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The Plot To Seize The White House

By Jules Archer

PART THREE

The Conspiracy Explodes

The McCormack-Dickstein Committee agreed to listen to Butler's story in a secret executive session in New York City on November 20, 1934. The two cochairman of the committee were Representative John McCormack, of Massachusets, and New York Representative Samuel Dickstein, who later became a New York State Supreme Court justice. Butler's testimony, developed in two hours of questions and answers, was recorded in full.

Simultaneously Paul Comly French broke the story in the Stern papers, the Philadelphia Record and the New York Post. Under the headline "$3,000,000 Bid for Fascist Army Bared," he wrote:


Major General Smedley D. Butler revealed today that he has been asked by a group of wealthy New York brokers to lead a Fascist movement to set up a dictatorship in the United States.

General Butler, ranking major general of the Marine Corps up to his retirement three years ago, told his story today at a secret session of the Congressional Committee on Un-American Activities.


McCormack opened the hearing by first noting that General Butler had been in the Marine Corps thirty-three years and four months and had received the Congressional Medal of Honor twice, establishing his integrity and credibility as a witness. Then he invited the general to "just go ahead and tell in your own way all that you know about an attempted Fascist movement in this country."

"May I preface my remarks," Butler began, "by saying, sir, that I have one interest in all of this, and that is to try to do my best to see that a democracy is maintained in this country?"

"Nobody who has either read about or known about General Butler," replied McCormack promptly, "would have anything but that understanding."

Butler then gave detailed testimony about everything that had happened in connection with the plot, from the first visit of MacGuire and Doyle on July 1, 1933.

Some of his testimony was not released in the official record of the bearings, for reasons that will be discussed later, but was nevertheless ferreted out, copied, and made public by reporter John L. Spivak. This censored testimony is indicated by the symbol † to distinguish it from the official testimony eventually released by the McCormack-Dickstein Committee. The same was true of testimony given by reporter Paul Comly French, who followed Butler as a witness, and the same symbol (†) indicates the censored portions.*

Butler first described the attempts made by MacGuire and Doyle to persuade him to go to the American Legion convention hand make a speech they had prepared for him.


BUTLER: . . . they were very desirous of unseating the royal family in control of the American Legion, at the convention to be held in Chicago, and very anxious to have me take part in it. They said that they were not in sympathy with the . . . present administration's treatment of the soldiers. . . . They said, "We represent the plain soldiers. . .We want you to come there and stampede the convention in a speech and help us in our fight to dislodge the royal family."


He told of MacGuire's revelation that he was the chairman of the Legion's "distinguished guest committee," on the staff of National Commander Louis Johnson, and that at MacGuire's suggestion Johnson had put Butler's name down as one of the distinguished guests to be invited to the convention.


† BUTLER: [MacGuire said] that Johnson had been taken this list, presented by MacGuire, of distinguished guests, to the White House for approval; that Louis Howe, one of the secretaries of the President, had crossed my name off and said that I was not to be invited-that the President would not have it.


This tale had struck Butler as peculiar, since the President had been grateful for the general's assistance in winning Republican votes for him away from Hoover, and their relations had always been cordial and warm.


BUTLER: I thought I smelled a rat, right away-that they were trying to get me mad-to get my goat. I said nothing....

CHAIRMAN: When you say you smelled a rat, you mean you had an idea that they were not telling the truth?

BUTLER: I could not reconcile . . . their desire to serve the ordinary man in the ranks, with their other aims. They did not seem to be the same. It looked to me as if they were trying to embarrass the administration in some way.... I was just fishing to see what they had in mind. So many queer people come to my house all the time and I like to feel them all out.


MacGuire had told him, Butler revealed, that invitation or no invitation, he and his supporters had figured out a way for Butler to address the Legion convention.


BUTLER: I said, "How is that, without being invited?" They said, "Well, you are to come as a delegate from Hawaii."

I said, "I do not live in Hawaii."

"Well, it does not make any difference. There is to be no delegate from one of the American Legion posts there in Honolulu, and we have arranged to have you appointed by cable, by radio, to represent them at the convention....

I said, "Yes; but I will not go in the back door."

They said, "That will not be the back door. You must come."

I said, "No; I will not do this."

"Well," they said, "are you in sympathy with unhorsing the royal family?"

I said, "Yes; because they have been selling out the common soldier in this Legion for years. These fellows have been getting political plums and jobs and cheating the enlisted man in the Army, and I am for putting them out. But I cannot do it by going in through the back door."

"Well," they said, "we are going to get them out. We will arrange this."


Butler described the second visit of MacGuire and Doyle a month later, at which time MacGuire had unfolded a new plan they had developed to get Butler to the speaker's platform at the Chicago convention of the Legion.


BUTLER: . . . I was to get two or three hundred legionnaires from around that part of the country and bring them on a special train to Chicago with me. . . . they would sit around in the audience, be planted here and there. . . . I was to appear in the gallery. These planted fellows were to begin to cheer and start a stampede and yell for a speech. Then I was to go to the platform and make a speech. I said, "Make a speech about what?"

"Oh," they said, "we have one here."

. . . They pulled out this speech. They said, "We will leave it here with you to read over, and you see if you can get these fellows to come."

I said, "Listen. These friends of mine that I know around here, even if they wanted to go, could not afford to go. It would cost them a hundred to a hundred and fifty dollars to go out there and stay for five days and come back."

They said, "Well, we will pay that."

I said, "How can you pay it? You are disabled soldiers. How do you get the money to do that?"

"Oh, we have friends. We will get the money." Then I began to smell a rat for fair....


To test the seriousness of their purpose and the extent of their backing, he had challenged their claim to have access to the funds they claimed to have.


BUTLER: . . . they hauled out a bank deposit book and showed me, I think it was $42,000 in deposits on that occasion, and on another occasion it was $64,000....

CHAIRMAN: Do you know on what bank that was? BUTLER: I do not. They just flipped the pages over. Now, I have had some experience as a policeman in Philadelphia. I wanted to get to the bottom of this thing and not scare them off, because I felt then that they had something real. They had so much money and a limousine. Wounded soldiers do not have limousines or that kind of money. They said, "We will pay the bill. Look around and see if you cannot get two or three hundred men and we will bring them out there and we will have accommodations for them."


Butler described MacGuire's third visit, without Doyle, during which the bond salesman had inquired as to his progress in rounding up soldiers to take to the convention. Pointing out to MacGuire that the speech given him urged a return by the United States to the gold standard, Butler had demanded to know what that had to do with the ostensible reasons for which he was being asked to go to Chicago.


BUTLER: . . . MacGuire had said, "We want to see the soldiers' bonus paid in gold. We do not want the soldier to have rubber money or paper money. We want the gold. That is the reason for this speech."


Butler had then sought to get MacGuire to reveal the source of the funds on deposit in his name.


BUTLER: He said that it was given to him by nine men, that the biggest contributor had given $9,000 and that the donations ran all the way from $2,50o to $9,000

I said, "What is the object?" He said the object was to take care of the rank and file of the soldiers, to get them their bonus and get them properly cared for.

Well, I knew that people who had $9,000 to give away were not in favor of the bonus. That looked fishy right away.

He gave me the names of two men; Colonel Murphy, Grayson M.-P. Murphy, for whom he worked, was one. He said, "I work for him. I am in his office."

I said to him, "How did you happen to be associated with that kind of people if you are for the ordinary soldier and his bonus and his proper care? You know damn well that these bankers are not going to swallow that. There is something in this, Jerry MacGuire, besides what you have told me. I can see that."

He said, "Well, I am a business man. I have got a wife and family to keep, and they took good care of them, and if you would take my advice you would be a business man, too."

I said, "What has Murphy got to do with this?"

"Well," he said, "don't you know who he is?"

I said, "Just indirectly. He is a broker in New York. But I do not know any of his connections."

"Well," he said, "he is the man who underwrote the formation of the American Legion for $125,000 He underwrote it, paid for the field work of organizing it, and had not gotten all of it back yet."

"That is the reason he makes the kings, is it? He has still got a club over their heads."

"He is on our side, though. He wants to see the soldiers cared for."


Butler revealed that he had then expressed sharply critical sentiments about the Legion. He later discovered that these remarks had been expunged from the record.


† BUTLER: "Is he [Murphy] responsible, too, for making the Legion a strikebreaking outfit?"

"No, no. He does not control anything in the Legion now."

I said: "You know very well that it is nothing but a strikebreaking outfit used by capital for that purpose and that is the reason we have all those big clubhouses and that is the reason I pulled out from it. They have been using these dumb soldiers to break strikes."

He said: "Murphy hasn't anything to do with that. He is a very fine fellow."

I said, "I do not doubt that, but there is some reason for his putting $125,000 into this."



 

2


In September, 1933, when he had gone to Newark for a convention of the 29th Division, Butler testified, MacGuire had unexpectedly showed up at his hotel to remind him that the time for the American Legion convention was rapidly approaching and to ask whether he was finally ready to take a contingent of veterans to Chicago.


BUTLER: I said, "No; I am not going to Chicago."

"Why not?"

I said, "You people are bluffing. You have not got any money," whereupon he took out a big wallet, out of his hip pocket, and a great, big mass of thousand dollar bills and threw them out on the bed.

I said, "What's all this?"

He says, "This is for you, for expenses. You will need some money to pay them."

"How much money have you got there?" He said, $18,000

"Where did you get those thousand dollar bills?"

"Oh," he said, "last night some contributions were made. I just have not had a chance to deposit them, so I brought them along with me."

I said, "Don't you try to give me any thousand dollar bill. Remember, I was a cop once. Every one of the numbers on these bills has been taken. I know you people and what you are trying to do. You are just trying to get me by the neck. If I try to cash one of those thousand dollar bills, you would have me by the neck."

"Oh," he said, "we can change them into smaller denominations."

I said, "You put that money away before somebody walks in here and sees that money around, because I do not want to be tied up with it at all. I told you distinctly I am not going to take these men to Chicago."

"Well, are you going yourself?"

I said, "Oh, I do not know. But I know one thing. Somebody is using you. You are a wounded man. You are a blue jacket. You have got a silver plate in your head. I looked you up.... You are being used by somebody, and I want know the fellows who are using you. I am not going to talk to you any more. You are only an agent. I want some of

the principals."

He said, "Well, I will send one of them over to see you." I said, "Who?" He said, "I will send Mr. Clark."

"Who is Mr. Clark?"

"Well, he is one of our people. He put up some money."

"Who is he?"

"Well, his name is R. S. Clark. He is a banker. He used to be in the Army."

"How old a man is he?" He told me.

"Would it be possible that he was a second lieutenant in the Ninth Infantry in China during the Boxer campaign?"

He said, "That is the fellow."

He was 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. An aunt and an uncle died and left him $10,000,000.


Having established contact with one of the plot's principals, Butler testified, he had been visited by Clark within the week with and invited to travel in a private car to the Chicago convention with the millionaire, who revealed that he would arrange an opportunity for Butler to deliver the gold-standard speech.


BUTLER: He said, "You have got the speech?" I said, "Yes. These fellows, Doyle and MacGuire, gave me the speech." I said, "They wrote a hell of a good speech, too." He said, "Did those fellows say that they wrote that speech?" I said, "Yes; they did. They told me that that was their business, writing speeches." He laughed and said, "That speech cost a lot of money."


In testimony afterward censored, Butler revealed that the speech had apparently been written for the millionaire by the chief attorney for J. P. Morgan and Company, who had been the 1924 Democratic candidate for President.


