincing the previous governor to lower the rates two years earlier which fueled the orgy of speculation that now rattled the system.
Morgan's senior partner, Thomas Lamont considered Norman the wisest man he had ever met.
But the U.
S.
stock market, as it would in 2008 had diverted its money and credit away from production into speculation borrowing to the hilt in order to loot the economy for huge profit.
When the English and American banks raised their rates the credit of the world tightened quickly and too-big-to-fail American banks went into a panic.
Huge banks in Austria and Germany followed.
The crash ended American loans to Germany and Germany's industry collapsed entirely in the winter of 1931-1932.
Unemployment soared to over 30 percent putting millions of angry young men in the streets.
Capitalists and conservative politicians feared an imminent Communist coup and Hitler, Germany's most virulent anti-Communist was thus invited by the ruling classes into the government.
Although still representing a radical minority party in January, 1933, Hitler became chancellor of Germany.
[ALL CHEERING.]
[m GERMAN.]
NARRATOR".
In speeches like this Hitler touched a deep chord with many Germans promising them something they could barely remember: pride.
[ALL YELLING.]
But disorder followed Hitler's rise to power when the Reichstag, the national parliament, mysteriously burned down.
Hitler readily blamed the Communists and many were thrown in concentration camps.
He quickly began a massive program of rearmament, which he made public in 1935.
And once Hjalmar Schacht became his Minister of Economics he received vital bank credits from Montagu Norman who in 1934 told a Morgan partner: NORMAN: Hitler and Schacht are the bulwarks of civilization in Germany.
They're fighting the war of our system of society against Communism.
NARRATOR".
Many American bankers agreed, trusting their friend Schacht and hoping that Hitler would repay at least some of the reparations and also crush the German communists.
America was in deep crisis as well.
Republican Herbert Hoover struggled ineffectively to quell the Great Depression.
More than 20,000, possibly as many as 40,000 angry American veterans known as the Bonus Army descended on Washington demanding war service bonuses not due to be paid until the year 1945.
I came to Washington to get my bonus.
And I'm going to wait for it till I get it if I have to wait till 1945.
NARRATOR".
They set up a tent city on the Anacostia Flats in Washington.
They brought their wives and children.
They lived by military discipline with a daily parade and a strict no-drinking rule.
General Smedley Butler arrived to lend moral support.
BUTLER: No.
[ALL CHEERING.]
NARRATOR".
He was mobbed by veterans wanting to speak to him.
Until late that morning, he sat with them in their tents listening to their tales of lost jobs and families in distress and old battle wounds.
After demonstrators clashed with district police President Hoover ordered General Douglas MacArthur to restore order.
Convinced that the Bonus Army was the vanguard of a communist coup Macarthur, not for the only time in his storied career disobeyed presidential orders and rousted the veterans with tanks, bayonets and tear gas.
MacArthur, whose aides included later generals Dwight Eisenhower and George Patton, pursued the fleeing veterans across the river and set their makeshift city aflame.
But when the Bonus Army marched again the next year into Washington there was a new president in the White House who sent his wife, Eleanor to help serve the veterans three hot meals a day with coffee.
One veteran remarked, "Hoover sent the army.
Roosevelt sent his wife.
" Several days later, the Bonus Army voted to disband.
The new president put many of the veterans to work in the civilian conservation corps.
It was in his famous inaugural address in March, 1933 that Franklin Delano Roosevelt rallied the nation with his declaration: That the only we thing we have to fear is fear itself.
NARRATOR".
It was the signature line of his extraordinary life.
In truth, he was facing a disaster.
Unemployment stood at 25 percent.
The gross national product had fallen 50 percent.
Farmers lost 60 percent of their income.
Industrial production dropped over 50 percent.
Between 1930 and '32, 20 percent of U.
S.
banks had failed.
Bread lines formed in every town to feed the starving.
Homeless walked the streets and slept in vast shanty towns known as Hoovervilles.
There was no safety net to assist the desperate.
Misery was everywhere.
Roosevelt united Americans around a message of inclusion the opposite of Hitler's.
