The Plots Against the President (20 page)
Chapter Thirty-five
In November 1933, shortly after the American Legion convention in Chicago, Gerard MacGuire turned up “like a bad penny,” as Butler put it, and informed Butler that a group of Boston veterans were hosting a dinner in his honor. They would transport Butler from Philadelphia by private car, and he would receive a thousand dollars for making remarks in support of the gold standard. Butler testily rebuffed him yet again, but MacGuire remained strangely unflappable, saying, “Well, then, we will think of something else.” MacGuire's perseverance flabbergasted the reluctant general, as the sweaty bond salesman continued his overtures. He was relentless in trying to convince Butler that it was pointless to support the soldiers' bonus until the country had a sound currency.
There followed a string of proposals over a period of months in which Butler was offered exorbitant fees for speaking before veterans' organizations. After Butler's lecture agent contracted for a national speaking tour for appearances before numerous Veterans of Foreign Wars (VFW) groups, for which Butler would be paid $250 per speech, MacGuire suddenly materialized and offered him an additional $750 per speech if he would insert an endorsement of the gold standard in each one. Again, Butler brushed him off.
The fall of 1933 saw an increase in the vitriolic anti-Roosevelt rhetoric, which reached a crescendo with FDR's November 17 diplomatic recognition of the Soviet Union. The United States had supported the White Russians in their civil war and had then ignored the victorious Bolsheviks since 1917. The Soviet Union had had an economic office in the United States for several months, but the actual exchange of embassies set off alarm bells in America's anti-Communist circles. It had been Roosevelt's personal initiative, begun with a letter to Soviet president Mikhail Kalinin stating that he had “contemplated the desirability of an effort to end the present abnormal relations between the hundred and twenty-five million people of the United States and the hundred and sixty million people of Russia.” A survey showed that 63 percent of the nation's 1,139 newspapers supported it, with the hopes of opening a market for American exports. But an even greater resolve took hold of Roosevelt when Hitler withdrew from the League of Nations, and Roosevelt sought the Soviet Union as an ally in the event of German expansion.
During a series of covert negotiations over a nine-day period, Roosevelt and Soviet emissary Maxim Litvinov, who had traveled to Washington at Roosevelt's invitation, exchanged eleven letters and one memorandum signaling the countries' agreement with each other. “A great many people at the time regarded this event as of earthshaking importance,” wrote one Roosevelt biographer.
Roosevelt's right-wing enemies were not among those who saw the move as a great boon for America. Already furious at his “Socialist” leanings, they were now confirmed in their suspicions that the president was a full-blown “Red” who was instituting the Bolshevik experiment in the United States. Business leaders saw a dangerous shift toward Soviet-style Communism at a moment when they were looking enviously at Italy and its dictator, if not also at Germany and Hitler. Their Italian counterparts had financed Mussolini's rise and staged a bloodless coup, and the end result was a highly efficient corporate Fascist state enjoying economic prosperity in the midst of a global depression. Just weeks later, as part of the “Good Neighbor” policy he had mentioned in his inaugural address, Roosevelt announced that the United States would no longer be sending troops to Latin America to protect private investments. The new policy sent more shock waves to America's business community, which had vast financial interests in Latin America and had long depended on U.S. military protection in the region. But Roosevelt unequivocally abandoned the policy of military intervention in the affairs of any other state.
On December 1, 1933, as yet unbeknownst to Butler, MacGuire left for Europe to study how veterans' organizations had brought about dictatorships. He spent two months in Italy evaluating the Black Shirts and their role in installing Mussolini. From there he went to Germany to witness the Nazi phenomenon firsthand. Robert Sterling Clark was the sponsor of his junket, he would later tell Congress. He sent enthusiastic postcards to Butler from Italy, Germany, Spain, and France. He had determined that the Italian and German examples were not feasible to institute in the United States because American veterans were too freedom-loving and would never embrace such absolute rigidity. But in France he had found a perfect model: the right-wing veterans' group called the Croix de Feu (Cross of Fire). He wrote a letter back to his benefactors. “Gentlemen,” he addressed them anonymously. “I just returned from a trip to Brussels, Rotterdam, Amsterdam, Hamburg, Copenhagen, Berlin, Prague, Leipzig, Vienna, Munich, Zurich, Basle, Geneva, and thence back to Paris.” He reported, “There is a Fascist Party springing up in Holland under the leadership of a man named Mussait, who is an engineer by profession and he has approximately 50,000 followers ⦠It is said that this man is in close touch with Berlin, and is modeling his entire program along the lines followed by Hitler in Germany.” In a second letter to the “Gentlemen,” MacGuire said, “Everywhere you go you see men marching in groups and company formation.”
