Alan Moore and the Mighty Crusaders: Before the Watchmen

http://www.alanmoorefansite.com/faq/dc.html
DC wanted Moore to write other stories in addition to Swamp Thing. For his part, Moore wanted to tell a story free of the usual comic book continuity, which he felt were "annoying limitations". He also wanted to work with artist Dave Gibbons.
All of this came together when Moore conceived an epic story involving superheroes from MLJ-Archie Comics. Unable to use those characters, he adapted the storyline to feature the Charlton Comics superheroes instead, which DC had acquired in 1983. Moore states, "My original idea, for what it's worth, involved the MLJ-Archie Comic super-hero line, the Mighty Crusaders. This, restricted to idle fanboy musing as it was, has no special significance, save that it was fairly easy to make the conceptual leap to the characters of the defunct Charlton Comics line once I heard that DC had acquired the rights to them."

The story for Moore's proposal, known as the "Charlton Project", involved Charlton super-hero Captain Atom instigating a plan to save the world from itself.

It became clear to DC after reading the proposal, that the characters would be unusable after the storys end. VP-Editor, Dick Giordano (who had also previously been an editor with Charlton) asked Moore not to use the Charlton characters, who had yet to appear officially in the DC Universe (their debut would be in the mini-series Crisis on Infinite Earths). Moore then re-worked the characters slightly and rewrote the proposal into what became the Watchmen series.

http://www.twomorrows.com/comicbookartist/articles/09moore.html

CBA: I always had a suspicion there was an element of the MLJ characters—The Hangman, The Shield, etc. —within Watchmen, and upon recently reading your intro to the Graffitti Watchmen special edition, I read that my inkling was indeed true. You were exposed to the MLJ characters, such as The Mighty Crusaders, and so on?
Alan: Right. That was the initial idea of Watchmen—and this is nothing like what Watchmen turned out to be—was it was very simple: Wouldn't it be nice if I had an entire line, a universe, a continuity, a world full of super-heroes—preferably from some line that has been discontinued and no longer publishing—whom I could then just treat in a different way. You have to remember this was very soon after I'd done some similar stuff, if you like, with Marvelman, where I'd used a pre-existing character, and applied a grimmer, perhaps more realistic kind of world view to that character and the milieu he existed in. So I'd just started thinking about using the MLJ characters—the Archie super-heroes—just because they weren't being published at that time, and for all I knew, they might've been up for grabs. The initial concept would've had the 1960s-'70s rather lame version of the Shield being found dead in the harbor, and then you'd probably have various other characters, including Jack Kirby's Private Strong, being drafted back in, and a murder mystery unfolding. I suppose I was just thinking, "That'd be a good way to start a comic book: have a famous super-hero found dead." As the mystery unraveled, we would be lead deeper and deeper into the real heart of this super-hero's world, and show a reality that was very different to the general public image of the super-hero. So, that was the idea.

http://blaklion.best.vwh.net/marvelman.html

"Zarathustra", Warrior #11 page 11: Jack Ketch resembles the MLJ hero the Hangman; the Hooded Justice from Watchmen is of the same type.

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