I was reading a Wikipedia article about two-time Medal of Honor winners the other day, one of whom was General Smedley Butler. He claimed to have unmasked the "business plot," also known as the "White House putsch," a scheme to install a fascist dictatorship in the U.S. Supposedly some congressional committee confirmed Butler's claims. Did the "business plot" really exist? If so, how come no one's ever heard of it? --Brent, Urbana
Afascist plot to take over the White House? Oh, wait, you mean the one that allegedly happened in 1934.
Smedley Butler's story was nutty--hey, even the guy's name was nutty--which is one reason you don't hear much about it today. Apart from that congressional committee you mentioned, most people at the time didn't take the plot seriously, and even now we don't know whether it was a scam, a pipe dream promoted by a few wealthy yo-yos, or an honest-to-Jesus conspiracy to overthrow the government. But something was definitely up.
Butler was a much-decorated general in the U.S. Marines. Outspoken, hardworking, and unpretentious, he was beloved by his men and influential with veterans. After retiring from the military in 1931, he urged Congress to accelerate payment of a bonus for World War I vets, many of whom were then out of work due to the Depression.
In 1933 Butler was visited by two officials in the American Legion, the veterans' organization, who tried to recruit him to give a speech at an upcoming Legion convention calling for the U.S. to return to the gold standard. (FDR had recently decoupled the country's money supply from gold to boost the economy.) Butler demurred, but one of the men, Gerald MacGuire, kept pestering him, flashing an impressive bankbook at one meeting, offering the general 18 thousand-dollar bills at another, and arranging a visit from Singer sewing machine heir Robert Clark, who encouraged Butler to give the speech. Again rebuffed, MacGuire went off to Europe on a fact-finding trip but approached Butler with a new scheme in 1934, saying he and his wealthy backers would organize an army of 500,000 veterans to make a show of force and persuade the overworked Roosevelt to accept the "assistance" of a "secretary of general affairs," who would run the government while the president stayed on as figurehead. The proposed SecGenAff? Smedley Butler.
Appalled at the idea of becoming the first U.S. dictator, Butler confided in journalist Paul French, who met with MacGuire and confirmed the outlines of the plan. A House committee got wind of the plot and held hearings. After taking testimony from Butler and French, the committee summoned MacGuire, who answered evasively. Robert Clark was never called; testimony by his attorney was limited to financial dealings with MacGuire. The big names who'd been implicated (for example, the J.P. Morgan and du Pont interests) denied everything or kept mum. Press coverage was dismissive--Time ran a story headlined "Plot Without Plotters." The committee issued a report saying Butler's story checked out, but few paid much attention. With that the matter died.
Dumbfounded later commentators have tended to ask the same question you did: How could America ignore a potential coup? (One plausible answer: fat cats controlled the press.) A more pertinent line of inquiry is: What went on here?
Butler was lying, deluded, etc. Nah. Browse through the testimony and you find that the committee did, as claimed, corroborate the essentials of the general's story.
A number of U.S. plutocrats really did conspire to depose the president. It's not out of the question. Though the idea of a popular revolt financed by zillionaires seems harebrained now, it was less so in the 1930s. In Europe jobless veterans were a potent political force, and enlisting respected military leaders in right-wing schemes was a common ploy--witness Hindenburg in Germany and, a little later, Marshall Petain in France. The New Deal polarized the nation; many in the moneyed crowd really did fear FDR was opening the door to bolshevism.
MacGuire was a con artist. Butler himself wondered whether MacGuire was using Clark's paranoia about losing his fortune to wheedle cash out of him.
The plot never got further than a small cadre of screwballs. The simplest explanation in my book. Though MacGuire dropped lots of big names, Butler had contact with only three conspirators--MacGuire, Clark, and the other American Legion official who'd tagged along on the first couple visits. Clark had a reputation as an eccentric. MacGuire was well wired, predicting political developments with uncanny accuracy, but that proves little in itself. Maybe the plotters figured if they got Butler on board everybody else would fall into line. Who's to say they wouldn't have? Look at the bridge club's worth of geniuses who got us into Iraq.
Art accompanying story in printed newspaper (not available in this archive): illustration/Slug Signorino.