FDR and the Corporate Socialists

by The republican Mother
Join my little study of tracing the real roots of the progressive agenda in the USA:

The Swope Plan
I think this is as revolutionary as anything that happened in this country in 1776, or in France in 1789, or in Italy under Mussolini or in Russia under Stalin.
Senator Thomas P. Gore in the National Recovery Administration Hearings, U.S. Senate Finance Committee, May 22, 1933.
That quote is essential in understanding when and how this country veered so far off course. In our last chapter, we examined the National Recovery Act, which FDR is credited with. However, this was written, as most laws in this country by other people for purposes withheld from the general public. We have so far traced the roots of corporate socialsim from FDR's great-grandpa, Clinton Roosevelt in 1841. We have learned that Bernard Beruch, who was also known in the correspondance as BM, was the architect of much of the NRA. But another player was Gerald Swope, President of General Electric and his Swope Plan, on which much of the NRA was based. After WW1, a similar plan was put in place for postwar Germany. Ironic that the Swope family was German, also. The Swope family was tight with BM and the whole New York gang. Get this:

During World War I Swope was assistant director of purchase, storage, and traffic in the Federal government under General George W. Goethals and planned the U.S. Army procurement program. In 1919 Swope became the first president of the International General Electric Company. Successful promotion of G.E.'s foreign business brought him to the presidency of G.E. in 1922 to succeed Edwin Rice, Jr. Swope remained as G.E.'s president from 1922 until 1939.
What you see there is the beginning of the military-industrial complex. What happens when large corporations profit immensely from war? Answer: you get more of it.

Swope started out on the factor floor and worked his way up the ladder. He also became director of the Power Securities Co. and National City Bank. Note that General Electric was a Morgan company. Now I'm sure Gerald Swope wasn't born a monopolist. Our host Dr. Sutton relates to us what happens when you hang out with the wrong people:
Gerard Swope's political development began in the 1890s. Biographer David Loth reports that, soon after coming to Chicago, Swope was introduced to socialists Jane Addams, Ellen Gates Starr, and their Hull House Settlement.
So then he wants to get everyone organized with the Swope Plan:

This interest in social affairs developed to culminate in the 1931 Swope plan for stabilization of industry, 90 per cent of which consisted of a scheme for workmen's compensation, life and disability insurance, old-age pensions, and unemployment protection. The Swope plan is an extraordinary document. One short paragraph removes all industry from the anti-trust laws—a long-time industrial goal—while numerous lengthy paragraphs detail proposed social plans. In sum, the Swope Plan was a transparent device to lay the groundwork for the corporate state by defusing potential labor opposition with a massive welfare carrot.
This Swope Plan plus the finishing touches of BM, became the National Recovery Act. Those in the know knew it came from Wall Street. The famous Senator from LA, the "Kingfish", Huey Long said in 1933:

I come here now and I complain. I complain in the name of the people of my country, of the sovereign State I represent. I complain in the name of the people wherever else it may be known. I complain if it be true, as I am informed by Senators on this floor, that under this act Mr. Johnson, a former employee of Mr. Baruch, has been put in charge of the administration of the act, and has already called as his aides the head of the Standard Oil Co., the head of General Motors, and the head of the General Electric Co.
I complain if Mr. Peek, who is an employee of Mr. Baruch, or has been, as I have been informed on the floor of the Senate, has been placed in charge of administering the Farm Act, however good a man he may be and whatever his ideas may be.
I complain if Mr. Brown, who, I am informed on the floor of the Senate, has been made an influential manipulator of the office of the Bureau of the Director of the Budget, has been an employee of Mr. Baruch, and is now given this authority. I complain because, on the 12th day of May 1932, before we went to Chicago to nominate a President of the United States, I stood in this very place on this floor and told the people of this country that we were not going to have the Baruch influence, at that time so potent with Hoover, manipulating the Democratic Party before nomination, after nomination, or after election.
Huey Long got assassinated in 1935, just so you know. But anyway, Dr. Sutton points out that Sen. Long didn't have all his facts exactly right, but got the gist of what was going on.