Upon arriving back in the United States in the spring of 1934, MacGuire excitedly related his findings to Butler when the two men met in a remote corner of the lobby at the Bellevue-Stratford Hotel in Philadelphia. MacGuire told him about the “superorganization ⦠an amalgamation of all other French veteran organizations ⦠composed of officers and noncoms.” An insurrection by this Croix de Feu had successfully toppled the government of Prime Minister Ãdouard Daladier, MacGuire claimed, and could be duplicated in the United States. It was time to “get the soldiers together” for a peaceful military takeover of the Roosevelt presidency, MacGuire told Butler.
MacGuire claimed to already have three million dollars available to launch the effort and said the promoters were prepared to spend as much as three hundred million. The men behind the putsch projected that it would take a year for Butlerâthe most popular and charismatic military leader in the nationâto assemble five hundred thousand veterans who would be paid between ten and thirty-five dollars per month, depending on their rank. They had chosen Butler, MacGuire told him with an apparent lack of irony, because Butler's unrelenting anti-capitalist, anti-imperialist criticism would strike a chord with the angry half million Bonus Army veterans who would do anything Butler told them to do.
The plot was stunning in its presumption and simplicity. “Did it ever occur to you that the President is overworked?” MacGuire asked Butler. He explained that it did not require a constitutional change to authorize a “Secretary of General Affairs” to take over the details of the office of the presidency. The man the plotters had in mind for this task was Brigadier General Hugh S. Johnson, Roosevelt's head of the National Recovery Administration, who, according to MacGuire's purported inside information, was about to be fired by Roosevelt. “We have got the newspapers. We will start a campaign that the President's health is failing. Everybody can tell that by looking at him, and the dumb American people will fall for it in a second.”
The veterans' army, led by Butler, would march on Washington and induce Roosevelt to step aside because of bad health. Vice President Garner, in the line of succession, would refuse the office because he didn't want to be president, and Secretary of State Cordell Hullânext in lineâwould decline based on his age, or so the plotters' reasoning went. After the “coup,” General Johnson would take Hull's place as a sort of “Super Secretary” who would be the de facto president and immediately reinstitute the gold standard. America needed a “man on a white horse,” MacGuire told Butler, “⦠a dictator who would come galloping in.” It was the only way to “save the capitalistic system.” It was all perfectly “constitutional,” as MacGuire and his cohorts saw it.
James Van Zandt, the national commander of the VFW, had already agreed to serve as a leader in the veterans' army, according to MacGuireâa charge that Van Zandt would later vehemently deny, although he would later corroborate Butler's story and reveal that he too had been approached by “agents of Wall Street” intent on overthrowing the government. In addition to this “superorganization,” an elite paramilitary group would be created, which would be led by General MacArthur.
Staggeringly, MacGuire portrayed the zany plot as an attempt to “support” Roosevelt in his hour of need. Butler challenged him: “The President doesn't need the support of that kind of an organization; and, besides, since when did you become a supporter of Roosevelt? The last time you were here you were against him.”
“Don't you understand?” MacGuire responded. “The set-up has got to be changed a bit. We have the President with us now. He has got to have more money ⦠Eighty percent of the money now is in Government bonds and he cannot keep this racket up much longer ⦠He has either got to get more money out of us or he has got to change the method of financing the government, and we are going to see to it that he isn't going to change that method. He will not change it. He is with us now.”
If Roosevelt acceded to their demands, they would allow him to remain as a powerless figurehead “analogous to Mussolini's handling of the king of Italy,” as one account put it. If Roosevelt “was not in sympathy with the Fascist movement,” then he would be “forced to resign.”
