Business Plot

The Business Plot was an alleged political conspiracy in 1933 in the United States. Retired Marine Corps Major General Smedley Butler claimed that wealthy businessmen were plotting to create a fascist veterans' organization with Butler as its leader and use it in a coup d'état to overthrow President Franklin D. Roosevelt. In 1934, Butler testified before the United States House of Representatives Special Committee on Un-American Activities (the "McCormack-Dickstein Committee") on these claims.[1] No one was prosecuted.

At the time of the incidents, news media dismissed the plot, with a New York Times editorial characterizing it as a "gigantic hoax".[2] While historians have questioned whether or not a coup was actually close to execution, most agree that some sort of "wild scheme" was contemplated and discussed.[3][4][5][6]

Background

Butler and the veterans

Shacks, erected by the Bonus Army on the Anacostia flats, burning after being set on fire by the US military (1932)
Main article: Bonus Army

On July 17, 1932, thousands of World War I veterans converged on Washington, D.C., set up tent camps, and demanded immediate payment of bonuses due to them according to the World War Adjusted Compensation Act of 1924 (the original act made the bonuses initially due no earlier than 1925 and no later than 1945). Walter W. Waters, a former Army sergeant, led this "Bonus Army". The Bonus Army was encouraged by an appearance from retired Marine Corps Major General Smedley Butler; as a popular military figure of the time, Butler had some influence over the veterans. A few days after Butler's arrival, President Herbert Hoover ordered the marchers removed, and U.S. Army cavalry troops under the command of General Douglas MacArthur destroyed their camps.

Butler, although a self-described Republican, responded by supporting Franklin D. Roosevelt in the 1932 US presidential election.[7]

By 1933 Butler started denouncing capitalism and bankers, going on to explain that for 33 years he had been a “high class muscle man” for Wall Street, the bankers and big business, labeling himself as a “racketeer for Capitalism.[8]

Reaction to Roosevelt

Roosevelt's election was upsetting for many conservative businessmen of the time, as his "campaign promise that the government would provide jobs for all the unemployed had the perverse effect of creating a new wave of unemployment by businessmen frightened by fears of socialism and reckless government spending."[9]

Some historians have said concerns over the gold standard were also involved; Jules Archer, in The Plot to Seize the White House, wrote that with the end of the gold standard, "conservative financiers were horrified. They viewed a currency not solidly backed by gold as inflationary, undermining both private and business fortunes and leading to national bankruptcy. Roosevelt was damned as a socialist or Communist out to destroy private enterprise by sapping the gold backing of wealth in order to subsidize the poor."[10]

McCormack–Dickstein Committee

The Committee began examining evidence on November 20, 1934. On November 24, the committee released a statement detailing the testimony it had heard about the plot and its preliminary findings. On February 15, 1935, the committee submitted its final report to the House of Representatives.[11]

During the McCormack–Dickstein Committee hearings, Butler testified that Gerald C. MacGuire attempted to recruit him to lead a coup, promising him an army of 500,000 men for a march on Washington, D.C., and financial backing. Butler testified that the pretext for the coup would be that the president's health was failing.[12]

Despite Butler's support for Roosevelt in the election[7] and his reputation as a strong critic of capitalism,[13] Butler said the plotters felt his good reputation and popularity were vital in attracting support amongst the general public and saw him as easier to manipulate than others.

Given a successful coup, Butler said that the plan was for him to have held near-absolute power in the newly created position of "Secretary of General Affairs", while Roosevelt would have assumed a figurehead role.

