Definitions

Business Plot

Business Plot

The Business Plot (also the Plot Against FDR and the White House Putsch) was a political conspiracy in 1933 wherein wealthy businessmen and corporations plotted a coup d’état to overthrow United States President Franklin D. Roosevelt. In 1934, the Business Plot was publicly revealed by retired Marine Corps Major General Smedley Butler testifying to the McCormack-Dickstein Congressional Committee. 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, but no prosecutions or further investigations followed, and the matter was mostly forgotten.

Background

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 self-described Republican, responded by supporting Roosevelt in that year's election.

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.

Timeline of events

Year Date Event
1933 July 1 First Butler meeting with MacGuire and Doyle
July 3 or 4 Second meeting with MacGuire and Doyle
Around August 1 MacGuire visits Butler alone. Butler never sees Doyle again.
September 24 MacGuire visits Butler's hotel room in Newark.
Late-September Butler meets with Robert Clark.
1934 First half of 1934 MacGuire travels to Europe, sends Butler postcards
March 6 MacGuire writes Clark and Clark's attorney letter describing the Croix de Feu
August 22 Butler meets MacGuire at a Hotel. Last time Butler meets MacGuire
September 13 Undercover reporter French meets MacGuire in his office
Late September Butler tells Van Zandt that conspirators will meet him at upcoming Veterans of Foreign Wars convention.
November 20 Committee begins examining evidence.
Paul Comly French breaks the story in the Philadelphia Record and the New York Post.
November 21 New York Times writes its first article on the story.
November 24 The committee publicly releases its preliminary findings.
1935 January 3 Final day of committee
January 29 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.
February 15 Committee submits to Congress its final report.

Participants Background Role
Gerald C. MacGuire MacGuire was a $100 a week bond salesman for Murphy & Company, former commander of the Connecticut American Legion who had been an activist for the gold currency movement that Robert Sterling Clark sponsored. Met Butler several times
William Doyle Bill Doyle was commander of the Massachusetts American Legion. Met Butler with MacGuire on first visit
Robert Sterling Clark Robert Sterling Clark was an art collector who lived mostly in Paris, one of Wall Street's richest investors, and heir to the Singer Sewing Machine 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.

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. 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, 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, 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."

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.

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.

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, 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.

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.

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.

Committee members

From the McCormack-Dickstein Committee files found at wikisource.

Deleted testimony to the Congressional Committee

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. . . . "

"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 15 February 1933. 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..."

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."

"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."

"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."

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."

Spivak wrote a two-part article revealing the Committee's deletions, 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’ [magazine] possessed a limited readership; the scoop was stigmatized as ‘Red’ propaganda, and generally not cited elsewhere".

After Spivak told Gen. Butler about the deletions from the transcript of his testimony, in his 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, “stopped dead in its tracks when it got near the top”. 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 Col. 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?"

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.

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.

Partial corroboration of Butler's story

Portions of Gen. 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’ ".
  • Captain Samuel Glazier—testifying under oath about plans of a plot to install a dictatorship in the United States.
  • Reporter Paul Comly French, reporter for the Philadelphia Record and the New York Evening Post.

Historians’ treatment of the Business Plot

These reasons were proposed to explain why the Business Plot did not become a cause célèbre:

  • The story embarrassed politically influential business people, who felt it best to deflect attention from themselves.
  • In 1934, newspapers were controlled by an élite — according to then-Interior Secretary Harold L. Ickes, 82 per cent of daily newspapers monopolised their communities; the media down-played Gen. Butler's testimony to protect the interests of advertisers and their owners.
  • Some of President Roosevelt's advisors were plotters, and downplayed the matter, avoiding exposure.
  • In the BBC Radio Document program, The Whitehouse Coup, John Buchanan suggests President Roosevelt stopped the investigation for 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".

Doubters of Gen. Butler's testimony claimed it lacked evidence:

  • 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."
  • 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. . . . "
  • Arthur M. Schlesinger Jr.: "Most people agreed with Mayor La Guardia of New York in dismissing it as a ‘cocktail putsch’ . . . 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".
  • 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".

The 2007 BBC radio documentary The White House Coup said that Prescott Bush, father of former President of the United States George H. W. Bush and the grandfather of President George W. Bush, was connected with the plot.

Bibliography

  • Archer, Jules The Plot to Seize the White House. Skyhorse Publishing. ISBN 1-60239-036-3.
  • 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. Excerpts of Schmidt's book dealing with the plot are available online.

References

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)
  • 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).

*McCormack-Dickstein Committee; pdf file 1;
*McCormack-Dickstein Committee#PDF file 2 pdf file 2;
* pdf file 3

Books with Business Plot chapters

  • 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.
  • Spivak, John L. (1967). A Man in His Time. Horizon Press. ASIN: B0007DMOCW. p. 294-298 Excerpts of the book can be found here.
  • Bankers, Lawyers and Linkage Groups found inSimpson, 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.
  • 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.

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.

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