How the United States Narrowly Missed a Coup

by Timothy Chilman

email: timothychilman@yahoo.com

The term “conspiracy theory” did not enter the Oxford English Dictionary until 1997, but it was used as early as January 27, 1877 by lawyer David Dudley Field in The Fitchburg Sentinel in support of his view that the Republicans had stolen the 1876 election from Samuel Tilden.

General Smedley Darlington Butler

Retired Marine Corps General Smedley Darlington Butler (1881-1940) was described as a “foolish conspiracy theorist” after blowing the whistle on a fascist coup in the United States in 1933. The story was uncovered by journalist John Spivak in 1967 in a secret Congressional 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, DC, December 29, 1934. Hearings No. 73-D.C.-6, Part 1. He was accidentally sent the un-censored rather than censored version, which made this communist very happy. The report was the basis of his book, A Man in his Time.

Butler was known as “Old Duckboard,” “Old Gimlet Eye,” and “the Fighting Quaker.” He became a major general at the age of 48 and faced gunfire 120 times. On January 19, 1931 there was an incident best reported in Jules Archer’s work The Plot to Seize the White House, which illustrates Butler’s personality admirably and occurred when he made a speech to the influential Contemporary Club of Philadelphia.

Butler said, “I agree with Dr. Hull of Swarthmore; if we could all lay down our arms, there couldn’t be any war. But there are mad-dog nations who won’t get the word, who will refuse to sign the agreement, or, if they sign it, refuse to abide by it. A friend of mine said he had a ride in a new automobile with Mussolini, a car with an armored nose that could knock over fences and slip under barbed wire. He said that they drove through the country and towns at seventy miles per hour. They ran over a child and my friend screamed. Mussolini said he shouldn’t do that, that it was only one life and the affairs of the state could not be stopped by one life.”

Benito Mussolini

Butler was rewarded with an audible gasp from his audience. He stood, arms akimbo, thrust his head forward aggressively, and concluded: “How can you talk disarmament with a man like that?”

Although Butler had been informed that the audience was private and he could speak in confidence, one attendee was an Italian diplomat who reported the remarks to the Italian Ambassador, Giacomo de Martino. A formal protest was made to the State Department and sensational headlines ensued: a high-ranking, uniformed U.S. officer had publicly insulted the leader (although he preferred the term “il Duce”) of an allied government.

Secretary of State Henry L. Stimson formally apologized. President Hoover signed charges against Butler: “conduct unbecoming an officer and a gentleman” and “conduct to the prejudice of good order and discipline.” These are known in the armed services as Mother Hubbard charges, because they cover everything. Butler had acquired 18 decorations and was one of only four men to be awarded the Congressional Medal of Honor twice. He was arrested by telephone by Marine Commandant Ben Fuller.

Confined to his post, Butler’s presence was requested as guest of honor at a sportsmen’s dinner. L.C. Whitaker, his aide-de-camp, replied that “As General Butler is under arrest, he will be unable to attend.”

Marine officers largely believed Butler was the victim of revenge by Washington’s caste of desk warriors, for whom Butler had long shown extreme scorn. Public opinion favored him overwhelmingly: he was supported by the millions of Americans who disliked Mussolini and millions more veterans who adored him. Eventually, he wrote a letter of apology and was given a gentle reprimand. One headline went “YOU’RE A VERY BAD BOY.”

Journalist Cornelius Vanderbilt admitted to being the “friend” of the infamous anecdote, although Mussolini’s line, accompanied by a pat on the knee, had been, “Never look back, Mr. Vanderbilt. Always look ahead in life.”

On March 15, 1931, newspaper columnist Will Rogers wrote: “”He is what I would call a natural born warrior. He will fight anybody, any time….He carries every medal we ever gave out. He has two Congressional Medals of Honor….You give him another war and he will get him another one….I do admire him.”

Butler’s retirement ceremony

Butler retired at the end of 1931, which he said had always been his plan. He became a much sought-after public speaker. When publishers asked him to produce a book, he replied that he was raking in much more money from speaking than he could by writing. He said no publisher could “outbid the public,” although he later acquiesced.