† BUTLER: Now either from what he said then or from what MacGuire had said, I got the impression that the speech had been written by John W. Davis-one or the other of them told me that.


Clark had been amused, Butler testified, that MacGuire and Doyle had claimed the authorship. Butler had pointed out that a speech urging a return to the gold standard did not seem to be relevant to the reasons he was being asked to go to the convention. Clark had reiterated MacGuire's explanation that he wanted to see the soldiers' bonus paid in gold-backed currency, not in inflated paper money.


BUTLER: "Yes," I said, "but it looks as if it were a big business speech. There is something funny about that speech, Mr. Clark." . . .

Clark said ". . . I have got $30,000,000. I do not want to lose it. I am willing to spend half of the $30,000,000 to save the other half. If you go out and make this speech in Chicago, I am certain 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. We can get the soldiers to go out Having established contact with one of the plot's principals, so in great bodies to stand up for it."

This was the first beginning of the idea, you see, of having a soldiers' organization, getting them to go out in favor of the gold standard. Clark's thought was, "I do not want to lose my money."


In a censored portion of the testimony, Butler explained why Clark thought that Roosevelt would permit himself to be pressured by such tactics.


† BUTLER: He said, "You know the President is weak. He will come right along with us. He was born in this class. He was raised in this class, and he will come back. He will run true to form. In the end he will come around. But we have got to be prepared to sustain him when he does."


This blatant snobbery and fatuous assumption about the President had been too much for Butler, and he had snapped a refusal to go to Chicago.


BUTLER: He said, "Why not?"

I said, "I do not want to be mixed up in this thing at all. I tell you very frankly, Mr. Clark, I have got one interest and that is the maintenance of a democracy. That is the only thing. I took an oath to sustain the democracy, and that is what I am going to do and nothing else. I am not going to get these soldiers marching around and stirred up over the gold standard. What the hell does a soldier know about the gold standard? You are just working them, using them, just as they have been used right along, and I am going to be one of those to see that they do not use them any more except to maintain a democracy. And then I will go out with them any time to do that."


At this point, Butler testified, Clark had offered him an outright bribe to win his cooperation.


BUTLER: He said, "Why do you want to be stubborn? Why do you want to be different from other people? We can take care of you. You have got a mortgage on this house," waving his hand, pointing to the house. "That can all be taken care of. It is perfectly legal, perfectly proper."

"Yes," I said, "but I just do not want to do it, that's all." Finally I said, "Do you know what you are trying to do? You are trying to bribe me in my own house. You are very polite about it and I can hardly call it that, but it looks kind of funny to me, making that kind of proposition. You come out into the hall, I want to show you something."

We went out there. I have all the flags and banners and medals of honor, and things of that kind. . . . They have been given me by the Chinese and the Nicaraguans and the Haitians-by the poor people. I said to him, "You come out here. Look at that and see what you are trying to do. You are trying to buy me away from my own kind. When you have made up your mind that I will not go with you, then you come on and tell me."


After being left in the hall to inspect the trophies and think about their significance, Butler testified, Clark had joined him in the office at the back of the house. The millionaire had then asked permission to make a long-distance call.


BUTLER: He called up Chicago and got hold of MacGuire at the Palmer House and lie said to MacGuire, "General Butler is not coming to the convention. He has given me his reasons and they are excellent ones, and I apologize to him for my connection with it. I am not coming either. You can put this thing across. You have got $45,000. You can send those telegrams. You will have to do it in that way. The general is not coming. I can see why. I am going to Canada to rest. If you want me, you know where you can find me. You have got enough money to go through with it."

. . . The convention came off and the gold standard was endorsed by the convention. I read about it with a great deal of interest. There was some talk about a flood of telegrams that came in and influenced them and I was so much amused, because it all happened right in my room.

Then MacGuire stopped to see me on his way back from the convention. This time he came in a hired limousine . . . and told me that they had been successful in putting over their move. I said, "Yes, but you did not endorse the soldier's bonus."

He said, "Well, we have got to get sound currency before it is worth while to endorse the bonus."

Not long afterward, Butler testified, MacGuire had called again to ask him to go to Boston for a soldier's dinner that was being given in the general's honor.


BUTLER: He said, "We will have a private car for you on the end of the train. You will make a speech at this dinner and it will he worth a thousand dollars to you."

I said, "I never got a thousand dollars for making a speech."

He said, "You will get it this time."

"Who is going to pay for this dinner and this ride up in the private car?"

"Oh, we will pay for it out of our funds."

"I am not going to Boston. If the soldiers of Massachusetts want to give a dinner and want me to come, I will come. But there is no thousand dollars in it."

So he said, "Well, then, we will think of something else."


He had next seen MacGuire, Butler testified, while in New York to make an election speech on behalf of a former Marine running for local office in a municipal campaign. MacGuire had then sought to draw Butler out on his subsequent plans.


BUTLER: He said, "You are going on a trip for the Veterans of Foreign Wars. You are going around recruiting them, aren't you?" I said, "Yes; I am going to start as soon as this campaign is over."

CHAIRMAN: When was this campaign?

BUTLER: This was in November, 1933. All of this happened between July and November, everything I told you.... He said, "You are going out to speak for the veterans." I said, "Yes. . . . You know I believe that sooner or later there is going to be a test of our democracy, a test of this democratic form of government. The soldiers are the only people in this country who have ever taken an oath to sustain it. I believe that I can appeal to them by the millions to stand up for a democracy, because they have more stake in a democracy than any other class of our citizens, because they have fought for it. I am going out to the Veterans of Foreign Wars. They are my kind, overseas people, old regulars, and see if I cannot get a half a million of those fellows and preach this to them, that we have got to stand up against war. I have got an object in doing it. I believe that sooner or later we are going to have a showdown, because I have had so many invitations to head societies and to join societies, all of them with a camouflaged patriotic intent. They are rackets, all of them."


MacGuire had then exposed the forward edge of a new plan to use the general, startling Butler by a proposal to join him in his travels around the country.


BUTLER: He said, "Well, that is what we are for. . . . I want to go around with you . . . and talk to the soldiers in the background and see if we cannot get them to join a great big superorganization to maintain the democracy.

I said, "I do not know about you going along, Jerry. Of course, I cannot keep you off of the train. But there is something funny about all this that you are doing and I am not going to be responsible for it and I do not want any more to do with it. You are a wounded soldier and I am not going to hurt you, but you must lay off this business with me, because there is too much money in it."

"Well, I am a business man," he said. . . . "I do not see why you will not be a business man, too."

I said, "If fiddling with this form of government is business, I am out of it; if that is your business."

"Oh," he said, "I would not disturb this form of government."

I said, "You have got some reason for getting at these soldiers other than to maintain a democracy."


Although Butler did not testify to having been offered, and turning down, $750 for every speech he made to veterans groups during his tour in which he inserted a short reference favoring the gold standard, a special tribute was paid to him on this score by a secret report he did not know of that reached the White House.

It had been written by Val O'Farrell, a former New York City detective who had become one of the city's leading criminal and civil investigators. On December 11, 1933, O'Farrell had written to presidential secretary Louis Howe:


My dear Colonel:

. . . Before he [Butler] left for Atlanta, he was approached by a representative of the bankers gold group system, and offered the sum of seven hundred and fifty dollars for each speech if he would insert some short reference in favor of continuing the bankers gold standard. This would have meant an additional ten thousand dollars to General Butler, but he told the representative of the gold group that even if he were offered a hundred thousand dollars to do this, his answer would be "no."

Notwithstanding the fact that I do not know General Butler, who has been occasionally subject to harsh criticism for the things he has done or failed to do, I felt it my duty to report this incident to you as it shows him to be a man of exceptional character. You can probably obtain the name of the representative of this gold group from General Butler, or if you are interested, I may be able to get it for you.



 

3


Butler found himself fascinated by MacGuire, suspecting that the bond salesman might be playing some kind of shrewd con game with Clark, using his contact with Butler as a lever with which to pry money out of the alarmed millionaire.


BUTLER: I began to get the idea that he was using Clark-to pull money out of Clark by frightening him about his $30,000,000-and then he was coming to me; and then he would go back and tell Clark, "I have been to see Butler, and he will go along if you will get me $5,000 more." In other words, I could see him working both ends against the middle and making a sucker out of Clark. However, if Clark wanted to get rid of his money, it was none of my business. . . .

Now, he [MacGuire] is a very cagey individual. He always approaches everything from afar. He is really a very nice, plausible fellow. But I gather, after this association with him, that due to this wound in his head, he is a little inconsistent, a little flighty. He is being used, too, but I do not think Clark is using him. My impression is that Murphy uses him; and he uses Clark, because Clark has the money.


During MacGuire's trip to Europe, Butler testified, the bond salesman had sent him a postcard from Nice in February, 1934, and a short note later from Berlin, both of the "having wonderful time" variety. Then after MacGuire's return, upon his urging to see Butler on a matter of the utmost importance, they had met in the empty restaurant of Philadelphia's Bellevue Hotel, on August 22, 1934.


BUTLER: He told me all about his trip to Europe.... He said, "I went abroad to study the part that the veteran plays in the various set-ups of the governments that they have abroad. I went to Italy for two or three months and studied the position that the veterans of Italy occupy in the Fascist set-up of government, and I discovered that they are the background of Mussolini. They keep them on the pay rolls in various ways and keep them contented and happy; and they are his real backbone, the force on which he may depend, in case of trouble, to sustain him. But that set-up would not suit us at all. The soldiers of America would not like that. I then went to Germany to see what Hitler was doing, and his whole strength lies in organizations of soldiers, too. But that would not do. I looked into the Russian business. I found that the use of the soldiers over there would never appeal to our men. Then I went to France, and I found just exactly the organization we are going to have. It is an organization of supersoldiers." He gave me the French name for it, but I do not recall what it is. I never could have pronounced it, anyhow. But I do know that it is a superorganization of members of all the other soldiers' organizations of France, composed of noncommissioned officers and officers. He told me that they had about 500,000 and that each one was a leader of ten others, so that it gave them 5,000,000 votes. And he said, "Now, that is our idea here in America-to get up an organization of that kind."


Investigators for the McCormack-Dickstein Committee were able to uncover a report on this French "superorganization," the Croix de Feu, that MacGuire had written about to Robert S. Clark and Clark's attorney, Albert Grant Christmas, from France on March 6, 1934:


I had a very interesting talk last evening with a man who is quite well up on affairs here and he seems to be of the opinion that the Croix de Feu will be very patriotic during this crisis and will take the [wage] cuts or be the moving spirit in the veterans to accept the cuts. Therefore they will, in all probability, be in opposition to the Socialists and functionaries. The general spirit among the functionaries seems to be that the correct way to regain recovery is to spend more money and increase wages, rather than to put more people out of work and cut salaries.

The Croix de Feu is getting a great number of new 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 because they are not politicians, they are a cross-section of the best people of the country from all walks of life, people who gave their "all" between 1914 and 1918 that France might be saved, and I feel sure that if a crucial test ever comes to the Republic that these men will be the bulwark upon which France will be saved.


During their meeting in Philadelphia, Butler testified, MacGuire had revealed the plans of his group to develop an American Croix de Feu.


BUTLER: I said, "What do you want to do with it when you get it up?"

"Well," he said, "we want to support the President." I said, "The President does not need the support of that kind of an organization. Since when did you become a supporter of the President? The last time I talked to you you were against him."

