FDR, Smedley Butler and the Business Plot of 1933
In 2022, the movie Amsterdam was loosely based on an alleged plot that is said to have occurred in 1933, which became known as the Business Plot. The hero of the story of the real life plot was also a military hero and an interesting historical figure with the unusual name of General Smedley Darlington Butler. (Robert DiNiro's character in Amsterdam is based on Butler, and in the movie's closing credits, a video of a speech given by Butler to a Congressional committee is played simultaneously with one of DiNiro as the movie's character giving the same speech.)
Butler was born on July 30, 1881 and he was nicknamed the "Maverick Marine." He first met Roosevelt when the future President was Assistant Secretary of the Navy and he and Butler were in Honduras during what was known as the Banana Wars. Butler was a senior United States Marine Corps officer who fought in the Philippines during the Spanish-American War, the Boxer Rebellion, the Mexican Revolution and World War I. During his 34-year career as a Marine, he participated in military actions in the Philippines, China, Central America, the Caribbean and in France in World War I. Butler was, at the time of his death, the most decorated Marine in U.S. history. By the end of his career, Butler had received 16 medals, five for heroism. He is one of 19 men to receive the Medal of Honor twice, one of three to be awarded both the Marine Corps Brevet Medal and the Medal of Honor. He is the only Marine to be awarded the Brevet Medal and two Medals of Honor, all for separate actions. But by the end of his military career Butler had seen enough of war, and he was of the view that rich men sent poor men to die in wars for their benefit, and in 1935 he wrote a book entitled War is a Racket in which he set out those views quite bluntly and quite clearly.
In 1933, Butler became involved in a controversy known as the Business Plot, details of which he went public on in November 1934. Butler claimed that a political conspiracy existed among a group of American business leaders to overthrow President Franklin Delano Roosevelt. He made these allegations to a special committee of the House of Representatives headed by Representatives John W. McCormack of Massachusetts and Samuel Dickstein of New York. It was later alleged that Dickstein was a paid agent of the NKVD (the Russian Secret Police, later known as the KGB). The committee heard Butler's testimony in secret.
Two years earlier, on July 17, 1932, thousands of World War I veterans converged on Washington, D.C., set up tent camps, and demanded immediate payment of bonuses due to them according to the World War Adjusted Compensation Act of 1924. Under that bill, the bonuses were due no earlier than 1925 and all no later than 1945. Walter W. Waters, a former Army sergeant, led this "Bonus Army" and Butler supported their cause and spoke to the group. Butler was retired at the time, but was still a popular military figure who was highly respected by officers and enlisted men alike. A few days after Butler's arrival, President Herbert Hoover ordered the marchers removed and U.S. Army cavalry troops under the command of General Douglas MacArthur destroyed their camps. The move backfired on Hoover, as it gained support for his opponent in the upcoming election, Franklin Roosevelt.
Butler had self-described as a Republican up until then, but he responded to the treatment of the Bonus Army by throwing his support behind Roosevelt in the 1932 US presidential election. By 1933, Butler started publicly denouncing capitalism and bankers. He said that he had once been a "high-class muscle man" for Wall Street, the bankers and big business, labeling himself as a "racketeer for Capitalism" and that he now wished to make amends for his past actions.
Roosevelt's election was unpopular with many conservative businessmen of the time. His campaign promise that the government would provide jobs for all the unemployed was seen as his being what one author has referred to as "a traitor to his class." Businessmen became frightened by fears of socialism and reckless government spending. There were also concerns over the gold standard and the possibility that it would come to an end (ironically something that did eventually happen under Republican Richard Nixon many years later). They viewed a currency not solidly backed by gold as inflationary, undermining both private and business fortunes and leading to national bankruptcy. Roosevelt was thought of as a socialist or Communist and an enemy of private enterprise by abandoning their interests in order to subsidize the poor.
The McCormack-Dickstein Committee began examining evidence on an alleged plot on November 20, 1934. On November 24 the committee released a statement detailing the testimony it had heard and its preliminary findings and on February 15, 1935, the committee submitted its final report to the House of Representatives.
During the committee hearings Butler testified that Gerald C. MacGuire, a bond salesman with Grayson M-P Murphy & Co., attempted to recruit him to lead a coup against Roosevelt. He said that MacGuire promised him an army of 500,000 men for a march on Washington, D.C., and would provide financial backing for the coup. Butler testified that the pretext for the coup would be that the president's health was failing. Despite Butler's support for Roosevelt in the election and his reputation as a strong critic of capitalism, Butler testified that the plotters wished to use his good reputation and popularity to attract support amongst the general public and gain credibility. He said that they falsely believed that he would be easy to manipulate. He said that once the coup was successful, the plan was for him to have held near-absolute power in the newly created position of "Secretary of General Affairs" in a new government with Roosevelt remaining only as a figurehead.