Those implicated in the plot by Butler all denied any involvement. MacGuire was the only figure identified by Butler who testified before the committee. Others Butler accused were not called to appear to testify because the "committee has had no evidence before it that would in the slightest degree warrant calling before it such men ... The committee will not take cognizance of names brought into testimony which constitute mere hearsay."[14]

On the final day of the committee,[15] January 29, 1935, John L. Spivak published the first of two articles in the communist magazine New Masses, revealing portions of the Congressional committee testimony that had been redacted as hearsay. Spivak argued that the plot was part of a "conspiracy of Jewish financiers working with fascist groups", referring specifically to Felix Warburg, the McCormack–Dickstein Committee, and certain members of the American Jewish Committee in collusion with J. P. Morgan. Hans Schmidt concludes that while Spivak made a cogent argument for taking the suppressed testimony seriously, he embellished his article with his "overblown" claims regarding Jewish financiers, which Schmidt dismisses as guilt by association not supported by the evidence of the Butler-MacGuire conversations themselves.[11][16]

Butler's testimony in detail

Smedley Butler describes the alleged plot in 1933

1933

On July 1, 1933, Butler met with MacGuire and Doyle for the first time. Gerald C. MacGuire was a $100-a-week bond salesman for Grayson Murphy & Company[17][18] and a member of the Connecticut American Legion.[19][20] Bill Doyle was commander of the Massachusetts American Legion.[21] Butler stated that he was asked to run for National Commander of the American Legion.[22]

On July 3 or 4, Butler held a second meeting with MacGuire and Doyle. He stated that they offered to get hundreds of supporters at the American Legion convention to ask for a speech.[23] MacGuire left a typewritten speech with Butler that they proposed he read at the convention. "It urged the American Legion convention to adopt a resolution calling for the United States to return to the gold standard, so that when veterans were paid the bonus promised to them, the money they received would not be worthless paper."[10] The inclusion of this demand further increased Butler's suspicion.

Around August 1, MacGuire visited Butler alone. Butler stated that MacGuire told him Grayson Murphy underwrote the formation of the American Legion in New York and Butler told MacGuire that the American Legion was "nothing but a strike breaking outfit."[24] Butler never saw Doyle again.

On September 24,[25][26] MacGuire visited Butler's hotel room in Newark.[27] In late-September Butler met with Robert Sterling Clark.[28] Clark was an art collector and an heir to the Singer Corporation fortune.[29][30] MacGuire had known Robert S. Clark when he was a second lieutenant in China during the Boxer Rebellion. Clark had been nicknamed "the millionaire lieutenant".[30]

1934

During the first half of 1934, MacGuire traveled to Europe and mailed postcards to Butler.[31] On March 6, MacGuire wrote Clark and Clark's attorney a letter describing the Croix-de-Feu.[32]

On August 22, Butler met MacGuire at a hotel, the last time Butler met MacGuire.[33][34] According to Butler's account, it was on this occasion that MacGuire asked Butler to run a new veterans' organization and lead a coup attempt against the President.

On September 13, Paul Comly French, a reporter who had once been Butler's personal secretary,[35] met MacGuire in his office.[36] In late September, Butler told Van Zandt that co-conspirators would be meeting him at an upcoming Veterans of Foreign Wars convention.

On November 20, the Committee began examining evidence. Journalist Paul Comly French broke the story in the Philadelphia Record and New York Post on November 21.[37] On November 22, The New York Times wrote its first article on the story and described it as a "gigantic hoax".[2][38]

Committee reports

The Congressional committee preliminary report said:

This committee has had no evidence before it that would in the slightest degree warrant calling before it such men as John W. Davis, Gen. Hugh Johnson, General Harbord, Thomas W. Lamont, Admiral Sims, or Hanford MacNider.


The committee will not take cognizance of names brought into the testimony which constitute mere hearsay.
This committee is not concerned with premature newspaper accounts especially when given and published prior to the taking of the testimony.


As the result of information which has been in possession of this committee for some time, it was decided to hear the story of Maj. Gen. Smedley D. Butler and such others as might have knowledge germane to the issue. ...

The Congressional committee final report said:

In the last few weeks of the committee's official life it received evidence showing that certain persons had made an attempt to establish a fascist organization in this country. No evidence was presented and this committee had none to show a connection between this effort and any fascist activity of any European country. There is no question that these attempts were discussed, were planned, and might have been placed in execution when and if the financial backers deemed it expedient.


This committee received evidence from Maj. Gen Smedley D. Butler (retired), twice decorated by the Congress of the United States. He testified before the committee as to conversations with one Gerald C. MacGuire in which the latter is alleged to have suggested the formation of a fascist army under the leadership of General Butler.


