2. Abortive Putsch
Major General Smedley Darlington Butler*, wearer of two congressional medals of honor, was a colourful hard-bitten soldier who had served thirty-three years in the Marine Corps before his habit of blunt speaking involved him in an international incident that brought about his enforced retirement. In 193 1, in a public speech delivered in Philadelphia, General Butler had described Benito Mussolini as “a mad dog about to break loose in Europe.” The General had also related how II Duce while speeding in his car through an Italian town had run over a child, driven on without slowing down and told an American journalist with him at the time, “Never look backward. What is one life in the affairs of state?” When the Italian Ambassador furiously protested against Butler’s remarks, and President Hoover issued an order to the Secretary of the Navy that the General withdraw his remarks or face court-martial, Butler stubbornly refused to recant. Shortly afterwards, the Italian government, embarrassed by the mounting publicity and reluctant to have more of the facts aired, requested the case be dropped. The court-martial proceedings against General Butler were discontinued, and the General was retired from active service. (* Author of On War, 1933)
Far from diminishing General Butler’s widespread popularity, the episode had considerably increased the number of his enthusiastic admirers — a fact not unnoted by certain influential circles then privately discussing potential candidates for the role of America’s “man on the white horse” . . .
In July 1933, two prominent American Legion officials, Gerald C. MacGuire and William Doyle, visited General Butler at his home in Newton Square, Pennsylvania. They proceeded to urge Butler to make a bid for the post of American Legion National Commander at the Legion convention that was scheduled to take place that October in Chicago. The General, said MacGuire, was just the man to lead a rank-and-file movement to oust the Legion’s autocratic leadership.
The General said he liked the idea of “unseating the royal family … because they’ve been selling out the common soldier in this Legion for years.” But he didn’t see how rank-and-file support could be rallied for his candidacy. What average veteran, he asked, could afford to go to the Chicago convention?
MacGuire reached into his pocket and took out a bank deposit book. He pointed to two entries — one for $42,000, and the other for $64,000. Rank-and-file delegates, said MacGuire, would be brought to the convention from all parts of the country…
Up to this point in the discussion. General Butler had felt there was something strange about the proposition being made to him. Now he was certain. “Soldiers don’t have that kind of money,” said Butler later.
The General decided not to let his visitors know his suspicions had been aroused. In his own words, “I wanted to get to the bottom of this thing and not scare them off.”
He would need time. General Butler told the two men, to think the whole thing over. He proposed they meet again in the near future …*
* The description of this meeting, and the dialogue quoted, is taken from testimony given by General Smedley Butler in November 1934 before the Special House Committee investigating Nazi Propaganda Activities, as is the balance of the material in this section, except where specifically indicated.
At a second meeting, MacGuire and Doyle presented General Butler with a typewritten “draft” of a speech, which they suggested he deliver at the Legion convention. Among other things, the speech recommended the convention adopt a resolution urging that the United States return to the gold standard. “We want to see the soldiers’ bonus paid in gold,” said MacGuire. “We don’t want the soldiers to have rubber money or paper money.”
When General Butler bluntly asked who was going to foot the cost of the campaign to make him Legion Commander, MacGuire replied that nine very wealthy men were putting up the necessary funds. One of them was the well-known Wall Street broker. Colonel Grayson M. -P. Murphy. “I work for him,” said MacGuire. “I’m in his office.”
“What has Murphy got to do with this?” Butler inquired.
“Well, he’s the man who underwrote the formation of the American Legion for $125,000,” MacGuire answered. “He paid for the field work of organizing it and has not gotten all of it back yet.’*
“That is the reason he makes kings, is it?” said Butler. “He has still got a club over their heads.”
“He’s on our side,” MacGuire insisted. “He wants to see the soldiers cared for.”*
* Grayson M. -P. Murphy— who besides heading his own brokerage firm, held directorships in the Anaconda Copper Company, Goodyear Tire Company, Bethlehem Steel Company and several Morgan banks-was a man of considerable experience in political-financial intrigues.
In the early 1900s, after visiting Panama on a confidential mission as a lieutenant in the U. S. Army, Murphy had sought to interest J. P. Morgan and Company in financing a military putsch in that country.
Following World War I, Murphy headed the Red Cross Mission to France and, later to Italy. Like Herbert Hoover, Murphy saw to it that food and other supplies were used as a weapon against the post-war revolutionary upsurgence in Europe. Subsequently, Murphy was decorated by Mussolini and made a Commander of the Crown of Italy.
General Butler said that before discussing the matter any further, he wanted to meet some of “the principals” who were putting up the money. MacGuire said this would be arranged . . .