He said, "Well, he is going to go along with us now."

"Is he?"

"Yes."

"Well, what are you going to do with these men, suppose you get these 500,000 men in America? . . ."

"Well," he said, "they will be the support of the President."

I said, "The President has got the whole American people. Why does he want them?"

He said, "Don't you understand the set-up has got to be changed a bit? . . . He has got to have more money. There is not any more money to give him. Eighty percent of the money now is in Government bonds, and he cannot keep this racket up much longer. . . . He has either got to get more money out of us or he has got to change the method of financing the Government, and we are going to see to it that he does not change that method. He will not change it."

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, be cause 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."

And I could see it. They had that sympathy racket, that they were going to have somebody take the patronage off of his shoulders and take all the worries and details off of his shoulders, and then he will be like the President of France. . . .

Now, I cannot recall which one of these fellows told me about the rule of succession, about the Secretary of State becoming President when the Vice President is eliminated. There was something said in one of the conversations that I had, that the President's health was bad, and he might resign, and that [Vice President] Garner did not want it, anyhow, and then this supersecretary would take the place of the Secretary of State and in the order of succession would become President. That was the idea.


In corroborative testimony Paul Comly French described what MacGuire had told him about the conspirators' plans.


FRENCH: During the course of the conversation he continually discussed the need of a man on a white horse, as he called it, a dictator who would come galloping in on his white horse. He said that was the only way; either through the threat of armed force or the delegation of power, and the use of a group of organized veterans, to save the capitalistic system.

He warmed up considerably after we got under way and he said, "We might go along with Roosevelt and then do with him what Mussolini did with the King of Italy."

It fits in with what he told the general, that we would have a Secretary of General Affairs, and if Roosevelt played ball, swell; and if he did not, they would push him out.

He expressed the belief that at least half of the American Legion and the Veterans of Foreign Wars would follow the general if he would announce such a plan.


In censored testimony Butler revealed that MacGuire had implicated General Hugh Johnson, head of the N.R.A., as Roosevelt's own choice to become an assistant President.


† BUTLER: He said, "That is what he [Roosevelt] was building up Hugh Johnson for. Hugh Johnson talked too damn much and got him into a hole, and he is going to fire him in the next three or four weeks."

I said, "How do you know all this?"

"Oh," he said, "we are in with him all the time. We know what is going to happen."


After having revealed the plans of the plotters, Butler testified, MacGuire had then bluntly asked the general to be the Man on a White Horse they were looking for.


BUTLER: He said, ". . . Now, about this superorganization -would you be interested in heading it?"

I said, "I am interested in it, but I do not know about heading it. I am very greatly interested in it, because you know, Jerry, my interest is, my one hobby is, maintaining a democracy. If you get these 500,00o soldiers advocating anything smelling of Fascism, I am going to get 500,000 more and lick bell out of you, and we will have a real war right at home. You know that."

"Oh, no. We do not want that. We want to ease up on the President." . . .

"Yes; and then you will put somebody in there you can run; is that the idea? The President will go around and christen babies and dedicate bridges, and kiss children. Mr. Roosevelt will never agree to that himself."

"Oh, yes; he will. He will agree to that."

I said, "I do not believe he will." I said, "Don't you know that this will cost money, what you are talking about? He says, "Yes; we have got $3,000,000 to start with, on the line, and we can get $300,000,000, if we need it." "Who is going to put all this money up?"

"Well," he said, "you heard Clark tell you he was willing to put up $15,000,000 to save the other $15,000,000."


Butler had then probed for particulars of the cabal's plans for organizing their projected military superorganization.


BUTLER: "How are you going to care for all these men?" He said, "Well, the Government will not give them pensions, or anything of that kind, but we will give it to them. We will give privates $10 a month and destitute captains $35. We will get them, all right."

"It will cost you a lot of money to do that."

He said, "We will only have to do that for a year, and then everything will be all right again."

. . . He said that they had this money to spend on it, and he wanted to know again if I would head it, and I said, "No, I am interested in it, but will not head it."


Seeking to persuade him to change his mind, Butler testified, MacGuire had sought to impress him with the importance of the interests who were involved in the plot.


BUTLER: He said, "When I was in Paris, my headquarters were Morgan & Hodges. We had a meeting over there. I might as well tell you that our group is for you, for the head of this organization. Morgan & Hodges are against you. The Morgan interests say that you cannot be trusted, that you will he too radical, and so forth, that you are too much on the side of the little fellow; you cannot be trusted. They do not want you. But our group tells them that you are the only fellow in America who can get the soldiers together. They say, `Yes, but he will get them together and go in the wrong way.' That is what they say if you take charge of them."


According to MacGuire, Butler testified, the Morgan interests preferred other noted military figures as head of the projected veterans' army. Discussion of these choices was also eliminated from the published version of the hearings.


† BUTLER: [MacGuire said,] "They are for Douglas MacArthur as the head of it. Douglas MacArthur's term expires in November, and if he is not reappointed it is to be presumed that he will be disappointed and sore and they are for getting him to head it."

I said, "I do not think that you will get the soldiers to follow him, Jerry. . . . He is in bad odor, because he put on a uniform with medals to march down the street in Washington, I know the soldiers."

"Well, then, we will get Hanford MacNider. They want either MacArthur or MacNider. . . ."

I said, "MacNider won't do either. He will not get the soldiers to follow him, because he has been opposed to the bonus."

"Yes, but we will have him in change [charge?]."

And it is interesting to note that three weeks later after this conversation 'MacNider changed and turned around for the bonus. It is interesting to note that.

He [MacGuire] said, "There is going to be a big quarrel over the reappointment of MacArthur . . . you watch the President reappoint him. He is going to go right and if he does not reappoint him, he is going to go left."

I have been watching with a great deal of interest this quarrel over his reappointment to see how it comes out. He [MacGuire] said, "You know as well as I do that MacArthur is Stotesbury's son in law in Philadelphia-[Stotesbury being] Morgan's representative in Philadelphia. You just see how it goes and if I am not telling the truth."

I noticed that MacNider turned around for the bonus, and that there is a row over the reappointment of MacArthur.



 

4


Convinced by now of the seriousness of the plot, and its magnitude, Butler had endeavored to learn how far along the conspirators were in the creation of the new superorganization that would control the proposed veterans' army. MacGuire gave him some tips on recognizing its appearance.


BUTLER: Now, there is one point . . . which I think is the most important of all. I said, "What are you going to call this organization?"

He said, "Well, I do not know."

I said, "Is there anything stirring about it yet?"

"Yes," he says; "you watch; in two or three weeks you will see it come out in the paper. There will be big fellows in it. This is to be the background of it. These are to be the villagers in the opera. The papers will come out with it-" He did not give me the name of it, but he said that it would all be made public; a society to maintain the Constitution, and so forth. They had a lot of talk this time about maintaining the Constitution. I said, "I do not see that the Constitution is in any danger."


Butler's next observation, possibly the most significant in all his testimony, was missing from the published version of his testimony. It was the link between the conspiracy and the powerful interests Butler had good reason to believe were the "big fellows" in the background.


† BUTLER: . . . and in about two weeks the American Liberty League appeared, which was just about what he described it to be.


The American Liberty League, which had brokerage head Grayson M.-P. Murphy as its treasurer and Robert S. Clark as one of its financiers, also had John W. Davis, alleged writer of the gold-standard speech for Clark, as a member of the National Executive Committee. Its contributors included representatives of the Morgan, Du Pont, Rockefeller, Pew, and Mellon interests. Directors of the League included A1 Smith and John J. Raskob. League later formed affiliations with pro-Fascist, antilabor, and anti-Semitic organizations.

It astonished Butler that former New York Governor A1 Smith, who had lost the 1928 presidential race to Hoover as the Democratic candidate, could be involved in a Fascist plot backed by wealthy men. But the "happy warrior" who had grown up on New York's East Side had traded his brown derby for a black one. He was now a business associate of the powerful Du Pont family, who had cultivated him through Du Pont official John J. Raskob, former chairman of the Democratic party. Under their influence Smith had grown more and more politically conservative following his defeat. Butler's query about Smith, and MacGuire's reply, were both deleted from the official testimony of the hearings.


† BUTLER: I said, "What is the idea of Al Smith in this?" "Well," he said, "A1 Smith is getting ready to assault the Administration in his magazine. It will appear in a month or so. He is going to take a shot at the money question. He has definitely broken with the President."

I was interested to note that about a month later he did, and the New Outlook took the shot that he told me a month before they were going to take. Let me say that this fellow [MacGuire] has been able to tell me a month or six weeks ahead of time everything that happened. That made him interesting. I wanted to see if he was going to come out right. . . .


In testimony that was also censored, Paul Comly French revealed that MacGuire had implicated the Du Ponts to him, indicating the role they would play in equipping the superarmy being planned by the plotters.


† FRENCH: We discussed the question of arms and equipment, and he suggested that they could be obtained from the Remington Arms Co., on credit through the Du Ponts.

I do not think at that time he mentioned the connections of Du Pouts with the American Liberty League . . . but he skirted all around the idea that that was the back door; one of the Du Pouts is on the board of directors of the American Liberty League and they own a controlling interest in the Remington Arms Co.... He said the General would not have any trouble enlisting 500,000 men.


In a story it ran on November 21, 1934, The New York Times noted, "According to General Butler ... he was to assemble his 500,000 men in Washington, possibly a year from now, with the expectation that such a show of force would enable it to take over the government peacefully in a few days."

During his last talk with MacGuire, Butler had once more pressured him to explain the persistent bond salesman's personal stake in the conspiracy.


BUTLER: I asked him again, "Why are you in this thing?"

He said, "I am a business man. I have got a wife and children."

in other words, he had had a nice trip to Europe with his family, for nine months, and he said that that cost plenty, too. . . .

So he left me, saying, "I am going down to Miami and I will get in touch with you after the convention is over, and we are going to make a fight down there for the gold standard, and we are going to organize."


After he had been urged over forty times to accept the leadership of the Fascist coup d'etat being planned, while he gathered as much information about it as he could, Butler had then sought to gather corroborative evidence through reporter Paul Comly French.


BUTLER: ... in talking to Paul French here-I had not said anything about this other thing, it did not make any difference about fiddling with the gold standard resolution, but this [the Fascist plot] looked to me as though it might be getting near that they were going to stir some of these soldiers up to hurt our Government. I did not know anything about this committee [the American Liberty League], so I told Paul to let his newspaper see what they could find out about the background of these fellows.


Although Butler recalled having induced French to check into the case, former Philadelphia Record city editor Tom O'Neil gave the author his recollection that Butler had approached him and told him the whole story. O'Neil recalled that he had agreed to assign French to investigate. Probably Butler first approached French, who had referred him to the city editor.

Butler gave the McCormack-Dickstein Committee his view that the plot might have been hatched out of a racket that MacGuire had been working as a moneymaking scheme.


BUTLER: I felt that it was just a racket, that these fellows were working one another and getting money out of the rich, selling them gold bricks. I have been in 752 different towns in the United States in three years and one month, and I made 1,022 speeches. I have seen absolutely no sign of anything showing a trend for a change of our form of Government. So it has never appealed to me at all. But as long as there was a lot of money stirring around-and I had noticed some of them with money to whom I have talked were dissatisfied and talking about having dictators-I thought that perhaps they might be tempted to put up money.


Butler testified that his last encounter with MacGuire had been reference to French's attempt to talk to him.