On August 21, 1931, Butler addressed a convention of the American Legion in Connecticut, and made a speech whose first line gets 73,900 hits on Google:

“I spent 33 years . . . being a high-class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer for capitalism. . . .I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912. I helped make Mexico and especially Tampico safe for American oil interests in 1916. I brought light to the Dominican Republic for American sugar interests in 1916. I helped make Haiti and Cuba a decent place for the National City [Bank] boys to collect revenue in. I helped in the rape of half a dozen Central American republics for the benefit of Wall Street….

“In China in 1927 I helped see to it that Standard Oil went its way unmolested. . . . I had . . . a swell racket. I was rewarded with honors, medals, promotions…. 1 might have given A1 Capone a few hints. The best he could do was to operate a racket in three cities. The Marines operated on three continents. . .”

A shack of the Bonus Army after the intervention of U.S. troops

On July 17, 1932, many thousands of Great War veterans marched on Washington, set up camp, and demanded to be immediately paid the bonuses they were due in 1945 under the Adjusted Service Certificate Law of 1924. Known as “the Bonus Army,” they were addressed by Butler, who had served with them in the Spanish-American War, the Philippines campaign, the Boxer Rebellion, various interventions in Central America and the Caribbean known as the Banana Wars, the Chinese intervention of 1927-8 and the Great War. Butler told the soldiers: “They may be calling you tramps now, but in 1917 they didn’t call you bums!” He was held in the highest esteem by this constituency. Days later, President Hoover ordered the removal of the marchers. The camps were left desolated by cavalry troops led by General Douglas MacArthur.

Although he had described himself as a Republican, Butler supported Franklin Delano Roosevelt in the election of that year. Roosevelt had assisted him during the Mussolini affair. Butler’s own run for Senate was unsuccessful.

President Franklin Delano Roosevelt

When Roosevelt was elected president, almost 25 percent of workers were unemployed and industrial output was 30 percent lower than before the Great Depression. On March 5, 1933, one day after his inauguration, Roosevelt took drastic measures. The United States placed an embargo upon the export of gold and left the gold standard, a matter over which even his administration was divided. Budget Director Lewis Douglas remarked: “This is the end of Western civilization.” The enactment of a “New Deal ordered: the banking industry was supported and reformed, an agency was created to regulate the stock market, wages were boosted, and Social Security was introduced to assist the indigent. Big business was appalled by the extent of this intervention, and wondered who would foot the bill. They feared changes to finance in the United States, a rise in taxes or, horror of horrors, socialism.

Prescott Bush stood 6’4” tall, was charming, and possessed a rich singing voice. He was shortlisted by President Eisenhower as a presidential candidate to run against Senator John F. Kennedy in 1960, but never pulled it off as did his son and grandson. In common with them, he attended Yale and was an initiate in the secretive Skull and Bones student society: he is widely believed to have stolen the skull of the American Indian leader, Geronimo.

The evil of Prescott Bush went beyond merely being grandfather of Dubya. Then a senator, he was director of and shareholder in companies which profited from dealings with Nazi Germany even after Nazi policies became clear, and whose assets were seized by the Alien Property Custodian on October 20, 1942 under the Trading with the Enemy Act. His dealings resulted over 60 years later in litigation for damages by two people who had been slave laborers at Auschwitz.

Clayton Cramer is a historian whose work was cited by the United States District Court for the Northern District of Texas in United States v. Emerson (2001) and by the Supreme Court in District of Columbia v. Heller (2008) and McDonald v. Chicago (2010). In an article in History Today in 1995, he said that due to the ongoing Depression, many Americans had become disillusioned with the institutions of liberal democracy. There were many traditionalists, he said, who “toyed with the ideas of Fascism and National Socialism,” while great numbers of liberals “dallied with Socialism and Communism.” Leaders of American business considered that fascism would allow the preservation of their interests and resurrection of the economy.

