Business Plot
Encyclopedia
The Business Plot was an alleged political conspiracy
in 1933. Retired Marine Corps
Major General
Smedley Butler
claimed that wealthy businessmen were plotting to create a fascist
veterans' organization and use it in a coup d’état to overthrow United States President Franklin D. Roosevelt
, with Butler as leader of that organization. In 1934 Butler testified to the McCormack–Dickstein Congressional committee
on these claims. In the opinion of the committee, these allegations were credible. No one was prosecuted.
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. Contemporaneous media
dismissed the plot, with a New York Times editorial characterizing it as a "gigantic hoax". When the committee's final report was released, the Times said the committee "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" and "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".
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 them according to the World War Adjusted Compensation Act
of 1924. This "Bonus Army
" was led by Walter W. Waters
, a former Army sergeant. The Army was encouraged by an appearance from retired Marine Corps
Major General
Smedley Butler
, who had some influence over the veterans, being a popular military figure of the time. A few days after Butler's arrival, President Herbert Hoover
ordered the marchers removed, and their camps were destroyed by US Army cavalry troops under the command of General Douglas MacArthur
.
Butler, although a self-described Republican, responded by supporting Franklin D. Roosevelt
in the 1932 US presidential election.
By 1933 Butler was denouncing capitalism and bankers, confessing that as a Marine general "I was a racketeer for capitalism."
The Hoover
administration had steadfastly defended the gold standard
even when Britain abandoned it in September 1931. With a devalued currency British manufactured goods became cheaper than American counterparts, resulting in more economic hardship for American industry. Roosevelt's campaign had promised to re-evaluate America's commitment to the gold standard, and through a series of actions from March 6 to April 18, 1933 abandoned it.
Conservative businessmen and other supporters of the gold standard were dismayed. Hoover who had championed the standard wrote that its abandonment was the first step toward "communism, fascism, socialism, statism, planned economy." He argued that the standard was needed to stop governments from "confiscating the savings of the people by manipulation of inflation and deflation....We have gold because we cannot trust Governments."
Roosevelt also dissolved any "gold clause" within contracts public or private that guaranteed payment in gold. This clause was part of every government bond and most corporate bonds, "It was a standard feature of mortgage agreements and other contracts. For creditors, it offered protection against inflation or congressional tinkering with the currency." For debtors though it was dangerous as "The gold dollar, before Roosevelt reduced it, was $1.69. This meant that a bank, for example, could suddenly require a farmer to make mortgage payments in gold coin-transferring a $10,000 mortgage into one worth $16,900, raising the farmer's debt burden by nearly 70 percent." Likewise the U.S treasury could be required to pay the bearer of a $10,000 Liberty Bond $16,900 in gold coins. (The constitutionality of this Roosevelt policy was later challenged before the Supreme Court in the Gold Clause Cases
.)
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."
Ending the gold standard allowed the country to escape the cycle of deflation, but the shift was not painless, "Since higher prices were not yet accompanied by higher wages, inflation meant lower [real] incomes for those fortunate enough to be employed. Until the effects of increased investment spending ramified through the economy, there was little reason for investment incomes and hence consumption to rise dramatically. Industrial production remained volatile". The problem was a lack of any measures for stimulus to accompany the new policy, there was no increased provision of money and credit.
To encourage foreign investment Roosevelt had the Reconstruction Finance Corporation
purchase gold with dollars thereby driving up the price of gold and reducing the value of the dollar. Still this did not immediately affect the balance of trade. Those considering buying American goods anticipated that there would be a further depreciation which would allow their own currency further purchasing power and therefore greater profits, so they held back their orders. At the same time Americans fearing additional depreciation purchased more foreign commodities in fear they would lose purchasing power in the future; "The volume of U.S. imports rose by 10 percent between 1932 and 1933. In contrast, exports stagnated. The consequence was a deteriorating balance of trade."