Those implicated in the plot by Butler all denied any involvement. MacGuire was the only figure identified by Butler who testified before the committee. Others whom Butler accused were not called to testify, mainly because the committee adopted an attitude of deference to these corporate giants. Their report said "The committee will not take cognizance of names brought into testimony which constitute mere hearsay." Other implicated by Butler included Alfred P. Sloan, Irinee DuPont, and financier J.P. Morgan Jr.
On January 29, 1935, John L. Spivak published the first of two articles in the communist magazine New Masses, revealing portions of testimony to the committee that had been redacted as hearsay. Spivak argued that the plot was part of a plan by J.P. Morgan and other financiers who were coordinating with fascist groups to overthrow Roosevelt.
On March 25, 1935, MacGuire died in a hospital in New Haven, Connecticut, at the age of 36. His attending doctor at the hospital attributed the death to pneumonia and its complications. Conspiracy theorists have speculated that his death may not have been due to natural causes.
The New York Times reported that Butler had told friends that General Hugh S. Johnson, former head of the National Recovery Administration, was to be installed as dictator, and that the J.P. Morgan banking firm was behind the plot. Butler told Congress that MacGuire had told him the attempted coup was backed by three million dollars, and that the 500,000 men were probably to be assembled in Washington, D.C. the following year. All the parties alleged to be involved publicly said there was no truth in the story, calling it a joke and a fantasy.
Butler testified that on July 1, 1933, he met with MacGuire and Doyle for the first time. MacGuire was a $100-a-week bond salesman for Wall Street banking firm Grayson Murphy & Company and was also a member of the Connecticut American Legion. Butler stated that he was asked to run for National Commander of the American Legion. Two or three days later, Butler said that he has a second meeting with MacGuire and Bill Doyle, the Commander of the Massachusetts American Legion. He stated that they offered to get hundreds of supporters at the American Legion convention to ask for a speech. MacGuire left a typewritten speech with Butler that they proposed he read at the convention. Butler said in his testimony that the speech "urged the American Legion convention to adopt a resolution calling for the United States to return to the gold standard, so that when veterans were paid the bonus promised to them, the money they received would not be worthless paper."
Around August 1, MacGuire had a private meeting with Butler in which Butler alleged that MacGuire told him Grayson Murphy underwrote the formation of the American Legion in New York and Butler told MacGuire that the American Legion was "nothing but a strikebreaking outfit."
On September 24, MacGuire visited Butler's hotel room in Newark, but the two men did not meet. In late September, Butler said that he met with Robert Sterling Clark, an art collector and an heir to the Singer Corporation fortune. MacGuire had known Clark when Clark was a second lieutenant in China during the Boxer Rebellion, where he had been nicknamed "the millionaire lieutenant".
During the first half of 1934, MacGuire traveled to Europe and mailed postcards to Butler. On August 22, Butler met MacGuire at a hotel, the last time Butler met him. According to Butler, it was on this occasion that MacGuire asked Butler to run a new veterans' organization and lead a coup attempt against the President. On September 13, Paul Comly French, a reporter who had once been Butler's personal secretary, met MacGuire in his office. In late September, Butler told Veterans of Foreign Wars (VFW) commander James E. Van Zandt that co-conspirators would be meeting him at an upcoming Veterans of Foreign Wars convention.
On November 20 the Committee began examining evidence. French broke the story in the Philadelphia Record and New York Post on November 21. On November 22, The New York Times wrote its first article on the story. Their story was not complimentary to Butler and described his claim of a coup as a "gigantic hoax".
The Congressional committee preliminary report read in part: "This committee has had no evidence before it that would in the slightest degree warrant calling before it such men as John W. Davis, Gen. Hugh Johnson, General Harbord, Thomas W. Lamont, Admiral Sims, or Hanford MacNider. The committee will not take cognizance of names brought into the testimony which constitute mere hearsay."
The congressional committee final report on February 15, 1935, said:
"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. 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."
A November 22, 1934, New York Times editorial published just two days into Committee testimony dismissed Butler's story as "a gigantic hoax" and a "bald and unconvincing narrative." Time magazine reported on December 3, 1934, that the committee "alleged that definite proof had been found that the much publicized Fascist march on Washington, which was to have been led by Maj. Gen. Smedley D. Butler, retired, according to testimony at a hearing, was actually contemplated." Gen. Douglas MacArthur had been alleged to be the back-up leader if Butler declined. When asked about this, MacArthur called it "the best laugh story of the year."
Following is a newsreel containing remarks made by Butler about the plot.