Prescott Sheldon Bush was one of a number of the top businessmen in the United States who liked the way things were going in Germany and Italy and contemplated a coup against Roosevelt. Others were of the Hutton, Pitcairn, Pew, Mellon, and Rockefeller families and the Sun, Swift, GMC, Goodyear, Bethlehem, Anaconda, Remington, du Pont, and Morgan enterprises. Du Pont funded various right-wing groups, of which one was the Black Legion, a “sort-of Northern Ku Klux Klan”: an anti-socialist group which terrorized workers, bombed union meeting halls, and murdered organizers. The Black Legion assisted with industrial relations at du Pont’s General Motors plants.

The conspirators of what became known as the Business Plot envisioned a 500,000 strong force of Great War veterans armed by Du Pont’s Remington Arms Company who could be led to Washington. It was a time of peace, and the U.S. Army numbered only around 130,000. This paramilitary force would be the American Liberty League, which began as a lobby group. Its benefactors included the organizations behind the ubiquitous household products of Maxwell House, Bird’s Eye, Colgate, General Motors, and Heinz. To give an idea of the beliefs held by its leaders, we have one such, Demarest Lloyd, who wrote in his magazine Affairs: “Popular government is a perilous extravagance in times of emergency. …It is quite apparent that, unless confusion is to become chaos, Congress, like a long line of unfit rulers, should abdicate.”

Events in Europe had been closely studied, and the organization was modeled on the fascist French veteran’s group, the Croix de Feu. The models of Hitler’s brownshirts and Mussolini’s blackshirts had been studied and rejected.

Smedley Butler’s reception by the Bonus Army demonstrated that he could mobilize such a force. While left-leaning, he had participated in a number of violent changes of regime and fraudulent elections. He was present when the United States occupied Haiti to restore order, as a battalion commander in 1915 and commandant of the Gendarmerie d’Haiti from 1915-1918. One Haitian native, B. Danache, described him as a “torturer without scruple.” Clearly the man for the job.

Butler was approached on alleged American Legion business by 38 year-old Gerald P. MacGuire, a bond salesman for Grayson M.P. Murphy & Co who made all of $75 a week. MacGuire was short, stocky, and corpulent. His bullet-shaped head contained a silver plate owing to a battle wound. He had previously been a Commander of the Connecticut American Legion.

Butler met MacGuire in a hotel on August 22, 1933, where MacGuire requested that Butler be the “man on the white horse” who would lead veterans to provide the muscle for a coup d’etat against President Roosevelt. The motivation for such an action was economic: MacGuire said, “He has got to do something about it. 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!”

The “method” spoken of was the relationship between private finance and the United States government.

To set Butler against Roosevelt, he was told that he had been slated to be invited as a guest of the Chicago Convention, but Louis Howe, Secretary to the President, had instructed that this not occur.

Roosevelt’s polio would be used against him. MacGuire said, “We have got the newspapers. We will start a campaign that the President’s health is failing. Everyone can tell that by looking at him, and the dumb American people will fall for it in a second…” He added: “You know the American people will swallow that.”

Roosevelt would be obliged to announce that he was too sick from polio to serve as President. A new cabinet position, the Secretary of General Affairs, would be created to discharge the President’s duties. There are striking similarities between this position and that of the Secretary of Homeland Security. MacGuire said that Roosevelt might be dealt with as Mussolini had dealt with the King of Italy. The New Deal, known to fascists in the United States and Germany as the “Jew Deal,” would be scrapped. This could be expected to appeal to Butler as he had criticized the New Deal in his speeches.

General Hugh S. Johnson

General Hugh S. Johnson, formerly an official with the National Recovery Administration and Time magazine’s man of the year for 1933, would be installed as dictator. Financing would be by the du Pont and J.P. Morgan financial empires. It is widely believed that one of Hitler’s principal financiers, Fritz Thyssen, would also contribute cash.

MacGuire said that fascism in Europe had been found to only be possible with the co-operation of a strong faction of the military, which is where Butler came in. MacGuire offered Butler an inflammatory speech to give to the American Legion. One measure Butler was to propose was a return to the gold standard, although he later said, “I don’t know a damned thing about gold.” This aspect, however, suggests the involvement of big business. MacGuire flashed bank books containing deposits of more than $100,000 and a wad of 18 $1,000 bills. He claimed that three million dollars were immediately available, and business leaders could stump up an additional 27 million.

