The Plots Against the President (22 page)

“The committee found that Butler was telling the truth,” Robert T. Cochran wrote in
Smithsonian
magazine years later. “Nothing much happened because few people really
wanted
to believe him, and because some prominent people were implicated, the story was hushed up.” The conspiracy “quickly and quietly fizzled,” as
Military History
magazine put it. After the committee issued its final report,
Time
published a mock photograph of General Butler and Jimmy Durante with the caption: “Schnozzle, Gimlet Eye. Fascist to Fascists?” A small footnote buried on the same page, printed in five-point type, reported that the committee was convinced “that General Butler's story of a Fascist march on Washington was alarmingly true.”

Once the story made the national newspapers after the release of the expanded report in which the committee confirmed the existence of a plot, letters came in from around the country directed to the committee, the White House, and the Division of Investigation. A letter from an official of Six Companies Inc. in Boulder City, Nevada—the colossal engineering and construction firm that was building Hoover Dam—alerted Congressman McCormack to the Fascist plot hatched within the American Legion. The letter, which McCormack forwarded to Hoover, and which has never before been cited or published, corroborated Butler's story. “Dear John,” the letter began, addressing Congressman McCormack with apparent familiarity. The author described how two men claiming to be representatives of an Eastern-based organization called the “American Fascist Veterans Association” planned to overthrow Roosevelt and had tried to recruit him to head up a Western division. “They told us … that General Butler would line up the Marines … that the Veterans of Foreign Wars Department heads were all members … and that the Republican National Committeeman was treasurer.” The author of the letter wrote that since the Hoover Dam project was a “Republican contractors' job” and because the Six Companies consortium had been “strong for Hoover,” he had been afraid to speak out sooner. Further, his workforce was composed of untold hundreds of previously unemployed and hungry veterans whom he legitimately feared could be incited to join a veterans' uprising.

Some Americans who had read the news stories about the coup plot began asking Roosevelt to make a public statement in response to the Dickstein-McCormack Committee findings. A letter from a longtime supporter of Roosevelt who resided in Santa Barbara, California, suggested that “the President take the people into his confidence and openly state what his relations are with regard to those Fascist groups supported by powerful financiers.” Roosevelt's reaction and response to the alleged plot has never been published, although Spivak reported that the president had personally intervened to bring the committee to a standstill—and the plot to a halt.

Contemporaneous and contemporary historians largely neglected the “Business Plot.” While it has been written about over the past seventy-five years—mostly in endnotes of Roosevelt biographies—and was reportedly the basis for Fletcher Knebel's 1962 political thriller
Seven Days in May
and Sinclair Lewis's 1935 novel
It Can't Happen Here
, it has been mostly marginalized or ridiculed by historians. “No one quite knew what to make of the Butler story,” historian Arthur M. Schlesinger Jr. concluded. “No doubt MacGuire did have some wild scheme in mind, though the gap between contemplation and execution was considerable and it can hardly be supposed that the republic was in much danger.” Nicholas Fox Weber, Robert Sterling Clark's biographer, deemed both the plot and Clark's alleged role in it to be credible. “The Fascist plot which General Butler exposed did not get very far,” according to one account. “But that plot had in it the three elements which make successful wars and revolutions: men, guns and money.” Butler biographer Hans Schmidt reviewed all the available evidence and found “little reason to doubt” that Butler was telling the truth, but he questioned MacGuire's motives and wondered if he was “working both ends against the middle,” as Butler had suspected. The scholarly Schmidt concluded that Butler may indeed have “blown the whistle on an incipient conspiracy” to overthrow the government, though the depth and breadth of the plot would never be thoroughly examined.

Whether the plot was what New York mayor Fiorello La Guardia dismissed as a fanciful “cocktail putsch” or what the secretary of war, secretary of the Navy, Commander James Van Zandt of the VFW, and numerous U.S. senators and representatives concluded was a real threat to the Roosevelt presidency, it is a fascinating tale of intrigue that sheds light on the power struggles of 1930s America. What is clear is that some of the nation's wealthiest men—Republicans and Democrats alike—were so threatened by Roosevelt's monetary policies that they actually flirted with antigovernment paramilitarism and sought to manipulate the American Legion to support the gold standard. How serious they were, and how far they went or were willing to go, would be debated over the next century. Perhaps at no other time in American history since the Civil War had the very stability of the nation been in play. The country's richest and most powerful men feared the collapse of capitalism and were willing to go to extremes to save it. Political parties were shifting allegiances and the nation's dispossessed were inflamed with anger and frustration. Those on the Right genuinely feared a Communist takeover of the republic, while those on the Left felt threatened by totalitarian schemes. “History is littered with governments destabilized by masses of veterans who believed that they had been taken for fools by a society that grew rich and fat at the expense of their hardship and suffering,” said a twenty-first-century secretary of veterans affairs, lending credence to the possibility of a veterans' rebellion. If the Butler charges did nothing else, they successfully identified the Liberty League as a group of right-wing fanatics and effectively neutralized the group's anti-Roosevelt smears.