Another Roosevelt policy also had an unanticipated effect on the recovery: the National Industrial Recovery Act
of June 16, 1933 provided established minimum wages of 40 cents an hour and revised upward the entire wage structure of many of the industries it covered; this placed upward pressure on labor costs.
The sustained recovery of industrial production "had to await stabilization of the dollar in 1934, along with the concomitant growth of commodity exports and capital imports."
During the McCormack–Dickstein Committee hearings, Butler testified that 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.
Despite Butler's support for Roosevelt in the election, and his reputation as a strong critic of capitalism, 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.
Though Butler had never spoken to them, Butler implicated several prominent businessmen, including chemical industrialist Irénée du Pont
, and veteran leaders as backers of the plot. The committee chose not to publish these allegations because they were hearsay
.
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
."
In response, Butler said that the committee had deliberately edited out of its published findings the leading business people whom he had named in connection with the plot. He said on February 17, 1935 on Radio WCAU, "Like most committees it has slaughtered the little and allowed the big to escape. The big shots weren't even called to testify. They were all mentioned in the testimony. Why was all mention of these names suppressed from the testimony?"
On the final day of the committee, 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 Fascist conspiracy of financiers and Jews to take over the U.S. government.
.
On July 3 or 4, Butler held a second meeting with MacGuire and Doyle. He stated they offered to get hundreds of supporters at the American Legion
convention to ask for a speech. 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." The inclusion of this demand further increased Butler's suspicion.
Around August 1 MacGuire visited Butler alone. Butler stated that MacGuire told him Col. 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." Butler never saw Doyle again.
On September 24, MacGuire visited Butler's hotel room in Newark
. In late-September Butler met with Robert Sterling Clark
. Clark was an art collector and an heir to the Singer Corporation
fortune. 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."
.
On August 22, Butler met MacGuire at a hotel, the last time Butler met MacGuire. 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, met MacGuire in his office. 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. On November 22, The New York Times
wrote its first article on the story and described it as a "gigantic hoax."
The Congressional committee final report said:
editorial dismissed Butler's story as "a gigantic hoax" and a "bald and unconvincing narrative." Thomas W. Lamont of J.P. Morgan called it "perfect moonshine." 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." 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".
Separately, Veterans of Foreign Wars commander James E. Van Zandt
stated to the press that, "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' ".
-winning historian Arthur M. Schlesinger, Jr. said, "Most people agreed with Mayor La Guardia of New York in dismissing it as a 'cocktail putsch' 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".
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."
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."
Many years later, McCormick continued to vouch for Butler: "General Smedley Butler was one of the outstanding Americans in our history. I cannot emphasize too strongly the very important part he played in exposing the Fascist plot in the early 1930s backed by and planned by persons possessing tremendous wealth."
In a book about art collector Robert Sterling Clark, art historian and non-profit executive Nicholas Fox Weber wrote: "Butler's testimony to the House Committee, which was played down in the newspaper and magazine accounts at the time, and made to seem largely specious by influential commentators, seems credible about the attempt to overthrow FDR, and Robert Sterling Clark's role in it. Butler's Claims, moreover, were supported by the committee's subsequent investigations and conclusions."
James E. Sargent, reviewing The Plot to Seize the White House by Jules Archer, wrote: "Thus, Butler (and Archer) assumed that the existence of a financially-backed plot meant that fascism was imminent, and that the planners represented a widespread and coherent group, having both the intent and the capacity to execute their ideas. So, when his testimony was criticized, and even ridiculed, in the media, and ignored in Washington, Butler saw (and Archer sees) conspiracy everywhere. Instead, it is plausible to conclude that the honest and straightforward, but intellectually and politically unsophisticated, Butler perceived in simplistic terms what were, in fact, complex trends and events. Thus, he leaped to the simplistic conclusion that the President and the Republic were in mortal danger. In essence, Archer swallowed his hero whole".