Last time, we learned that Hugh Johnson was BM's man on working out the details of the NRA. His assistants included Walter Teagle, president of Standard Oil, a Rockefeller company; Gerard Swope of GE, whom we've mentioned and Louis Kirstein, VP of Filene's Sons of Boston.  William Filene was a big time corporate socialist. The head of GM at the time was Alfred P Sloan, perhaps you've heard of his foundation. But a VP at GM was John Raskob who was a big, big player in FDR's campaign and NRA pusher. Dr. Sutton explains the carosel of power thusly:
The Public relations explanation for business men turned bureaucrats is that businessmen have the experience and should become involved in public service. The intent in practice has been to control industry. It should not, however, surprise us if the corporate socialists go to Washington D.C. after election of their favorite sons to take over the reins of monopoly administration. One would have to be naive to think it would be otherwise after the massive election investments recorded in Chapter 8.
Let's talk about the famous "brain trust"--aka the geniuses that got to plan my life fifty years before I was born. Let's see, she'll need a number if she wants to be employed, which eventually, not right away mind you, she'll register all her earnings to us so we'll know what she's been up to.  Ok, drumroll please:
 This group comprised General Hugh Johnson, Bernard Baruch (see p. 106 for his political contributions), Alexander Sachs of Lehman Brothers (see p. 117 for political contributions), Rexford G. Tugwell, and Raymond Moley. This small group, three from Wall Street and two academics, generated Roosevelt's economic planning.
The first draft of the NRA was rejected, being only two pages that did away with anti-trust laws and gave the president to do anything to the economy he pleased. It was too much tyranny too soon. Got to boil that pot slowly Johnson!

 Johnson's first draft attempts were to set up NRA in a form consistent with Roosevelt as an economic dictator, and its rejection by Roosevelt is consistent with serious charges laid at the feet of Wall Street (p. 141). At this point in the planning, according to Roos, Johnson and Moley were joined by Tugwell and later by Donald R. Richberg, a Chicago labor attorney. The three proceeded to draft a more "comprehensive" bill, whatever that meant.


Having begun to hijack the educational system as far back as the 1890s, and having bought up so many of newspapers, these banksters had created a warm and comfy petri dish ripe for the public to accept socialst and collectivist ideals. These are antithetical to the US Constitution, but the process of weaning the American people off of their treasured history and ideals had already begun. Of course you always had your kooks out there, like Ludwig von Mises who had written Socialism, or so the bankster-owned media would portray them. There's a lot of pressure to plan, especially when you have men who don't really have God first in their lives, but instead idols of wealth, power, and prestige.

Using monopoly trade organization, control of entire sectors of the economy could be achieved. Remember Frederic Howe said to "go political" and that's just what big business did. Let's look at a chart of the big "plans":

Economic Stabilization Plans: 1933
Name of Plan
Proposal for Industry
Government Regulation
Welfare Proposals
Industry Plans
Swope Plan (General Electric)Trade Associations, membership compulsory after three years for companies with 50 or more employees. Rulings mandatoryContinuous regulation by Federal Trade CommissionLife and disability insurance, pensions, and unemployment insurance
U.S. Chamber of Commerce PlanNational Economic Council; power not mandatoryNo regulationIndividual corporation plans; public works planning
Associated General Contractors of America PlanGrant by Congress of greater power to Federal Reserve Board. Bond issues to be authorized for revolving fund for construction; bond for increasing public and semi-public construction. Federal Reserve to guarantee solvency of banksFinancial regulation. Licensing of contractors. Establishment of construction credit bureausStimulation of employment through greater building and construction activity. State bonds for public buildings; development of home loan bank
Labor Plans
American Federation of Labor PlanNational Economic Council; power not mandatoryNo regulationSpread jobs; maintenance of wages; guarantees of jobs; long range stabilization plans. Five day week and shorter day immediately. Program of public building
Academic and General
Stuart Chase PlanRevival of War Industries Board using coercive, mandatory power, confined to 20 or 30 basic industriesContinuous regulationNational employment bureaus; reduction of hours; unemployment insurance; raising of wages; allocation of labor
National Civic Federation Plan"Business Congress" of industrial organizations. No limitations or restrictions; full and complete power to fix prices or combineContinuous regulationUnemployment insurance plan. Raise wages
Beard PlanNational Economic Council," authorized by Congress, to coordinate finance, operation, distribution, and public service enterprises. Each industry governed by subsidiary syndicatesContinuous regulationUse of unemployed on housing and public project programs

