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The Wall Street Issue
When Revolution Came to America
A brief history of violence against Wall Street and its accomplices.
by Christopher Ketcham
December 16, 2014, 5:00am
A little violence can sometimes work to defend against predatory bankers. Consider the farmers of Le Mars, Iowa. The year was 1933, the height of the Great Depression.
A finance bubble on Wall Street had crashed the economy, the gears of industrial production had ground to a halt, and 13 million Americans had lost their jobs. Across the Corn Belt, farmers couldn't get fair prices for milk and crops, their incomes plummeted, and their mortgages went unpaid. Seeing opportunity, banks foreclosed on their properties in record numbers, leaving the farmers homeless and destitute.
So they organized. Under the leadership of a boozing, fist-fighting Iowa farmer named Milo Reno, who had a gift for oratory, several thousand farmers across the Midwest struck during 1933, refusing to sell their products. "We'll eat our wheat and ham and eggs" went the popular doggerel of the movement. "Let them"—the bankers—"eat their gold."
They called it a farmers' holiday and named their group the Farmers' Holiday Association. In speeches across the Midwest, Reno inveighed against "the destructive program of the usurers"—by which he meant, of course, the ruinous policies of Wall Street and the banking industry. Farmers, he said, had been "robbed by a legalized system of racketeering." He said that the "forces of special privilege" were undermining "the very foundations of justice and freedom upon which this country was founded." He compared the farmers' fight to that of the Founders, who had taken up arms. He warned that the farmers might have to "join hands with those who favor the overthrow of government," a government that he considered a servant of corporations. "You have the power to take the great corporations," he said, and "shake them into submission." One of his deputies in Iowa, John Chalmers, ordered FHA men to use "every weapon at their command." "When I said weapons," Chalmers added, "I meant weapons."
In Le Mars, the weapon of choice was the hanging rope. On April 27, 1933, in a series of incidents that would become national news, hundreds of farmers descended on a farm that was being foreclosed under the eye of the local sheriff and his deputies. They smacked the lawmen aside, stopped the foreclosure, and dragged the sheriff to a ball field in town, where they brandished their noose. Instead of hanging the sheriff, however, they went for a bigger prize: the county judge, Charles C. Bradley, who was presiding over the foreclosures.
Bradley was seized at his bench, dragged from the courtroom, driven into the countryside, dumped on a dusty road, stripped naked, "beaten, mauled, smeared with grease and jerked from the ground by a noose as [the] vengeful farmers shouted their protests against his foreclosure activities," reported the Pittsburgh Press. According to one account, the mob "pried his clenched teeth open with a screwdriver and poured alcohol down his throat." An oily hubcap was placed on his head, the oil running down his face as the farmers smashed Iowa dirt into his mouth. "That's his crown," they said.
The judge was hauled into the air on the hanging rope, until he fell unconscious, and was then hauled up again. When he revived, the farmers told him to pray. "Only a prayer for Divine guidance which Judge Bradley uttered as he knelt in the dust of a country road sobered the mob," reported the Pittsburgh Press, decrying the event as a harbinger of "open revolution."
The farmers, knowing they were about to involve themselves in murder, spared Bradley. He was bloodied, covered in filth, humiliated, and this was enough.
The threat of continued unrest fomented by Reno and the FHA had its intended effect: State legislatures across the Midwest enacted moratoriums on farm foreclosures. By 1934, the country was seething with revolt. Industrial laborers in Toledo, Ohio, and Minneapolis, Minnesota; dockworkers across the West Coast; and textile workers from Maine to the Deep South mounted strikes and protests demanding fair pay, worker protections, and union representation. They encountered brute force at the hands of local authorities and thugs in the pay of business interests. The strikers in Toledo and Minneapolis responded not by peaceably dispersing but by fighting back with clubs and rocks. According to the newspapers, a savage battle unfolded between autoworkers and the militia of the Ohio National Guard in Toledo, with the tear-gassed strikers unleashing their own gas barrage against the authorities, "matching shell for shell with the militiamen." Truck drivers fought in bloody hand-to-hand combat against the enforcers of the pro-business Citizens' Alliance in the streets of Minneapolis. A prominent corporate leader in the city was said to have announced, "This, this—is revolution!"