John Buchanan
said, "The investigations mysteriously turned to vapor when it comes time to call them to testify. FDR's main interest was getting the New Deal
passed, and so he struck a deal in which it was agreed that the plotters would walk free if Wall Street would back off of their opposition to the New Deal and let FDR do what he wanted". The program connected major companies to the American Liberty League
, formed by Al Smith
, who, the program asserted, was to be the fascist ruler.
Conspiracy (political)
In a political sense, conspiracy refers to a group of persons united in the goal of usurping or overthrowing an established political power. Typically, the final goal is to gain power through a revolutionary coup d'état or through assassination....
in 1933. Retired Marine Corps
United States Marine Corps
The United States Marine Corps is a branch of the United States Armed Forces responsible for providing power projection from the sea, using the mobility of the United States Navy to deliver combined-arms task forces rapidly. It is one of seven uniformed services of the United States...
Major General
Major general (United States)
In the United States Army, United States Marine Corps, and United States Air Force, major general is a two-star general-officer rank, with the pay grade of O-8. Major general ranks above brigadier general and below lieutenant general...
Smedley Butler
Smedley Butler
Smedley Darlington Butler was a Major General in the U.S. Marine Corps, an outspoken critic of U.S. military adventurism, and at the time of his death the most decorated Marine in U.S...
claimed that wealthy businessmen were plotting to create a fascist
Fascism
Fascism is a radical authoritarian nationalist political ideology. Fascists seek to rejuvenate their nation based on commitment to the national community as an organic entity, in which individuals are bound together in national identity by suprapersonal connections of ancestry, culture, and blood...
veterans' organization and use it in a coup d’état to overthrow United States President Franklin D. Roosevelt
Franklin D. Roosevelt
Franklin Delano Roosevelt , also known by his initials, FDR, was the 32nd President of the United States and a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war...
, with Butler as leader of that organization. In 1934 Butler testified to the McCormack–Dickstein Congressional committee
United States Congressional committee
A congressional committee is a legislative sub-organization in the United States Congress that handles a specific duty . Committee membership enables members to develop specialized knowledge of the matters under their jurisdiction...
on these claims. In the opinion of the committee, these allegations were credible. No one was prosecuted.
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. Contemporaneous media
News media
The news media are those elements of the mass media that focus on delivering news to the general public or a target public.These include print media , broadcast news , and more recently the Internet .-Etymology:A medium is a carrier of something...
dismissed the plot, with a New York Times editorial characterizing it as a "gigantic hoax". When the committee's final report was released, the Times said the committee "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" and "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".
Butler and the veterans
On July 17, 1932, thousands of World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
veterans converged on Washington, D.C.
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
, set up tent camps, and demanded immediate payment of bonuses due them according to the World War Adjusted Compensation Act
World War Adjusted Compensation Act
The World War Adjusted Compensation Act, or Bonus Act, was a United States federal law passed on May 19, 1924, that granted a benefit to veterans of American military service in World War I.-Provisions:...
of 1924. This "Bonus Army
Bonus Army
The Bonus Army was the popular name of an assemblage of some 43,000 marchers—17,000 World War I veterans, their families, and affiliated groups—who gathered in Washington, D.C., in the spring and summer of 1932 to demand immediate cash-payment redemption of their service certificates...
" was led by Walter W. Waters
Walter W. Waters
Walter W. Waters of Portland, Oregon, was a former Army Sergeant in the United States Army who, in May 1932, led the 20,000-strong army of World War I veterans called the Bonus Army on their march to Washington, D.C....
, a former Army sergeant. The Army was encouraged by an appearance from retired Marine Corps
United States Marine Corps
The United States Marine Corps is a branch of the United States Armed Forces responsible for providing power projection from the sea, using the mobility of the United States Navy to deliver combined-arms task forces rapidly. It is one of seven uniformed services of the United States...
Major General
Major General
Major general or major-general is a military rank used in many countries. It is derived from the older rank of sergeant major general. A major general is a high-ranking officer, normally subordinate to the rank of lieutenant general and senior to the ranks of brigadier and brigadier general...