Years later, after McCormack had become Speaker of the House, he told an interviewer that legal technicalities had precluded the committee from subpoenaing Robert Sterling Clark. “There was no doubt that General Butler was telling the truth … Millions were at stake when Clark and the others got the Legion to pass that resolution on the gold standard in 1933. When Roosevelt refused to be pressured by it, and went even further with the gold standard, those fellows got desperate and decided to look into European methods, with the idea of introducing them into America. They sent MacGuire to Europe to study Fascist organizations … If General Butler had not been the patriot he was, and if they had been able to maintain secrecy, the plot certainly might very well have succeeded … When times are desperate and people are frustrated, anything like that could happen … If the plotters had got rid of Roosevelt, there's no telling what might have taken place … This was a threat to our very way of government by a bunch of rich men who wanted Fascism.”

Chapter Thirty-eight

Are You Better Off Than You Were Last Year?

The historical record of President Roosevelt's reaction to the “Business Plot” is conspicuously silent, although he doubtless possessed a strong opinion on the matter. The Dickstein-McCormack Committee sent a copy of its findings to Roosevelt, who responded, simply: “I am interested in having it. I take it that the committee will proceed further.”

General Butler's motive baffled serious journalists, historians, and scholars, who pursued the story in years to come. Having railed against capitalist profiteers since World War I, Butler could not have been expected to be a reliable ally for Wall Street interests. He had classic macho military values, albeit as a maverick warrior who had outspokenly challenged the bureaucratic and political hierarchy of the elitist American Legion. Emotionally anti-war and anti-imperialist, Butler aroused speculation that he was associated with a loose-knit coalition of progressive populists bent on driving a wedge between Roosevelt and the Wall Street titans and other conservative forces in American politics. Proponents of this theory suggested that Butler was aligned with Huey Long and Father Coughlin in a political ploy to move Roosevelt leftward. Others posited a theory that no criminal prosecutions arose from the evidence because some of Roosevelt's own advisers had participated in the plot and it was considered a matter of national security to suppress the details.

The role of the press was similarly confusing. Was the story downplayed because of potential embarrassment to influential figures, or was it marginalized because the plot was so absurdly far-fetched that it resembled one of the potboiler adventure stories that Butler wrote for various magazines, if not a Marx Brothers zany comedy? “An apparently serious effort to overthrow the government, perhaps with the support of some of America's wealthiest men, largely substantiated by a Congressional Committee, was mostly ignored,” wrote Clayton E. Cramer in
History Today
. “Why?”

Roosevelt's secretary of the interior, Harold Ickes, would charge an alliance between the American Liberty League and the country's major newspapers, which distorted and covered up the news “in the interest of both their advertisers and in defense of the capitalist class.” In any event, the Liberty League was fast becoming the most significant anti-Roosevelt organization in the country. With infinite resources, much of it from the du Pont family, it would spend millions to destroy the New Deal. Providing editorials to thousands of newspapers, radio stations, and libraries, it was described as sponsoring “one of the most extensive propaganda campaigns of the twentieth century.”

Another formidable Liberty League coalition blossomed as well. By early 1934 the League was providing a large share of money to anti-Roosevelt groups, including, ironically, to Huey Long's Share Our Wealth Movement and Coughlin's National Union for Social Justice, as well as the ubiquitous “rainbow of colored shirts.” Uniting malcontents on the Left and Right to “save the Constitution,” the Liberty League consortium was the fiercest challenge to Roosevelt and the New Deal by big business.

“Roosevelt's friends took the American Liberty League seriously,” said Samuel Rosenman, one of Roosevelt's closest advisers and an original Brain Truster. “So did he.”