Not long afterwards, a Wall Street broker named Robert Sterling Clark came to see General Butler at his home. He was, he told Butler, one of the men who were interested in seeing the General take over the leadership of the Legion.
During the conversation that followed, General Butler mentioned the speech that MacGuire and Doyle had given him. “They wrote a hell of a good speech,” said Butler.
“Did those fellows say that they wrote that speech?” asked Clark.
“Yes, they did.”
The broker chuckled. “That speech cost a lot of money,” he said.
General Butler spoke of the resolution calling for a return to the gold standard. “It looks to me as if it were a big business speech. There is something funny about that speech, Mr. Clark.”
“I’ve got thirty million dollars,” Clark quietly told the General. “I don’t want to lose it. I am willing to spend half of the thirty million to save the other half. If you get out and make that speech in Chicago, I am sure that they will adopt the resolution and that will be one step toward the return to gold, to have the soldiers stand up for it …”
When General Butler said he wanted no part in such a project, Clark politely asked if he might use the General’s telephone. Calling Gerald MacGuire by long distance, the broker told him that Butler would not be coming to the convention. “You’ve got forty-five thousand dollars,” said Clark to MacGuire. “You’ll have to do it that way.”
Clark then took his leave of General Butler.
That October, the gold standard resolution was passed at the Legion convention in Chicago.
In the spring of 1934, Gerald MacGuire travelled to Europe. The purported reason for his trip was “business.” Actually, MacGuire was being sent to conduct a private survey of the role played by war veterans in the Nazi Party in Germany, the Fascisti in Italy and the Croix de Feu movement in France.
In a letter from Paris, MacGuire reported to the broker, Robert Sterling Clark:
The Croix de Feu is getting a great number of recruits, and I recently attended a meeting of this organization and was quite impressed with the type of men belonging. These fellows are interested only in the salvation of France, and I feel sure that the country could not be in better hands . . . and that if a crucial test ever comes to the Republic these men will be the bulwark upon which France will be saved . . .
Returning to America that summer, MacGuire rendered a personal account to his “principals” in New York City of his findings on the European continent.
Soon afterwards, MacGuire again went to see General Butler. The proposition MacGuire now made to the General was more startling than his original one. What was needed in America, MacGuire told Butler, was a complete change of government to save the nation from the “communist menace.” Such a change, said MacGuire, could be brought about by a militant veterans’ organization, like the Croix de Feu in France, which would stage a coup d’état in the United States. The financial details were already arranged. “We have three million dollars to start with on the line,” said MacGuire, “and we can get three million more if we need it.” And the ideal person to head the projected “militantly patriotic” veterans’ organization and to lead “a march on Washington,” MacGuire emphatically stated, was General Smedley Butler. . .
General Butler subsequently related:
To be perfectly fair to Mr. MacGuire, he didn’t seem bloodthirsty. He felt such a show of force in Washington would probably result in a peaceful overthrow of the government. He suggested, “we might even go along with Roosevelt and do with him what Mussolini did with the King of Italy.” . . .
Mr. MacGuire proposed that the Secretary of State and Vice-President would be made to resign, by force, if necessary, and that President Roosevelt would probably allow MacGuire’s group to appoint a Secretary of State. Then, if President Roosevelt was “willing to go along,” he could remain as President. But if he were not in sympathy with the Fascist movement, he would be forced to resign, whereupon, under the Constitution the President succession would place the Secretary of State in the White House . . .
He told me he believed that at least half of the American Legion and Veterans of Foreign Wars would follow me.
“Is there anything stirring about yet?” General Butler asked MacGuire.
“Yes, you watch,” MacGuire replied. “In two or three weeks, you will see it come out in the papers. There will be big fellows in it. This is to be the background of it.”
MacGuire did not reveal the specific nature of the development to which he was referring, and the discussion ended with MacGuire urging the General to give the entire matter very careful consideration.
A fortnight later, the formation of the American Liberty League was publicly announced. Named as Treasurer of the Liberty League was MacGuire’s employer, the Wall Street financier, Grayson M. -P. Murphy . . .
Amazed at the audacity of the scheme of which he had learned, General Butler immediately contacted Paul Comly French, an enterprising journalist on the Philadelphia Record, with whom he was acquainted. The General enlisted the services of the newspaperman to help him uncover the full details of the plot. “The whole affair smacked of treason to me,” said Butler later.
On September 13, 1934, Paul French visited MacGuire at his office at the brokerage firm of Grayson M. -P. Murphy Company in New York City. Pretending a sympathetic interest in the proposition made to General Butler, French won MacGuire’s confidence.
MacGuire then told the journalist, as French later revealed, “substantially the same story as related by the General.”