Smedley Butler
Smedley Butler
Smedley Darlington Butler was a Major General in the U.S. Marine Corps, an outspoken critic of U.S. military adventurism, and at the time of his death the most decorated Marine in U.S...
, who had some influence over the veterans, being a popular military figure of the time. A few days after Butler's arrival, President Herbert Hoover
Herbert Hoover
Herbert Clark Hoover was the 31st President of the United States . Hoover was originally a professional mining engineer and author. As the United States Secretary of Commerce in the 1920s under Presidents Warren Harding and Calvin Coolidge, he promoted partnerships between government and business...
ordered the marchers removed, and their camps were destroyed by US Army cavalry troops under the command of General Douglas MacArthur
Douglas MacArthur
General of the Army Douglas MacArthur was an American general and field marshal of the Philippine Army. He was a Chief of Staff of the United States Army during the 1930s and played a prominent role in the Pacific theater during World War II. He received the Medal of Honor for his service in the...
.
Butler, although a self-described Republican, responded by supporting Franklin D. Roosevelt
Franklin D. Roosevelt
Franklin Delano Roosevelt , also known by his initials, FDR, was the 32nd President of the United States and a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war...
in the 1932 US presidential election.
By 1933 Butler was denouncing capitalism and bankers, confessing that as a Marine general "I was a racketeer for capitalism."
Reaction to Roosevelt
The election of Roosevelt was upsetting for many conservative businessmen of the time, 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."The Hoover
Herbert Hoover
Herbert Clark Hoover was the 31st President of the United States . Hoover was originally a professional mining engineer and author. As the United States Secretary of Commerce in the 1920s under Presidents Warren Harding and Calvin Coolidge, he promoted partnerships between government and business...
administration had steadfastly defended the gold standard
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of gold standard...
even when Britain abandoned it in September 1931. With a devalued currency British manufactured goods became cheaper than American counterparts, resulting in more economic hardship for American industry. Roosevelt's campaign had promised to re-evaluate America's commitment to the gold standard, and through a series of actions from March 6 to April 18, 1933 abandoned it.
Conservative businessmen and other supporters of the gold standard were dismayed. Hoover who had championed the standard wrote that its abandonment was the first step toward "communism, fascism, socialism, statism, planned economy." He argued that the standard was needed to stop governments from "confiscating the savings of the people by manipulation of inflation and deflation....We have gold because we cannot trust Governments."
Roosevelt also dissolved any "gold clause" within contracts public or private that guaranteed payment in gold. This clause was part of every government bond and most corporate bonds, "It was a standard feature of mortgage agreements and other contracts. For creditors, it offered protection against inflation or congressional tinkering with the currency." For debtors though it was dangerous as "The gold dollar, before Roosevelt reduced it, was $1.69. This meant that a bank, for example, could suddenly require a farmer to make mortgage payments in gold coin-transferring a $10,000 mortgage into one worth $16,900, raising the farmer's debt burden by nearly 70 percent." Likewise the U.S treasury could be required to pay the bearer of a $10,000 Liberty Bond $16,900 in gold coins. (The constitutionality of this Roosevelt policy was later challenged before the Supreme Court in the Gold Clause Cases
Gold Clause Cases
The Gold Clause Cases were a series of actions brought before the Supreme Court of the United States, in which the court narrowly upheld restrictions on the ownership of gold implemented by the administration of U.S. President Franklin D. Roosevelt in order to fight the Great Depression. The cases...
.)
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."
Ending the gold standard allowed the country to escape the cycle of deflation, but the shift was not painless, "Since higher prices were not yet accompanied by higher wages, inflation meant lower [real] incomes for those fortunate enough to be employed. Until the effects of increased investment spending ramified through the economy, there was little reason for investment incomes and hence consumption to rise dramatically. Industrial production remained volatile". The problem was a lack of any measures for stimulus to accompany the new policy, there was no increased provision of money and credit.