CHAIRMAN: Did you have any further talks with him?

BUTLER: No. The only other time I saw or heard from him was when I wanted Paul to uncover him. He talked to me and he telephoned Paul, saying he wanted to see him. He called me up and asked if Paul was a reputable person, and I said he was. That is the last thing I heard from him. CHAIRMAN: The last talk you had with MacGuire was in the Bellevue in August of this year?

BUTLER: August 22; yes. The date can be identified.


He concluded his testimony by urging the committee to question several persons about the plot in addition to MacGuire-notably Murphy, Doyle, and Legion Commander Frank N. Belgrano. This request was also stricken from the official record.

Butler was aware that Chairman McCormack was himself a Legionnaire and that the revelations of the plot implicating Legion officials might be painful to him. But Butler also knew that McCormack was a determined foe of Nazi propaganda and a staunch supporter of New Deal measures. Butler counted on his indignation over the conspiracy to bring about a full-scale investigation by the Department of justice.


 

5


After Butler had completed his testimony, Paul Comly French took the witness chair to report on his own investigation of the plot, in which a candid two-hour conversation with MacGuire at the latter's office figured prominently.

Describing these talks on the premises of Grayson M.-P. Murphy and Company, French verified every allegation about the plot the general had attributed to MacGuire. In addition French reported the more open statements MacGuire had made to him about the nature of the conspiracy and how it would work. More frank with French, apparently, than he had dared to be with the general, MacGuire made little attempt to disguise the Fascist nature of the proposed putsch with euphemistic phrases about "supporting the President."


FRENCH: We need a Fascist government in this country, he insisted, to save the Nation from the Communists who want to tear it down and wreck all that we have built in America. The only men who have the patriotism to do it are the soldiers and Smedley Butler is the ideal leader. He could organize a million men overnight.

During the conversation he told me he had been in Italy and Germany during the summer of 1934 and the spring of 1934 and had made an intensive study of the background of the Nazi and Fascist movements and how the veterans had played a part in them. He said he had obtained enough information on the Fascist and Nazi movements and of the part played by the veterans, to properly set up one in this country.

He emphasized throughout his conversation with me that the whole thing was tremendously patriotic, that it was saving the Nation from Communists, and that the men they deal with have that crackbrained idea that the Communists are going to take it apart. He said the only safeguard would be the soldiers. At first he suggested that the General organize this outfit himself and ask a dollar a year dues from everybody. We discussed that, and then he came around to the point of getting outside financial funds, and he said that it would not be any trouble to raise a million dollars.


French's use of the phrase "crackbrained idea" to describe the notion by financiers and captains of industry that the country needed to be saved from communism was obviously his own, and not MacGuire's, expression.

Censored in French's testimony was his revelation of the sources to which MacGuire had said that he could turn for the funds to finance the veterans' army.


† FRENCH: He said he could go to John W. Davis [attorney for J. P. Morgan and Company] or Perkins of the National City Bank, and any number of persons to get it.

Of course, that may or may not mean anything. That is, his reference to John W. Davis and Perkins of the National City Bank.


French testified that MacGuire had sought to impress him by indicating high-level support for the conspiracy from important movers and shakers of the American Legion.


FRENCH: He then pushed a letter across the desk and said that it was from Louis Johnson, a former national commander of the American Legion.

CHAIRMAN: Did he show you the letter?

FRENCH: I did not read it. He just passed it over so I could see it, but he did not show it to me. He said that he had discussed the matter with him along the lines of what we were now discussing, and I took it to mean that he had talked of this Fascist proposition with Johnson, and Johnson was in sympathy with it.


During the conversation he also mentioned Henry Stevens, of Warsaw, N.C., a former national commander of the American Legion, and said that he was interested in the program. Several times he brought in the names of various former national commanders of the American Legion, to give me the impression that, whether justly or unjustly, a group in the American Legion were actively interested in this proposition.


CHAIRMAN: In other words, he mentioned a lot of prominent names; and whether they are interested or not, you do not know, except that he seemed to try to convey to you that they were, to impress on you the significance of this movement?

FRENCH: That is precisely the impression I gained from him.


As MacGuire had grown increasingly comfortable with him, French testified, the plotter had grown candid and enthusiastic about the Fascist rewards that would follow seizure of the White House. French's use of the word "brilliant" in the following portion of testimony was obviously sarcastic.


FRENCH: He had a very brilliant solution of the unemployment situation. He said that Roosevelt had muffed it terrifically, but that he had the plan. He had seen it in Europe. It was a plan that Hitler had used in putting all of the unemployed in labor camps or barracks-enforced labor. That would solve it overnight, and he said that when they got into power, that is what they would do; that that was the ideal plan.

He had another suggestion to register all persons all over the country, like they do in Europe. He said that would stop a lot of these Communist agitators who were running around the country.

He said that a crash was inevitable and was due to come when bonds reached 5 percent. He said that the soldiers must prepare to save the Nation.


If Roosevelt went along with the dictatorship as the King had done in Italy, MacGuire had suggested, Butler could have the proposed labor camps put under his own control.


† FRENCH: . . . he suggested that Roosevelt would be in sympathy with us and proposed the idea that Butler would be named as the head of the C.C.C. [Civilian Conservation Corps] camps by the President as a means of building up the organization. . . .


French then testified that MacGuire had told him the plotters could obtain arms and equipment from the Remington Arms Company, on credit through the Du Ponts. His testimony also implicated the American Liberty League.


† FRENCH: I do not think at that time he mentioned the connection of Du Ponts with the American Liberty League, but he skirted all around it. That is, I do not think he mentioned the Liberty League, but he skirted all around the idea that that was the back door; one of the Du Ponts is on the board of directors of the American Liberty League and they own a controlling interest in the Remington Arms Co. . . . He said the General would not have any trouble enlisting 500,000 men.


It was because MacGuire saw the general as the indispensable man of the putsch, French testified, that he persisted in his efforts to win Butler's adherence to the scheme.


FRENCH: When I left him he said that he planned to get in touch with the general and again try to persuade him to accept the leadership of this organization; that he was going to Miami in a couple of weeks for the national convention to do a little work.

CHAIRMAN: To beat the bonus?

FRENCH: Yes.

CHAIRMAN: I thought he was for the bonus.

FRENCH: He was at first.

BUTLER (interposing): He wants it paid in gold. Clark told me that he had been for the bonus or that he would be for the bonus if we could get the gold standard restored.

FRENCH: Then he said he would be in Miami. I told him that the general was going out on a rather lengthy speaking tour and did not know how to get to him. He said that he would either see him before he went to Miami or, if he could not, after he came back from Miami. But he did not see him and in a couple of days the general went out West. Then I went back to see MacGuire on the 27th of September and talked to him for only a few minutes this time. In the meantime I had tried to get in touch with him once when I was in New York, but he was then in Miami and could not. At this time he said that he was extremely sorry that he could not get to Newtown Square [Butler's home town], but hoped to do so soon; that things were moving nicely. Everything is coming our way, is the way he expressed it.



 

6


That same afternoon the committee grilled Jerry MacGuire, who had also been summoned to testify at the executive session. MacGuire, who earned only $150 a week as a bond salesman, contradicted himself on the amount of money he had received from sponsors and what he had done with it. He denied Butler's allegation that he had thrown eighteen thousand-dollar bills on the bed at the Newark hotel during the 29th Division convention to bribe Butler into going to the Legion convention in Chicago.

But he could not explain what he had done with at least thirty thousand in letters of credit, funds advanced to him by either Clark or Clark's attorney, Albert Grant Christmas, and which MacGuire had had with him at the Legion convention in Chicago the following October, at which he had been both a delegate and a member of the "distinguished guest committee."

The McCormack-Dickstein Committee found five significant facts that lent validity to Butler's testimony. Clark, who wanted the Legion to pass a gold-standard resolution, had given MacGuire those funds. In the long-distance call Clark had allegedly made to Chicago while Butler was listening, he had instructed MacGuire, "You can put this thing across alone. You've got $45,000. You can send those telegrams." MacGuire could not explain how he had spent those funds. But telegrams had, indeed, flooded the convention, and the Legion had passed the resolution.

Corroboration of Butler's testimony about MacGuire's mission in Europe was borne out by the committee's finding that he had spent large sums of money on that trip to study Fascist movements in Italy, Germany, and France. The committee found, too, that he and Clark had handled large sums of money for various organizations, that he had been active in organizations mentioned by Butler, and that he had acted as cashier for one organization. His accounts of some of these financial transactions failed to satisfy the committee, and he was curtly instructed to reappear the following day for further questioning.

Interviewed by reporters afterward, MacGuire declared that he was a personal friend of General Butler's and had last seen him six months earlier when he had gone to Philadelphia to sell some bonds. They had talked about an adequate military force for the nation, MacGuire insisted, and about world affairs in general, but he denied ever discussing a Fascist army or movement. A little desperately MacGuire suggested that "General Butler must be seeking publicity," and called the general's testimony "a pacifist stunt:" His attorney, Norman L. Marks, called it "a joke and a publicity stunt for General Butler."


 

7


Smedley Butler's reputation as an honest patriot made what he had testified to under oath impossible for the press to ignore. On November 21, 1934, in the center of its front page, The New York Times carried a two-column headline:

 


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

 

Reading the Times's account of the secret hearings, Butler was struck by a unique arrangement of the facts in the story. Instead of beginning with a full account of his charges, there was only a brief paragraph restating the facts in the headline. This was followed by a whole string of denials, or ridicule of the charges, by prominent people implicated. Extensive space was given to their attempts to brand Butler a liar or lunatic. Only at the tail of the story, buried inside the paper, did the Times wind up its account with a few brief paragraphs mentioning some of his allegations.

Many papers that picked up the story dropped the tail carrying even those cursory details of the plot. Newspaper publishers had little reason to be fond of the firebrand general who, in his speech to veterans in Atlanta almost a year earlier, had warned them not to believe the capitalist-controlled press, which, Butler charged, suppressed facts unfavorable to America's powerful corporations.

The New York Times did note, however, that Butler had told friends in Philadelphia that General Hugh S. Johnson, former N.R.A. administrator, had been among those slated for the role of dictator if Butler turned it down and that J. P. Morgan and Company and Grayson M.-P. Murphy and Company were both involved in the plot.

"It's a joke-a publicity stunt," Jerry MacGuire was quoted as insisting. "I know nothing about it. The matter is made up out of whole cloth. I deny the story completely."

General Johnson growled, "He had better be pretty damn careful. Nobody said a word to me about anything of this kind, and if they did I'd throw them out the window. I know nothing about it."

Thomas W. Lamont, partner in J. P. Morgan and Company, gave his comment: "Perfect moonshine! Too unutterably ridiculous to comment upon!" J. P. Morgan himself, just back from Europe, had nothing to say.

"A fantasy!" scoffed Colonel Grayson M.-P. Murphy. "I can't imagine how anyone could produce it or any sane person believe it. It is absolutely false so far as it relates to me and my firm. and I don't believe there is a word of truth in it with respect to Mr. MacGuire."

Colonel Murphy specifically denied to reporters that he had financed any Fascist plot and called the statement that he had made out a check for General Butler's Chicago expenses "an absolute lie." He declared that he did not know General Butler and had never heard of the reputed Fascist movement until the charges had been published. He insisted that in 1932 he had voted for President Roosevelt, the target of the alleged plot.

