Monday, April 13, 2009

The Plot to Overthrow FDR's America

The Real Plot to Overthrow FDR's America

[Preliminary Note: Some of you may wonder about the relevance of this diary, but trust me, by the end you'll see how it all ties in with our present day situation.]

Time for a trip in the way-back machine to recall a bit of history of which most of us have never heard. Last year, Phillip Roth had a bestseller with his novel, The Plot Against America, a fictionalized alternative history involving a fascist plot to take over the government of the USA and turn it into a fascist state under President Charles Lindbergh. But how many of you know of the real plot to overthrow FDR during the early years of his administration, a plot conceived by rich industrialists and bankers concerned that Roosevelt was about to conduct a massive redistribution of wealth?

More after the fold . . .

It's a sordid tale of fascist intrigue by some of America's most famous corporate and political families (including members of FDR's own party) which was deliberately covered up by both the only Congressional Committee to investigate the plot, and also by the leading media outlets of the day including the New York Times. And the truly scary part is that the plot might very well have succeeded if not for the bravery of a single, progressive leader: Marine General, Smedley Butler.

The life of Smedley Butler is an uniquely American story. A decorated soldier (he was awarded the Congressional Medal of Honor twice) and warrior who ascended through the ranks to become one of the most admired soldiers of his era, he also grew to deeply despise war, and to distrust the reasons he had been sent to fight in distant places. As he stated himself in a speech he gave on August 21, 1931 to an American Legion convention in New Britain, Connecticut:

"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....I might have given Al Capone a few hints. The best he could do was to operate a racket in three cities. The Marines operated on three continents..."

Fortunately for those of us living today, the people he condemned in that speech must not have been aware of his beliefs, or if they were they must have told themselves he didn't mean what he said, because they selected him to be the leader of a military coup attempt by which they meant to supplant Roosevelt as President in all but name. These plotters represented

some of America's richest and most famous names of the time:

* Irenee Du Pont - Right-wing chemical industrialist and founder of the American Liberty League, the organization assigned to execute the plot.
* Grayson Murphy - Director of Goodyear, Bethlehem Steel and a group of J.P. Morgan banks.
* William Doyle - Former state commander of the American Legion and a central plotter of the coup.
* John Davis - Former Democratic presidential candidate and a senior attorney for J.P. Morgan.
* Al Smith - Roosevelt's bitter political foe from New York. Smith was a former governor of New York and a co-director of the American Liberty League.
* John J. Raskob - A high-ranking Du Pont officer and a former chairman of the Democratic Party. In later decades, Raskob would become a "Knight of Malta," a Roman Catholic Religious Order with a high percentage of CIA spies, including CIA Directors William Casey, William Colby and John McCone.
* Robert Clark - One of Wall Street's richest bankers and stockbrokers.
* Gerald MacGuire - Bond salesman for Clark, and a former commander of the Connecticut American Legion. MacGuire was the key recruiter to General Butler.

They chose MacGuire as the point man to approach Butler with their proposal. The plot would be funded by Dupont and Morgan money funneled through an organization they had recently created to oppose Roosevelt, the American Liberty League. (The League was funded by donations from US Steel, General Motors, Chase Manhattan Bank, Standard Oil, Goodyear and the Dupont family, among others. Not surprisingly, the League would later actively oppose almost every major piece of New Deal legislation, including, but not limited too Social Security).

Butler was supposed to be the "famous name" who would recruit an army of out of work war veterans to march on Washington. It was thought that his popularity with the troops would make it easy for him to rally them to the cause of supplanting Roosevelt as the effective head of government. As proposed,

[T]hey wanted General Butler to deliver an ultimatum to Roosevelt. Roosevelt would pretend to become sick and incapacitated from his polio, and allow a newly created cabinet officer, a "Secretary of General Affairs," to run things in his stead. The secretary, of course, would be carrying out the orders of Wall Street. If Roosevelt refused, then General Butler would force him out with an army of 500,000 war veterans from the American Legion. But MacGuire assured Butler the cover story would work:

"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. Everyone can tell that by looking at him, and the dumb American people will fall for it in a second..."

The businessmen also promised that money was no object: Clark told Butler that he would spend half his $60 million fortune to save the other half.

And what type of government would replace Roosevelt's New Deal? MacGuire was perfectly candid to Paul French, a reporter friend of General Butler's:

"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."

Indeed, it turns out that MacGuire travelled to Italy to study Mussolini's fascist state, and came away mightily impressed. He wrote glowing reports back to his boss, Robert Clark, suggesting that they implement the same thing.

The plot collapsed when Butler went public in late 1934 and exposed the conspiracy. The General revealed the details of the coup attempt in sworn testimony before the "McCormack-Dickstein" Committee (the predecessor of the soon to be infamous "House Un-American Affairs Committee":

This House committee was named after its chairman and vice chairman, John W. McCormack and Samuel Dickstein. It was called the Special Committee on Un-American Activities Authorized to Investigate Nazi Propaganda and Certain Other Propaganda Activities. In 1934, it held public and private hearings in six cities, questioned hundreds of witnesses and collected testimony filling 4,300 pages. Its mandate was to get "information on how foreign subversive propaganda entered the U.S. and the organizations that were spreading it."

