The Business Plot (also known as the Plot Against FDR or the White House Putsch) was a political conspiracy in 1933 where several wealthy businessmen and corporations planned to overthrow the presidency of Franklin D. Roosevelt.
Details of the plot came to light in early 1934, when retired Marine CorpsMajor GeneralSmedley Butler testified before the McCormack-Dickstein Congressional Committee.[1] In his testimony, Butler claimed that a group of men had approached him as part of a plot to overthrow Roosevelt in a military coup. One of the alleged plotters, Gerald MacGuire, vehemently denied any such plot. In their final report, the Congressional committee supported Butler's allegations of the existence of the plot,[2] but no prosecutions or further investigations followed, and the matter was mostly forgotten.
Shacks, put up by the Bonus Army on the Anacostia flats, Washington, D.C., burning after the battle with the military (1932).
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 Adjusted Service Certificate Law 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 considerable influence over the veterans, being one of the most popular military figures 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 prominent Republican, responded by supporting Roosevelt in that year's election.[3]
In a 1995 History Today article Clayton Cramer argued that the devastation of the Great Depression had caused many Americans to question the foundations of liberal democracy. "Many traditionalists, here and in Europe, toyed with the ideas of Fascism and National Socialism; many liberals dallied with Socialism and Communism." Cramer argues that this explains why some American business leaders viewed fascism as a viable system to both preserve their interests and end the economic woes of the Depression.[4]
Spivak publishes first of two articles in Communist magazine, revealing deleted portion of congressional committee. Spivak argues the plot is part of a Fascist conspiracy of financiers and Jews to take over the USA; he alleges names of big business leaders.
Bill Doyle was commander of the Massachusetts American Legion.[26]
Met Butler with MacGuire on first visit
Robert Sterling Clark
Robert Sterling Clark was an art collector who lived mostly in Paris,citation needed one of Wall Street's richest investors,citation needed and heir to the Singer Sewing Machine fortune.[27][28] MacGurie had known Robert S. Clark when he was a Second Lieutenant in China during the Boxer Rebellion. Clark had been nicknamed "the millionaire lieutenant.[29]
McCormack-Dickstein Committee
The events testified to in the McCormack-Dickstein Committee happened between July and November 1933. The Committee began examining evidence a year later, 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 to the House of Representatives its final report.[20] The McCormack-Dickstein Committee was the precursor to the House Committee on Un-American Activities (HUAC); its materials are archived with those of the HUAC.
During the McCormack-Dickstein Committee hearings, Butler testified that through MacGuire and Bill Doyle, who was then the department commander of the American Legion in Massachusetts,[30] the conspirators attempted to recruit him to lead a coup, promising him an army of 500,000 men for a march on Washington, D.C., $30 million in financial backing,[31] and generous media spin control.
[BUTLER:] I said, "The idea of this great group of soldiers, then, is to sort of frighten him, is it?"
"No, no, no; not to frighten him. This is to sustain him when others assault him."
I said, "Well, I do not know about that. How would the President explain it?"
He said: "He will not necessarily have to explain it, because we are going to help him out. Now, did it ever occur to you that the President is overworked? We might have an Assistant President, somebody to take the blame; and if things do not work out, he can drop him."
He went on to say that it did not take any constitutional change to authorize another Cabinet official, somebody to take over the details of the office-take them off the President's shoulders. He mentioned that the position would be a secretary of general affairs-a sort of a supersecretary.
CHAIRMAN: A secretary of general affairs?
BUTLER: That is the term used by him-or a secretary of general welfare-I cannot recall which. I came out of the interview with that name in my head. I got that idea from talking to both of them, you see [MacGuire and Clark]. They had both talked about the same kind of relief that ought to be given the President, and he [MacGuire] said: "You know, the American people will swallow that. 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."[32]
Despite Butler's support for Roosevelt in the election,[3] 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.
Butler said he spoke for thirty minutes with Gerald C. MacGuire. In attempting to recruit Butler, MacGuire may have played on the general's loyalty toward his fellow veterans. Knowing of an upcoming bonus in 1935 for World War I veterans, Butler said MacGuire told him, "We want to see the soldiers' bonus paid in gold. We do not want the soldier to have rubber money or paper money." Such names as Al Smith, Roosevelt's political foe and former governor of New York, and Irénée du Pont, a chemical industrialist, were said to be the financial and organizational backbone of the plot. Butler stated that once the conspirators were in power, they would protect Roosevelt from other plotters.[33]
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.