ROOSEVELT: The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.
NARRATOR".
In this vein he called for strict supervision of all banking and credits and investments and an end to speculation with other people's money.
He proclaimed a New Deal.
And although he could've nationalized the banks with hardly a word of protest he chose a much more conservative course of action.
He declared a four-day national bank holiday conferred with the nation's top bankers on his first full day in office and signed the emergency banking act which was written largely by the bankers themselves.
The banking system was essentially restored without radical change.
And despite being accused of betraying his class Roosevelt would ironically save capitalism from the capitalists themselves.
Recognizing the failures of unfettered capitalism Roosevelt unleashed the powers of the federal government.
In his first 100 day in office, he passed legislation that established the Agricultural Adjustment Administration to save farming the Civilian Conservation Corps to put young men to work in the forests and parks the Federal Emergency Relief Administration to provide federal assistance to the states the Public Works Administration to coordinate large scale public works projects the National Recovery Administration, NRA, to promote economic recovery.
And he passed the Glass-Steagall banking act which separated investment and commercial banking and instituted federal insurance of bank deposits.
He also repealed Prohibition and stated, "Now would be a good time to have a beer.
" Roosevelt assembled a team of visionaries.
Among them were Harry Hopkins, Roosevelt's chief aide National Youth administrator Aubrey Williams Rexford Tugwell, Adolf Berle and Secretary of the Interior Harold lckes.
There was also the formidable Frances Perkins the U.
S.
Secretary of Labor and the first woman ever appointed to the cabinet.
They became known as the New Dealers.
Henry A.
Wallace, the young Iowa geneticist would become one of their leading lights.
He was from a Republican farming clan that had worked the land since it was frontier.
His father, Harry, had served presidents Warren Harding and Calvin Coolidge as secretary of agriculture.
Roosevelt told Wallace to take whatever actions necessary to repair the nation's devastated rural sector.
His solutions were controversial.
To stop overproduction, he paid farmers to destroy 25 percent of the cotton crop that was in the ground.
He also ordered the slaughter of 6 million baby pigs although he made sure the Agriculture Department distributed much of the pork lard and soap to needy Americans.
Condemned by critics, Wallace took to the radio to defend his program.
He called it a declaration of interdependence.
WALLACE: The ungoverned push of rugged individualism perhaps had an economic justification in the days when we had all the west to surge upon and conquer.
But this country has filled up now and grown up.
There are no more Indians to fight.
We must blaze new trails in the direction of a controlled economy, common sense and social decency.
NARRATOR".
In the end, Wallace's plan worked brilliantly.
Cotton prices doubled.
Farm income jumped 65 percent from 1932 to '36.
Corn, wheat, and pig prices stabilized and the farmers became Wallace's staunchest supporters.
For a man who had spent years perfecting a strain of hybrid corn and who believed that abundant food supplies were essential for a peaceful world, Wallace was horrified by the unfortunate message such policies sent.
WALLACE: The plowing under of 10 million acres of cotton and the slaughter of 6 million little pigs in 1933 were not acts of idealism in any sane society.
They were emergency acts made necessary by the almost insane lack of world statesmanship during the period from 1920 to 1932.
NARRATOR".
The public, which blamed business for causing the Depression welcomed Roosevelt with great enthusiasm hoping he could spark a recovery.
But he was an enigma campaigning at times as a big government liberal spinning out one new government program after another and at other times as a budget-balancing conservative.
Some thought him a socialist in the Eugene Debbs Norman Thomas tradition others, a fascist or a corporatist supporting the merger of state and corporate power.
His industrial recovery program, the NRA, regulated production competition and minimum wage rates some of which smacked of Italian fascism.
In reality, Roosevelt was actually more pragmatic than ideological.
Nonetheless, he was misunderstood by big business.
Openly opposing Wall Street made for smart politics but it won the everlasting enmity of conservative Republicans who attacked his inflationary policies as unconstitutional.
Printing press money, they called it.
And worse yet, F.
D.
R.
took the U.
S.
off the gold standard.