MacGuire denied these allegations under oath, but your committee was able to verify all the pertinent statements made by General Butler, with the exception of the direct statement suggesting the creation of the organization. This, however, was corroborated in the correspondence of MacGuire with his principal, Robert Sterling Clark, of New York City, while MacGuire was abroad studying the various forms of veterans organizations of Fascist character.[39]

Contemporary reaction

A New York Times editorial dismissed Butler's story as "a gigantic hoax" and a "bald and unconvincing narrative."[2][38] Thomas W. Lamont of J.P. Morgan called it "perfect moonshine".[38] General Douglas MacArthur, alleged to be the back-up leader of the putsch if Butler declined, referred to it as "the best laugh story of the year."[38] Time magazine and other publications also scoffed at the allegations.

When the committee released its report, editorials remained skeptical. Time wrote: "Also last week the House Committee on Un-American Activities purported to report that a two-month investigation had convinced it that General Butler's story of a Fascist march on Washington was alarmingly true." The New York Times reported that the committee "alleged that definite proof had been found that the much publicized Fascist march on Washington, which was to have been led by Major. Gen. Smedley D. Butler, retired, according to testimony at a hearing, was actually contemplated."[40][41]

Separately, Veterans of Foreign Wars commander James E. Van Zandt stated to the press, "Less than two months" after General Butler warned him, "he had been approached by 'agents of Wall Street' to lead a Fascist dictatorship in the United States under the guise of a 'Veterans Organization'."[42]

In 1936, William Dodd, the U.S. Ambassador to Germany, wrote a letter to President Roosevelt in which he stated,

A clique of U.S. industrialists is hell-bent to bring a fascist state to supplant our democratic government and is working closely with the fascist regime in Germany and Italy. I have had plenty of opportunity in my post in Berlin to witness how close some of our American ruling families are to the Nazi regime. ... A prominent executive of one of the largest corporations, told me point blank that he would be ready to take definite action to bring fascism into America if President Roosevelt continued his progressive policies. Certain American industrialists had a great deal to do with bringing fascist regimes into being in both Germany and Italy. They extended aid to help Fascism occupy the seat of power, and they are helping to keep it there. Propagandists for fascist groups try to dismiss the fascist scare. We should be aware of the symptoms. When industrialists ignore laws designed for social and economic progress they will seek recourse to a fascist state when the institutions of our government compel them to comply with the provisions.[43][44][45]

Later reactions

Pulitzer Prize-winning historian Arthur M. Schlesinger, Jr. said, "Most people agreed with Mayor La Guardia of New York in dismissing it as a 'cocktail putsch'."[46] In Schlesinger's summation of the affair, "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."[6]

Robert F. Burk wrote: "At their core, the accusations probably consisted of a mixture of actual attempts at influence peddling by a small core of financiers with ties to veterans organizations and the self-serving accusations of Butler against the enemies of his pacifist and populist causes."[3]

Hans Schmidt wrote: "Even if Butler was telling the truth, as there seems little reason to doubt, there remains the unfathomable problem of MacGuire's motives and veracity. He may have been working both ends against the middle, as Butler at one point suspected. In any case, MacGuire emerged from the HUAC hearings as an inconsequential trickster whose base dealings could not possibly be taken alone as verifying such a momentous undertaking. If he was acting as an intermediary in a genuine probe, or as agent provocateur sent to fool Butler, his employers were at least clever enough to keep their distance and see to it that he self-destructed on the witness stand."[4]