The academic plans were notable in the sense that they supported industry objectives. Stuart Chase, a well-known socialist, came up with something very close to the Wall Street plans: in effect, a revival of Bernard Baruch's 1918 War Industries Board, with coercive power granted to industry, but confined to 20 or 30 basic industries, with continuous regulation. The Chase plan was an approximation of Italian fascism. The Beard plan also proposed syndicates along Italian lines, with continuous regulation and use of the unemployed in public programs √° la Marx and The Communist Manifesto. The National Civic Federation advocated the total planning concept: full and complete power to fix prices and combinations, with state regulation and welfare features to appease labor.Almost no one, except of course Ludwig von Mises, pointed to the roots of the problem to draw the logical conclusion from economic history that the best economic planning is no economic planning.
Ron Paul is nuts is he? Just like they said Mises was nuts.


Mr. Swope's scheme of regulation is a probably unconstitutional plan for putting the power of government behind the formation of strong capitalist syndicates which will seek to control the government which regulates them and, failing that, will fight it.
--Norman Thomas

The hard core socialists were ticked off with this because they wanted control to be in the hands of the state, not with the corporations. But look at us now! We've got the best of both worlds and we're only completely spiraling out of control!!

Norman Thomas goes on to say:
Certainly it is significant that at least one of our authentic captains of industry, one of the real rulers of America, has overcome the profound and bewildered reluctance of the high and mighty to go beyond the sorriest platitudes in telling us how to break the depression they did so much to cause and so little to avert. Obviously Mr. Swope's speech had its good points . . .

At other times Thomas is skeptical and points out that Swope, ". . . no longer trusts individual initiative, competition and the automatic working of markets," but proposes to gear the system to the benefit of "the stockholding class."
These are the same people that the Rush Limbaugh's and Mark Levin's of the world say are good free marketers. Really? Cramming socialism down our throat under the cover of the word "corporation" is free market? This is what they don't tell you and why so many conservatives are missing such a huge piece of the puzzle.  These mega banks and corporations involved in cartels don't trust the average person at all and they are constantly scheming on how to get more of us dependent on them. For instance, JP MorganChase runs the food stamp program.

The National Recovery Administration was conceived by Wall Streeters for Wall Streeters. Guess where they had their offices? Oh yes, that portal from hell we learned about back in Wall Street and the Bolshevik Revolution:
Bernard Baruch's office was at 120 Broadway; the offices of Franklin D. Roosevelt (the New York offices of Fidelity & Deposit and the law offices of Roosevelt & O'Connor) were also at 120 Broadway. Gerard Swope's office and the executive offices of General Electric Company were at the same address. We can therefore say in a limited sense that the Roosevelt NRA was born at 120 Broadway, New York City.
I've already mentioned the three assistants that Hugh Johnson had on the NRA, he called them the three musketeers. How much of a big shot were they? Let's just say that they were big and the regs in the NRA helped them to get even bigger:
The peak of the Roosevelt National Recovery Administration consisted of the president of the largest electrical corporation, the chairman of the largest oil company, and the representative of the most prominent financial speculator in the United States.

And now we get to real enchalada. Of course these Wall Street Fat Cats went on and on how the NRA would help the small businessman. And by help, they mean hopelessly grind into obsolescence. You see, a big part of the NRA was the suspension of anti-trust laws, which the Wall Streeters said was being unfairly applied to small business. However, without the anti-trust laws, they would be wide open to hunt down small business and get monopolies. That's the goal of the game, right? Senator Borah (R-ID) called out these special interests:
The elder Rockefeller did not need any criminal law to aid him when he was building up his wealth. He destroyed the independents everywhere; he scattered them to the four winds; he concentrated his great power. But the Senator would not only give to the combines all the power to write their code, but would give them the power to indict and prosecute the man who violated the code, although he might be pursuing a perfectly legitimate business.
Mr. President, I do not care how much we strengthen, how much we build up, how much we buttress the antitrust law; I object to a suspension in any respect whatever, because I know that when those laws are suspended, we give these 200 non banking corporations, which control the wealth of the United States, a stupendous power, which can never be controlled except through the criminal laws enforced by the courts.
Hey, nobody tell Senator Borah about TARP, how few banking corporations there are today, or how interlocked the big corporations really are. It might depress him.

