Turning Blood into Gold

The Business of War and Overthrowing the U.S. Government

On a hot July morning in Rome in 1926, a guard ushered Cornelius Vanderbilt IV inside the palace. It took Vanderbilt’s eyes a few moments to adjust from the brightness outside to the darkness within what looked like a convention hall or railroad station. He squinted in order to spot a desk, chair, or anything that belonged in a dictator’s office. In a far corner of the room, he was able to focus on a large desk and two men, one standing and one sitting. The man sitting in the chair was small but broad-shouldered, wearing white linen pajamas. Vanderbilt coughed but neither of the two men on the other side of the room made a sound. Vanderbilt decided to advance in their direction, until he was close enough to recognize the face of the man in the pajamas, Benito Mussolini. “Be seated,” Mussolini instructed as Vanderbilt bowed. “Is it your first visit to Rome?” Vanderbilt responded: “First since 1922, Your Excellency.” Mussolini had taken power in October of that year. “Then it is your first visit to Rome!” he grinned. Mussolini was particularly pleased to learn that Vanderbilt, a journalist and newspaper publisher, was a New Yorker and expounded on this in Italian; the man standing next to him explained that Il Duce’s second favorite city was New York due to its large Italian population.

The topic changed to cars, with Vanderbilt confident that he was enough of an aficionado to hold his own in conversation. “A few years more and you will be building as excellent cars as we do in Milan,” Mussolini said, catching Vanderbilt’s reaction: “You are smiling? Wait…” He quickly pulled open the main drawer of his desk. Vanderbilt expected there to be blueprints inside, but instead Mussolini took out a small datebook. “You are going to spend this weekend with me,” Mussolini decided, standing up. “I’ll show you what a good Italian car can do on a good Italian highway.” Understanding the highways to be an achievement of the fascist regime, Vanderbilt offered him a compliment. “No flattery, my friend,” Mussolini responded. “Save it for the weekend. Flatter Italy, flatter this reborn nation but criticize Mussolini. Yes, criticize Mussolini. Nothing in the world like constructive criticism. Mussolini loves constructive criticism. Come here Saturday at ten in the morning. Bring your weekend bag.” Within minutes, Vanderbilt was back on the bright street, marveling at how Mussolini talked faster than a Miami realtor.

At noon on Saturday, Vanderbilt found himself in the passenger seat of Mussolini’s long and shiny roadster. Mussolini drove at blistering speeds that would have had him pulled over by police and sent to jail in the United States, but here, only two large cars filled with black-shirted guards tried in vain to keep up. Every time they approached within a quarter of a mile, Mussolini sped even faster. He talked about numerous topics, including America, Europe, and the possibility of war. “Peace!” he declared. “That’s my motto! Eternal peace. Peace agreed upon by the strong and forced upon the weak. Another world war? Nonsense! There will be no war in Europe so long as Mussolini is alive. Where the Geneva chatterers failed, fascism shall succeed…” They made frequent stops as Mussolini delivered speeches in front of fascist authorities, dedicated a war monument, reviewed a graduating military class, and watched a bomber aircraft take flight. Changing out of his leather jacket into a military uniform for each event, Mussolini would return to the car and complain, “No holiday for Mussolini. Work, work, and some more work.”

Hunger struck Mussolini at around 8:00 PM on Sunday. “Let’s speed up,” he told Vanderbilt sitting in the car with him, “there are fifty miles between us and a decent dinner.” Already traveling at 80 miles per hour along the country road, Vanderbilt bit his lip with a sense of trepidation and had a difficult time understanding how they could go any faster. His worst fear came true when they approached a sharp turn on the way to a village at 90 mph: “The most reckless driver in the world, including myself,” he recalled, “would have navigated the turn at not more than twenty.” In the blink of an eye, they breezed past a group of children situated near the road and heard a scream. Vanderbilt turned his head around and saw the lifeless body of a child behind the car. “Look, Your Excellency!” he yelled. Mussolini had already moved on: “Never look back, my friend, always forward.” The car sped into the distance as Mussolini’s eyes remained focused on the road ahead.