To encourage foreign investment Roosevelt had the Reconstruction Finance Corporation
Reconstruction Finance Corporation
The Reconstruction Finance Corporation was an independent agency of the United States government, established and chartered by the US Congress in 1932, Act of January 22, 1932, c. 8, 47 Stat. 5, during the administration of President Herbert Hoover. It was modeled after the War Finance Corporation...
purchase gold with dollars thereby driving up the price of gold and reducing the value of the dollar. Still this did not immediately affect the balance of trade. Those considering buying American goods anticipated that there would be a further depreciation which would allow their own currency further purchasing power and therefore greater profits, so they held back their orders. At the same time Americans fearing additional depreciation purchased more foreign commodities in fear they would lose purchasing power in the future; "The volume of U.S. imports rose by 10 percent between 1932 and 1933. In contrast, exports stagnated. The consequence was a deteriorating balance of trade."
Another Roosevelt policy also had an unanticipated effect on the recovery: the National Industrial Recovery Act
National Industrial Recovery Act
The National Industrial Recovery Act , officially known as the Act of June 16, 1933 The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933 The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933 (Ch. 90, 48 Stat. 195, formerly...
of June 16, 1933 provided established minimum wages of 40 cents an hour and revised upward the entire wage structure of many of the industries it covered; this placed upward pressure on labor costs.
The sustained recovery of industrial production "had to await stabilization of the dollar in 1934, along with the concomitant growth of commodity exports and capital imports."
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.During the McCormack–Dickstein Committee hearings, Butler testified that MacGuire attempted to recruit him to lead a coup, promising him an army of 500,000 men for a march on Washington, D.C.
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
, and financial backing. Butler testified that the pretext for the coup would be that the president's health was failing.
Despite Butler's support for Roosevelt in the election, and his reputation as a strong critic of capitalism, 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.
Though Butler had never spoken to them, Butler implicated several prominent businessmen, including chemical industrialist Irénée du Pont
Irénée du Pont
Irénée du Pont was a U.S. businessman, former president of the DuPont company and head of the Du Pont trust.-Biography:A descendant of Eleuthère Irénée du Pont, he graduated from Andover in 1894 and MIT in 1897, then worked for Fenn’s Manufacturing Contracting Company for a number of years before...
, and veteran leaders as backers of the plot. The committee chose not to publish these allegations because they were hearsay
Hearsay
Hearsay is information gathered by one person from another person concerning some event, condition, or thing of which the first person had no direct experience. When submitted as evidence, such statements are called hearsay evidence. As a legal term, "hearsay" can also have the narrower meaning of...
.
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
Figurehead
A figurehead is a carved wooden decoration found at the prow of ships largely made between the 16th and 19th century.-History:Although earlier ships had often had some form of bow ornamentation A figurehead is a carved wooden decoration found at the prow of ships largely made between the 16th and...
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
Hearsay
Hearsay is information gathered by one person from another person concerning some event, condition, or thing of which the first person had no direct experience. When submitted as evidence, such statements are called hearsay evidence. As a legal term, "hearsay" can also have the narrower meaning of...
."
In response, Butler said that the committee had deliberately edited out of its published findings the leading business people whom he had named in connection with the plot. He said on February 17, 1935 on Radio WCAU, "Like most committees it has slaughtered the little and allowed the big to escape. The big shots weren't even called to testify. They were all mentioned in the testimony. Why was all mention of these names suppressed from the testimony?"
On the final day of the committee, January 29, 1935, John L. Spivak
John L. Spivak
John Louis Spivak , an American socialist and later communist reporter and author, wrote about the problems of the working class, racism, and the spread of fascism and anti-Semitism in Europe and the United States. Most of his writings date from the 1920s and 1930s...