The committee did investigate Butler's claims, and subpoenaed witnesses, including MacGuire, Butler's main contact with the plotters. Initially,

MacGuire, not surprisingly, denied that such a plot existed. Instead, he claimed his activities had been political lobbying to preserve the gold standard, but he quickly destroyed his credibility as a witness by giving contradictory testimony. While the final report agreed with Butler that there was evidence of a coup d'├ętat plot against Roosevelt, no further action was taken on it. The Committee's authority to subpoena witnesses expired at the end of 1934, and the Justice Department started no criminal investigation.

So why, after concluding that the plot did indeed exist was no one prosecuted? Why were principals of the plot never even required to testify? It's hard to say at this far remove. Certainly it wasn't because the individuals behind the coup attempt abandoned all hope of future success, as this letter, dated 1936, from William Dodd, the U.S. Ambassador to Germany, to President Roosevelt makes clear:

"A clique of U.S. industrialists is hell-bent to bring a fascist state to supplant our democratic government and is working closely with the fascist regime in Germany and Italy. I have had plenty of opportunity in my post in Berlin to witness how close some of our American ruling families are to the Nazi regime.... A prominent executive of one of the largest corporations, told me point blank that he would be ready to take definite action to bring fascism into America if President Roosevelt continued his progressive policies. Certain American industrialists had a great deal to do with bringing fascist regimes into being in both Germany and Italy. They extended aid to help Fascism occupy the seat of power, and they are helping to keep it there. Propagandists for fascist groups try to dismiss the fascist scare. We should be aware of the symptoms. When industrialists ignore laws designed for social and economic progress they will seek recourse to a fascist state when the institutions of our government compel them to comply with the provisions."

Perhaps the naming of prominent Democrats, such as Al Smith and former Democratic Party Chairman Raskob, as members of the plot convinced the Roosevelt administration, not anxious to reveal dissent within its own ranks, to suppress the Committee report. Perhaps MacGuire's untimely death from pneumonia shortly after he testified led the Department of Justice to back away from any investigation. Or perhaps the wealth and influence of the plotters themselves was simply too great. What is abundantly clear, however, is that the Committee report was suppressed.

Suppression by the [Committee] took the form of deleting extensive excerpts relating to Wall Street financiers including Guaranty Trust director Grayson Murphy, J.P. Morgan, the Du Pont interests, Remington Arms, and others allegedly involved in the plot attempt. Even today, in 1975, a full transcript of the hearings cannot be traced.

* * *

John L. Spivak, the reporter who unearthed the suppression in the Congressional transcripts, challenged Committee Co-chairman Samuel Dickstein of New York with his evidence. Dickstein admitted that:

the Committee had deleted certain parts of the testimony because they were hearsay."
"But your published reports are full of hearsay testimony."
"They are?" he said.
"Why wasn't Grayson Murphy called? Your Committee knew that Murphy's men are in the anti-Semitic espionage organization Order of '76?"
"We didn't have the time. We'd have taken care of the Wall Street groups if we had the time. I would have no hesitation in going after the Morgans."
"You had Belgrano, Commander of the American Legion, listed to testify. Why wasn't he examined?"
"I don't know. Maybe you can get Mr. McCormack to explain that. I had nothing to do with it."

The fact remains that the committee did not call Grayson Murphy, Jackson Martindell, or John W. Davis, all directly accused in sworn testimony. Further, the committee deleted all portions of the testimony involving other prominent persons: J.P. Morgan, the Du Ponts, the Rockefeller interests, Hugh Johnson, and Franklin D. Roosevelt. When Congressman Dickstein pleaded his innocence to John Spivak, it was inconsistent with his own letter to President Roosevelt, in which he claims to have placed restrictions even upon public distribution of the committee hearings, as printed, "in order that they might not get into other than responsible hands."

The final report issued by the committee in February 15, 1935 buried the story even further. John L. Spivak sums up the burial succinctly: "I... studied the Committee's report. It gave six pages to the threat by Nazi agents operating in this country and eleven pages to the threat by communists. It gave one page to the plot to seize the Government and destroy our democratic system."

What was even more distressing (and eerily familiar to the our present situation) was not just the failure of the press of that era to cover the story, but the active role they played in covering it up, even to the extent of scrubbing internal archives:

The role of leading newspapers and journals of opinion in reporting the Butler affair is equally suspect. In fact, their handling of the event has the appearance of outright distortion and censorship. The veracity of some major newspapers has been widely questioned in the last 50 years, and in some quarters the media have even been accused of a conspiracy to suppress "everything in opposition to the wishes of the interest served."