Indeed, it was in part the specter of violent revolution during the 1930s that spurred Franklin Delano Roosevelt and Congress to legislate the historic reform of capitalism called the New Deal. The government protected labor from the cruel abuses of big business, legalized unions, established the social security system, and put the usurers on Wall Street under the thumb of the Securities and Exchange Commission and other federal watchdogs, locking them in the regulatory cage where they belonged. The people had spoken and forced the government to listen.
Following the Wall Street crash of 2008, which sent the country into the debacle of the Great Recession, I began writing a futurist novel inspired by my readings about the Le Mars revolt. I titled it Kill the Banker, in honor of William "Wild Bill" Langer, two-time governor of North Dakota during the 1930s, US senator from 1941 to 1959, and staunch supporter of the Farmers' Holiday Association. During a campaign stop at the height of the Depression, he told voters, "Shoot the banker if he comes on your farm. Treat him like a chicken thief." We don't have politicians like Wild Bill anymore.
In the novel I imagined a cabal of terrorists who wage a campaign against Wall Street. Like the Red Army Faction—Marxist maniacs who from the 1970s through the 90s spread terror across Europe—my terrorists, who call themselves the Strangers, assassinate members of the elite banking class who have escaped justice. The Strangers go after Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, Wells Fargo, Deutsche Bank, Citigroup, and Credit Suisse. They bomb the New York Stock Exchange. They have no ideology except slaughter of their perceived enemy, killing for the sake of killing, much as a man makes money for the sake of money—as an expression of power.
The Strangers take their hapless captives from Bank of America to a basement in the mountains of upstate New York, where they hold mock trials that they post to YouTube, passing judgment before the American masses: death by torture. The Wall Streeters protest their innocence as mere cogs in the machine. The Strangers strap them to a steel chair bolted to the floor, piss in their mouths, tear off their fingernails, spear out their eyes, smash their testicles with a ball-peen hammer, remove their intestines with a pair of pliers, string their guts like Christmas lights, and behead the sobbing victims with a rusty saw.
It was a lousy novel from the start, more agitprop than storytelling, and I abandoned the project after 30,000 words of gore, concluding that terrorists are as tediously predictable in fiction as they are loathsome in real life. The farmers of Le Mars would have wanted nothing to do with the Strangers.
Part of my research for the book was the historical precedent of terrorism against Wall Street. Until the Oklahoma City bombing in 1995—eclipsed only by the attacks of 9/11—the Wall Street bombing of September 16, 1920, was the most destructive act of terrorism on American soil. At noon, a horse and buggy, laden with 100 pounds of dynamite and 500 pounds of cast-iron sash weights for shrapnel, pulled up in front of 23 Wall Street, the offices of J. P. Morgan, the richest, most powerful, most ruthless investment banker of his time. Morgan had manipulated the national economy to his benefit, exploited workers, and destroyed lives. He was, like our current crop of financiers, a vicious bastard, and he was the likely target of the bomb.
The driver fled, and minutes later there was a terrible explosion. A "mushroom-shaped cloud of yellowish, green smoke," said one observer, "mounted to a height of more than 100 feet, the smoke being licked by darting tongues of flame," as "hundreds of wounded, dumb-stricken, white-faced men and women" fled in panic. Instantly, bodies were "blown to atoms"; a woman's head, hat still on, was sent hurling into a concrete wall, where it stuck; and "great blotches of blood appeared on the white walls of several of Wall Street's office buildings."