The Fear of Death

“What in hell is the matter?” 61-year-old Captain Mancil C. Goodrell looked down at Second Lieutenant Smedley D. Butler with contempt. Butler had just turned seventeen, having lied about his age to participate in the Battle of Guantánamo Bay, and was laying down on the ground after hearing sniper fire during a nightly inspection between two Marine outposts. If he was going to have a successful career in the United States Marine Corps, he felt that he would need to become fearless like his superiors. During the Boxer Rebellion in North China, he watched with amazement as fellow Marines handled their wounds with stoic fortitude: “An old corporal who marched with us was shot on the inside of the leg. He limped along for fifteen miles without complaining or mentioning his wound. The old Marine gave the rest of us an invaluable object lesson. Another old Marine, a sergeant, was walking beside me. Crack! A stream of blood trickled down his face. The sergeant pulled his hat down over the wound and walked right on. The amazing courage of men like these did more than anything else to swing us into our stride and make us a fighting company.”

During the Battle of Tientsin, Butler had his own brush with death. In attempt to rescue a fallen soldier, Butler was shot, the bullet entering the back of his leg between the hip and knee, exiting without hitting the bone. He dragged himself back to a mud wall in the trenches but was unable to bring himself to safety. Colonel Robert L. Meade refused to order anyone to rescue him, citing the imminent danger of the situation. A fellow officer described the conditions: “The bullets came like hail. I had the heel shot from my shoe and a hole through my hat, which I did not know about until we had crossed the outer wall…that was the hardest five hours I think I ever spent.” Lieutenant Henry L. Leonard volunteered to save Butler anyway and with the help of two other enlisted men pulled Butler over the mud wall. To make it to the hospital, Butler had to grab another to another wounded officer and they both shuffled for hours on foot towards the foreign settlement, leaning on each other as Butler continued to bleed.

Butler assisted others more seriously wounded until he was treated that evening. He was able to walk after ten days and while in hospital, he was promoted to captain, a few days shy of his nineteenth birthday, praised for having brought “in a wounded man from the front under heavy and accurate fire.” During another firefight during a march to Peking, Butler was hit in the chest, the bullet knocking him unconscious. When he awoke, he spent the next 30 minutes gasping for breath, and the next several days coughing up blood. He soon wrote of the experience: “I had the most fortunate escape you could imagine; the bullet was making straight for my heart, passing at an angle to my body, fortunately, when one of my brass buttons interfered and was driven into my breast bone with outrageous force…I have been hurt a great many times, but no pain has ever compared with this last blow.” That night, he laid on the ground outside the Peking Legation Quarter, wrapped in a blanket, his chest “aching abominably.” Over the next few days, the Marines were welcomed inside by European diplomatic legations grateful for their presence; Marine Corporal James Bevan reported that “though we were filthy with mud, grime, and sweat of our ten days on the march some of us were soundly kissed by the women of the party much to our embarrassment.” Butler wrote his mother that “all the hardships were forgotten when we gazed on the women and children we had saved.”

Left unaddressed by the superiors was what Lieutenant Frederick M. Wise in his memoirs called “The Sacking of Tientsin”: he had never seen “such looting. Except for the Japanese, none of the allies knew the real value of many priceless treasures of porcelain and cloisonne shattered to fragments by allied soldiers searching for gold, silver and jewels, silks, brocades and furs.” The quarters of officers ended up resembling “a wealthy Chinese lady’s private apartment as the men sat around off duty comparing trophies. Silken robes of every color, embroidered with the gaudiest flowers; rich, costly furs—ermine, sable and white fox; bolts of valuable silk; were piled about the place. The men had no idea of the value of porcelain or enamels or lacquer. But they knew all about bars of gold and chunks of silver. They could be sold instantly for cash.”

Butler noted how they gave into temptation: “It took stronger wills than we possessed not to be tempted by brocades and furs lying in the gutters.” One evening Butler and two others came across a gleaming box they thought was brimming with gold and buried it outside their barracks. “A few days later we secretly dug up our treasure,” he recalled. “To our disgust, our fortune turned out to be brass.” Colonel Henry Clay Cochrane, joining the troops mid-stream in September 1900, found a “generally demoralized” group “behaving badly,” adding rape and sodomy to the misconduct previously observed. Leaving the conflict, Butler came down with a bout of typhoid fever, experiencing intense hallucinations of a near death experience involving the mythological River Styx. He no longer feared death as a result, feeling that he had already experienced it to the fullest through this hallucination that left him a meager 90 pounds.