“We want to ease up on the President,” MacGuire told Butler.
“You want to put somebody in there you can run; is that the idea?” Butler was incredulous at both the naïveté and grandiosity of the scheme. “The President will go around and christen babies and dedicate bridges and kiss children? Mr. Roosevelt will
never
agree to that himself.”
Butler was by now convinced that the prospective putsch, wacky and delusional as it was, constituted treason. He considered whom or which government agency he should alert. If such powerful financial magnates and high-level military officials were truly conspiring, as MacGuire alleged, he needed to be careful in how he proceeded. “His protagonists in the present scrapâWall Street brokers, their legal counselors, and shrewd political operativesâwere backed by a supporting network that extended into veterans affairs, politics, and the rightwing press,” said a military historian of Butler's dilemma. He considered taking the story to J. Edgar Hoover at the Division of Investigation, to a carefully chosen member of Congress, to the media, or directly to the White House.
MacGuire asked Butler for a commitment. Stalling for time, Butler said he needed to think about it a little longer.
MacGuire said that an umbrella organization had already been created to support the objectives of the plotters and that widespread publicity about the group would soon emerge. “You watch,” MacGuire told him, “in two or three weeks you will see it come out in the paper. There will be big fellows in it ⦠These are to be the villagers in the opera.” At that point it would be imperative for Butler to decide whether he was in or out.
Two weeks later, Butler read in the newspaper about the creation of the American Liberty Leagueâa heavily funded organization formed “to combat radicalism, to teach the necessity of respect for the rights of persons and property, and generally to foster free private enterprise” and to oppose the destruction of America by New Deal policies. Formed by displeased moguls of finance and industry, the Liberty League attacked Roosevelt for “fomenting class hatred” by using such terms as “unscrupulous money changers,” “economic royalists,” and “privileged princes of these new economic dynasties.”
Butler read the list of the Liberty League's 156 sponsors with a combination of disbelief and trepidation. All the founding supporters contributed sizable cash amounts to the new organization and together controlled assets worth nearly forty billion dollars. The first name he looked for on the long list was “treasurer.” He was unsurprised: Grayson M-P. MurphyâGerald MacGuire's boss. The rest of the names read like a who's who of American capitalism and reactionary politics, of organizations and individuals long associated with avowed anti-labor and pro-Fascist policies: Robert Sterling Clark, John W. Davis, Irénéé and Lammot du Pont, Alfred E. Smith, Sewell Avery, Alfred P. Sloan, S. B. Colgate, Elihu Root, E. F. Hutton, John H. Raskob, and J. Howard Pew, among many others.
For the first time it struck Butler that MacGuire's revelations about a “plot to seize the White House were no crackpot's fantasy.”
Chapter Thirty-six
“There was definitely something crazy about the whole affair,” wrote J. Edgar Hoover's biographer Curt Gentry. “Butler, who had gained prominence for speaking out
against
fascism, [was] being asked to become an American
duce
.”
Butler decided that it was premature to take the information to either the president or Hoover until he had more evidence. It would be Butler's word against Clark's and MacGuire's, and Butler could end up looking like the crazy one. Suspecting that the entire “plot” might be nothing more than an attempt to discredit him and neutralize him as a critic of Wall Street and Fascism, Butler chose to share the story with a journalist first. He contacted Tom O'Neil, city editor of the
Philadelphia Record
âa liberal newspaper owned by J. David Stern, who also published the
New York Evening Post
. He told O'Neil the bizarre story and asked him to assign his star reporter, Paul Comly French, a fellow Quaker, to explore the legitimacy of the conspiracy. O'Neil agreed and Butler told French everything about what he had come to call the “bankers gold group.”
French set out to determine whether the plot was an attempt to extort money from a cabal of rich right-wingers “by selling them political gold bricks,” as Butler wondered, or whether a cabal of rich right-wingers, “enraged by Roosevelt and his New Deal policies, was putting up big money to overthrow F.D.R. with a putsch.”
