Legion of Terror was the first in a cycle of "exposé" films inspired by the upsurge in such hate groups as the KKK, the Silver Shirts and the Black Legion. The titular vigilante organization, which cloaks its extortionist motivations in the guise of patriotism, has a habit of sending mail bombs to its enemies -- and that's how Postal Inspector Frank Marshall (Bruce Cabot) becomes involved in the story. Before Marshall is able to expose the Legion of Terror for the cowards that they are, the group has murdered Don Foster (Ward Bond), the brother of Marshall's sweetheart Nancy (Marguerite Churchill). The film closes with an admonition to the audience to avoid getting suckered in by similar phony "All American" organizations. Legion of Terror was released just before Warner Bros. similar (and superior) The Black Legion.
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