Asked about these denials, Butler snorted to a New York Times reporter, "Hell, you're not surprised they deny it, are you? What they have to say they'll say before the committee." He wanted them under oath, as lie had been.

In Washington General Douglas MacArthur, Chief of Staff, was unavailable for comment because of a real or a diplomatic "heavy cold." His aides, however, expressed amazement and amusement that MacArthur had been named by Butler as an alternate choice of the plotters for dictator if Butler persisted in refusing the offer.

"All the principals in the case," George Seldes noted in his book Facts and Fascism, "were American Legion officials and financial backers."

Secretary of War George H. Dern, Secretary of the Navy Claude A. Swanson, and a large number of senators and congressmen urged the McCormack-Dickstein Committee to get to the bottom of the conspiracy.

"We are going to make a searching investigation of the evidence submitted by General Butler," McCormack announced. "Our original information came from several different sources. General Butler was not the first source of our information. . . . We have been in possession of certain information for about five weeks and have been investigating it. We will call all the men mentioned in the story, although Mr. Clark is reported to be in Europe."

"From present indications," declared Dickstein, "Butler has the evidence. He's not going to make any serious charges unless he has something to back them up. We'll have the men here with bigger names than his." He added that Butler had substantiated most of the statements attributed to him and had enied none. Both McCormack and Dickstein emphasized that the general had repulsed all proposals from the Fascist group.

Dickstein indicated that about sixteen persons mentioned to the committee by Butler would be subpoenaed and that an open hearing might be held within a week.


 

8


Returning frorn Washington, Butler was besieged by reporters at his home in Newtown Square.

"My name has been used all around the country by organizations," he told them. "They'd get some vets and say, `See, we have Butler with us.' They were using me. The investigators who have been running this thing down found my name popping up everywhere, so they wanted to know what I knew about it-and I'm not the only man in this thing."

Next day Dr. W. D. Brooks, of Jackson, Michigan, wired the President:


Very obviously Wall St. plans to take over the U.S. Govt. if Hoover re-elected. Very obviously Butler is telling the truth. I have been looking for just this attempt at a Wall St. coup if your policies looked like succeeding. Wall St. is the enemy of our govt. and Butler is giving it to you straight-don't doubt that for a minute.


The writer was unable to ascertain the identity of Dr. Brooks, but apparently his opinion carried some weight at the White House, because Louis Howe referred his wire to Attorney General Homer S. Cummings "for acknowledgment and consideration." A demand for prosecution of the conspirators came from many V.F.W. posts all over the country, which passed resolutions praising Butler for exposing the plotters. Typical was the resolution of Philadelphia Post 37 on November 22, 1934:


Whereas Major General Smedley D. Butler has again exhibited his patriotism, sterling integrity and incorruptible character by exposing a sinister clique of adventurers who would undermine and destroy our form of government, and whereas such treasonable activities by men of money and of influence are more dangerous to our institutions than radical groups in our midst, therefore be it resolved ... that it commend General Butler for his patriotic spirit and hereby expresses its deep gratitude for his great service to our country. And be it further resolved that the Clair Post hereby respectfully requests the Attorney General of the United States to take proper legal action against all guilty parties involved.


If the press seemed overeager to emphasize denials of Butler's charges, the people of grass-roots America were far readier to believe the man who had exposed the plot. Letters of encouragement poured in from all over the country. One Nebraska woman wrote him:


It is heartening to find a man who has the courage to fight that Octopus, Wall St. More power to you. There are millions of honest people in the United States who applaud you and would follow you heart & soul. Read of MacNider's name being linked with the case. Heard him speak before a woman's club in Omaha. Sized him up as being that kind of tripe. Here's hoping you expose these traitors to a showdown. Yours for justice. . . .


Jerry MacGuire returned as a witness for a second day of secret grilling by the McCormack-Dickstein Committee. Again he denied Butler's charges that he had approached the general on behalf of a plot to establish a Fascist dictatorship.

He testified that lie had received thirty thousand dollars from Robert Sterling Clark to be deposited in the Hanover Trust Company to the credit of "The Committee for a Sound Dollar and Sound Currency, Inc." He and his backers had only wanted to interest Butler in that committee, MacGuire insisted, because as an important and popular public figure the general could command attention for their movement. They wanted to give him the opportunity to "make a little money" in the process.

Although Clark, his attorney A. G. Christmas, Walter E. Frew, and others were behind the Committee for a Sound Dollar and Sound Currency, their names had been carefully omitted from its records. MacGuire testified that as far as he knew, Clark had never had any interest in a Fascist organization. But the McCormack-Dickstein Committee located letters from MacGuire written from Europe to Clark and Christmas that proved otherwise.

To many questions thrown at him MacGuire answered evasively, "It is too far back," or "I cannot recall." At the conclusion of his testimony Dickstein told reporters that MacGuire was "hanging himself" by contradictions in his story and by forced admissions made during his testimony. When this opinion was quoted in a few evening newspapers, Dickstein observed that he had meant it to be "off the -record."

Norman L. Marks, the attorney who had accompanied Mac Guire at the secret hearings, told reporters that MacGuire had denied ever having had any connection with any Fascist organization of any sort; that he had ever been the "cashier" for any Fascist group; or that he had gone to Europe to study the Fascist movement. MacGuire's European trip, Marks alleged, had been solely for purposes of private business.

McCormack declared that all information about the testimony would be withheld because it had been given in closed executive session. But the fact that the committee regarded the testimony as important, he added, was shown by the decision to recall MacGuire for further questioning. Despite Dickstein's earlier statement that sixteen people named by Butler would be subpoenaed, McCormack said that the committee had not yet decided whether to call additional witnesses. Noting that the most important witness, apart from MacGuire, was Robert S. Clark, "a wealthy New Yorker with offices in the Stock Exchange Building," who was abroad, McCormack indicated that if the facts warranted, a public hearing would be held. Leaders of important organizations like the American Legion and the V.F.W. would then be invited to appear before the committee.

The Associated Press reported from Indianapolis that banker Frank N. Belgrano, Jr., national commander of the Legion, had denied that the Legion was involved "in the slightest degree" in any plot to supply an army for a "march on Washington." Highly placed Legion officials in Washington also characterized as "horsefeathers" a rumor that a group of "big-business men" had promised the Legion payment of adjusted service certificates, in return for a pledge to support the Fascist movement.

Louis Johnson, former Legion national commander, declared in Fairmont, West Virginia, that he could not recall having written the letter to Jerry MacGuire, promising to see him about Fascist army plan, that MacGuire had shown briefly to Paul Comly French. If he had written such a letter, Johnson insisted, it would show that he and the Legion were unalterably opposed to any dictatorship.

On November 22 the Associated Press struck a low blow at Butler by getting Mayor Fiorello LaGuardia, of New York, to express an opinion of the conspiracy based on what he had read about it in the press. The AP ran this "news item" under the headline "COCKTAIL PUTSCH," MAYOR SAYS:


Mayor LaGuardia of New York laughingly described today the charges of General Smedley D. Butler that New York brokers suggested he lead an army of 500,000 ex-service men on Washington as "a cocktail putsch." The Mayor indicated he believed that some one at a party had suggested the idea to the ex-marine as a joke.


Reading the press treatment of the scanty disclosures that had leaked out of the closed hearing, Butler was not surprised by the attempts to minimize and ridicule his exposure of the conspiracy. He had expected to be pilloried for his audacity in pinning a traitors' label on powerful American interests. He hoped, however, that the press would eventually be compelled to print the whole story of the plot as it had unfolded to him, when he testified at a public hearing along with French's corroboration. The committee would surely have to subpoena all the people who were implicated, in one way or another, to testify at that open meeting under oath.


 

9


Fresh support for Butler's expose came from Van Zandt, who revealed to the press that he, too, had been approached by "agents of Wall Street" to lead a Fascist dictatorship in the United States under the guise of a "Veterans Organization."

He revealed that Butler had informed him about the plotters' solicitation of the general two months earlier and had warned him that he, too, would be contacted by them at the V.F.W. convention in Louisville, Kentucky. Van Zandt said he had asked Butler the purpose of the organization and the general had replied that it sought to return the American dollar to the gold standard and, in MacGuire's words, "to get rid of this fellow in the White House."

In addition to Butler and himself, Van Zandt told reporters, MacArthur, Colonel Theodore Roosevelt, Jr., and former Legion Commander Hanford MacNider had recently been sounded out on their interest in leading the proposed Fascist veterans organization. He also charged that MacGuire had spent months in Europe studying Fascist organizations as models for an American one.

Theodore Roosevelt, Jr., decried as "ridiculous" the idea that he could be used to wrest the powers of the Presidency away from his fourth cousin, Franklin D. Roosevelt.

McCormack declared that the committee was continuing to give serious consideration to General Butler's charges and might call Van Zandt to testify on the proposals made to him and others he had named. MacGuire would be called before the committee again in executive session, he announced, for scrutiny of his bank accounts and records. But McCormack indicated that he intended to keep the scope of the investigation circumscribed by legal considerations.

"We don't intend to drag in names that come to us through rumors," he told reporters. "If investigation discloses there is sufficient reason to subpoena witnesses, we will do so. Simply because someone mentions the name of Mr. Lamont or General Johnson is not sufficient to ask them to appear before the committee."

Meanwhile the focus of the committee's interest was shifted when it turned its attention to investigating charges that some left-wing unions had used a three-million-dollar fund to "foment and carry on strikes." The New York Times ran headlines reading "Reds Fund Activity in Fur Industry" and "Red Union Funds Traced at Hearing." Buried in third-rank subheads, and in the body of the story, was further information about the Fascist plot.

A news dispatch from Paris reported that Robert Sterling Clark was sending a lawyer to New York to answer charges made by Butler and "clear the matter up." Clark declared himself bewildered by the mention of his name and said he would send the lawyer "if the whole affair isn't relegated to the funny papers by Sunday."

"MacGuire went to Europe for me, but his visit had nothing to do with politics," he insisted. "He visited France, Italy and Germany and was in Paris in February of this year. He spent four months on the Continent. His trip was made for the purposes of investigating the financial situation, the possibilities of monetary stabilization and commercial trends."

When reporters showed him Van Zandt's accusation that MacGuire had returned to the United States with copious data for setting up an American Fascist regime, he exclaimed, "My God, what is back of all this? I saw all of MacGuire's reports. I cannot imagine him doing anything else on the side."

Although he was on vacation in Paris, Clark declared, he was ready to return to testify if the committee summoned him.


 

10


MacGuire showed up a third time for interrogation by the committee, this time with the bankbooks, canceled checks, and other financial records he was ordered to produce. Before entering the committee room accompanied by his counsel, he asked permission to read to the committee a cablegram he had received from Albert Grant Christmas, Clark's lawyer, in Paris:


Read this wire when you testify. Reports of the Butler testimony in Paris outrageous. If reports are correct, my opinion is that a most serious libel has been committed. I am returning at once to testify as to our anti-inflation activities.


MacGuire now testified that on September 24, 1933, on the date Butler had said he was approached by MacGuire in the Newark hotel and offered eighteen thousand-dollar bills, MacGuire had been in Chicago. He claimed to have registered at the Palmer House on September 21, remaining in Chicago until October 8, so that he could not have met Butler in Newark on the twenty-fourth.

But committee investigators found that he had indeed called upon Butler that day and had had available at least sixteen thousand dollars, largely in thousand-dollar bills. Unless MacGuire had shown them to him, Butler could not possibly have known about them, lending strong verification to the general's charge that they had been tossed on his bed as a bribe.