Butler rose through the ranks of the Marine Corps at a steady pace, with natural leadership abilities that enabled him to command groups of men, including those of foreign countries. During the occupation of Nicaragua as part of the Banana Wars of the early 20^th century, he expressed amazement at how he “practically took command of the Government Army of about 4,000 men...This move of mine must not become public for I really have no authority for such a course...the State Department, I surmise, is anxious that it should continue in power.” While riding on a train at night, sitting on an open flatcar in the town of Masaya, a man on horseback approached: “When he was about 10 yards away he pulled his revolver and fired right at me...The ball missed me and hit a poor Corporal sitting beside and a little to the rear of me.”

The possibility of death was always around the corner. He wrote home instructions to his wife regarding his son and daughter: “if anything should happen to me, bring my Blessed Son up with the idea firmly planted in his head that his Dadda was not a coward—whatever else he was (I mean hot tempered and profane at times) also my Precious Nooksie.” Falling ill with malaria, Butler pressed on with bloodshot eyes, earning him the nickname Old Gimlet Eye. His resolve had an impact on those around him, with Lieutenant Alexander A. Vandegrift recalling: “he impressed not by words but by action. He was a fighter in the fullest sense of the word—at one point in the campaign he was terribly ill of malaria and yet with 104-degree temperature he not only held on but carried on.” Ensign Harold C. Train noted his imperviousness to terror: “I can say without equivocation that he’s the only man I’ve ever known well who was without any fear whatsoever.”

By 1912, Butler began to express in private correspondence, infused with racial slurs cursing the local populations, his realization that the foreign wars in which he participated were driven by money; he regretted the loss of men “all because [the investment bank] Brown Bros. have some money down here.” When he attempted to redirect the spoils of war to their rightful owners, the local politicians complained and he was relieved of command and handed a medal instead. The corruption ran much deeper, when Butler relayed what occurred in that year’s Nicaraguan election in a later 1929 speech: “The opposition candidates were declared bandits when it became necessary to elect our man to office. Our candidates always win. In one election nobody liked the fellow;...the district was canvassed, and 400 were found who would vote for the proper candidate. Notice of the opening of the polls was given five minutes beforehand, the 400 voters were assembled in a line and when they had voted, in about two hours, the polls were closed.”

Following the Battle of Veracruz during the Mexican Revolution in 1914, Butler earned his first Congressional Medal of Honor. However, given the small amount of fighting involved and the low casualties, Butler called the offer of 55 medals to those involved “wretchedly awarded.” He tried to return the medal in protest, stating he had done nothing to deserve the nation’s highest military award for valor. U.S. Navy Secretary Josephus Daniels sent the medal back to Butler and ordered him to keep and wear it instead.

During the U.S. occupation of Haiti which began in 1915, Butler earned his second Congressional Medal of Honor and was promoted to lieutenant colonel. After an attempt to manipulate the elections of 1917, the United States’ presence was fully personified by Butler, who in the midst of the National Assembly passing a constitution in defiance of the U.S., personally walked in a decree to dissolve the legislative body: “I walked into the assembly amid hisses and jeers, which had no effect, of course, and notified Mr. [Sténio] Vincent [the Senate’s president] that I had a communication from the President of the Republic.” The Assembly as a result “became so impudent that the Gendarmerie had to dissolve them, which dissolution was effected by genuinely Marine Corps methods.” Vincent approached Butler afterwards “with a look of intense hatred upon his face,” according to Butler, but instead of cussing at him remarked, “General, I am hungry,” which was an invitation to go to lunch. The actual role of running of the government largely fell to Butler on behalf of the U.S., who angered the Haitian elite so much that a later financial advisor to the country in the 1920s reported that “For years some of us had the job of trying to heal up the scars which that gentleman left.” Butler was determined to join World War I and made the opposite impact on troops in the French battlefields, one veteran later writing him that, “A good many of us never can, nor never will forget the talks that you gave us while in the mud holes…”

Under the Car

Butler’s final promotion to Major General came at the age of 47 during his tenure at the Marine Corps Base in Quantico, Virginia. Major General Robert Blake commented that, “Butler, with all his political influence and perhaps discreditable attributes, was a very dramatic figure. He may well have saved the Marine Corps then [in the 1920s] when it looked as though it was going to be scuttled.”