He sacrificed foreign trade and its profits in order to stimulate domestic recovery.
He also took steps to reduce the country's small 140,000-man Army.
The plan as outlined to me was to form an organization of veterans.
NARRATOR".
In 1934, retired general Smedley Butler reentered the picture presenting shocking information to the House Special Committee on Un-American Activities.
I was supposed to lead an organization of 500,000 men which would be able to take over the functions of government.
NARRATOR".
Butler charged the anti-Roosevelt oligarchs including J.
P.
Morgan's son Jack and the wealthy Du Pom' business clan with trying to recruit him to lead an uprising of desperate veterans to force Roosevelt from office.
This is what I found.
The key to Robert Forest's fascist organization.
They didn't call it fascism.
They painted it red, white and blue and called it Americanism.
In here are the funds to see it through.
Fantastic amounts subscribed by a few private individuals to whom money didn't mean anything but who wanted political power.
They could never get it by democratic means.
In there are the names and addresses of the men who were designated to be America's first storm troopers.
NARRATOR".
The press dismissed it as the business plot, a paranoid conspiracy.
Henry Luce 's TIME magazine led the charge.
But after hearing the testimony, the House Committee chaired by future Speaker of the House John McCormack of Massachusetts reported that it had been able to verify all the pertinent statements made by General Butler and concluded that attempts to establish a fascist organization in the United States were discussed, were planned and might have been placed in execution when and if the financial backers deemed it expedient.
The committee strangely chose not to call many of those implicated to testify including failed 1928 Catholic presidential candidate AI Smith Thomas Lamont of Morgan, Army General Douglas MacArthur various high placed corporate executives as well as the former American Legion commander and the head of the National Recovery Administration.
The tumultuous, frightening prospect of a fascist coup was popularized in the bestselling novel by Nobel Prize-winner Sinclair Lewis it Can't Happen Here which depicted a similar series of events to those alleged by Butler.
And later, a similar plot emerged in the very popular Frank Capra film Meet John Doe.
All right, now supposing a certain unmentionable worm whose initials are D.
B was trying to use that to shove his way into the White House so he could put the screws on.
You sit there back at your big cigars and think of deliberately killing an idea that's made millions of people a little bit happier.
An idea that's brought thousands of them here from all over the country by bus and by freight, in jalopies and on foot so they could pass onto each other their own simple little experiences.
Why look, I'm just a mug and I know it.
But I'm beginning to understand a lot of things.
Why, your type's as old as history.
If you can't lay your dirty fingers on a decent idea and twist it and squeeze it and stuff it into your own pocket you slap it down.
Like dogs, if you can't eat something, you bury it.
NARRATOR".
AI Smith, who became a spokesman for the right wing American Liberty League scorched Roosevelt.
SMITH: There can be only one capital, Washington or Moscow.
There can be only the clear, pure, fresh air of free America or the foul breath of Communistic Russia.
There can be only one flag the Stars and Stripes or the flag of the godless union of the Soviets.
NARRATOR".
Although the Smedley Butler hearings could be soft-pedaled by the media the House of Morgan and the four Du Pont brothers were actually called to testify by one of the most remarkable congressional hearings in U.
S.
history that of the senate committee investigating the munitions industry under North Dakota's Gerald Nye, a progressive Republican.
The target: war profiteering on an unimaginable scale and collusion with the German enemy in World War I.
Nye, sensing another war was coming supported nationalizing the arms industry and increasing taxes on incomes over $10,000 to 98 percent on the day a war began.
The investigations reached their zenith in early 1936 when the House of Morgan and other Wall Street firms were called in.
Was it true that Morgan and other firms had pushed the U.
S.
to war in order to recoup the enormous sums they had lent the Allies? Morgan Jr.
along with Thomas Lamont and other partners dismissed this as a fantastic theory claiming there was no material advantage to having the U.
S.
enter the First World War because the U.
S.
businesses were already thriving from supplying the Allies.
One skeptical senator asked the bankers: SENATOR: Do you think Great Britain would have paid her debts if she had lost the war? NARRATOR".
A banker replied: BANKER'.
