These Wall Street millionaires literally plotted to overthrow the president
When FDR messed with their money, they began engineering a coup
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.
At the time, Butler was enjoying the boost of a positive public profile, as a result of his enthusiastic advocacy for veterans. American Legion members Bill Doyle and Gerald MacGuire wanted to harness this when they asked Butler to appear at the Legion convention in Chicago, as part of a campaign to undermine the body’s leadership. Butler was sympathetic: He had long known of the Legion’s capacity for ignoring its members.
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.
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.
Gerald MacGuire was a portly, sweaty man, and made a habit of talking to Butler about his concerns with frustrating vagueness and equivocation. But after his trip, he brought Butler up to speed and came forward with an even larger proposal. 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.
MacGuire informed Butler that the press would soon make an announcement about the league of businessmen fatigued by the president’s reckless economic reforms. They planned to plant stories about Roosevelt’s ill health, and expected the president to comply with orders from his fellow patricians to hand over the highest seat of government. He would be permitted a ceremonial position while Butler and his allies steered the country in the proper direction.
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.”
Now that he had a second witness, Butler brought his story to the Feds. The committee began hearings on November 20, 1934. “To be perfectly fair to Mr. MacGuire,” Butler said, “He didn’t seem bloodthirsty. He felt that such a show of force in Washington would probably result in a peaceful overthrow of government.” French corroborated Butler’s testimony. Gerald MacGuire, however, denied everything but that the Legion solicited Butler’s support for the gold standard.
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.”
Those implicated agreed. Banker Grayson M.P. Murphy called it a “damned lie” and said he wasn’t “able to stop laughing” at the thought he, a prominent citizen and veteran of the Spanish-American War would attempt such treason. Thomas Lamont, a Wall Street banker implicated, called it “perfect moonshine. Too unutterably ridiculous to comment upon.”
Shortly before the committee hearings, in September of 1934, the newly formed American Liberty League—made up of leaders and captains of industry opposed to the president “fomenting class hatred” and his handling of the Depression—released a statement. Among its members were the DuPonts, S.B. Colgate, Sewell Avery, John Raskob, Alfred P. Sloan, and former secretary of State Elihu Root. Butler noticed Robert Sterling Clark’s name on the list, as well as Grayson M. P. Murphy, Gerald MacGuire’s boss.
Also implicated in the plot was Al Smith, former New York governor and 1928 Democratic presidential nominee, as well as Prescott Bush, a banker, future Connecticut senator, and father to George H. W. Bush and grandfather to George W. Bush.
Of these wealthy and prominent people, none was called for testimony, and none was punished.
Butler went on to rise in public profile, championing populism and pacifism with his 1935 book, War Is a Racket, but for the beneficial publicity, the committee as well as French agree that he was telling truth. And only recently has the public learned of a letter to Congress sent from an official at the company building the Hoover Dam, in which the writer warned of a plot by the “American Fascist Veterans Association” to overthrow the president.
What remains for many historians to debate is how wide the gap was in this scheme between contemplation and fruition. Butler’s whistleblowing certainly stopped it short, but one wonders if nothing else would have brought down such a complicated and inauspicious plan. Still, as historian Sally Denton points out, “The Fascist plot which General Butler exposed did not get very far, but that plot had in it three elements which make successful wars and revolutions: men, guns, and money.”
In the 1930s, Germany and Italy proved that no form of government should be taken for granted. At this exigent time in America — brought forth by the Depression, a destabilized world, and a transformative president — the rich doubled down on what they always do: protecting their own.