In an ironic twist, Butler became the only person punished over the incident involving Mussolini running over a child with his car. In 1930, Butler relayed the story in a public speech, describing how he had learned from a friend of the killing and Mussolini’s cruel indifference. Vanderbilt heard that Butler had garbled parts of the story, including incorrect details such as Mussolini patting him on the knee, reassuring him: “What is one life? There are millions of children in Italy.” Vanderbilt was careful to note that Mussolini had not uttered these words and may have not even known what he hit: “For all I know, he may have honestly missed the whole episode: few drivers making a sharp turn at ninety would not.” Mussolini denied ever having met Vanderbilt, something for which he apologized privately to Vanderbilt a day later. To aid in Butler’s defense during a court-martial process as a result of his speech, Vanderbilt submitted to the Secretary of State Henry Stimson the following items: a photograph featuring Mussolini’s inscription of a thank you to Vanderbilt for “a pleasant weekend,” a signed pass from Mussolini, and gold cufflinks with the monogram “B.M.” Butler apologized to U.S. Navy Secretary Charles Francis Adams III and received only an oral reprimand. Mussolini, after his administration changed course and admitted to having received Vanderbilt for a visit in 1926, received no apology.

The Bonus Army

By the time of his retirement in 1931, Butler had served for over 33 years and earned 16 medals, including five for heroism in the line of duty, making him the most decorated Marine in U.S. history at the time. In 1932, he ran unsuccessfully for the U.S. Senate in Pennsylvania as a pro-Prohibition Republican, attempting to follow in the footsteps of his father, Thomas S. Butler, who died in 1928 after being elected to Congress sixteen times. During his Senate campaign, Butler supported the Bonus Army, a group of World War I veterans demanding early payment of promised bonuses.

That July, he visited the Bonus Army encampment in Washington, DC. Speaking passionately and without pretense, Butler rallied the discouraged veterans: “You hear folks call you fellows tramps, but they didn’t call you that in ’17 and ’18. I never saw such fine soldiers. I never saw such discipline…You have as much right to lobby here as the United States Steel Corporation…This is the greatest demonstration of Americanism ever seen.” He urged them to “keep [their] sense of humor” and to remain peaceful and politically engaged, warning that violence would destroy their public support. He also made reference to the class conflict involved: “One class believes that the country was made for them. The other class would like to come in somehow. A few people on one side, and the great masses on the other.”

Despite Butler’s encouragement and efforts to secure state aid for the veterans’ return home, the federal government violently dispersed the encampment under orders from President Herbert Hoover, resulting in deaths and injuries. For the two dead soldiers, the press grimly reported that the bonus was now payable: “Last week William Hushka’s Bonus for $528 suddenly became payable in full when a police bullet drilled him dead in the worst public disorder the capital has known in years.” Two other veterans were wounded in the gunfire and one of them, Eric Carlson, 38, of Oakland, California, later died from his injuries. Outraged by the government’s actions, Butler publicly condemned the Hoover administration and later supported Franklin D. Roosevelt in the 1932 presidential election, helping to unseat Hoover.

The Racketeer

“I spent thirty-three years and four months in active service as a member of our country's most agile military force—the Marine Corps. I served in all commissioned ranks from a second lieutenant to major-general. And during that period I spent most of my time being a high-class muscle man for Big Business, for Wall Street, and for the bankers. In short, I was a racketeer for capitalism...

“Thus I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in...I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912. I brought light to the Dominican Republic for American sugar interests in 1916. I helped make Honduras ‘right’ for American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went its way unmolested.

“During those years I had, as the boys in the back room would say, a swell racket. I was rewarded with honors, medals, promotion. Looking back on it, I feel I might have given Al Capone a few hints. The best he could do was operate his racket in three city districts. We Marines operated on three continents.”