Y es even if she'd lost the war, she would have paid.
" NARRATOR".
But we must ask would a broken and bankrupt Britain really have repaid those debts? Although Nye and his committee failed to stop war profiteering they did succeed in educating the public and also raised another disturbing issue that continues to rankle historians.
What to say about U.
S.
businesses' contributions to German economic and military revitalization? World War ll continues to be one of the most heroic periods in American history and myth.
Thirty seconds.
NARRATOR".
A modern media industry of books, television and movies have applauded America's contribution to the defeat of Hitler's Nazi regime.
But they ignore, forget, or overlook that many prominent American businessmen and citizens driven by greed but sometimes by fascist sympathies, knowingly aided the Third Reich.
IBM, headed by Thomas Watson had purchased a controlling interest in the German firm Dehomag in the early 1920s and held on once the Nazis seized power.
On his 75th birthday, in 1937 Watson accepted the Grand Cross of the German Eagle given him for the assistance IBM's German subsidiary provided the government in tabulating its census with its punch card machines.
This later proved very effective in, among other things, identifying Jews and later still, in helping make the trains to Auschwitz run on time.
On an even larger scale, General Motors' Alfred Sloan through his German subsidiary Adam Opel built cars and transport vehicles for the German army.
Sloan, on the eve of Germany's invasion of Poland said his company was too big to be affected by a petty international squabble.
Henry Ford's German subsidiary manufactured an arsenal of military vehicles throughout the war with the consent of the parent company in Michigan.
Ford himself had earlier published a series of articles later a book, titled The International Jew: The World's Foremost Problem.
Hitler hung a portrait of Ford in his Munich office and told the Detroit News in 1931 regard Heinrich Ford as my inspiration.
" When the European war was declared in 1939 Ford and GM, despite subsequent disclaimers refused to divest themselves of their German holdings and even complied with German government orders to retool for war production while resisting similar demands from the U.
S.
government.
Ford, GM, Standard Oil, Alcoa, ITT, General Electric the munitions maker Dupont, Eastman Kodak Westinghouse, Prat & Whitney, Douglas Aircraft, United Fruit Singer and International Harvester continued to trade with Germany up to 1941.
Although the United States declared many of these business activities illegal under the Trading with the Enemy Act several corporations still received special licenses to continue operations in Germany.
Profits piled up in blocked bank accounts as Americans were dying on the battlefield.
German coal and steel magnate Fritz Thyssen had been one of Hitler's early backers and much of his wealth was protected overseas by the Brown Brothers Harriman investment firm through the holding company Union Banking Corporation in an account managed by Prescott Bush father of future president George H.
W.
Bush and grandfather to W.
Bush.
In 1942, the U.
S.
government seized Union Banking Corp along with four other Thyssen-linked accounts managed by Bush.
Then, after the war, the shares were returned to the American shareholders, including Bush.
By 1943, half of the German workforce was slave labor or as the Nazis called them, foreign workers.
Despite having lost direct control, Ford profited from these people earning millions in sequestered funds after the war.
Ford also benefitted from its alliance with IG Farben a chemical cartel that built the Buna rubber plant at Auschwitz which manufactured Zyklon-B, the poison gas that killed so many.
Farben employed 83,000 forced laborers from Auschwitz and held a 15-percent share of the subsidiary Ford Werke.
American authorities knew of the death camps by August of '42 but until this could be clarified, said nothing to the public.
Rabbi Stephen Wise finally broke the silence in late '42.
The story was carried on page 10 in the New York Times and not much was made of it.
IBM fought and succeeded in recovering all of their sequestered profits.
And Ford and GM both reabsorbed their German subsidiaries even having the audacity to sue and win reparations for those European factories that had been destroyed or damaged in Allied bombing raids up to $33 million in the case of GM.
Then, after the war, these corporations took steps to obscure their involvement.
Documents were suddenly burned or went missing especially in former Nazi-occupied areas.
The subject of collaboration is highly taboo.
To facilitate such dealings, of course, banks and law firms were needed.