Sources

  • Archer, Jules (2007) [1973]. The Plot to Seize the White House. New York, NY: Skyhorse Publishing. ISBN 1-60239-036-3. Book Information and Chapter 
  • Denton, Sally (2012). The Plots Against the President: FDR, A Nation in Crisis, and the Rise of the American Right. Bloomsbury Press. ISBN 978-1-60819-089-8.  Interview of the author and an excerpt are available at NPR's "When The Bankers Plotted To Overthrow FDR" here
  • Feran, Tim (1999-02-12). "History Channel Looks At Plot to Oust FDR". Columbus Dispatch (Ohio): 1H. 
  • Schlesinger Jr., Arthur M. (2003). The Politics of Upheaval: 1935–1936, The Age of Roosevelt, Volume III (The Age of Roosevelt). Mariner Books. ISBN 0-618-34087-4. 
  • Schmidt, Hans (1998). Maverick Marine: General Smedley D. Butler and the Contradictions of American Military History. University Press of Kentucky. ISBN 0-8131-0957-4. 
  • Seldes, George (1947). 1000 Americans: The Real Rulers of the U.S.A. Boni & Gaer. ASIN: B000ANE968. pp. 292–298 
  • Spivak, John L. (1967). A Man in His Time. Horizon Press. ASIN: B0007DMOCW.  pp. 294–298 .
  • Offner, Arnold A. American Appeasement: United States Foreign Policy and Germany, 1933–1938 (Harvard University Press, 1969)