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
Hearsay
Hearsay is information gathered by one person from another person concerning some event, condition, or thing of which the first person had no direct experience. When submitted as evidence, such statements are called hearsay evidence. As a legal term, "hearsay" can also have the narrower meaning of...
. Spivak argued that the plot was part of a Fascist conspiracy of financiers and Jews to take over the U.S. government.
Butler's testimony in detail
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 Murphy & Company, and member of the Connecticut American Legion. Bill Doyle was commander of the Massachusetts American Legion. Butler stated he was asked to run for National Commander of the American LegionAmerican Legion
The American Legion is a mutual-aid organization of veterans of the United States armed forces chartered by the United States Congress. It was founded to benefit those veterans who served during a wartime period as defined by Congress...
.
On July 3 or 4, Butler held a second meeting with MacGuire and Doyle. He stated they offered to get hundreds of supporters at the American Legion
American Legion
The American Legion is a mutual-aid organization of veterans of the United States armed forces chartered by the United States Congress. It was founded to benefit those veterans who served during a wartime period as defined by Congress...
convention to ask for a speech. 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." The inclusion of this demand further increased Butler's suspicion.
Around August 1 MacGuire visited Butler alone. Butler stated that MacGuire told him Col. Murphy underwrote the formation of the American Legion in New York, and Butler told MacGuire that the American Legion
American Legion
The American Legion is a mutual-aid organization of veterans of the United States armed forces chartered by the United States Congress. It was founded to benefit those veterans who served during a wartime period as defined by Congress...
was "nothing but a strike breaking outfit." Butler never saw Doyle again.
On September 24, MacGuire visited Butler's hotel room in Newark
Newark, New Jersey
Newark is the largest city in the American state of New Jersey, and the seat of Essex County. As of the 2010 United States Census, Newark had a population of 277,140, maintaining its status as the largest municipality in New Jersey. It is the 68th largest city in the U.S...
. In late-September Butler met with Robert Sterling Clark
Robert Sterling Clark
Robert Sterling Clark , heir to the Singer Sewing Machine fortune, was an American art collector, horse breeder, and philanthropist.-Biography:...
. Clark was an art collector and an heir to the Singer Corporation
Singer Corporation
Singer Corporation is a manufacturer of sewing machines, first established as I.M. Singer & Co. in 1851 by Isaac Merritt Singer with New York lawyer Edward Clark. Best known for its sewing machines, it was renamed Singer Manufacturing Company in 1865, then The Singer Company in 1963. It is...
fortune. MacGuire had known Robert S. Clark when he was a second lieutenant in China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
during the Boxer Rebellion
Boxer Rebellion
The Boxer Rebellion, also called the Boxer Uprising by some historians or the Righteous Harmony Society Movement in northern China, was a proto-nationalist movement by the "Righteous Harmony Society" , or "Righteous Fists of Harmony" or "Society of Righteous and Harmonious Fists" , in China between...
. Clark had been nicknamed "the millionaire lieutenant."
1934
During the first half of 1934 MacGuire traveled to Europe, and mailed post cards to Butler. On March 6, MacGuire wrote Clark and Clark's attorney a letter describing the Croix-de-FeuCroix-de-Feu
Croix-de-Feu was a French far right league of the Interwar period, led by Colonel François de la Rocque . After it was dissolved, as were all other far right leagues during the Popular Front period , de la Rocque replaced it with the Parti social français .- Beginnings :The Croix-de-Feu were...
.
On August 22, Butler met MacGuire at a hotel, the last time Butler met MacGuire. 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
Paul Comly French
Paul Comly French was an American reporter, writer, anti-war activist and non-profit executive.-Early life and career:...
, a reporter
Investigative journalism
Investigative journalism is a form of journalism in which reporters deeply investigate a single topic of interest, often involving crime, political corruption, or corporate wrongdoing. An investigative journalist may spend months or years researching and preparing a report. Investigative journalism...
who had once been Butler's personal secretary, met MacGuire in his office. In late September, Butler told Van Zandt that co-conspirators would be meeting him at an upcoming Veterans of Foreign Wars
Veterans of Foreign Wars
The Veterans of Foreign Wars of the United States is a congressionally chartered war veterans organization in the United States. Headquartered in Kansas City, Missouri, VFW currently has 1.5 million members belonging to 7,644 posts, and is the largest American organization of combat...
convention.