French was fired up about the story but worried too that it was so improbable that, short of ironclad evidence, he and Butler both would be disbelieved and ridiculed. He knew that much depended on the credibility, integrity, and patriotism of his main source, Smedley Butler, so he first probed into Butler's background and interviewed the retired Marine extensively. What French found was a highly controversial figure, a whistle-blower whose salty language and “irrepressible temper and tongue kept him in the headlines,” whose candor and courage unsettled his enemies and landed him “in hot water with his superiors,” and whose blunt truth telling was generated by an idealized love of America and democracy.
Once satisfied that Butler had no history of, or known proclivity for, lying and that his zealous outbursts were inspired by honorable motives, French began to investigate Butler's claims that a group of wealthy Americans was arming and financing Fascist plots.
MacGuire agreed to be interviewed by French after Butler vouched for French's dependability. Posing as a reporter who was sympathetic to the anti-Roosevelt forces, French gained MacGuire's trust and was invited to visit him at his suite at the Grayson Murphy New York brokerage firm. They met in MacGuire's twelfth-floor office at 52 Broadway for a two-and-a-half hour conversation. MacGuire told French the same story that he had told Butler except for one significant amplification: that the weapons and ammunition they needed for a coup would be supplied by “Remington Arms Company on credit through the DuPonts,” who owned a controlling interest in the firm. “We need a Fascist government in this country,” MacGuire insisted to French, “to save the Nation from the communists who want to tear it down and wreck all that we have built in America. The only men who have the patriotism to do it are the soldiers and Smedley Butler is the ideal leader. He could organize a million men overnight.” MacGuire told French of his fact-finding mission to Europe, and how he had “obtained enough information on the Fascist and Nazi movements and of the part played by veterans, to properly set up one in this country.” At first MacGuire and his sponsors had planned to have Butler ask each of the million veterans to contribute a dollar to the effort, MacGuire said, but they decided instead to raise funds from wealthy simpatico financiers and industrialists.
Throughout the interview, MacGuire emphasized the patriotism of those desirous of a Fascist government to stop Roosevelt's Socialist plot to redistribute the wealth. They all agreed, he said, that bonds would soon reach 5 percent, creating an economic crash requiring the soldiers to save the country. MacGuire volunteered names of individuals and organizations that had pledged more than a million dollars each. He provided French with the identities of potential leaders of the Fascist plot, including a former national commander of the American Legion. MacGuire was obsessed with the “unemployment situation,” saying that Roosevelt had “muffed it terrifically” but that an ingenious plan he had witnessed in Germany would “solve it overnight.” French listened, dumbfounded, as MacGuire suggested that the United States follow Hitler's “ideal” prototype of “putting all of the unemployed in labor camps or barracksâenforced labor.”
Butler abhorred all the dictator talk, which he thought merely a euphemism for a big-business, corporate takeover of government. “I have been in 752 different towns in the United States in three years and one month, and I made 1,022 speeches,” Butler would later testify. “I have seen absolutely no sign of anything showing a trend for a change of our form of Government.”
The next, and final, time that MacGuire approached Butler to see whether he would agree to lead a veterans' march on Washington, the ex-Marine was unsparing. “If you get 500,000 soldiers advocating anything smelling of Fascism, I am going to get 500,000 more and lick the hell out of you, and we will have a real war right at home.”
His true sentiments now exposed to MacGuire, and with the story confirmed by Paul French, Butler went to see J. Edgar Hoover in the fall of 1934. “Hoover knew a loaded gun when he saw one,” Gentry wrote. “This sounded to him like a plot to overthrow the government of the United States. However, if the Division of Investigation investigated Butler's charges, he would risk alienating some of America's most powerful corporation heads.” In characteristic fashion, Hoover sought to use Butler's information to expand his own power while avoiding a delicate probe that might jeopardize his ambitions. He told Butler that he thought the plot a grave situation, but that lacking an apparent federal offense, he was powerless to pursue an investigation. Behind the scenes Hoover quickly used the opportunity to justify a larger role in national law enforcement. Indeed, the Butler exposé would, “with Hoover's skillful handling,” as Gentry wrote, “help the director grasp control of all domestic intelligence in the United States.”