Reaction to Butler's testimony by the media and business elite was dismissive or hostile. The majority of media outlets, including The New York Times, Philadelphia Post,[34] and Time Magazine ridiculed or downplayed his claims, saying they lacked evidence. After the committee concluded, The New York Times and Time Magazine downplayed the conclusions of the committee.[35]
The committee deleted extensive excerpts from the report relating to Wall Street financiers including J.P. Morgan & Co., the Du Pont interests, Remington Arms, and others allegedly involved in the plot attempt. As of 1975, a full transcript of the hearings had yet to be traced.[36]
Those accused of the plotting by Butler all denied any involvement. MacGuire was the only figure identified by Butler who testified before the committee. Others involved were actually called to appear to testify, though never were forced to testify.
The Intricate Structure of Wall Street's Fascist Conspiracy, from the February 5, 1935 issue of New Masses magazine. Historian Schmidt wrote Spivak's wider claims were: "overblown aspersions against "Jewish financiers working with fascist groups" -- a mishmash of guilt-by-association...[42]
Reporter "John L. Spivak had been tipped off earlier by a fellow Washington correspondent that some of Butler's testimony had been deleted in the committee's November 26, 1934 report to the House of Representatives..."[43]
"Other newsmen joined (Spivak) in pressing for a copy of the (McCormack-Dickstein Committee report). It was then that the defunct McCormack-Dickstein Committee...decided to publish a 125-page document containing the testimony of Butler, MacGuire, and others, on February 15, 1935. It was marked "Extracts"... "A veteran Washington correspondent told Spivak that he had heard the deletions had been made at the request of a member of the President's Cabinet..."[43]
Spivak "had been tipped-off earlier that the House of Representatives intended to let the McCormack-Dickstein Committee expire on January 3, 1935, rather than renew it as the committee had asked in order to continue its investigations."[43]
"About a week later...Spivak won permission from Dickstein to examine the committee's official exhibits and make photo...copies of those that had been made public [from] the committee's secretary, Frank P. Randolph."[43]
"Randolph, flooded with work involved in closing the committee's files and records, gave Spivak stacks of documents, exhibits, and transcripts of testimony that were being sent to the Government Printing Office. To Spivak's amazement, he found among these records a full transcript of the executive session hearings in the Butler affair."[43]
Spivak "compared it with the official extract of the hearings and found a number of startling omissions made from the testimony of both Butler and French."[43]
Spivak wrote a two part article revealing the committee's deletions.[44] Historian Schmidt explains:
"Journalist John L. Spivak...two-part feature "Wall Street's Fascist Conspiracy" appeared in early 1935, a month after the hearings closed. He cogently developed a case for taking the suppressed testimony seriously. But this relevant material was embellished with overblown aspersions against "Jewish financiers working with fascist groups" -- a mishmash of guilt-by-association that connected Morgan interests with Jewish financier Felix Warburg, HUAC, and certain members of the American Jewish Committee. Spivak was intent upon grinding his own axes, and elucidation of the plot was obscured. The suppressed Butler-MacGuire conversations could hardly support all this. Moreover New Masses possessed a limited readership; the scoop was stigmatized as "red" propaganda and generally not cited elsewhere."[42]
After being told about the deletions by Spivak, in Butler's "broadcast over WCAU on February 17, 1935, Butler revealed that some of the "most important" portions of his testimony had been suppressed in the McCormack-Dickstein report to Congress. The committee, he growled, had "stopped dead in its tracks when it got near the top."[43] He added angrily:
"Like most committees, it has slaughtered the little and allowed the big to escape. The big shots weren't even called to testify. Why wasn't Colonel Grayson M.-P. Murphy, New York broker ... called? Why wasn't Louis Howe, Secretary to the President of the United States, called? ... Why wasn't Al Smith called? And why wasn't Gen. Douglas MacArthur, Chief of Staff of the United States Army, called? And why wasn't Hanford MacNider, former American Legion commander, called? They were all mentioned in the testimony. And why was all mention of these names suppressed from the committee report?"[43][45]
Final resolution
The Congressional committee report confirmed Butler's testimony (emphasis added):
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 government in this 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.[46]
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.[47]
Partial corroboration of Butler's story
Portions of Butler's story were corroborated by:
Veterans of Foreign Wars commander James E. Van Zandt. "Less than two months" after General Butler warned him, he said "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.'"[48]
Captain Samuel Glazier—testifying under oath about plans of a plot to install a dictatorship in the United States.[36][49]
Reporter Paul Comly French, reporter for the Philadelphia Record and the New York Evening Post.[50]
Historical treatment
Several scenarios have been proposed in explaining why the affair did not become a cause celebre, among which are:
The story was an embarrassment to people of influence, who felt it best to deflect attention from the matter as quickly as possible.