On November 20, the Committee began examining evidence. Journalist Paul Comly French
Paul Comly French
Paul Comly French was an American reporter, writer, anti-war activist and non-profit executive.-Early life and career:...
broke the story in the Philadelphia Record and New York Post
New York Post
The New York Post is the 13th-oldest newspaper published in the United States and is generally acknowledged as the oldest to have been published continuously as a daily, although – as is the case with most other papers – its publication has been periodically interrupted by labor actions...
on November 21. On November 22, The New York Times
The New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
wrote its first article on the story and described it as a "gigantic hoax."
Other testimony
Some parts of Gen. Butler's story were supported by the statements of others. Paul Comly French, a reporter for the Philadelphia Record and the New York Evening Post, testified to the same effect.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. DavisJohn W. DavisJohn William Davis was an American politician, diplomat and lawyer. He served as a United States Representative from West Virginia , then as Solicitor General of the United States and US Ambassador to the UK under President Woodrow Wilson...
, Gen. Hugh JohnsonHugh Samuel JohnsonHugh Samuel "Iron Pants" Johnson American Army officer, businessman, speech writer, government official and newspaper columnist. He is best known as a member of the Brain Trust of Franklin D. Roosevelt in 1932-34. He wrote numerous speeches for FDR and helped plan the New Deal...
, General HarbordJames HarbordJames Guthrie Harbord was a Lieutenant General in the United States Army and President and Chairman of the Board of RCA....
, Thomas W. LamontThomas W. LamontThomas William Lamont, Jr. was an American banker.- Biography :Lamont was born in Claverack, New York. He graduated from Phillips Exeter Academy in 1888 and earned his degree from Harvard University in 1892. He became a generous benefactor of the school once he had amassed a fortune, notably...
, Admiral SimsWilliam SimsWilliam Sowden Sims was an admiral in the United States Navy who sought during the late 19th and early 20th centuries to modernize the Navy. During World War I he commanded all United States naval forces operating in Europe...
, or Hanford MacNiderHanford MacNiderHanford “Jack” MacNider was a United States diplomat and United States Army General, serving in both World War I and World War II. He was a Scottish Rite Freemason.-Biography:...
.
- 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.
Contemporary reaction
A New York TimesThe New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
editorial dismissed Butler's story as "a gigantic hoax" and a "bald and unconvincing narrative." Thomas W. Lamont of J.P. Morgan called it "perfect moonshine." General Douglas MacArthur
Douglas MacArthur
General of the Army Douglas MacArthur was an American general and field marshal of the Philippine Army. He was a Chief of Staff of the United States Army during the 1930s and played a prominent role in the Pacific theater during World War II. He received the Medal of Honor for his service in the...
, alleged to be the back-up leader of the putsch if Butler declined, referred to it as "the best laugh story of the year." Time
Time (magazine)
Time is an American news magazine. A European edition is published from London. Time Europe covers the Middle East, Africa and, since 2003, Latin America. An Asian edition is based in Hong Kong...
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".
Separately, Veterans of Foreign Wars commander James E. Van Zandt
James E. Van Zandt
James Edward Van Zandt was a Republican member of the U.S. House of Representatives from Pennsylvania.-Biography:...
stated to the press that, "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' ".
Historians
Pulitzer PrizePulitzer Prize
The Pulitzer Prize is a U.S. award for achievements in newspaper and online journalism, literature and musical composition. It was established by American publisher Joseph Pulitzer and is administered by Columbia University in New York City...
-winning historian Arthur M. Schlesinger, Jr. said, "Most people agreed with Mayor La Guardia of New York in dismissing it as a 'cocktail putsch' 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".