MacGuire produced the bank accounts of the Committee for a Sound Dollar and Sound Currency, Inc., of which he was an official, and whose purpose he described as "opposing monetary inflation in the United States." He and his lawyer now insisted that the only discussions MacGuire had had with Butler concerned financial backing for a contracting concern.

MacGuire reluctantly admitted receiving $75,000 from Clark for an "unexplained purpose," the McCormack-Dickstein Committee report later noted, while working on a drawing account of $432 a month. This $75,000 was in addition to $30,00o he had also received from Walter E. Frew, of the Corn Exchange Bank, for the Committee for a Sound Dollar and Sound Currency, Inc. "Whether there was more, and how much more," said the report, the [McCormack-Dickstein] Committee does not yet know."

MacGuire admitted spending almost $8,000 on the trip to Europe, ostensibly to buy bonds, but the investigators noted the trip had resulted in detailed reports to MacGuire's backers on various Fascist organizations abroad.

Although he still denied having tossed the eighteen thousand-dollar bills on Butler's bed in the Newark hotel, the committee found bank records showing he had bought letters of credit six days later from Central Hanover Bank, paying for them with thirteen thousand-dollar bills.

The testimony of MacGuire under oath flatly contradicted everything Butler had testified to. The McCormack-Dickstein Committee was left with no other option than to conclude either that Butler was lying, in which case the whole plot was a fabrication or fantasy, or that MacGuire was lying, in which case Butler's charges were true, and the dangerous conspiracy of which he warned was a reality.


MCCORMACK: Did you leave a speech with him-a speech that he was to make to the convention if he went out there?

MACGUIRE: No, sir.

MCCORMACK: Was anything said about weakening the influence of the administration with the soldiers?

MACGUIRE: No, sir; I do not believe the administration was mentioned, as far as President Roosevelt or anybody down there are concerned....

MCCORMACK: Was there some talk about his going out as an individual Legionnaire and having two or three hundred Legionnaires go out to Chicago, too?

MACGUIRE: No, sir. . . .

MCCORMACK: At any time did you take out a bank book and show him deposits in it?

MACGUIRE: No, sir. . . .

MCCORMACK: Did he at any time ask you where you got the money?

MACGUIRE: I never had any money, and he never asked me if I had any. . . .

MCCORMACK: Did you know that Mr. Clark had a personal talk with General Butler?

MACGUIRE: It seems to me that he mentioned it to me, but I am not sure. . . .

MCCORMACK: Did you know that Mr. Clark talked with him about going to the convention?

MACGUIRE: No, sir; I do not....

MCCORMACK: Did Mr. Clark call you up in Chicago at any time?

MACGUIRE: Mr. Clark. No, sir....

MCCORMACK: Did 11e ever call you uP in Chicago from General Butler's home?

MACGUIRE: No, sir; to my recollection he did not. . . .

MCCORMACK: Did you tell him [Butler] at that time that you went abroad to study the part that the veterans played abroad in the set-up of the governments of the countries abroad?

MACGUIRE: No, sir.... .

MCCORMACK: Did you talk with him about the forming of an organization of that kind here.

MACGUIRE: No, sir....

MCCORMACK: You previously testified that you only had one transaction in the swapping of checks with Christmas [Clark's attorney] of $20,000 and until later, when you paid him back the balance?

MAcGUIRE: No; I believe that was paid back to Christmas in cash.

MCCORMACK: What have you got to show that?

MACGUIRE: I haven't got anything to show it.

MCCORMACK: Did you receive a receipt from Christmas?

MACGUIRE: No, sir; not necessarily; as far as that goes, he is an old friend of mine. . . .


At this point McCormack produced subpoenaed bank records showing that MacGuire had cashed letters of credit in the amount of $30,300, prior to the Legion convention in Chicago. MacGuire claimed that this money was meant to allow him to buy bonds in case he came across a good buy.


MCCORMACK: What did you do with that $30,300 in Chicago?

MACGUIRE: I kept that money in cash and put it in a safe deposit box with the First National Bank....

MCCORMACK: What became of that money? MACGUIRE: That money was brought back and returned to Mr. Christmas.

MCCORMACK: In cash?

MACGUIRE: Yes.

MCCORMACK: When did you return this $30,300 to Mr. Christmas?

MACGUIRE: I do not remember the date. . . .

MCCORMACK: Did you get a receipt for it?

MACGUIRE: No, I did not get a receipt for it....

MCCORMACK: Let me ask you this: why should you have cashed the letters of credit in Chicago and put that money in a safe deposit box?

MACGUIRE: Because I felt that if I had a chance to buy the bonds I could buy them right off for cash.

MCCORMACK: Wouldn't letters of credit be accepted just as cash?

MACGUIRE: They probably would.

MCCORMACK: Wouldn't they be safer than cash on your person?

MACGUIRE: They probably would, yes; but there is no objection to getting the cash, is there? ...

MCCORMACK: Did you buy any bonds?

MACGUIRE: No, sir.

MCCORMACK: What bonds did you want to buy? ...

MACGUIRE: I think Chicago Sanitary District 4's.

MCCORMACK: Whom did you talk to about buying the Chicago Sanitary District 4's?

MACGUIRE: I did not talk to anybody.

MCCORMACK: Whom did you speak to about it?

MACGUIRE: I didn't speak to anybody....


McCormack next turned to subpoenaed reports that MacGuire had sent back from Europe and cited the one he had sent back praising the Croix de Feu as a model veterans organization. He also read out another report MacGuire had submitted to his backers on the Fascist party of Holland.


MCCORMACK: And in this report you also said: "I was informed that there is a Fascist Party springing up in Holland under the leadership of a man named Mussait who is an engineer by profession, and who has approximately 50,000 followers at the present time, ranging in age from 18 to 25 years. It is said that this man is in close touch with Berlin and is modeling his entire program along the lines followed by Hitler in Germany. . . ." So you studied this Fascist Party when you were in Holland, did you?

MACGUIRE: No, sir; I did not. It was a matter of public information in the press and was reported so in the letter....


The committee examined tellers from the Central Hanover Bank and Trust Company and other banks on financial transactions that had taken place between MacGuire and Clark, on the account of Albert Christmas, Clark's attorney.

Evidence was found that the day before MacGuire had allegedly seen Butler in Newark, he had drawn six thousand dollars m thousand-dollar bills from a "special account" in the Manufacturers Trust Company and had also been given ten thousand dollars in thousand-dollar bills by Christmas in Clark's presence. The committee was convinced that MacGuire had been the "cashier" for the planned veterans organization.

The committee also found evidence that disproved MacGuire's alibi that he had been in Chicago on September 24, as well as his contention that he had not seen Butler on that day at the Newark hotel. And it was established beyond dispute that he had written detailed letters to Clark and Christmas reporting on the Black Shirts of Italy, the Brown Shirts of Germany, and the Croix de Feu of France.

McCormack announced grimly that he would subpoena Clark as soon as he returned from Europe. "As the evidence stands," he declared, "it calls for an explanation that the committee has been unable to obtain from Mr. MacGuire."

On November 26, 1934, referring to MacGuire's testimony, Representative Dickstein declared, "You can't get away from it -somebody is trying to shield somebody on something that looks rotten, and honest people don't do that."


 

11


When the committee called no further witnesses from among those named in the testimony, gossip swept Washington that the uncalled witnesses were simply too powerful to be subpoenaed.

Investigating, reporter John Spivak learned that the only one known to have been called to testify was California banker Frank N. Belgrano, commander of the American Legion. Checking into why he had not testified, Spivak found that he had been informed he could return home without having to answer a single question. The reporter could not verify a rumor that Belgrano had met with President Roosevelt at the White House, after which he had been taken off the committee's hook.

When Spivak tried to learn more about this from the committee itself, Dickstein revealed that he didn't know why Belgrano had been sent home without being questioned, and McCormack declined to answer any questions on the subject.

Apparently in response to Spivak and other newsmen pressing for an explanation of what the committee was doing about Butler's charges, McCormack announced on November 2,5 that the committee would make a statement the next day detailing the testimony it had received. He declared that it would reveal " several important inconsistencies" between the testimony of MacGuire and statements attributed to him in the press. McCormack also went out of his way to emphasize vigorously that General Butler could not be accused of "publicity seeking" in making public his exposure of the plot.

Next day, November 26, the committee's preliminary findings were released in an eight-thousand-word statement signed by McCormack and Dickstein. It began: "This committee has had no evidence before it that would in the slightest degree warrant calling before it such men as John W. Davis, General Hugh Johnson, General James G. Harbord, Thomas W. Lamont, Admiral William S. Sims or Hanford MacNider. The committee will not take cognizance of names brought into the testimony which constitutes mere hearsay. This committee is not concerned with premature newspaper accounts, when given and published prior to the taking of testimony. . . ."

In 1971 McCormack told the author that he had always tried to operate by the rules of courtroom law, eliminating hearsay evidence lie considered legally inadmissible. Dickstein had given the same explanation of the committee's modus operandi in 1934, whereupon Spivak had pointed out, "But your published reports are full of hearsay testimony." Dickstein had merely blinked and said, "They are?"

The committee statement withheld passing judgment on the testimony it had heard as premature, but the two chairmen indicated that they intended to pursue their inquiry further by calling Clark and Christmas to testify on their return from Europe, to question them about the thousand-dollar bills.

The New York Times reported:

 


COMMITTEE CALM
OVER BUTLER 'PLOT'

Has No Evidence to Warrant
Calling Johnson and Others
Named, It Declares

The so-called plot of Wall Street interests to have Major Gen. Smedley D. Butler head a Fascist movement to take over the national government and restore the gold dollar failed yesterday to emerge in any alarming proportions from the statement by the Congressional Committee on Un-American Activities cm the evidence before it. . . .

 

But the committee was far from being as "calm" about the matter as the Times story insisted. On that same day Dickstein wrote to President Roosevelt, "The committee on C.U.A.A. has issued the enclosed short report on Gen. Butler's charges, which we have made public, as the pressure brought to bear on the committee made this course absolutely imperative. . . . I should very much like to have a conversation with you at your convenience."

The day after the Times ran its "Committee Calm" version of the preliminary McCormack-Dickstein statement, a refutation of this interpretation by Dickstein compelled the paper to print a revised article of the retraction. Now a new headline no longer carried the word "plot" in scoffing quotes:

 


BUTLER PLOT INQUIRY
NOT TO BE DROPPED

Dickstein Says Committee Will
Get to the Bottom of Story-
Awaits Clark's Return

The Congressional Committee on Un-American Activities still intends to get to the bottom of the story of a Wall Street plot to put Major Gen. Smedley D. Butler at the head of a Fascist army here, Representative Samuel Dickstein, vice chairman, said yesterday. The committee's statement of the evidence, he explained, was intended only to satisfy the great public interest in the plot.
Mr. Dickstein said that the committee was pleased that this preliminary report was received "neither as a whitewash of notable persons nor as sensationalism because of the startling nature of the possibilities, but simply as an indication of the purpose of the committee to proceed carefully in such an important matter."

 

Dickstein emphasized that the committee was far from satisfied with the story told by MacGuire, whose memory had failed to produce any satisfactory account of the funds that he had handled for Clark and Christmas. Furthermore, although Clark and Christmas had cabled from abroad that they were willing to return to testify, Dickstein said that they had not done so and that the committee would like to question them both. As soon as their presence was assured, a special executive session of the committee would be called to hear them.