No prosecutions or further investigations followed. The news media dismissed the plot. Butler moved to Newtown Square, Pennsylvania, where he lived with his wife until his death from an incurable condition of the upper gastro-intestinal tract (believed to be cancer) on June 21, 1940. Butler died at Naval Hospital, Philadelphia.
Butler was born on July 30, 1881 and he was nicknamed the "Maverick Marine." He first met Roosevelt when the future President was Assistant Secretary of the Navy and he and Butler were in Honduras during what was known as the Banana Wars. Butler was a senior United States Marine Corps officer who fought in the Philippines during the Spanish-American War, the Boxer Rebellion, the Mexican Revolution and World War I. During his 34-year career as a Marine, he participated in military actions in the Philippines, China, Central America, the Caribbean and in France in World War I. Butler was, at the time of his death, the most decorated Marine in U.S. history. By the end of his career, Butler had received 16 medals, five for heroism. He is one of 19 men to receive the Medal of Honor twice, one of three to be awarded both the Marine Corps Brevet Medal and the Medal of Honor. He is the only Marine to be awarded the Brevet Medal and two Medals of Honor, all for separate actions. But by the end of his military career Butler had seen enough of war, and he was of the view that rich men sent poor men to die in wars for their benefit, and in 1935 he wrote a book entitled War is a Racket in which he set out those views quite bluntly and quite clearly.
In 1933, Butler became involved in a controversy known as the Business Plot, details of which he went public on in November 1934. Butler claimed that a political conspiracy existed among a group of American business leaders to overthrow President Franklin Delano Roosevelt. He made these allegations to a special committee of the House of Representatives headed by Representatives John W. McCormack of Massachusetts and Samuel Dickstein of New York. It was later alleged that Dickstein was a paid agent of the NKVD (the Russian Secret Police, later known as the KGB). The committee heard Butler's testimony in secret.
Two years earlier, on July 17, 1932, thousands of World War I veterans converged on Washington, D.C., set up tent camps, and demanded immediate payment of bonuses due to them according to the World War Adjusted Compensation Act of 1924. Under that bill, the bonuses were due no earlier than 1925 and all no later than 1945. Walter W. Waters, a former Army sergeant, led this "Bonus Army" and Butler supported their cause and spoke to the group. Butler was retired at the time, but was still a popular military figure who was highly respected by officers and enlisted men alike. A few days after Butler's arrival, President Herbert Hoover ordered the marchers removed and U.S. Army cavalry troops under the command of General Douglas MacArthur destroyed their camps. The move backfired on Hoover, as it gained support for his opponent in the upcoming election, Franklin Roosevelt.
Butler had self-described as a Republican up until then, but he responded to the treatment of the Bonus Army by throwing his support behind Roosevelt in the 1932 US presidential election. By 1933, Butler started publicly denouncing capitalism and bankers. He said that he had once been a "high-class muscle man" for Wall Street, the bankers and big business, labeling himself as a "racketeer for Capitalism" and that he now wished to make amends for his past actions.
Roosevelt's election was unpopular with many conservative businessmen of the time. His campaign promise that the government would provide jobs for all the unemployed was seen as his being what one author has referred to as "a traitor to his class." Businessmen became frightened by fears of socialism and reckless government spending. There were also concerns over the gold standard and the possibility that it would come to an end (ironically something that did eventually happen under Republican Richard Nixon many years later). They viewed a currency not solidly backed by gold as inflationary, undermining both private and business fortunes and leading to national bankruptcy. Roosevelt was thought of as a socialist or Communist and an enemy of private enterprise by abandoning their interests in order to subsidize the poor.
The McCormack-Dickstein Committee began examining evidence on an alleged plot on November 20, 1934. On November 24 the committee released a statement detailing the testimony it had heard and its preliminary findings and on February 15, 1935, the committee submitted its final report to the House of Representatives.
During the committee hearings Butler testified that Gerald C. MacGuire, a bond salesman with Grayson M-P Murphy & Co., attempted to recruit him to lead a coup against Roosevelt. He said that MacGuire promised him an army of 500,000 men for a march on Washington, D.C., and would provide financial backing for the coup. Butler testified that the pretext for the coup would be that the president's health was failing. Despite Butler's support for Roosevelt in the election and his reputation as a strong critic of capitalism, Butler testified that the plotters wished to use his good reputation and popularity to attract support amongst the general public and gain credibility. He said that they falsely believed that he would be easy to manipulate. He said that once the coup was successful, the plan was for him to have held near-absolute power in the newly created position of "Secretary of General Affairs" in a new government with Roosevelt remaining only as a figurehead.