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."
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."
Many years later, McCormick continued to vouch for Butler: "General Smedley Butler was one of the outstanding Americans in our history. I cannot emphasize too strongly the very important part he played in exposing the Fascist plot in the early 1930s backed by and planned by persons possessing tremendous wealth."
In a book about art collector Robert Sterling Clark, art historian and non-profit executive Nicholas Fox Weber wrote: "Butler's testimony to the House Committee, which was played down in the newspaper and magazine accounts at the time, and made to seem largely specious by influential commentators, seems credible about the attempt to overthrow FDR, and Robert Sterling Clark's role in it. Butler's Claims, moreover, were supported by the committee's subsequent investigations and conclusions."
James E. Sargent, reviewing The Plot to Seize the White House by Jules Archer, wrote: "Thus, Butler (and Archer) assumed that the existence of a financially-backed plot meant that fascism was imminent, and that the planners represented a widespread and coherent group, having both the intent and the capacity to execute their ideas. So, when his testimony was criticized, and even ridiculed, in the media, and ignored in Washington, Butler saw (and Archer sees) conspiracy everywhere. Instead, it is plausible to conclude that the honest and straightforward, but intellectually and politically unsophisticated, Butler perceived in simplistic terms what were, in fact, complex trends and events. Thus, he leaped to the simplistic conclusion that the President and the Republic were in mortal danger. In essence, Archer swallowed his hero whole".
Other commentators
The BBC's online précis for its documentary program The White House Coup, said "The coup was aimed at toppling President Franklin D. Roosevelt with the help of half-a-million war veterans." In that documentary, author and conspiracy theoristConspiracy theory
A conspiracy theory explains an event as being the result of an alleged plot by a covert group or organization or, more broadly, the idea that important political, social or economic events are the products of secret plots that are largely unknown to the general public.-Usage:The term "conspiracy...
John Buchanan
John Buchanan (American politician)
John Howard Buchanan is a freelance journalist, and was a fringe Republican candidate in the 2004 Presidential election. Buchanan was previously based in Florida and currently lives in rural Georgia....
said, "The investigations mysteriously turned to vapor when it comes time to call them to testify. FDR's main interest was getting the New Deal
New Deal
The New Deal was a series of economic programs implemented in the United States between 1933 and 1936. They were passed by the U.S. Congress during the first term of President Franklin D. Roosevelt. The programs were Roosevelt's responses to the Great Depression, and focused on what historians call...
passed, and so he struck a deal in which it was agreed that the plotters would walk free if Wall Street would back off of their opposition to the New Deal and let FDR do what he wanted". The program connected major companies to the American Liberty League
American Liberty League
The American Liberty League was an American political organization formed in 1934 by conservative Democrats to oppose the New Deal of Franklin D. Roosevelt. It was active for just two years...
, formed by Al Smith
Al Smith
Alfred Emanuel Smith. , known in private and public life as Al Smith, was an American statesman who was elected the 42nd Governor of New York three times, and was the Democratic U.S. presidential candidate in 1928...
, who, the program asserted, was to be the fascist ruler.
Further reading
pp. 294–298 Excerpts: Socioeconomic and Political Context of the Plot, General Smedley Butler.External links
- U.S. House of Representatives, Special Committee on Un-American Activities, Public Statement, 73rd Congress, 2nd session, (Washington, D.C.: Government Printing Office, 1934)s:McCormack–Dickstein Committee#Public Statement on Preliminary findings of HUAC, November 24, 1934
- U.S. House of Representatives, Special Committee on Un-American Activities, Investigation of Nazi Propaganda Activities and Investigation of Certain Other Propaganda Activities, Hearings 73-D.C.-6, Part 1, 73rd Congress, 2nd session, (Washington, D.C.: Government Printing Office, 1935). Examines Butler's testimony from both sides
- "The Plot Against FDR" History Channel documentary