Now they want to control us with licensing, check out this conversation between Sen. Gore and Bankster Tool Senator Wagner (who was born in Prussia, btw, and was instrumental in writing the Social Security Act - thanks a lot bub!)
SENATOR GORE. Could the President revoke that license at this pleasure?
SENATOR WAGNER. Yes, for a violation of the code imposed by the Federal Government.
SENATOR GORE. On what sort of hearing?
SENATOR WAGNER. After a hearing. It is provided that a hearing may be had, before a license can be revoked.
SENATOR GORE. That is something that really affects the life and death of a particular industry or enterprise, if he has the power to revoke the license.
SENATOR WAGNER. Yes; it is a sanction.
SENATOR GORE. What I wanted to ask you. Senator, is this: Do you think you could place that power in the hands of an executive officer?
SENATOR WAGNER. I do, in the case of an emergency.
SENATOR GORE. To exterminate an industry?
SENATOR WAGNER. All of these powers, of course, are lodged in one individual, and we have just got to rely upon him to administer it fairly and justly. We had the same sort of power during the war.
SENATOR GORE. I know that, and Mr. Hoover, if I may use these words, put free-born American citizens out of business without trial by jury.
SENATOR WAGNER. The philosophy of this bill is to encourage voluntary action and initiative on the part of industry, and I doubt whether or not these compulsory methods will be used at all except on very rare occasions; but if you are going to lift the standard, you have got to have some sanctions in order to enforce the code that may be adopted.
SENATOR GORE. I understand, but if you are going to carry out this system you have to have power to carry it out. My point is why in a free country a free man ought to be required to take out a license to engage in legitimate industry, and why somebody under our constitutional system should be given the power to destroy the value of his property, which you do when you bring about a situation where he cannot operate. That seems to me approaching the point of taking property without due process of law.
Source: United States Senate, National Industrial Recovery, Hearings before Committee on Finance, 73rd Congress, 1st Session, S.17and H.R. 5755 (Washington: Government Printing Office, 1933 

Notice how Sen. Wagner justifies the use of all this power in the hands of one man: because it was done during "the war". Remember that war is the health of the state. Remember, too, how the Reece Committee of 1953 discovered that in the minutes of the Carnegie Endowment for International Peace, one of their conclusions was that the fastest way to change a society was through war. Notice here how it is being used as a pretext to give the President unconstitutional powers to eliminate entire industries. Health care anyone?? Notice how the system would be voluntary meaning they'll just use enormous amounts of propaganda and pressure to "get" you to accept their operating terms. It's voluntary,except in the extreme conditions when it becomes compulsory, meaning you didn't accept their terms. Binding arbitration, anyone??

So after the NRA got passed, small business indeed got shafted. The biggest businesses in industry were all in collusion on passing industrial standards. The smaller operators could not afford to standardize, and were then out of business. Dr. Sutton uses the steel industry as a prime example:
In the 1930s two leading companies, United States Steel, with 39 per cent, and Bethlehem Steel, with 13.6 per cent, controlled over half of the country's steel ingot capacity. The board of U.S. Steel included J.P. Morgan and Thomas W. Lamont, as well as chairman Myron C. Taylor. The board of Bethlehem included Percy A. Rockefeller and Grayson M-P. Murphy of Guaranty Trust, whom we shall meet again in Chapter 10.
Thomas Lamont! When he's not on the board at US Steel, he was tooling around Europe, giving Mousolinni truckloads of cash, wheeling and dealing in London for the socialists, and cruising the Atlantic with commie-loving "captialists". Let's see what US Steel has been up to lately:

link to map
The guys on the left are dead, but they were really well entrenched into the government. The corporations in the right corner are not comprehensive. Check out the bankster activity in the upper right. If you expand on Dick Gephardt's node, you'll find he's been a busy beaver since leaving office - good grief! Anyway, Dr. Sutton sums it up:

In the NRA, we find that U.S. Steel and Bethlehem Steel effectively controlled the whole industry by virtue of their votes in the industrial codes; of a total of 1428 votes, these two companies alone were allowed a total of 671 votes, or 47.2 per cent, perilously close to outright control and with undoubted ability to find an ally among the smaller but still significant companies.
NRA-Voting Strength in the Iron and Steel Industry Code
Votes in Code Authority
Percentage of Total
U.S. Steel
Bethlehem Steel
Republic Steel
National Steel
Jones and Laughlin
Youngstown Sheet & Tube
Wheeling Steel
American Rolling Mill
Inland Steel
Crucible Steel
McKeesport Tin Plate
Allegheny Steel
Sharon Steel Hoop
Continental Steel
Source: NRA Report Operation of the Basing Point System in the Iron and Steel Industry.

Sutton explains why US Steel would want to use the codes to control:
Although U.S. Steel and Bethlehem were the major units in the iron and steel industry before passage of the NRA, they were unable to control competition from numerous smaller firms. After the passage of NRA, these two firms were able, through their dominance of the code system, also to dominate the iron and steel industry.
Dr. Sutton looks at Standard Oil and acknowledges that the Sherman Act "broke it up", but they instead camouflaged themselves, reorganizing to look the part of the broken up monopoly. Remember that Walter Teagle of New Jersey Standard Oil was one of the three musketeers  of the NRA.

Looking at the automotive industry, we find that General Motors was a Morgan company, the chairman of the board was Pierre DuPont, and had overlapping board membership with people from GE, Morgan banks, and Junius Morgan himself. Henry Ford did not run in Wall Street circles and was very much opposed to the NRA. However, Ford and GM comprised over half of automobiles produced in 1930. But remember the Henry Ford had major "issues", like hating Jews with a purple passion, and his Ford Foundation is probably the biggest culprit in taking down America by continuously sowing seeds of discord.

When you look at the companies that built large machines in 1930, when the NRA was being worked on by Hugh Johnson and company, you will find all of the companies with big market shares all intertwined with the Wall Street socialists we've been talking about in this series and in the previous one. Let's look at this chart:

Major Machine Building Firms (1929)
Assets in Millions
Profits (1929) in Millions
Sales (1929) in Millions
General Electric, 120 Broadway
American Radiator & Standard Sanitary, 40 W. 40th St.
Westinghouse Electric, 150 Broadway
Baldwin Locomotive, 120 Broadway
American Locomotive, 30 Church St.
American Car & Foundry, 30 Church St.
International Business Machines, 50 Broadway
Otis Elevator, 260 11th Avenue
Crane Company

Most of these are still operating today. Buying legislation really does pay dividends! Dr. Sutton goes on to tell that until the NRA was declared unconstitutional, small businesses claimed oppression. How do you compete with firms that have bought the government and write laws to put you out of business? By the way, these firms all had big time contributors to FDR's campaign. Shutting down upstart competition? That's a huge return on the investment of contributing to a campaign. 

IndustryNumbers of Complaints of Oppression (January-April 1934)
Major Industry
Iron and Steel
Investment Banking
Electrical Manufacturing
Small Business
Cleaning and Dyeing
Boot and Shoes
Source: Roos, NRA Economic Planning, p. 411, from unpublished NRA data.

Complain away little people!! Too bad we've bought up justice at pennies on the dollar! 

Wall Street and FDR may be read in its entirety at Reformed Theology

xposted at The republican Mother


  1. Awesome analysis. How do I excerpt the whole article?!!!

    1. Well, this comes from the book Wall Street and FDR and I struggle not to just cut and paste the whole book, so I understand. I tried to boil it down as best I could, but Dr. Sutton is so succinct and well-spoken, you can hardly improve on his prose. This was written circa 1975, so I just try to attempt to bring it up to date.


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