Butler disliked the idea, and decided to introduce a journalist to the scene so it would not be only his word against that of the conspirators. He chose Paul Comfy French, previously his personal secretary. French met MacGuire in his Wall Street office. MacGuire told him: “We need a fascist government in this country …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.”

French reported that MacGuire named high-ranking members of the American Legion whom he claimed were involved.

Butler asked to meet the people behind the plot, and was introduced to Robert Sterling Clark, a leading Wall Street banker and stockbroker and heir to the Singer sewing machine fortune. Butler said that Clark told him: “You know the president is weak. He will come right along with us. He was born in this class, and he will come back. He will run true to form. In the end he will come around.”

A meeting of the House Un-American Activities Committee

After MacGuire contacted him for a second time, Butler made his findings known to the government. The Special Committee on Un-American Activities Authorized to Investigate Nazi Propaganda and Certain Other Propaganda Activities was headed by future Speaker John W. McCormack of Massachusetts and Samuel Dickstein of New York. This was a precursor to the House Committee on Un-American Activities. More comfortably known as the McCormack-Dickstein Congressional Committee, it began to investigate Butler’s claims in March 1934. It had been established to obtain “information on how foreign subversive propaganda entered the U.S. and the organizations that were spreading it.”

French broke the story in the Philadelphia Record and New York Post on November 21. The next day, the New York Times described the affair as a “gigantic hoax.” House of Morgan partner Thomas Lamont was collared by journalists when he returned to the Untied States from Europe by steamer.
“Perfect moonshine! Too unutterably ridiculous to comment upon!” was his comment. Grayson Murphy said, “It was as if somebody had walked in and accused me of stealing the moon.”

Butler testified before the Committee at the Bar Association Building on 42 West 44th Street on December 29, 1934. In addition to Prescott Bush, as a plotter he named Grayson Murphy, a director of Goodyear, Bethlehem Steel, and a selection of Morgan Banks. Murphy was the original financier of the American Legion, which had been formed to “offset radicalism”. Also named were chemical industrialist Irénée du Pont; William Doyle, one-time state commander of the American Legion and allegedly the originator of the coup idea; John W. Davis, former Democratic candidate for President and a high-level attorney for J.P. Morgan; Robert Clark, one of the richest bankers on Wall Street; and Al Smith, the Democratic nominee for president in 1924 and 1928 and Roosevelt foe. None were called to testify. Butler complained that the names of plotters had been omitted from the Committee’s final report. Speaking on the radio, Butler said the Committee had “slaughtered the little and allowed the big to escape.” To newspapers, Butler said General MacArthur had been involved.

Captain Samuel Glazier told the Committee that he had been approached by another Wall Street bond salesman with an offer similar to Butler’s. James Van Zant, National Commander of the Veterans of Foreign Wars said he has also been spoken to by “agents of Wall Street.”

Those named dismissed the allegations as a “joke and a fantasy.” MacGuire denied all under oath, and died of pneumonia shortly after at the age of 37. As a repentant New York Times reported, the Committee determined after three months and 4,320 pages of testimony that Butler’s allegations were “alarmingly true” and that an attempt had been made “to establish a fascist organization in this country.” There was no great deal of coverage of the episode as the newspapers and magazines of the time were owned by a small group of men who were bankrolled by the figures Butler implicated. William Randolph Hearst was a member of the American Liberty League.

Roosevelt preferred not to execute some of the wealthiest men in the United States for treason. The BBC reported that he cut a deal with them: he would not order prosecution if Wall Street opposition to the New Deal ended. Butler became yet more repulsive to polite company.

The 2007 BBC radio documentary on the subject went unmentioned by the U.S. press. In a critique of the overextended American empire, retired U.S. Army Col. Andrew Bacevich said more U.S. officers had to get in touch with their “inner Smedley Butler.”

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