The corporate powerhouse law firm Sullivan & Cromwell whose managing director was future Secretary of State John Foster Dulles, with his brother, Allen Dulles as a partner had, as clients, many of these powerful institutions including the very important Bank for International Settlements which was set up in Switzerland in 1930 to channel World War I reparations between the U.
S.
and Germany.
After the war was declared, the bank continued to offer financial services to the Third Reich and the majority of gold looted during the Nazi conquests of Europe ended up in BIS vaults which allowed the Nazis access to money that would have normally been trapped in blocked accounts.
Several Nazis and supporters were involved at high levels including Hjalmar Schacht and Walther Funk who both ended up in the dock at the Nuremberg trials.
Schacht was acquitted.
American lawyer and chairman of the bank Thomas McKittrick claiming neutrality in Switzerland, managed this process.
Roosevelt's Secretary of the Treasury Henry Morgenthau âunsuccessfully tried to close the bank down after the war claiming it had acted as an agent of the Nazis.
The Chase Bank continued to work with Vichy France a client state and intermediary of the Third Reich.
Its deposits doubled during the war years.
In 1998, the bank was sued by Holocaust survivors claiming it held blocked accounts from this era.
Morgan Bank, Chase Bank, Union Banking Corporation and BIS were the four dominant banks who succeeded in obfuscating their collaborations with the Nazis.
William Randolph Hearst, the newspaper baron who was proud to have provoked the Spanish-American war, was still alive and went to Germany to meet with Hitler, whom he admired.
Throughout the '30s his papers demonized the Soviet Union and ran stories depicting the Nazis in a friendly light.
American hero Charles Lindbergh one of the most celebrated Americans of the 1920s, alongside Jack Dempsey Babe Ruth and Charlie Chaplin became the poster boy for the America First movement.
The future of this nation, and of our American ideals NARRATOR".
Although Hitler had just smashed France Lindbergh feared Germany's ultimate defeat and implored the American public.
Hitler's destruction would lay Europe open to the rape, loot and barbarism of Soviet Russia's forces causing possibly the fatal wounding of Western civilization.
NARRATOR".
Lindbergh was enthralled with Hitler and almost moved to Germany.
Roosevelt suspected a darker reality than simple pacifism, and remarked in 1940: ROOSEVELT: If I should die tomorrow, I want you to know this: I'm absolutely convinced Lindbergh is a Nazi.
NARRATOR".
Many Americans abhorred fascism and repudiated Lindbergh's right-wing views.
But they remembered the horrors of World War I and wanted the U.
S.
to keep out of Europe's wars.
Even General Smedley Butler would join the ranks of the isolationists although he would die in 1940 before the U.
S.
entered the war.
Mr.
Roosevelt will be reelected unless he makes some false step and involves us in a foreign war which is surely coming.
Do you mind if I ask you a few questions? - Unofficially, of course.
- Make it official if you like.
- What is your nationality? - I am a drunkard.
[ALL LAUGH.]
And that makes Rick a citizen of the world.
I was born in New York City, if that will help you any.
I understand that you came here from Paris at the time of the occupation.
There seems to be no secret about that.
Are you one of those who cannot imagine Germans in their beloved Paris? It's not particularly my beloved Paris.
Can you imagine us in London? - When you get there, ask me.
- Oh, diplomatist, heh.
How about New York? There are certain sections of New York that I wouldn't advise you to try to invade.
- Uh-huh, who do you think will win the war? - I haven't the slightest idea.
Rick is completely neutral about everything.
And that takes in the field of women too.
NARRATOR".
From the American point of view, in the heart of the 1930s Depression in a time of great moral confusion, when the world was upside down when even a maverick like General Smedley Butler would become isolationist where American business was not to be trusted by the workers there was a gigantic, unseen global struggle going on.
It was essentially between the left and the right between communism at one extreme and fascism at the other.
Between these poles America was a baby giant a nascent empire going through birthing pains confused, anxious, scared.
What would America become? It could be argued in hindsight that the non-intervention of the United States in the Spanish Civil War which Roosevelt later characterized as a grave mistake set the course for a numb neutrality between fascism and communism that would seriously confuse the stakes for the American public.