In 1934, as they are today, newspapers were controlled by a relatively small elite — according to then-Interior SecretaryHarold L. Ickes, 82% of all dailies had monopolies in their communities. Proponents of the theory thus suggest that the media downplayed Butler's testimony based on the interests of their advertisers and owners.
Some of Roosevelt's advisors were in on the plot, and downplayed it to prevent exposure.
As part of the BBC Radio Document program The Whitehouse coup,[45]John Buchanan suggests that Roosevelt stopped the investigation as part of a political deal: "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."
Those who doubt Butler's testimony claim that it simply lacked evidence.
Historian Robert F. Burk: "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."[51]
Historian Hans Schmidt: "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...MacGuire repeatedly perjured himself...Butler may have blown the whistle on an incipient conspiracy..."[52]
Historian Arthur M. Schlesinger Jr.: "Most people agreed with Mayor La Guardia of New York in dismissing it as a "cocktail putsch"[53]... As for the House committee, headed by John McCormack of Massachusetts, it declared itself "able to verify all the pertinent statements made by General Butler" except for MacGuire's direct proposal to him, and it considered this more or less confirmed by MacGuire's European reports. 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."[54]
Historian James E. Sargent reviewing "The Plot to Seize the White House" by Jules Archer: "Thus, Butler (and Archer) assumed that the existence of a financially backed plot meant that fascism was imminent and that the planners represented a wide spread 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."[55]
The 2007 BBC radio documentary The White House Coup argued that Prescott Bush, father and grandfather to the 41st and 43rd US Presidents respectively, was also connected with the plot.[45]
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. Excerpts of Schmidt's book dealing with the plot are available online.[1]
References
^ Schlesinger, p. 85 "In March 1934, the House of Representatives authorized an investigation into "un-American" activities by a special committee headed by John W. McCormack of Massachusetts and Samuel Dickstein of New York. In the following months the McCormack-Dickstein Committee inquired into Nazi operations in America, exposed William Dudley Pelley and the Silver Shirts, looked into Smedley Butler's allegations, and called the Communist leaders up for testimony. Its manner of investigation commanded special respect. McCormack used competent investigators and employed as committee counsel a former Georgia senator with a good record on civil liberties. Most of the examination of witnesses was carried on in executive sessions. In public sessions, witnesses were free to consult counsel. Throughout, McCormack was eager to avoid hit-and-run accusation and unsubstantiated testimony. The result was an almost uniquely scrupulous investigation in a highly sensitive area."
^ Schlesinger, p. 85 "As for the House committee, headed by John McCormack of Massachusetts, it declared itself "able to verify all the pertinent statements made by General Butler" except for MacGuire's direct proposal to him, and it considered this more or less confirmed by MacGuire's European reports."
^ ab 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) B.E.F -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."
^ 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 boon 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
^ Beam, Alex (May 25, 2004). "A Blemish Behind Beauty at The Clark". The Boston Globe: E1.: "In his congressional testimony, Butler described Clark as being "known as the "millionaire lieutenant" and was sort of batty, sort of queer, did all sorts of extravagant things. He used to go exploring around China and wrote a book on it, on explorations. He was never taken seriously by anybody. But he had a lot of money." "Clark was certainly eccentric. One of the reasons he sited his fantastic art collection away from New York or Boston was that he feared it might be destroyed by a Soviet bomber attack during the Cold War..."(Clark) was pointed out to me during a trip to Paris," says one on his grandnieces. "He was known to be pro-fascist and on the enemy side. Nobody ever spoke to him."" Wikisource: McCormack-Dickstein Committee
^ Author unknown (December 3, 1934). "Plot Without Plotters". Time Magazine.