Those implicated in the plot by Butler all denied any involvement. MacGuire was the only figure identified by Butler who testified before the committee. Others whom Butler accused were not called to testify, mainly because the committee adopted an attitude of deference to these corporate giants. Their report said "The committee will not take cognizance of names brought into testimony which constitute mere hearsay." Other implicated by Butler included Alfred P. Sloan, Irinee DuPont, and financier J.P. Morgan Jr.
On January 29, 1935, John L. Spivak published the first of two articles in the communist magazine New Masses, revealing portions of testimony to the committee that had been redacted as hearsay. Spivak argued that the plot was part of a plan by J.P. Morgan and other financiers who were coordinating with fascist groups to overthrow Roosevelt.
On March 25, 1935, MacGuire died in a hospital in New Haven, Connecticut, at the age of 36. His attending doctor at the hospital attributed the death to pneumonia and its complications. Conspiracy theorists have speculated that his death may not have been due to natural causes.
The New York Times reported that Butler had told friends that General Hugh S. Johnson, former head of the National Recovery Administration, was to be installed as dictator, and that the J.P. Morgan banking firm was behind the plot. Butler told Congress that MacGuire had told him the attempted coup was backed by three million dollars, and that the 500,000 men were probably to be assembled in Washington, D.C. the following year. All the parties alleged to be involved publicly said there was no truth in the story, calling it a joke and a fantasy.
Butler testified that on July 1, 1933, he met with MacGuire and Doyle for the first time. MacGuire was a $100-a-week bond salesman for Wall Street banking firm Grayson Murphy & Company and was also a member of the Connecticut American Legion. Butler stated that he was asked to run for National Commander of the American Legion. Two or three days later, Butler said that he has a second meeting with MacGuire and Bill Doyle, the Commander of the Massachusetts American Legion. He stated that they offered to get hundreds of supporters at the American Legion convention to ask for a speech. MacGuire left a typewritten speech with Butler that they proposed he read at the convention. Butler said in his testimony that the speech "urged the American Legion convention to adopt a resolution calling for the United States to return to the gold standard, so that when veterans were paid the bonus promised to them, the money they received would not be worthless paper."
Around August 1, MacGuire had a private meeting with Butler in which Butler alleged that MacGuire told him Grayson Murphy underwrote the formation of the American Legion in New York and Butler told MacGuire that the American Legion was "nothing but a strikebreaking outfit."
On September 24, MacGuire visited Butler's hotel room in Newark, but the two men did not meet. In late September, Butler said that he met with Robert Sterling Clark, an art collector and an heir to the Singer Corporation fortune. MacGuire had known Clark when Clark was a second lieutenant in China during the Boxer Rebellion, where he had been nicknamed "the millionaire lieutenant".
During the first half of 1934, MacGuire traveled to Europe and mailed postcards to Butler. On August 22, Butler met MacGuire at a hotel, the last time Butler met him. According to Butler, it was on this occasion that MacGuire asked Butler to run a new veterans' organization and lead a coup attempt against the President. On September 13, Paul Comly French, a reporter who had once been Butler's personal secretary, met MacGuire in his office. In late September, Butler told Veterans of Foreign Wars (VFW) commander James E. Van Zandt that co-conspirators would be meeting him at an upcoming Veterans of Foreign Wars convention.
On November 20 the Committee began examining evidence. French broke the story in the Philadelphia Record and New York Post on November 21. On November 22, The New York Times wrote its first article on the story. Their story was not complimentary to Butler and described his claim of a coup as a "gigantic hoax".
The Congressional committee preliminary report read in part: "This committee has had no evidence before it that would in the slightest degree warrant calling before it such men as John W. Davis, Gen. Hugh Johnson, General Harbord, Thomas W. Lamont, Admiral Sims, or Hanford MacNider. The committee will not take cognizance of names brought into the testimony which constitute mere hearsay."
The congressional committee final report on February 15, 1935, said:
"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. 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."
A November 22, 1934, New York Times editorial published just two days into Committee testimony dismissed Butler's story as "a gigantic hoax" and a "bald and unconvincing narrative." Time magazine reported on December 3, 1934, that the committee "alleged that definite proof had been found that the much publicized Fascist march on Washington, which was to have been led by Maj. Gen. Smedley D. Butler, retired, according to testimony at a hearing, was actually contemplated." Gen. Douglas MacArthur had been alleged to be the back-up leader if Butler declined. When asked about this, MacArthur called it "the best laugh story of the year."
Following is a newsreel containing remarks made by Butler about the plot.
Click to viewNo prosecutions or further investigations followed. The news media dismissed the plot. Butler moved to Newtown Square, Pennsylvania, where he lived with his wife until his death from an incurable condition of the upper gastro-intestinal tract (believed to be cancer) on June 21, 1940. Butler died at Naval Hospital, Philadelphia.