Thirty-eight people were killed, 143 wounded. No group ever claimed responsibility, and the crime was never solved. It was likely the work of Italian socialist revolutionaries who had been on a bombing campaign across the US during the previous year, hitting elected officials and law enforcement. The Wall Street bombing was supposed to be their finest hour. Mostly they killed clerks, stenographers, and brokers—lowly office workers. J. P. Morgan wasn't even in town that day. The attack, which caused $2 million in damage (about $24 million in today's money), produced in the public only fear and revulsion and a newfound sympathy for Wall Street.
The ideology of revolutionary terrorism targeting big finance in the US originated with a Bavarian-born immigrant named Johann Most, who, upon his arrival in New York in 1882, observed—as accurately then as today—that "whoever looks at America will see: the ship is powered by stupidity, corruption, or prejudice." He denounced Wall Street and the ruling class as "the reptile brood." He wrote that "the existing system will be quickest and most radically overthrown by the annihilation of its exponents. Therefore, massacres of the enemies of the people must be set in motion." In 1885 he published a book, Revolutionary War Science, to bring on the massacre. It had a helpful subtitle: A Little Handbook of Instruction in the Use and Preparation of Nitroglycerine, Dynamite, Gun-Cotton, Fulminating Mercury, Bombs, Fuses, Poisons, Etc.
Most was a deformed runt, his days spent in a fever of resentment, and in the end, though he traveled the country making speeches and fostering hatred, he didn't throw a single bomb. He did, however, inspire others to eliminate the reptile brood. In 1892, Alexander Berkman, an anarchist agitator, tried to kill Henry Frick, partner of Andrew Carnegie in the Carnegie Steel Company, which was notorious for its maltreatment of workers. Later, Berkman was allegedly involved in the failed 1914 plot to kill industrialist John D. Rockefeller, who had presided over massacres of his striking employees. It was a catalogue of failures, whose sole result, perversely, was to turn public opinion in favor of the enemies of the people.
In the 1970s, carrying the banner of revolutionary destruction, the Weather Underground, a radical offshoot of Students for a Democratic Society, bombed a Bank of America branch as part of an anti-capitalist campaign whose targets included military installations, courthouses, corporate headquarters, the State Department, the Pentagon, and the US Capitol building. The Weathermen, as they were known, were gentlemanly in their attacks: Prior to detonation, they often issued an anonymous warning to evacuate the targeted site, in order that no person would be harmed. The scores of bombings in the 70s proved totally ineffective in achieving the Weathermen's main goal: "the creation of a mass revolutionary movement" for the overthrow of the US government.
On September 29, 2009, a 64-year-old Phoenix resident named Kurt Aho, who was suffering from cancer, stood outside his foreclosed home with a .357 Magnum and shot out the tires of two trucks sitting in his driveway. It was three years after the bursting of the housing bubble, and almost exactly one year after the onset of the Great Recession. Millions of homeowners, desperate and fearful, without jobs or revenue, couldn't keep up with their mortgage payments. And the banksters came calling to kick them out.
The cars belonged to two real estate investors who said they had purchased Aho's home out of foreclosure from Bank of America. Now they wanted to see their new property. Aho was in shock. He had lived in the house for 29 years, had raised his children there.
According to his daughter, Tammy Aho, he was experiencing financial troubles. He was a construction contractor. Unable to find enough work, he was living off credit and struggling with his illness. In June 2009, Aho had contacted Bank of America to ask for a loan modification. Bank representatives told him—"not directly," said Tammy, "but in a roundabout way"—that he needed to fall behind on his payments. "They told him that if you get six months behind on your mortgage they will help you modify the loan."
It would be a strategic default. He followed the advice. Bank of America assured him the modification was being processed. They assured him of this up to the very minute the property was sold at auction on September 29, when Aho found the two investors standing on his lawn.
Aho asked the investors for proof of ownership, but they had none at hand. They claimed the paperwork was still being completed. He told them to get off the property. They refused. That's when the gun came out and the tires went flat and the two men fled. Aho, for the moment, had stopped the taking of his home.