Author unknown (November 21, 1934). "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.". New York Times: 1.; Author unknown (November 22, 1934). "Credulity Unlimited". New York Times: 20.
Philadelphia Record, November 21 and 22, 1934;Time Magazine, 25 February1935: "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." New York TimesFebruary 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."
^ Investigation of Nazi Propaganda Activities and Investigation of Certain Other Propaganda Activities: Public Hearings Before the Special Committee on Un-American Activities, House of Representatives, Seventy-third Congress, Second Session, at Washington, D.C. p.8-114 D.C. 6 II
Schmidt, p. 245 "HUAC's final report to Congress: "There is no question that these attempts [the plot] were discussed, were planned, and might have been placed in execution when and if the financial backers deemed it expedient." The committee had verified "all the pertinent statements made by General Butler, with the exception of the direct statement suggesting the creation of the organization.""
^ Investigation of Nazi Propaganda Activities and Investigation of Certain Other Propaganda Activities: Public Hearings Before the Special Committee on Un-American Activities, House of Representatives, Seventy-third Congress, Second Session, at Washington, D.C. p. 111 D.C. 6 II.
^ 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." (November 23 1934). New York Times: 3.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. For more on Van Zandt, and the Archer quotes, see Unknown author. "James Edward Van Zandt". Coalition to Oppose the Arms Trade (COAT). Retrieved on 2006-03-28.
^ 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.
^ Wolfe, Part IV: "New York's Mayor Fiorello LaGuardia, who was known as the "Little Flower"... 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."
U.S. House of Representatives, Special Committee on Un-American Activities, Public Statement, 73rd Congress, 2nd session, (Washington, D.C.: Government Printing Office, 1934)[2]
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).
Seldes, George (1947). 1000 Americans: The Real Rulers of the U.S.A.. Boni & Gaer. ASIN: B000ANE968. p. 292-298 Excerpts of the book can be found here.[3]
Spivak, John L. (1967). A Man in His Time. Horizon Press. ASIN: B0007DMOCW. p. 294-298 Excerpts of the book can be found here.[4][5]
Bankers, Lawyers and Linkage Groups found in Simpson, Christopher (1995). The Splendid Blond Beast: Money, Law and Genocide in the Twentieth Century. Common Courage Press. ISBN 1-56751-062-0. p. 43-58 Book Experts can be found here.[6]
Colby, Gerard (1984). Du Pont Dynasty: Behind the Nylon Curtain. L. Stuart. ISBN 0-8184-0352-7. p. 324-330 Excerpts of the book about the plot found here.[7]
Related subjects
Goodman, Walter (1968). The Committee: The Extraordinary Career of the House Committee on Un-American Activities. Farrar Straus & Giroux. ISBN 0-374-12688-7.
Helms, Harry (2003). Inside the Shadow Government: National Emergencies and the Cult of Secrecy. Feral House. ISBN 092291589X.
Higham, Charles (1982). Trading With the Enemy: An Expose of the Nazi-American Money Plot, 1933-1949. Doubleday. ISBN 0385290802.
Hougan, Jim (1978). Spooks: The Haunting of America: The Private Use of Secret Agents. William Morrow & Co. ISBN 0688033555.
Hopsicker, Daniel (2001). Barry & 'the Boys' : The CIA, the Mob and America's Secret History. Mad Cow Press. ISBN 0970659105.
Thomas, Kenn (2003). The Octopus: Secret Government and the Death of Danny Casolaro. Feral House. ISBN 0922915911.
Wolfskill, George (1962). The Revolt of the Conservatives: A History of the American Liberty League 1934-1940. Houghton Mifflin. ISBN 0-8371-7251-9.
Wolfskill, George John A. Hudson (1969). All but the people: Franklin D. Roosevelt and His Critics, 1933-39. Macmillan. ASIN: B0006BYJJQ.