We've described the lurch towards fascism that would end with World War II.
But the wrestling match with Communism continued to haunt the American imagination for decades to come.
In 1931, as U.
S.
unemployment approached 25 percent desperate Americans stampeded Soviet offices looking for jobs.
In the eyes of the poor, there was this great hope that the world would be a better place.
The combination of a left-leaning Congress and energized progressive populace and a responsive president in Roosevelt now made possible the greatest period of social experimentation in American history.
It's there to be seen in the passionate works of Dos Passos and Clifford Odets in the iconic photos of Dorothea Lange in the riveting message of Mr.
Smith goes to Washington written by Sydney Buckman, who was a Communist Party member in the lyrics of "Over the Rainbow" and "This Land is Your Land" in one of the greatest novels of that era The Grapes oi Wrath by Nobel Prize-winning John Steinbeck in which can be found the dark optimism of the ordinary American.
We've sure taken a beating.
I know, heh.
That's what makes us tough.
Rich fellas come up and they die and their kids ain't no good and they die out, but we keep a-coming.
We're the people that live.
They can't wipe us out.
They can't lick us.
And we'll go on forever, Pa, because we're the people.
NARRATOR: Hundreds of thousands of people either joined the Communist Party itself or passed through the popular front groups during the period of 1935 to '39 when the Party appealed to progressive Democrats including Roosevelt, to unite with the Soviet Union against fascist aggression.
Not only did the Communists lead the fight against fascism they provided the foot soldiers to build the great industrial unions of the CIO and they battled for African-American civil rights decades ahead of their time.
To many, they seemed to represent the moral conscience of the nation.
Communist sympathizers included some of the nation's greatest writers such as Sherwood Anderson James Farrell, Richard Wright, Odets, Hughes, Hemingway Dos Passos, Steinbeck and Lewis.
Renowned writer and critic Edmund Wilson visited Russia, saying he felt as if he were at: WILSON: The moral top of the universe where the light never really goes out.
NARRATOR".
He wrote in 1932: WILSON: To the writers and artists of my generation who had grown up in the big business era and had always resented its barbarism these years were not depressing, but stimulating.
One couldn't help being exhilarated at the sudden and unexpected collapse of the stupid gigantic fraud, gave us a new sense of freedom to find ourselves still carrying on while the bankers, for a change, were taking a beating.
NARRATOR".
Was Communism the answer for America? The popular perception of Russia was still a forbidding one.
I have heard of the arrogant male in capitalistic society.
It is having a superior earning power that makes you that way.
A Russian.
I love Russians.
Comrade, I've been fascinated by your Five-Year Plan for the last 15 years.
Your type will soon be extinct.
NARRATOR".
Henry Wallace, a symbol of the New Deal's caring capitalism professed himself an admirer of Soviet social programs that offered its citizens universal health care free public education and subsidized housing.
Roosevelt's Republican opponents, however, were horrified.
Things grew worse when Wallace hit the cover of TIME magazine in 1938 as Roosevelt's logical successor.
Wallace, like many Americans was focusing more on the Soviet Union's achievements than on the ugly and still largely hidden brutality of Stalin's repression which he would later discover and renounce.
What they saw in the USSR was a thriving state-run full-employment economy.
It was based, starting in 1928 on a five-year plan that was building big, highly visible projects dams, steel mills, canals by unleashing science and technology.
Progressives had long favored this kind of intelligent planning over the dog-eat-dog ethic of capitalism in which individuals made decisions based on maximizing individual profit.
What a charming idea for Moscow to surprise us with a lady comrade.
If we had known, we would have greeted you with flowers.
Don't make an issue of my womanhood.
We are here for work, all of us.
Let's not waste any time.
Shall we go? Porter.
Here, please.
What do you want'? - May I have your bags, madame? - Why? - He is a porter, he wants to carry them.
- Why? - Why should you carry other people's bags? - That's my business, madame.
- That's no business.
That's social injustice.
- That depends on the tip.