Aho was responding not simply to his own personal crisis but to the widespread perception that the banks were coming after everyone. Starting roughly in 2000, more than a dozen financial institutions, Bank of America most prominently, colluded with mortgage lenders to extend home loans to anyone who could fog a mirror—basically a long line of suckers who were told they could own a big house with only a waitress's tips. These risky loans, pooled into mortgage-backed securities that the banks knew to be lousy investments, were marketed as AAA-rated bonds and sold to institutional investors worldwide for trillions of dollars.
The banks, flush with cash, pumped more money into more shoddy home loans, with the lenders on the Street scamming to get more warm bodies to sign on the line. Real estate prices skyrocketed in the largest financial bubble in history. And when it burst, producing this country's most severe housing-market collapse ever—worse than during the Great Depression—homeowners like Aho were left holding overpriced mortgages on houses whose real value had plummeted.
Between 1990 and 2014, the finance, insurance, and real estate sectors spent $3.8 billion lobbying Congress, and it was during those years that lawmakers in both parties increasingly did the bidding of their buyers by massively deregulating the finance industry. Congress overturned FDR's banking reforms of the 1930s, allowing mega-mergers of banking, securities, and insurance companies. It relaxed the laws governing the operations of the mega-banks and opened financial markets to the abuses of instruments like mortgage-backed securities. And in the revolving door of corporatocracy and government, by the mid 1990s the bankers themselves had nailed jobs heading up the very institutions—the Federal Reserve, the SEC, the Department of the Treasury—mandated to enforce what few laws remained to keep the industry from preying whole-hog on the public.
Bank of America eventually settled at least 21 lawsuits from investors and regulators over securities fraud related to its peddling worthless mortgage-backed securities. The gamut of its frauds ranged from the obscene sophistication of junk mortgage bonds to the paper-pushing thuggery of predatory lending and unlawful foreclosure. According to the National Association of Attorneys General, Bank of America was among five mega-banks that organized the infamous "robo-signing" of illegal foreclosure affidavits, producing forged and fabricated documents to speed the eviction of homeowners so that the properties could be re-sold for more profit.
The bank played cruel games with homeowners, routinely promising them loan modifications—as in the case of Kurt Aho—only to claim to lose the paperwork, bullying ahead with the foreclosure. A class-action suit settled last February found the bank engaged in a "kickback scheme inflating the cost of insurance that homeowners were forced to buy." The Department of Justice reported that one of the bank's subsidiaries "wrongfully foreclosed upon active duty servicemembers without first obtaining court orders." According to investigative journalist Matt Taibbi, the totality of Bank of America's corruption and venality meant rigged bids in 2008's multitrillion municipal bond market, dubious arbitration disputes with its credit-card holders, and rampant charging of account holders with bogus overdraft fees, robbing its own customers of $4.5 billion.
And this is just Bank of America. At least a dozen other large banks and mortgage lenders have been implicated in similar frauds.
Instead of handing out prison sentences, the government gave bailouts to Bank of America and its allies. The company would have flushed itself down the shitter after the 2008 crash if the Department of the Treasury hadn't stepped in with a $45 billion infusion of cash in 2009. By 2011, according to Taibbi, the Federal Reserve had put taxpayers on the hook for as much as $55 trillion of the bank's bad investments.
The tens of billions of dollars in fines forced by federal regulators on Bank of America and a dozen other financial behemoths were pittances measured against the real cost to the economy of the bank-created bubble and crash, which the US Government Accountability Office has conservatively estimated at $12.8 trillion. The government nevertheless crowed victory over a chastised Wall Street. Congress's own specially appointed Financial Crisis Inquiry Commission found that executives at the highest level likely knew about—and possibly even condoned—the frauds committed by their companies. Yet only one executive went to jail. In a nation whose government has been captured by its bankers, this farce of enforcement, effectively a legalized system of racketeering, is the accepted norm.
