The Billion $ Plot to Destroy the Socialist & Labor Movements of 1920

by Hal Verb / November issue of Socialist Action Newspaper

Any socialist, radical, or progressive is undoubtedly aware of the “Red Scare” days of 1920 and beyond, and the notorious “Palmer raids” carried out by President Woodrow Wilson’s attorney general, who was determined to smash and crush all radical movements—especially socialist and labor groups. But very little attention has been paid to an episode that was dramatically exposed in that same year (1920).

The exposé was initially revealed in the foremost U.S. socialist weekly paper, The Appeal to Reason, on Feb. 28, 1920. In bold red letters, The Appeal blazoned forth: “Billion Dollar Plot to Crush Socialism!” The billion-dollar figure, The Appeal claimed, represented the combined wealth and assets of various capitalist organizations that had gathered hundreds of millions of dollars to carry out the “plot.”

These powerful pillars of capitalism, The Appeal stated, included manufacturers, railroad interests, financial institutions, and chambers of commerce. Directly underneath the banner headline, the paper stated, “Wall Street directorate uses psychological key to carry on propaganda in small town and rural districts—Albany outrage important link in the conspiracy. Fear strong sentiment for Debs.”

The reference to Albany alluded to eight Socialist Party city assemblymen who had been democratically elected but prevented from taking their seats. The second reference was to Eugene V. Debs, the Socialist Party candidate running for president, who then languished in prison for his vigorous opposition to World War I.

In a follow-up issue, April 24, 1920, The Appeal gave precise details of the capitalist plot, describing it as “the most colossal scheme of thought control ever dreamed in America.” This “scheme,” The Appeal maintained, was hatched by a “Wall Street directorate” consisting of some 36 corporations banded together in an association known as the Inter-Racial Council.

The 36 corporations named by The Appeal included such industrial capitalist giants as Standard Oil, Phelps Dodge, Prudential, Western Electric, DuPont, Commonwealth Edison, Bethlehem Steel, International Harvester, Armour, General Electric, First National Bank, and American Can.

The Inter-Racial Council’s plan would have “psychological experts,” using a “psychological key” (as stated in The Appeal’s issue of Feb. 20, 1920), seek out and inquire into the political and economic views of the top 100 influential persons in towns of less than 20,000 population, centering on eight town leaders who were clergyman, editor, lawyer, teacher, physician, labor leader, merchant, and, finally, a public official.

The reasoning behind this small-town approach is that American politics were guided to a large extent by what these small-town residents believed, and that was in large measure already conservative.

The “billion dollar plan” called for these top “influencers” to be contacted by the proposed psychological operatives. Pro-business, pro-capitalist views would be encouraged and promoted. Presumably, efforts would be made to decrease the influence of any small-town leaders found to have pro-socialist tendencies.

No one should be surprised at The Appeal’s mention of a “colossal scheme of thought control” when one considers our modern-day nightmarish conditions, with the U. S. government carrying out illegal wiretaps, lawless detentions, torture, and other civil liberties violations in the so-called War on Terrorism.

The targets of the U. S. government—with the collusion of the giant corporations—are the same as in the 1920s. A “terrorist” can be labeled as anyone opposing U. S. foreign policy and the capitalist system. Legitimate protest is condemned and exorcised. Witness protester Cindy Sheehan’s ouster from the halls of Congress for merely wearing a T-shirt.

The Appeal of April 24, 1920 named six Inter-Racial Council officers, with the top three being among the leading influential and politically powerful capitalists in the U.S. Coleman DuPont was chairman, and Philip T. Dodge (mentioned as a “print-paper king”) and Mrs. David Rumsey both served as vice presidents. Another officer was the financial giant, A. J. Hemphill, who was chairman of the board of directors of the Guaranty Trust Company—at that time the richest bank in the world.

Interestingly enough, in this same issue, “The Jungle” author Upton Sinclair revealed to Appeal readers how “print paper interests” were out to destroy the “red revolutionary radicalism” it found so pervasive in American society. Paper for printing such radical labor and socialist publications as The Appeal was the “life blood” of these movements, and any attempt to cut off the source could spell doom for these organizations in their attempts to reach millions of workers.

Sinclair cited the paper industry’s publication, Paper Trade Journal, and called attention to its “warning”: “If you want to effect a genuine cure you just wipe out the source of supply.”

The Appeal was widely read not only by socialists but by thousands upon thousands of readers at a time when the socialist movement was rapidly gaining strength—even though the Socialist Party had lost a lot of support because it sided with President Wilson in going to war against Germany.

In regard to the “billion-dollar plot,” the editor of The Appeal said that the details were provided to him by a socially conscientious world-renowned international banker, whose name the editor pledged not to reveal. The banker was certainly not attempting to help socialists but rather feared that the extreme measures adopted by the U. S. government at the behest of business interests would backfire and inevitably aid in destroying capitalism itself.

The Appeal never did reveal the name of this early-day “whistleblower,” and the paper’s exposé of the billion-dollar conspiracy effectively thwarted it. But what if the plotters had succeeded? Such a question can be raised about our present-day political climate. The answer, as early 20th-century Wobbly leader Joe Hill put it so succinctly, is, “Don’t Mourn, Organize!”

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