I’ve mentioned this before, but I was careful to bury the story within another story [stderr] because I felt that the whole story was questionable.
Briefly: Smedley Butler, one of the founding pillars of the modern US Marine Corps, winner of multiple congressional medals of honor for shooting helpless people (that’s how he put it), came forward one day with a shocking story that he had been approached by an agent representing some very wealthy and powerful American industrialists who wanted him to pull together and lead an army of 500,000 veterans to overthrow the government. The whole thing was laughed off as an old warrior’s fantasies, and the agent who had offered Butler the money never materialized; there was a lot of plausible deniability.
Suddenly, I don’t find the idea of wealthy power elites deciding to bypass a bit of democracy, to be so far-fetched. [timeline]
President Franklin Roosevelt made an enemy of the richest Americans with remarkable haste. By his first term, his heavily progressive New Deal taxes and the suspension of the gold standard inspired vocal opponents within the highest echelons of industry. Among them was an irate William Randolph Hearst, who filmed a message decrying the “impudent” and “despotic” new tax code. Yet of all of Roosevelt’s powerful enemies, perhaps none were more formidable, or incensed, than those who considered throwing him out of office by way of a fascist military coup.
It is impossible to say exactly how close the Business Plot – also called the White House Coup and Wall Street Putsch – came to overthrowing the president. Nearly all we know about the plot is the result of an investigation conducted by the House McCormack-Dickstein Committee in November, 1934. Its chief whistleblower was one Major General Smedley Butler, a respected and tenured military leader with a talent for rallying support to his side. His part in the story began on July 1, 1933, the day he met with two members of the American Legion who had ties to Wall Street heavies.
America’s rich were disgusted at having to share the pie; when Roosevelt tried to salvage the wrecked economy that resulted from run-away capitalist greed, a market bubble, and demobilization after WWI, the rich plotted to remove him. This was all seen (by the rich) in the context of a global march toward socialism, in the form of labor unions forming as a reaction to abusive labor practices – the flip side to the immense wealth of the Carnegies and Rockefellers was violence against laborers and the establishment of a permanent under-class.
In a second meeting, MacGuire, a $150-a-week bond salesman for the financier Grayson M. P. Murphy, proposed Butler bring along a few hundred veterans for support, and showed him bank statements amounting to $106,000, to pay for their travel expenses. A skeptical Butler surmised that no coalition of veterans could have gathered those funds. Adding to his bemusement was the speech they wanted him to deliver. It lacked populist, pro-veteran rhetoric, and read heavily as a screed in favor of the gold standard, a policy which President Roosevelt had suspended about a month earlier.
The gold standard, as Butler’s subsequent research would uncover, was a major concern for the country’s wealthiest citizens. Bankers especially did not want to be paid back on their gold-backed loans with cheaper, ever-inflating paper. Keynesian economics be damned: To the capital interests of the country, a break from gold meant ravaging the nation’s wealth and savings.
The rich see gold as a currency that cannot be controlled, and which can be squirreled away in locked boxes hidden in the castle, where the starving people (who want food, anyhow) can’t get at it. I suppose you can also grab your gold and run when the angry peasants come. The whole American aversion to inflation is intimately tied up in the movement from specie to “fiat currency.” As though the instantaneous value of gold and silver is not also a social construct that depends heavily on demand and futures speculation; that always drove me nuts on the few occasions I’ve talked to “gold bugs” – ‘oh, no, gold is inherently valuable’ not like paper money. That ignores the rich history of kings and other thugs manipulating the gold market by simply swanning in and grabbing the stuff, trading your gold for your life, which is to say devaluing it considerably, or revaluing it infinitely, depending on how important your life is to you. I never understood how gold is not a “fiat currency” when its value also depends on your local governments’ willingness not to march in and grab yours.
Inflation is the great anathema to the rich, and for good reason (from their perspective) – it’s a proportional tax on wealth that nobody can escape. Inflation hardly hurts the poor at all, but the rich are utterly traumatized by seeing all the paper they chased their whole lives revealed as worthless. Not to belabor the point: the same goes for gold – if your paper money is worthless and it’s 100,000 zorkmids for an egg, perhaps your gold zorkmid coins will hold up better than the paper zorkmids, but the price-gouging is going to still apply: that egg may cost 2 gold zorkmids, or a small fortune, if you haven’t got any food, and the seller does. The old Russian saying is “the rich cannot eat money” and it doesn’t matter because gold is as inedible as paper.
At this point, Butler knew MacGuire was taking orders from someone, and requested to speak up the chain of command. It was then he met with Robert Sterling Clark, whose net worth of $30 million owed much to a recent inheritance from the Singer sewing machine fortune. Butler remembered Clark as a “millionaire lieutenant,” from when they served together during the Boxer Rebellion. Clark was blunt about his concerns. He and his associates hoped Butler would encourage support within the Legion and perhaps the country for the reinstatement of the gold standard. “I am willing to spend half of the 30 million to save the other half,” Clark confessed. As Butler suspected, this appeared less and less to be about veterans’ interests.
Clark also bankrolled MacGuire’s seven-month trip abroad in December of 1933, in which the bond salesman was to survey the transforming political tides of Europe. He observed the ascending Nazis. He appreciated the Italian Fascists and their symbiotic relationship with the country’s powerful business interests. But MacGuire’s ultimate model ended up being a right-wing nationalist league in France called the Croix-de-Feu, which had managed to summon 150,000 supporters, many of whom were veterans.
Oh, looky, another fan of Mussolini.
Yes, MacGuire admitted, it was true that the money came from a coalition of concerned captains of industry. At the moment, they had invested $3 million in the project, and MacGuire estimated he could raise $300 million need be. What he wanted, he told Butler, was for the major general to assemble a paramilitary force of some 500,000 veterans, and to use them to throw President Roosevelt out of office.
“Concerned captains of industry” is pretty transparent code for “rich people.”
An astounded Butler debated where to turn first, and decided to enlist a liberal Philadelphia paper to verify the details of his outlandish story. The paper sent their star reporter Paul Comly French who feigned anti-Roosevelt sympathies to interview MacGuire, who was candid about his views and details of the plot. He mentioned that the Remington arms manufacturers would supply the army, thanks to a working relationship with the DuPonts. “We need a Fascist government in this country,” he told the reporter, “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.”
The DuPonts were tremendously wealthy war profiteers who specialized in making many of the things that went “BOOM” in WWI go “BOOM.” [wik] For a bunch of French-descended immigrants, they were one of America’s wealthiest families, being in the gunpowder business since 1801. When I was a kid I used to take day-tours of the magnificent gardens at the huge DuPont summer house “Longwood”, a masterpiece of American castle-building. Personally I’m disappointed that the holders of such vast wealth were so foolish as to imagine that they’d be dispossessed in an attempt to get the US economy back on its feet, but as many rich people are stupid as poor people, and their economics tend to be on the myopic side, as in “what’s in it for me?”
The New York Times stepped in on the affair and adjudged Butler as a crank:
In a few days, the story hit the news cycle. “$3,000,000 Bid for Fascist Army Bared,” read one headline. Much of the press found the story risible. “Details are lacking to lend verisimilitude to an otherwise bald and unconvincing narrative,” wrote the New York Times. “The whole story sounds like a gigantic hoax … It does not merit serious discussion.”
In other words: “fake news.” Nothing here to see, move on.