Yet those who fought back against Wall Street did go to jail, or worse. In May 2009, for example, Daniel Gherman defended his home in Riverside, California, by booby-trapping it with phony bombs after it had been foreclosed. The bombs were ineffectual, but the homeowner was charged with four counts of possessing facsimile explosives.
In July 2010, a homeowner facing foreclosure drove his car to a PNC bank branch in Illinois late one evening and ignited a bomb, destroying the car and shattering the windows of the bank. No one was hurt, and the homeowner, David Whitesell, waited across the street for the cops to arrive. It's been reported that his intention was to make a political statement. He was charged with arson and criminal damage to property with an incendiary device.
In February 2011, a man named Elias Mercado, of San Marcos, California, drove his car into the front door of a Bank of America branch at 4 AM. According to news reports, he plowed through two sets of glass double doors and hit a coffee table, a wall, a cubicle, a teller counter, and several plants. He backed up two times, hitting more furniture, and departed via the newly created exit where the double doors had stood. His car left a trail of bank parts, and he was later caught and charged with burglary of a building and evading arrest.
In April 2012, a man named James Ferrario, armed with an assault rifle, gunned down and killed a sheriff's deputy and locksmith in Modesto, California, as the two men served an eviction on his apartment. And so on. A man in Florida, charged with arson and attempted manslaughter, set his home on fire when it was foreclosed. Another Florida man bulldozed his home to the ground before the bank could seize it. A California man fearing homelessness and suffering from a fatal illness robbed a Bank of America of $107,000 to fund his 17 percent mortgage.
It's a depressing litany. No citizens came to their aid, no farmers with a rope rallied at their door, no Homeowners' Holiday Association had their backs. The acts of defiance were rabid, isolated, hopeless, and ultimately meaningless.
In September 2011, Occupy Wall Street erupted on the scene. Here was a movement that held out the promise of uniting against the banking industry. I spent a good deal of time at Zuccotti Park—the protesters' headquarters—as a reporter, though I was also a believer in the movement. When I saw a young woman holding a sign that said WALL STREET: THE ENEMY OF HUMANITY, I wanted to hug her. I wanted to tell her about Milo Reno and Wild Bill Langer.
The postmortem offered by the media was that the movement's inability to formulate tangible goals, its lack of demands, its steadfast adherence to the principles of "non-hierarchy," its refusal to elect or bow to a leadership, its unwillingness to embrace the traditional system of interest-group politics—all resulted in its self-destruction. Occupy, we were meant to believe, committed suicide because of its untenable framework.
This was not the whole story, of course. A movement that vowed to undo Wall Street was undone, at least in part, by federal and state and local governments bent on protecting Wall Street. We know this because of the work of the nonprofit Partnership for Civil Justice Fund, which in 2012 obtained a ream of documents from the US Department of Justice, the FBI, and the Department of Homeland Security—memos, emails, briefings—detailing how Occupy was targeted for destruction. The documents show that the FBI, the DHS, and local police departments coordinated to surveil, infiltrate, and undermine Occupy encampments across the nation.
"From its inception the FBI treated the Occupy movement as a potential criminal and terrorist threat," said Mara Verheyden-Hilliard, executive director of the PCJF. Anti-terrorist branches of the FBI swung into action to deal with the threat of the Occupiers—who, it should be remembered, avowed and practiced a philosophy of nonviolent resistance and civil disobedience. The heavily redacted documents even state that members of the Occupy movement in New York, Seattle, Austin, Houston, Dallas, and San Antonio, Texas, were targeted for assassination by a person or persons the FBI refused to identify. According to the documents, "[ name redacted] planned to gather intelligence against the leaders of the protest groups and obtain photographs, then formulate a plan to kill the leadership via suppressed sniper rifles." The FBI never informed Occupiers of the danger.