- Allow me, comrade.
- No.
No, thank you.
- How are things in Moscow? - Very good.
The last mass trials were a great success.
There are going to be fewer but better Russians.
NARRATOR".
In the late 1920s, former Bolshevik enforcer Joseph Stalin had risen to prominence through a calculated course of murder and ruthlessness.
Some called him the Red Tsar.
In another century, Stalin would simply have declared himself divine as a king would and rule without protest.
In fact, he often behaved more like a traditional Czar using Communism as an authoritative weapon to rule.
[m RUSSIAN.]
NARRATOR".
During the 1930s, controversial reports often disbelieved b y American progressives, filtered out of the USSR telling of famines and starvation political trials and repression, secret police brutal prisons and ideological orthodoxy.
More than 13 million lives were terminated under Stalin's despotic resolve.
Kulaks were slaughtered or allowed to starve for resisting forced collectivization of agriculture.
Organized religion was stifled.
Scientists were arrested.
Military leaders loyal to the Russian revolution of 1917 were purged in huge phony showcase trials.
It was a backward police state having nothing in common with Karl Marx's vision.
Stalin believed that the West would ultimately combine to try to crush revolutionary Russia as they had in 1918.
But although he defended Soviet interests abroad he was primarily concerned with maintaining control at home.
His war was not with the world, but with his own people.
Unlike Hitler, who was devoted mystically to his Nazi ideology the highly paranoid Stalin was in comparison a poor student of the Communism preached by Marx and Lenin and that of his implacable enemy whom he exiled in 1929, Leon Trotsky.
Trotsky felt that the Soviet revolutions surrounded by hostile powers with its vast peasantry and small industrial base was way too backward economically and could not stand on its own.
He called for a worldwide permanent revolution to realize the Bolshevik's visionary transformation.
But Stalin's response was socialism in one country by which he meant the U.
S.
S.
R.
And when Stalin finally had the outspoken idealistic Trotsky silenced once and for all with a pick ax in his skull by agents in Mexico City in 1940 few in the West understood that this murder signified the end truly, not the beginning the end of a revolutionary movement towards international Communism.
Stalin, unlike Trotsky or Lenin was finally no more a true communist than Mao Tse Tung would ultimately become in China.
In pursuit of his nationalistic goal Stalin, encircled by hostile capitalist nations, and fearing this new war with Germany concluded the non-aggression pact with Hitler after desperately trying to forge an alliance to stop Hitler.
In hindsight, it was Stalin who was right about Germany not the United States.
He had to get ready for the bloodiest war in human history.
The West painted Stalin as not only a monster, which he was but added the fundamentally tragic misperception that Russia itself and Stalin's victims, the almost 200 million Soviet people were indeed an equally implacable monster bent upon global conquest.
But the facts revealed that, during the 1930s it turned out that it was the anti-Communist fascists who were spreading the world revolution we so feared not Stalin who was turning backward Russia into an industrial giant.
And out of this confusion and suspicion grew the basis of a severe and grievous future misunderstanding between the West, particularly the United States and the U.
S.
S.
R.
which would result, once World War ll ended in the equally dangerous Cold War.
In the cross-currents of the 1930s the U.
S.
stumbled between isolationism and engagement between hatred and fear of Communist Russia followed by friendship and alliance with it.
But then the curtain of hatred and fear descended once again.
And with the great brutality and soon-to-be- discovered horrors of World War II a new pessimism was about to enter the human consciousness with his hopes ground once more to dust under the boot of fascism war, and big business the common man would have to find his own one-eyed way to survive in the kingdom of the blind.
How am I gonna know about you, Tommy? Why, they could kill you and I'd never know.
I'll be all around in the dark.
I'll be everywhere.
Wherever you can look.
Wherever there's a fight so hungry people can eat, I'll be there.
Wherever there's a cop beating up a guy, I'll be there.
I'll be in the way guys yell when they're mad.
I'll be in the way kids laugh when they're hungry and they know supper's ready.
And when the people are eating the stuff they raised living in the houses they build I'll be there too.
[English - US - SDH.]