Whether spurred by the plot or not, Roosevelt did indeed turn leftward, and he went after Wall Street with renewed vigor. “If the First Hundred Days had comforted the afflicted,” wrote Roosevelt biographer Ted Morgan, “the Second Hundred Days would afflict the comfortable.” Much of the legislation for the Second Hundred Days was directed against the wealthy, including a bill dismantling holding companies, an inheritance tax, and a tax on corporate income. At the heart of what was derisively called the soak-the-rich policy was the Securities Exchange Act, which regulated securities and prohibited exploitative stock market practices that swindled consumers. For the first time in American history, stock exchanges were required to register with the federal government and bow to oversight by the newly created Securities and Exchange Commission. Roosevelt appointed the indefatigable “hellhound of Wall Street” and J. P. Morgan nemesis Ferdinand Pecora to the commission, prompting Will Rogers to exclaim, “There's finally a cop on Wall Street.” Further inciting the wrath of Wall Street was Roosevelt's appointment of Joseph P. Kennedy as chairman of the commission—Kennedy being a notorious swashbuckling Irish stockbroker whose anti-Morgan sentiments were legendary. When a hue and cry arose comparing Kennedy at the SEC to the fox in the henhouse, Roosevelt responded: “Set a thief to catch a thief.”

Roosevelt also threw his support behind a U.S. Senate inquiry into the munitions industry and World War I war profiteering. Known as the Nye Committee, for its chairman, North Dakota Republican Gerald Nye, the probe targeted the DuPont, J. P. Morgan, and Remington Arms companies. The president sent a message to the Senate urging full cooperation with the committee and pledging executive backing. “The private and uncontrolled manufacture of arms and munitions and the traffic therein has become a serious source of international discord and strife,” he wrote.

The evils of the arms makers were the subject of numerous books, including the bestseller
Merchants of Death
and John Gunther's
Harper's
series “Slaughter for Sale.” The explosive hearings of the Special Committee Investigating the Munitions Industry were front-page news and continued for weeks as the committee attempted to determine whether Wall Street financiers “had nudged the United States into war in 1917,” as one official account put it, to profit from the production of ammunition, weapons, tanks, and other materiel. Dozens of hearings were held and hundreds of observers crowded into the Senate committee room, eager for the wealthy warmongers to be exposed. While the investigators affirmed that the munitions industry “depended to a large extent on ‘greasing the palms' of public officials in Latin America, the Near East, and China,” they found that such bribery was not exclusive to the gun trade and no criminal prosecutions resulted.

“The time has come to take profit out of war,” Roosevelt said, pressing the committee to hold the arms makers accountable. Committee investigators examined the files and interrogated officers of J. P. Morgan and Company—“the financial angel of the Allied government of 1914–1917,” as an official history described it—which “brought a thunderous clap from across the Atlantic.”

Roosevelt also unleashed his Internal Revenue Service and Justice Department to go after his Wall Street adversaries. The Justice Department established a new division to investigate civil and criminal violations of the tax code, and one of its first high-profile targets was Andrew Mellon—Herbert Hoover's treasury secretary and the third-richest man in the world. The man who had pronounced the economy “sound and prosperous” at the time of the stock market crash in 1929, and who had once been celebrated as the greatest treasury secretary since Alexander Hamilton, was investigated for tax fraud. Although a federal grand jury declined to indict the “caricature of capitalism,” as Amity Shlaes called the elderly Mellon, the civil and criminal cases dogged him until his death; he was posthumously exonerated. Widely seen as politically motivated—to counter Huey Long's burgeoning anti–Wall Street movement—as well as driven by Roosevelt's personal animus against his enemies, Roosevelt's David-versus-Goliath battles were heralded in the hinterland.

Roosevelt was by all accounts genuinely baffled by the animosity and venom spewed at him by his “class.” He sincerely believed that he had saved the capitalist system and thought the hatred his actions had engendered was a remarkable “lack of appreciation for him and his policies … spiteful ingratitude and political and economic Neanderthalism.”

While Roosevelt realized that the road to recovery and reform would be long and complicated, he believed he was on the right track. In early 1934 he published a book outlining the course ahead and aptly titled
On Our Way
. In his first fireside chat of his second year in office, he asked simply: “Are You Better Off Than You Were Last Year?” The nation responded with a resounding yes, as evidenced by the Democratic landslide of the midterm elections, prompting William Randolph Hearst to begrudgingly note: “There has been no such popular endorsement since the days of Thomas Jefferson and Andrew Jackson.”

The journalist William Allen White said simply, “He has been all but crowned by the people.”