According to Verheyden-Hilliard, instead of protecting citizens from possible assassination, federal law enforcement ended up as "a de facto intelligence arm of Wall Street and Corporate America." And when the final blow came, as journalist Dave Lindorff reported, the FBI and DHS helped local law enforcement plan and execute the raids on the encampments that drove out the Occupiers in Zuccotti Park and in dozens of other cities. Those raids were characterized by a terrific show of force. Beating, tear-gassing, mass arrest of peaceful protesters: This is how Occupy came to an end. The Occupiers offered no organized resistance. They scattered like leaves.
Sociologist Max Weber once observed that "the modern state is a compulsory association which organizes domination. It [seeks] to monopolize the legitimate use of physical force as a means of domination." This monopoly on violence is the distinguishing characteristic of the modern nation-state, according to Weber. But Weber warns that the state's use of physical force comes with a caveat: The state must prove its legitimacy by protecting the interests of the public—say, when police defend a crowd against a gun-wielding maniac.
The maniacs on Wall Street, of course, have friends at the highest rungs of government—a bought-and-sold government whose work as a servant of the wealthy and the powerful is unexcelled, but whose legitimacy as a protector of the public interest looks increasingly suspect. The people have a moral right to rise up against such a government and, ultimately, to question its monopoly on violence; this is the imperative of revolution. Good luck with that in the age of crowd-control devices, militarized police units, Hellfire drones, mass-surveillance systems, and the panoply of domestic laws that render even peaceful protest a potentially criminal act. The apparatus of state domination has grown ever larger, more powerful, complex, effective, and terrifying—at the same time, the domination of the state by corporate interests has been perfected as never before. One doubts the farmers of Le Mars these days would survive ten minutes with their pathetic length of hanging rope.
When Kurt Aho shot out the tires of the cars of the two investors, a swarm of Phoenix police officers descended on his residence, including an armored-car unit, a SWAT unit, and sniper teams on adjacent rooftops. According to police, Aho was told to come out of the house, drop his weapon, and approach the armored car with his hands over his head. He appeared in his doorway, half-dressed, pistol in one hand, a beer in the other. There was a round of negotiations. Aho refused to depart from the premises. "You're gonna have to kill me," he said.
Tammy Aho raced to her father's house and pleaded with officers to let her talk with him. She had recently lost her own house to foreclosure, and she was in the process of moving in with her father. "Not only would he be homeless if we lost this place," Tammy told me—"my kids and I would be homeless."
The cops rebuffed her. "I told the police, if you're gonna shoot him, shoot him in the knees—buckle his knees. But they didn't listen."
An hour passed in the standoff. Kurt drank his beer. What happened next is disputed. Police claimed that Kurt opened fire, and the police answered with rubber bullets, hitting him in the arm and knocking him down. Tammy Aho says the cops fired without provocation, and that only then did Aho squeeze off several rounds, hitting the armored car. A well-placed bullet in his chest killed him instantly on his front lawn. "After they killed him," Tammy told me, "the cops sat around eating pizza and taking pictures of each other and laughing like it was no big deal."
But the officers were totally unprepared for the chaos that followed. An armed crowd, shouting curses about "police murder," emerged like grubs out of the ground and opened fire. The two investors who had taken Aho's home, accompanied by a Bank of America vice president, were shot in the back, and men from the neighborhood carrying axes and shovels leaped on them and finished the job by crushing their skulls. The armored car was overwhelmed, its officers fleeing. Thousands of citizens converged at the Aho home, armed with shotguns, AR-15s, Kalashnikovs. The police, surrounded, outgunned, outnumbered, surrendered within minutes, and not a few of them—more than we'd like to admit—joined the nascent Citizen Homeowners' Militia, which declared the neighborhood a Bank-Free America Zone.
You didn't hear about this revolt on the news. Because of course it never happened.
Tagged:WALL STREETVICE MagazineHistoryrevolutionOccupy Wall StreetNew York Stock ExchangeStuffVice BlogVolume 21 Issue 12bank of americagreat depressionbankersJP MorganMilo RenoFarmers' Holiday AssociationWilliam LangerKurt Aho