On November 30 President Roosevelt replied to Dickstein, thanking him for sending him the preliminary report on the testimony and declaring, "I am interested in having it. I take it that the committee will proceed further."


 

12


On December 3, 1934, Time magazine ran a first-page story that attempted to ridicule Butler under the headlines "Plot Without Plotters." The story opened with a pseudoaccount of Butler on a white horse assembling 500,00o veterans at a C.C.C. camp at Elkridge, Maryland, and crying, "Men, Washington is but 30 miles away! Will you follow me?" The men all shout, "We will!" Then Butler's army marches south to Washington on Highway 1 while an ammunition train supplied by Remington Arms Company and E. I. du Pont de Nemours and Company brings up the rear.

Also in the column on horseback behind Butler, according to Time's burlesqued version of the plot, are "that grim, old-time cavalryman, General Hugh Samuel Johnson" and MacArthur; behind them, three past national commanders of the American Legion-MacNider, Johnson, and Henry Stevens. They are followed in a shiny limousine by J. P. Morgan and his partner, Thomas W. Lamont.

Then, in Time's parody, Butler ("his spurs clinked loudly") strides into Roosevelt's study and barks, "Mr. President, I have 500,000 men outside who want peace but want something more. I wish you to remove Cordell Hull as Secretary of State." Roosevelt promptly telephones for Hull's resignation.

"And now, Mr. President, I ask you to fill the vacancy which has just occurred in your Cabinet by appointing me Secretary of State." Roosevelt signs the commission for Butler, who then tells him, "Let it be understood that henceforth I will act as the nation's executive. You may continue to live here at the White House and draw your salary but you will do and say only what I tell you. If not, you and Vice-President Garner will be dealt with as I think best. In that event, as Secretary of State, I shall succeed to the Presidency, as provided by law." The President nods assent, and the United States becomes a Fascist state. Time then commented:


Such was the nightmarish page of future United States history pictured last week in Manhattan by General Butler himself to the special House Committee investigating un-American Activities. No military officer of the United States since the late tempestuous George Custer has succeeded in publicly floundering in so much hot water as Smedley Darlington Butler.


Time then recounted highlights of Butler's career, emphasizing the controversies he had never shied away from and implying that they arose solely from the general's taste for publicity.


Last month he told a Manhattan Jewish congregation that he would never again fight outside the U.S. General Butler's sensational tongue had not been heard in the nation's Press for more than a week when he cornered a reporter for the Philadelphia Record and New York Post, poured into his ears the lurid tale that he had been offered leadership of a Fascist Putsch scheduled for next year. . . .

Thanking their stars for having such sure-fire publicity dropped in their laps, Representatives McCormack and Dickstein began calling witnesses to expose the "plot." But there did not seem to he any plotters.

A bewildered army captain, commandant at the Elkridge CCC camp, could shed no light on the report that his post was to be turned into a revolutionary base.

Mr. Morgan, just off a boat from Europe, had nothing to say, but Partner Lamont did: "Perfect moonshine! Too utterly ridiculous to comment upon!" . . .

Investor Clark, in Paris, freely admitted trying to get General Butler to use his influence with the Legion against dollar devaluation, but stoutly maintained: "I am neither a Fascist nor a Communist, but an American." He threatened a libel suit "unless the whole affair is relegated to the funny sheets by Sunday."

"It sounds like the best laugh story of the year," chimed in General MacArthur from Washington. . . .

Though most of the country was again laughing at the latest Butler story, the special House Committee declined to join in the merriment. . . . "From present indications," said the publicity-loving New York Representative [Dickstein], "General Butler has the evidence. He's not making serious charges unless he has something to back them up. We will have some men here with bigger names than Butler's before this is over."


For those of its readers who might have found Time's satirical attack too subtle, the magazine helped them get the message by its choice of photos to accompany the story. An unflattering photo of Butler in civilian clothes, with his finger reflectively in one ear, was labeled, "He was deaf to a dictatorship." The pose subtly suggested that the general, as the copy broadly hinted, was a bit daft.

In contrast, a jovial, laughing picture of that good-natured, genial humanitarian, J. P. Morgan, looking like everybody's grandfather, was labeled, "Moonshine provided the amusement." And a stern, handsome picture of Colonel Grayson M.-P. Murphy, dressed in a trim World War I colonel's uniform, hand dashingly on hip, was captioned with this quote: "'A fantasy!"'

The author asked McCormack in 1971 about Time's fairness in reporting the Butler hearing. The answer was a snort of disgust. "Time has always been about as filthy a publication as ever existed," he said emphatically. "I've said that publicly many times. The truth gets no coverage at all, just sensationalism, whatever will sell copies."

Indignant on Butler's behalf, the New York City post of the V.F.W. sent President Roosevelt a wire on December 7 pledging their loyalty and support, and commending Butler for his courage and patriotism in exposing the conspirators.

Ten days later McCormack announced that Albert Christmas had returned from Europe and would testify in two or three days in an executive session. Clark's attorney was not questioned, however, until the final day of the committee's life, January 3, 1935, after which no further investigatory action could be taken by the committee.

". . . and then the questions were limited only to money given MacGuire by the lawyer and Clark," Spivak noted. "Presumably because of the sacredness of lawyer-client confidences, no questions were asked about conversations or correspondence between an alleged principal in the plot and his attorney."

There was an interesting exchange, nevertheless, in the matter of $65,000 MacGuire testified that he had received for traveling and entertainment expenses:


MCCORMACK: So the way you want to leave it is there is $65,000 or $66,000 that Mr. MacGuire received from either you, or Mr. Clark, which he spent in the period between June and December of 1933 for traveling and entertainment expenses?

CHRISTMAS: Yes, sir.

MCCORMACK: Did he return to you some time in August [1934] approximately $30,000 in cash?

CHRISTMAS: No.

MCCORMACK: Do you know he testified he did?

CHRISTMAS: The committee gave me some indication of such testimony at a previous session.

MCCORMACK: Assuming he has testified to that, that is not so?

CHRISTMAS: I would say he is in error. He is mistaken.


So the committee found still another reason to doubt the veracity of MacGuire, who had denied, under oath, all the allegations of the Fascist plot in which he was the go-between, as alleged by General Smedley Butler.


 

13


Press coverage of what was obviously a startling story of utmost importance to the security of the nation was largely one of distortion, suppression, and omission.

"In the case of the Liberty League-Legion-Wall Street conspiracy to overthrow the United States Government," George Seldes declared in his book 1000 Americans, "there was one of the most reprehensible conspiracies of silence in the long (and disgraceful) history of American journalism."

In his book Facts and Fascism he wrote, "Most papers suppressed the whole story or threw it down by ridiculing it. Nor did the press later publish the McCormack-Dickstein report which stated that every charge Butler made and French corroborated had been proven true."

The most sensitive revelations, as far as the press was concerned, were those touching upon connections with J. P. Morgan and Company and the powerful interests represented by the American Liberty League. Heywood Broun, the highly esteemed columnist for the New York World Telegram, once observed that the face of The New York Times was "black with the Morgan shoepolish." Speaker McCormack told me, "The Times is the most slanting newspaper in the world. I would not expect anything else from them. They brainwash the American people. It's an empire."

In fairness to The New York Times of today, however, I should quote their severest critic, George Seldes, who wrote me in October, 1971, "I find the press [today] more liberal, too, especially The New York Times. (And I have not grown mellow in my views, I think.)"

If the prestigious Times had distorted the Wall Street conspiracy story in 1934-1935, class-angling the news was obviously more pronounced in the heavily anti-Roosevelt, pro-big-business press of that day, much of which derived huge advertising revenues from corporations involved in the American Liberty League.

Van Zandt wrote Butler on December 26, "The next time I see you I will explain to you just how I became involved in the Nazi story. After I read your article in the paper the Commander of North Dakota and a few others asked me to give them the lowdown which I did resulting that one of the boys carried the story to the newspaper; therefore, causing such article to appear in print, and, of course, misquoting me all around."

Butler replied on January 2, 1935, "I thought your statements on the Fascist story were darn good and served to stir up the lines. However, I can guess how it came about, but it did no harm."


 

14


The storm of controversy over his exposure of the plot led radio station WCAU of Philadelphia, Pennsylvania, to urge Butler to make broadcasts for them two to four nights a week. He agreed, and beginning on January 4 took to the airwaves with hard-hitting attacks on Fascist plotters. What he had to say was impressive enough to make small headlines in the back pages of newspapers sufficiently often to generate enthusiastic support from the nation's veterans.

On January 7 the Miami, Oklahoma, post of V.F.W. passed a resolution: "Major General Smedley D. Butler should be commended for his high type of patriotism in exposing the alleged plot to establish a dictatorship in the United States, and . . . Franklin D. Roosevelt, President, and citizens of the United States, should express their appreciation of this exposure."

A movement began within the V.F.W. to have each post reaffirm its loyalty to the President and the Constitution. "This, in my opinion, would serve notice upon all plotters against our government," wrote Henry S. Drezner, V.F.W. official of a Brooklyn post, "that the Veterans will not stand idly by while an attempt should be made to destroy our form of government."

On January 31 a New Jersey veteran wrote Butler, "General, at this time I can say you have 95 percent of the New Jersey veterans in back of you in anything you do."

Two weeks later Dickstein declared that he intended to seek a new congressional appropriation to press a thorough investigation into Butler's charges.

"General Butler's charges were too serious to be dropped without further investigation," Dickstein insisted. "He is a man of unquestioned sincerity and integrity. Furthermore, in my opinion, his statements were not denied or refuted. I think the matter should be gone into thoroughly and completely and I intend asking Congress for funds to make such an investigation. The country should know the full truth about these reputed overtures to General Butler. If there are individuals or interests who have ideas and plans such as he testified to, they should be dragged out into the open."

February 15 McCormack submitted to the House of Representatives the committee's findings in the investigation:


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 (p. 9-114 D.C. 6 II).

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 (p. 111 D.C. 611).


There was also corroboration of this point in French's testimony. The committee then cited an excerpt from the letter MacGuire had written to Clark and Christmas from France praising the Croix de Feu as a model veterans organization.


This committee asserts that any efforts based on lines as suggested in the foregoing and leading off to the extreme right, are just as bad as efforts which would lead to the extreme left.

Armed forces for the purpose of establishing a dictatorship by means of Fascism or a dictatorship through the instrumentality of the proleteriat, or a dictatorship predicated on racial and religious hatreds, have no place in this country.


This total vindication of Butler did not burst like a bombshell across the front pages of America. Instead, as Seldes noted, "Most newspapers again suppressed or buried or belittled the official verdict."

The New York Times made no mention of the plot in its headlines on the committee's report, emphasizing instead the committee's proposal that all foreign propagandists-Fascist, Nazi, and Communist-be compelled to register with the State Department. In the fifth and sixth paragraphs of the story the Times briefly reported:


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.


And that was all.
 

15


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, and not for national security reasons. Spivak determined to get a look at the complete uncensored record of the testimony given at the executive session.

He had asked for permission to see it, in order to follow up leads on Nazi activities in the United States, but he had been turned down on grounds that no one outside the committee and its employees could sec transcripts of testimony taken in executive session.