Does such suppression extend to major news journals? We can take two prime examples; The New York Times and Time magazine. If such a combination as Callaway charges did exist, then these two journals would certainly be among "25 of the greatest papers involved in the 1930s." The New York Times reporting of the "plot" opens up with a front-page headline article on November 21, 1934: "Gen. Butler Bares 'Fascist Plot' to Seize Government by Force," with the lead paragraph quoted above (p. 143). This Times article is a reasonably good job of reporting and includes a forthright statement by Congressman Dickstein: "From present indications Butler has the evidence. He's not going to make any serious charges unless he has something to back them up. We'll have men here with bigger names than his." Then the Times article records that "Mr. Dickstein said that about sixteen persons mentioned by General Butler to the Committee would be subpoenaed, and that a public hearing might be held next Monday." The Times also includes outright and sometimes enraged denials from Hugh Johnson, Thomas W. Lamont, and Grayson M-P. Murphy of Guaranty Trust.

The following morning, November 22, the Times made a major switch in reporting the plot. The disclosures were removed to an inside page, although the testimony now concerned Gerald MacGuire, one of the accused plotters. Further, a decided change in the attitude of the committee can be discerned. Congressman McCormack is now reported as saying that "the committee has not decided whether to call any additional witnesses. He said that the most important witness, aside from Mr. MacGuire, was Robert Sterling Clark, a wealthy New Yorker with offices in the Stock Exchange Building."

While the Times reporting was consigned to an inside single column, the editorial page, its most influential section, carried a lead editorial that set the tone for subsequent reporting. Under the head "Credulity Unlimited," it contended that the Butler charge was a "bald and unconvincing narrative. ... The whole story sounds like a gigantic hoax ... it does not merit serious discussion," and so on. In brief, before the 16 important witnesses were called, before the evidence was on the record, before the charge was investigated, the New York Times decided that it wanted to hear nothing about this story because it was a hoax, not fit to print.

The next day, November 23, the Times changed its reporting still further. The headlines were now about Reds and Red Union Strife and concerned alleged activities by communists in American trade unions, while the Butler testimony and the developing evidence were secreted deep within the reporting of Red activities. The resulting story was, of course, vague and confused, but it effectively buried the Butler evidence.

On November 26, the hearings continued, but the committee itself now had cold feet and issued a statement: "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."

It should be noted that these names had come up in sworn testimony, later to be deleted from the official record. The Times pursued its reporting of this development in abbreviated form on an inside page under the head, "Committee Calm over Butler 'Plot', Has No Evidence to Warrant Calling Johnson and Others." On November 27 the Times reporting declined to five column inches on an inside page under the ominous head "Butler Plot Inquiry Not To Be Dropped." The December hearings were reported by the Times on a front page (December 28 1934), but the plot was now twisted to "Reds Plot to Kidnap the President, Witness Charges at House Inquiry."

Reviewing the story of the Butler Affair in the Times 40 years after the event and comparing its story to the printed official testimony, itself heavily censored, it is obvious that the newspaper, either under its own initiative or under outside pressure, decided that the story was not to be made public. Consistent with this interpretation, we find that The New York Times, the "newspaper of record," omits the Butler testimony from entries in its annual index, depended upon by researchers and scholars. The Times Index for 1934 has an entry "BUTLER (Maj Gen), Smedley D," but lists only a few of his speeches and a biographic portrait. The Butler testimony is not listed. There is an entry, "See also: Fascism-U.S.," but under that cross-reference there is listed only: "Maj Gen S.D. Butler charges plot to overthrow present govt; Wall Street interests and G.P. MacGuire implicated at Cong com hearing." The only significant Wall Street name mentioned in the index is that of R.S. Clark, who is reported as "puzzled" by the charges. None of the key Morgan and Du Pont associates cited by General Butler is listed in the Index. In other words, there appears to have been a deliberate attempt by this newspaper to mislead historians.

Now it's true that this story hasn't been completely forgotten. There are websites that discuss the conspiracy (some to which I've already linked, and others which I'll list at the conclusion of this diary), and a few people wrote books which at least mention the subject. However, the only book that focuses exclusively on the fascist plot to oust President F.D. Roosevelt is now out of print: The Plot to Seize The White House (New York: Hawthorne Books, 1973) by Julius Archer. Soon after publishing this, Hawthorne Books went out of business. Second-hand copies are now available for as much as $250.

What's to be learned from all this? The simple truth that those of us who see a corporatist conspiracy to manipulate and even "steal" our state and national elections, to influence at the highest levels the policies of our government, and to suppress or distort the news that the media reports are not as crazy as our opponents make us out to be. Because IT HAS ALL HAPPENED BEFORE, and we were JUST DAMN LUCKY THE BASTARDS DIDN'T SUCCEED!

Eternal vigilance, my friends.

So endeth the lesson.

Some other links on the plot, its participants and those who told the tale:

Jules Archer

The putsch that wasn't

The McCormack-Dickstein Committee

The role of Smedley Butler

The American Liberty League

Gerald MacGuire

J. W. Davis

Robert Clark

Grayson Murphy

John Spivak

Corporate Roots of American Fascism