“The whole movement is patriotic,” said MacGuire, “because the Communists will wreck the nation unless the soldiers save it through Fascism. All General Butler would have to do to get a million men would be to announce the formation of the organization and tell them it would cost a dollar a year to join.”
The chief financial support of the movement, however, was to come from other sources. French subsequently related:
He [MacGuire] said he could go to John W. Davis or Perkins of the National City Bank, and any number of persons and get it [financial backing] . . .
Later we discussed the question of arms and equipment, and he suggested that they could be obtained from the Remington Arms Company on credit through the du Fonts. I do not think at that time he mentioned the connection of du Pont with the American Liberty League, but he skirted all around the idea that that was the back door, and that this was the front door.
To indicate to French the progress already made toward securing support from American veterans groups for the projected movement, MacGuire held up a letter. “It’s from Louis Johnson, the former National Commander of the American Legion,” he said.
Then, according to French’s account:
He [MacGuire] said that he had discussed the matter with him [Johnson] along the lines of what we were now discussing, and I took it to mean that he had discussed this Fascist proposition with Johnson, and Johnson was in sympathy with it. *
* When Louis Johnson was National Commander of the American Legion, Gerald MacGuire had served on his staff as chairman of the League’s distinguished-guest committee.
On March 28, 1949, President Harry S. Truman appointed Louis Johnson U. S. Secretary of Defense.
Both General Butler and Paul French were now convinced they had unearthed sufficient evidence to warrant a full-scale Government investigation of the plot for a fascist coup d’état. Contacting the McCormack-Dickstein Congressional Committee then investigating Nazi and other propaganda in America, Butler asked to testify at one of its hearings.
On November 20, at a private session of the McCormack-Dickstein Committee, General Butler gave a detailed account of the manner in which he had been asked to lead a fascist putsch against the U.S. Government. If the committee wanted to get at the bottom of the conspiracy, said Butler at the conclusion of his testimony, it should call for questioning Grayson M. -P. Murphy, General Douglas MacArthur, ex-American Legion Commander Hanford MacNider and various members of the American Liberty League. *
* In his testimony, Butler had related that MacGuire had told him that General MacArthur and Hanford MacNider were also being considered as potential leaders of the fascist putsch.
Among other witnesses to testify before the Committee were James Van Zandt, commander of the Veterans of Foreign Wars, who admitted knowledge of the whole plot and corroborated General Butler’s story; and Gerald MacGuire, who admitted to having met periodically with General Butler but asserted that he had been “misunderstood,” by the General . . .
An exclusive news-story by Paul French revealing the content of General Butler’s testimony before the McCormack-Dickstein Committee appeared in the Philadelphia Record, the New York Post and two papers in New Jersey.
Immediately, General Butler’s story became a national sensation.
But the startling disclosures by General Butler and Paul French did not accomplish what they had anticipated. With the exception of a handful of liberal and left wing newspapers, the nation’s press rallied to the defence of the powerful interests involved in the conspiracy, suppressed the most incriminating portions of General Butler’s testimony, and ridiculed his story as a whole. The New York Times casually reported that the “so-called plot of Wall Street interests” had “failed to emerge in any alarming proportion.” Time magazine mockingly dismissed the affair as a “plot without plotters.”
The broker Grayson M. -P. Murphy’s statement to the press flatly denying all knowledge of the plot and characterizing General Butler’s story as “a joke — a publicity stunt,” was more prominently featured by most newspapers than the General’s charges.
Soon, all references to the sensational case vanished from the newspapers.
No Government investigation of the conspiracy took place.
The McCormack-Dickstein Committee never summoned as witnesses any of the prominent persons named by General Butler; and when the Committee finally made public the General’s testimony, many of his most startling charges, including the names of various Wall Street figures and all mention of the American Liberty League, had been deleted from the report on the hearing.
Even so, the Committee report stated:
There is no question that these attempts [of a fascist putsch’] were discussed, were planned, and might have been placed in execution when and if the financial backers deemed it expedient . . . .
. . . 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 [fascist] 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.
Following the publication of the Committee’s report, the head of the Civil Liberties Union, Roger Baldwin, made this observation:
The Congressional Committee investigating un-American activities has just reported that the Fascist plot to seize the government . . . was proved; yet not a single participant will be prosecuted under the perfectly plain language of the federal conspiracy act making this a high crime. Imagine the action if such a plot were discovered among Communists!
Which is, of course, only to emphasize the nature of our government as representative of the interests of the controllers of property. Violence, even to the seizure of the government, is excusable on the part of those whose lofty motive is to preserve the profit system . . .