-Smedley Butler, quoted in We, the People (1932)

Now with some distance from his long military career, Butler considered the larger picture of U.S. foreign policy and those who died in service of it. “For a great many years, as a soldier, I had a suspicion that war was a racket; not until I retired to civil life did I fully realize it,” he wrote in 1935 treatise War Is a Racket. Butler argued in the short book that war is a corrupt and profit-driven enterprise, orchestrated by a small elite at the expense of the general public. He condemned the exploitation of war for financial gain, citing how World War I created thousands of new millionaires while ordinary soldiers suffered and died. He criticized global militarization and the rising tensions in Europe and Asia, warning of the looming threat of another war. Butler claimed that wars benefit only a few—bankers, arms manufacturers, and industrialists—while imposing massive human and financial costs on the wider population. He urged Americans to reconsider foreign entanglements, emphasizing that peace, not war, served the broader public interest.

Butler explained that while World War I cost the U.S. government—and ultimately taxpayers—$52 billion ($1.2 trillion today), a significant portion of that money went to a small number of corporations and individuals who made massive profits. Butler contrasted modest peacetime business profits with the astronomical gains made during wartime, citing examples of those “who turned blood into gold” such as:

• DuPont: pre-war profits of $6 million annually skyrocketing to $58 million ($1.35 billion today) per year during the war.

• Bethlehem Steel: from $6 million to $49 million ($1.14 billion today).

• U.S. Steel: from $105 million to $240 million ($5.6 billion today).

Copper companies, leather suppliers, chemical firms, and even sugar refineries all saw similar surges. Government contracts were abused through overproduction and unnecessary purchases—such as 35 million pairs of shoes for 4 million soldiers, mosquito nets never shipped to France, and wooden ships that did not float. Banks and financiers, a more secretive part of the process, also profited enormously, with Butler emphasizing that wartime profiteering often came at the direct expense of the soldiers who risked and lost their lives. “How the bankers made their millions and their billions I do not know,” he wrote, “because those little secrets never become public—even before a Senate investigatory body.”

Butler thought of who ultimately paid the price of war and argued that the American people, through taxes and manipulated financial schemes like Liberty Bonds, financed the profits of war profiteers. Soldiers, however, paid the highest price: not only with their lives, but with lasting physical and mental trauma. Many returned home unable to adjust, and were neglected or institutionalized. He now saw “the medal business” as a cheap way to buy soldiers’ acquiescence: “the government learned it could get soldiers for less money,” he wrote, “because the boys liked to be decorated. Until the Civil War there were no medals. Then the Congressional Medal of Honor was handed out. It made enlistments easier. After the Civil War no new medals were issued until the Spanish-American War.”

Butler criticized the use of propaganda, national pride, and religious rhetoric to manipulate young men into fighting, all while they were grossly underpaid and forced to fund their own participation in the war. Meanwhile, industries and financiers thrived, taking advantage of both the war effort and the soldiers themselves. In the book, Butler outlined a plan to end the exploitation of war for profit. In order to destroy the war “racket,” where a few benefited financially while the many suffered and paid with their lives, he proposed three key steps to dismantle it:

1. Taking the Profit Out of War: Before any soldiers were drafted, capital, industry, and labor would also be “conscripted”—meaning that executives, bankers, industrialists, politicians, and officers would all be paid the same low wages as soldiers, with the same obligations (supporting families, buying bonds, paying war insurance). This would strip war of its profitability and in Butler’s view, likely prevent it from happening at all.

2. Letting Soldiers Decide on War: Instead of politicians or profiteers deciding on war, only those who would actually fight and die would have the right to vote in a special plebiscite to approve war. This would ensure that only those directly impacted made the decision, not those who profited from it safely at home.

3. Limiting Military Forces to Defense Only: Butler proposed that the military be legally restricted to defensive operations. Naval ships would not be allowed more than 200 miles from U.S. shores, and the army would remain within the national borders. These limits would prevent offensive wars and provocations, such as those that led to past conflicts in which Butler participated.

Butler warned that future wars would be even more horrific, waged not with ships or guns, but with new technologies of mass destruction. These developments would continue because war remained profitable—for shipbuilders, arms manufacturers, and uniform suppliers—while scientists would be diverted from solving real problems to creating deadlier weapons. “If we put them to work making poison gas and more and more fiendish mechanical and explosive instruments of destruction,” he wrote, “they will have no time for the constructive job of building greater prosperity for all peoples.”

Being a Businessman

Nearly two years into his retirement, wealthy interests would attempt to recruit Butler for the most daring assignment of his life: overthrowing the U.S. government.