References

  1. ↑ Schlesinger, p. 85
  2. 1 2 3 "Credulity Unlimited". The New York Times. November 22, 1934.
  3. 1 2 Burk, Robert F. (1990). The Corporate State and the Broker State: The Du Ponts and American National Politics, 1925–1940. Harvard University Press. ISBN 0-674-17272-8.
  4. 1 2 Schmidt p. 226, 228, 229, 230
  5. ↑ Fox (2007). The Clarks of Cooperstown. Knopf. ISBN 0-307-26347-9.
  6. 1 2 Schlesinger, p. 83
  7. 1 2 Schmidt, p. 219 "Declaring himself a "Hoover-for-Ex-President Republican," Smedley used the bonus issue and the army's use of gas in routing the "Bonus Expeditionary Force"  – recalling infamous gas warfare during the Great War  – to disparage Hoover during the 1932 general elections. He came out for the Democrats "despite the fact that my family for generations has been Republican," and shared the platform when Republican Senator George W. Norris opened a coast-to-coast stump for FDR in Philadelphia....Butler was pleased with the election results that saw Hoover defeated; although he admitted that he had exerted himself in the campaign more "to get rid of Hoover than to put in Roosevelt," and to "square a debt." FDR, his old Haiti ally, was a "nice fellow" and might make a good president, but Smedley did not expect much influence in the new administration."
  8. ↑ Smedley D. Butler, War is a Racket (Los Angeles: Feral House, 1935, 2003), 26
  9. ↑ Peter L. Bernstein (2000). The Power of Gold: the history of an obsession. NY, NY: John Wiley & Sons.
  10. 1 2 Jules Archer (1973). The Plot to Seize the White House: The Shocking True Story of the Conspiracy to Overthrow FDR. Skyhorse Publishing.
  11. 1 2 Archer, p. x (Foreword)
  12. ↑ Archer, p. 155.
  13. ↑ Schmidt, p. 231
  14. ↑ Public Statement on Preliminary findings of HUAC, November 24, 1934, page 1
  15. ↑ Archer, p. 189
  16. ↑ Schmidt, p. 229
  17. ↑ Schmidt, p. 224
  18. ↑ s:McCormack–Dickstein Committee#Testimony of Gerald C. Macguire
  19. ↑ Archer, p. 6.
  20. ↑ This contradicts MacGuire's testimony: "You are a past department commander in the American Legion?" "No, sir; never held an office in the American Legion I have just been a Legionnaire—oh, I beg your pardon. I did hold one office. I was on the distinguished guest committee of the Legion in 1933, I believe." Wikisource: McCormack–Dickstein Committee report, testimony of Gerald C. MacGuire
  21. ↑ Archer, p. 6
  22. ↑ Wikisource: McCormack–Dickstein Committee report, p. 1
  23. ↑ Wikisource: McCormack–Dickstein Committee report
  24. ↑ Wikisource: McCormack–Dickstein Committee report
  25. ↑ Archer, p. 178
  26. ↑ Wikisource: McCormack–Dickstein Committee report, p. 20
  27. ↑ Wikisource: McCormack–Dickstein Committee report
  28. ↑ Wikisource: McCormack–Dickstein Committee report
  29. ↑ Schmidt, p. 239, 241
  30. 1 2 Archer, p. 14
  31. ↑ Wikisource: McCormack–Dickstein Committee report, p. 3
  32. ↑ Wikisource: McCormack–Dickstein Committee report, p. 10
  33. ↑ Archer, p. 153
  34. ↑ Wikisource: McCormack–Dickstein Committee report, p. 3 and p. 20
  35. ↑ Mennonite Church Historical Archives Paul French Biographical Information
  36. ↑ Wikisource: McCormack–Dickstein Committee report, pg. 5
  37. ↑ Archer, p. 139
  38. 1 2 3 4 Schmidt, Hans (1998). Maverick Marine (reprint, illustrated ed.). University Press of Kentucky. p. 224. ISBN 0-8131-0957-4.
  39. ↑ 74th Congress House of Representatives Report, pursuant to House Resolution No. 198, 73d Congress, February 15, 1935. Quoted in: George Seldes, 1000 Americans (1947), pp. 290–292. See also Schmidt, p. 245
  40. ↑ "Plot Without Plotters". Time magazine. 1934-12-03.
    "Gen. Butler Bares 'Fascist Plot' To Seize Government by Force; Says Bond Salesman, as Representative of Wall St. Group, Asked Him to Lead Army of 500,000 in March on Capital – Those Named Make Angry Denials – Dickstein Gets Charge.". The New York Times: 1. 1934-11-21.;
    Philadelphia Record, November 21 and 22, 1934;Time magazine, February 25, 1935: "Also last week the House Committee on Un-American Activities purported to report that a two-month investigation had convinced it that General Butler's story of a Fascist march on Washington was alarmingly true."
    The New York Times February 16, 1935. p. 1, "Asks Laws To Curb Foreign Agitators; Committee In Report To House Attacks Nazis As The Chief Propagandists In Nation. State Department Acts Checks Activities Of An Italian Consul – Plan For March On Capital Is Held Proved. Asks Laws To Curb Foreign Agitators, "Plan for “March” Recalled. It also alleged that definite proof had been found that the much publicized Fascist march on Washington, which was to have been led by Major. Gen. Smedley D. Butler, retired, according to testimony at a hearing, was actually contemplated. The committee recalled testimony by General Butler, saying he had testified that Gerald C. MacGuire had tried to persuade him to accept the leadership of a Fascist army."
  41. ↑ Archer, p. 173
    Philadelphia Post, November 22, 1934
  42. ↑ Schlesinger, p 85; Wolfe, Part IV: "But James E. Van Zandt, national commander of the Veterans of Foreign Wars and subsequently a Republican congressman, corroborated Butler's story and said that he, too, had been approached by "agents of Wall Street". "Zandt had been called immediately after the August 22 meeting with MacGuire by Butler and warned that...he was going to be approached by the coup plotters for his support at an upcoming VFW convention. He said that, just as Butler had warned, he had been approached "by agents of Wall Street" who tried to enlist him in their plot.""Says Butler Described. Offer.". The New York Times: 3. 1934-11-23. Quoted material from the NYT
    Schmidt, p. 224 But James E. Van Zandt, national commander of the Veterans of Foreign Wars and subsequently a Republican congressman, corroborated Butler's story and said that he, too, had been approached by "agents of Wall Street."
    Archer, p.3, 5, 29, 32, 129, 176.
  43. ↑ Offner, 204
  44. ↑ Ford, 452
  45. ↑ The New York Times: "Dodd Resigns Post as Envoy to Reich; Wilson Successor," December 8, 1937. Retrieved March 16, 2011
  46. ↑ Wolfe, Part IV: "New York's Mayor Fiorello LaGuardia,..  a (supporter) of the fascist program of Mussolini, coined the term cocktail putsch to describe the Butler story: It's a joke of some kind, he told the wire services, "someone at a party had suggested the idea to the ex-marine as a joke."

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