What Hoover neglected to tell Butler was that his agency was already investigating American Fascism at the personal directive of President Roosevelt. Roosevelt had called a secret White House conference with Hoover six months earlierâjust weeks after MacGuire's return from his European Fascist research tourâto discuss the growing Nazi movement in the United States. Present at the meeting with Roosevelt and Hoover were Attorney General Homer Cummings, Secretary of the Treasury Henry Morgenthau, Secretary of Labor Frances Perkins, and Secret Service Chief W. H. Moran. In an internal memorandum, Hoover wrote that Roosevelt requested that the Division of Investigation work with the other agencies to conduct “a very careful and searching investigation” of Nazi organizations and, especially, “any possible connection with the official representatives of the German government in the United States.”
Since Roosevelt, Hoover, and several other high-level government officials in the administration were obviously concerned about an internal Nazi threat, it seemed highly likely that they knew about the “Business Plot,” or the “Wall Street Putsch”âas the Clark-Murphy-MacGuire-veterans scheme would eventually be dubbed by the press.
For his part, Butler reasoned that even though Hoover didn't have the jurisdiction to investigate the charges, the nation's top cop would undoubtedly see that the explosive information got into the right hands. If Butler considered taking his story to the White House, he didn't need to. Suddenly Washington was abuzz with gossip that the American Legion was organizing a Fascist army to seize the capital. John L. Spivak, a veteran muckraker and foreign correspondent, an admitted Communist but one with impeccable high-placed sources, had begun digging into the rumors of a coup. At the same time, the U.S. House Un-American Activities Committee had learned of the plotâundoubtedly from Hooverâand a committee investigator called Butler to see whether he would be willing to cooperate with Congress. Indeed, Butler responded. He had been praying for just such a call.
In the fall of 1934, the political atmosphere was highly charged heading into the midterm elections of Roosevelt's first term in office. The newly formed American Liberty Leagueâwell funded and ubiquitousâblanketed the country with incendiary anti-Roosevelt propaganda. It sent out more than five million pamphlets denouncing Roosevelt's “socialist” agenda, hinting darkly at his Machiavellian plots to dismantle the Constitution and referring to the president as “King Franklin I.” Supposedly nonpartisan, the professional patriots of the Liberty League were a collection of wealthy Democrats and Republicans concerned that the new administration's work projects and regulations of industry were interfering with the labor market and upsetting the natural method of supply and demand. “Five Negroes on my place in South Carolina refused work this Spring ⦠saying they had easy jobs with the government,” an official with the DuPont company wrote to the former chairman of the Democratic Party. “A cook on my houseboat at Fort Myers quit because the government was paying him a dollar an hour as a painter.”
The group, hoping to encourage Americans to work and to get rich, had agonized over its name. One founding member suggested Association Asserting the Rights of Property, which was then shortened to the National Property League. Just before filing official papers for the organization, John W. Davis lighted on the catchy name the American Liberty League. The new patriotic sounding name “hid the fact that it was really about rich men protecting their interests,” as the biographer of founder Alfred E. Smith wrote after reviewing correspondence between the wealthy board of directors. Claiming widespread support from a cross-section of business and finance, its leadership actually drew exclusively from a minuscule group of extremely wealthy individuals. Its thirty-two-room headquarters in the National Press Building in Washington emblemized its provenance as well as its income, which exceeded that of the national Republican Party. In fact, fewer than two dozen bankers and businessmen had contributed more than half the Liberty League's funds, and, notably, its founding members included more conservative “Jeffersonian Democrats” than Republicans. “The financial community,” reported the
New York Times
, “sees in the movement the nucleus of a new force for conservatism.”
Ultimately, the gap between rich and poor had become too wide, too starkly apparent for the League of multimillionaires to have credibility with most Americans. As George Wolfskill wrote in
The Revolt of the Conservatives
, “New Deal spokesmen did not have to refute the views of the League; they only had to call the roll.”
Socialists or not, Roosevelt and the Democrats won both Houses in an unprecedented landslide, increasing the Democrats from 60 to 69 in the Senate and from 309 to 322 in the House of Representatives. Not since Civil War Reconstruction had one party gained such an overwhelming majority. Roosevelt was now assured of a responsive and productive Seventy-fourth Congress of the United StatesâWall Street's worst nightmare.