Other newsmen, however, joined him in pressing for a copy of the Butler testimony. It was then that the defunct McCormack-Dickstein Committee, possibly to quiet persistent rumors about why it was being hushed up, decided to publish a 125-page document containing the testimony of Butler, McGuire, and others, on February 15, 1935. It was marked "Extracts," and the last page explained why:


In making public the foregoing evidence, which was taken in executive session in New York City from November 20 to 24, inclusive, the committee has ordered stricken there-from certain immaterial and incompetent evidence, or evidence which was not pertinent to the inquiry, and which would not have been received during a public hearing.


Spivak's newshawk instincts did not let him fully accept this explanation, because he knew that the committee had published hearsay evidence. Like a terrier worrying a rag doll, he persisted in trying to find out what evidence had been cut. Other questions nagged at him. Why had the committee at first announced it would subpoena all those named by Butler, only to declare later that it had no evidence on which to question them? Was the clue to this abrupt change of mind to be found in the censored testimony?

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. The implication was that release of certain names could embarrass the Democratic party, because two had been unsuccessful Democratic candidates for the Presidency -John W. Davis, the Morgan lawyer, and A1 Smith, governor of New York before Roosevelt.

Davis had been named in the committee's press release, but not A1 Smith, the erstwhile "happy warrior" from the slums of New York who had become codirector with Irenee du Pont in the American Liberty League, and a bitter critic of Roosevelt's liberalism and New Deal reform.

Spivak tried everything to check out the story but found himself up against a brick wall at every turn.

He 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. And die the committee did.

About a week later, seeking to do a story on its accomplishments in exposing Nazi and anti-Semitic activities in the United States, Spivak won permission from Dickstein to examine the committee's official exhibits and make photostatic copies of those that had been made public. Dickstein wrote a letter to this effect to the committee's secretary, Frank P. Randolph, and added, "If necessary consult John [McCormack] about it."

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.

Excited by this accidental stroke of luck, he 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, some of which could not be justified on grounds of hearsay evidence. Spivak copied down the censored material.

In 1971 I asked former Speaker McCormack if he could recall, after thirty-four years, the reasons for these omissions from the official record of the testimony at the hearings.

"I don't recall striking anything from the record," he told me, "but if I did, it was because I tried to be as careful as I could about hearsay evidence in open hearings. Executive hearings were different. We'd let people say anything there because we'd get lots of valuable tips to follow up that way. But in open hearings I insisted that all the evidence had to be pertinent, relevant, and germane-evidence that would stand up in a courtroom to the nth degree. I don't think all investigative committees follow this method, but they should. I wanted to be very careful about safeguarding the character of anyone who might be named, without hard evidence, by a witness in testimony at an open hearing, so if somebody gave hearsay evidence, I would say, `Strike it out."'

Omissions from the official record of some revelations from the testimony of Butler and French gave the American press, with a few minor exceptions, a legitimate excuse to keep silent about them. It was significant that none of the biggest newspaper chains or wire services saw fit to assign crack reporters to dig into what was obviously one of the biggest news stories of the decade.

John L. Spivak could not help wondering why MacGuire, the key to the plot, had not been compelled to testify on where and how he had obtained his advance inside information about AI Smith's plans, Hugh Johnson's firing, and the appearance of the American Liberty League; or why he had not been asked to reveal the sources of his information about the Morgan and Du Pont interests' involvement in the plot.

Worst of all, no one involved in the plot had been prosecuted. Spivak went to the Department of justice and pointed out that MacGuire had denied essential parts of Butler's testimony, which the committee itself reported it had proved by documents, bank records, and letters. Did the department intend to file a criminal prosecution against MacGuire for perjury or involvement in the plot?

"I was told," Spivak reported, "it had no plans to prosecute." Roger Baldwin, director of the American Civil Liberties Union, issued an angry statement on the curious apathy of the justice Department in punishing any of the miscreants:


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 government, is excusable on the part of those whose lofty motive is to preserve the profit system. . . .


Powerful influences had obviously been brought to bear to cut short the hearings, stop subpoenas from being issued to all the important figures involved, and end the life of the committee.

The Philadelphia Record, which broke the story by French, had these observations in an editorial:


General Butler deserves the highest praise for recognizing the significance of the offers made to him, and the menace they represent. "I'm a democrat, not a Fascist," General Butler says, "and I was sick and tired of being linked by rumor to this Fascist movement and that one. I believe in the right to vote, the right to speak freely and the right to write whatever one believes. . . . I am certainly not going to lead a movement to destroy the very principles in which I believe." General Butler performed a great public service and showed himself a true American by taking his information to the McCormack committee.


The Record condemned phony "popular" movements like the National Economy League, a front for big business, and added:


Some of the same interests behind the League, according to General Butler, are behind this effort to use him and his soldier following in defense of special privilege in America. The same people who succeeded in slashing aid to veterans would like to use those same veterans as their pawns in a war on democracy.

The folk who want Fascism in this country are the same folk who made profit while others bled and who would rather see the veteran starve than unbalance the budget, i.e., add to the burden of taxes on great wealth. They did it in Italy. They did it in Germany. They did it in Austria. They will try to do it in America. . . . General Butler has nipped one such movement in the bud.


John L. Spivak had shrewd observations about the reasons the conspirators had failed dismally in their treason:


The takeover plot failed because though those involved had astonishing talents for making breathtaking millions of dollars, they lacked an elementary understanding of people and the moral forces that activate them. In a money-standard civilization such as ours, the universal regard for anyone who is rich tends to persuade some millionaires that they are knowledgeable in fields other than the making of money. The conspirators went about the plot as if they were hiring an office manager; all they needed was to send a messenger to the man they had selected.


And with incredible ineptitude, they had selected the wrong man.


 

16


Was it possible that MacGuire had exaggerated to both Butler and French about the powerful and influential figures involved in the plot, in order to impress Butler into accepting the leadership of the Fascist putsch that MacGuire was in charge of planning?

It is conceivable that some of those named by MacGuire as under consideration for the role of dictator or subordinate posit ions of leadership had no knowledge of this fact, although Van Zandt reported that he, for one, had been approached. It is unlikely that Douglas MacArthur, as Chief of Staff and a stiff-necked hero with patriotic credentials as unchallengeable as Butler's, would have had any unsavory dealings with the plotters, however patrician his outlook.

As for involvement of the American Legion, MacGuire had obviously been influential enough in the organization to have been made chairman of the "distinguished guest committee" of its convention, on the staff of National Commander Louis Johnson, former Secretary of Defense and head of a large law firm in Clarksburg, West Virginia.

There is solid evidence that MacGuire had been able to use the Legion to do multimillionaire Robert S. Clark's bidding and get the Legion to pass a resolution demanding a return to the gold standard.

MacGuire was certainly financed by Clark, Christmas, Walter E. Frew, of the Corn Exchange Bank, and others through the Committee for a Sound Dollar and Sound Currency, Inc., of which MacGuire was an official. And the McCormack-Dickstein Committee verified that he had been sent abroad to study Fascist organizations in Europe as models for creating one in America and had reported favorably to Clark and Christmas about the Croix de Feu.

MacGuire had outlined to Butler and French the conspirators' plans for a putsch, indicating it would easily succeed in just a few days because a "big fellow" organization-later identified by Butler and French as the American Liberty League-was behind it with money and arms.

He might have been boasting falsely about having had his headquarters while in Paris at the offices of Morgan and Hodges and about the involvement of the Morgan interests in the plot. The McCormack-Dickstein Committee failed to pursue this line of investigation, but a remarkable number of "coincidences" linked the Morgan interests to various facets of the plot.

Colonel Grayson M.-P. Murphy, MacGuire's boss who had supported his denial of Butler's charges by insisting, "I don't believe there is a word of truth in it with respect to Mr. MacGuire," was a director of a Morgan bank. Butler testified that Clark had implicated John W. Davis, attorney for J. P. Morgan and Company, as author of the speech Clark had given MacGuire to get Butler to deliver at the Legion convention. Davis was the same man from whom MacGuire had declared he could easily raise a million dollars for his Fascist army. MacGuire had also revealed to Butler that the same financial interests who had been behind the gold-standard propaganda were financing the plot to seize the White House.

The formation of the American Liberty League had been announced precisely at the time MacGuire had predicted the emergence of an organization of "big fellows" who were in the background of the Fascist putsch. Its treasurer had been none other than Colonel Grayson M.-P. Murphy. One of its financial backers was Robert S. Clark. Two of the largest contributors had been the J. P. Morgan Associates and the Du Pont interests. John W. Davis was a member of the National Executive Committee. Morgan and Du Pont men were directors. And MacGuire had told French that the putsch could obtain arms and equipment from the Remington Arms Company, in which the Du Ponts held a controlling interest, on credit through the Du Ponts.

The presence of ex-Governor AI Smith in the American Liberty League baffled many Americans who could not understand what the former poor kid from the Bowery was doing mixed up with America's richest ultraconservatives. Few realized that following his defection from the Roosevelt camp, Smith entered private business as chairman of the board of the New York County Trust Company and joined in erecting the Empire State Building, of which he was corporation president.

His alliance with Raskob and the Du Ponts in the League brought charges that he had "forsaken the brown derby for the top hat." When he failed to stop Roosevelt's renomination in 1936, he stumped for Republican candidate Alf Landon, losing much of his former popularity in the process and speaking to dwindling, hostile audiences.

Were all the interlacing connections linking MacGuire, Clark, Colonel Murphy, and the Morgan and Du Pont interests to the plot only a series of remarkable coincidences? If so, another unique coincidence led the American Liberty League to subsidize such affiliated organizations as the openly Fascist and anti-Semitic Sentinels of the Republic and the Crusaders, who were urged by their leader, George W. Christians, to consider lynching Roosevelt.

One night when the President was scheduled to arrive in Chattanooga, Christians threatened to cut off the city's electric power and warned grimly, "Lots of things can happen in the dark!" This protege of the American Liberty League was kept under surveillance by the Secret Service.

As Donald R. McCoy observed in his book, Coming o f Age: The United States During the 1920's and 1930's, ". . . it was clear to most people that the organization [American Liberty League] was playing the same game on the Right as the radical groups were playing on the Left, to influence the [Roosevelt] administration and if unsuccessful to oppose it. As James Farley would later say, the American Liberty League. `ought to be called the American Cellophane League' because, `first it's a Du Pont product and second, you can see right through it."'

Finally, one must consider the outlook of the conspirators against the background of the times. During the feverish atmosphere of the early New Deal days, big business was horrified by Roosevelt's drastic surgery on the broken-down machinery of the capitalist system. The savage hatred of "that cripple in the White House" represented the most bitter animosity big business had ever manifested toward any President in American history.

Their hate campaign was echoed by the vast majority of newspapers, like the Hearst press, which had originally supported the President, then denounced him as a dictator. Roosevelt had been compelled to turn to "fireside chats" over the radio in order to communicate with the American people over the heads of the press lords.

In that emotional climate it was not at all surprising that some elements of big business should have sought to emulate their counterparts in Germany and Italy, supporting a Fascist putsch to take over the government and run it under a dictator on behalf of America's bankers and industrialists.

That it did not happen here could be credited largely to the patriotism and determination of one courageous American-Major General Smedley Darlington Butler.


*The reader who wishes to examine the official testimony is referred to the government report, 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., December 29, zg34. Hearings No. 73-D.C.-6, Part 1. Extracts of the censored testimony are revealed in the books A Man in His Time, by John L. Spivak, and 1000 Americans, by George Seldes.

*Italics are the author's."

 

 

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. Information Clearing House has no affiliation whatsoever with the originator of this article nor is Information ClearingHouse endorsed or sponsored by the originator.)

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