The Plots Against the President

by Sally Denton

Butler decided to force MacGuire’s hand, telling him that he had no intention of going to Chicago and didn’t believe that MacGuire had any money behind him. Then, Butler recalled, MacGuire whipped out his wallet and threw a stack of thousand-dollar bills on the bed.

  “What’s all this?” Butler asked. MacGuire responded that it was eighteen thousand dollars for Butler’s “expenses.”

  Now, insulted that he was being bribed, Butler got agitated. “Don’t you try to give me any thousand dollar bill … I know you people and what you are trying to do. You are just trying to get me by the neck … You put that money away … because I don’t want to be tied up with it at all.” MacGuire nervously asked whether he was intending to go to Chicago.

  “I do not know,” Butler replied. “But I know one thing. Somebody is using you. You are a wounded man. You are a bluejacket … I want to know the fellows who are using you. I am not going to talk to you any more. You are only an agent. I want some of the principals.”

  A few days later Butler—apparently seeking to create a paper trail as he drew out the identity of the sponsors of the plot—wrote to MacGuire and said he had given the proposal more thought and now considered it “a great idea.” He agreed that he could easily mobilize a hundred Legionnaires as long as there was “positive assurance of financial support” and no “slip-up in the arrangements, particularly in the matter of paying their expenses and treating them properly.” Butler reiterated that he did not want to appear on the convention floor posing as a delegate from Hawaii. “If I am to be of any value to the cause you sponsor, I would necessarily have to have some position. All of this would be lost if I force my way into this part through an imitation delegateship.”

  MacGuire agreed to set up a meeting with Robert Sterling Clark. A week later, Clark called Butler and arranged to travel to Newtown Square to see him.

  Although he had not seen Clark for thirty-four years, Butler recognized him immediately as he stepped off the train. On the drive to Butler’s home, they reminisced about the Boxer campaign. After a pleasant lunch, Clark launched into business. He had made plans to travel to the American Legion convention in a private railway car that would retrieve Butler at the Paoli, Pennsylvania, rail station. He had reserved a suite for Butler at the Palmer House in Chicago and had made arrangements for Butler to address the convention to demand the restoration of the gold standard. “There is something funny about that speech, Mr. Clark,” Butler said, describing it as too refined to have been written by the clumsy MacGuire and calling it a “big-business speech” that was contradictory to the veterans’ interests.

  Clark was silent for a few minutes and then was astonishingly candid. “That speech cost a lot of money,” Clark admitted, saying that the author was John W. Davis—the 1924 Democratic candidate for president who was currently chief counsel for J. P. Morgan and Company—and implying that the millionaire had paid Davis to write it. “We want the soldiers’ bonus paid in gold. We do not want the soldier to have rubber money or paper money. We want the gold. That is the reason for this speech.”

  “I have got 30 million dollars and I don’t want to lose it,” Clark told Butler. “I am willing to spend half of the 30 million to save the other half.” Clark said he felt certain that if Butler made the speech in Chicago, the Legion would follow his directive and force Roosevelt to return to the gold standard.

  When Butler asked Clark why he believed that Roosevelt would be responsive to a veterans’ resolution, Clark replied that when Roosevelt realized that it was his own patrician class directing the pressure, that he would willingly succumb. “You know the President is weak. He will come right along with us. He was born in this class. He was raised in this class, and he will come back,” Clark said. “He will run true to form. In the end he will come around. But we have got to be prepared to sustain him when he does.” Butler was shocked by what he thought a wishful fantasy that Roosevelt was a malleable aristocrat.

  When Butler told Clark he would not participate in the plan, Clark stiffened and then berated him. In what Butler considered a thinly veiled bribe, Clark implied that Butler’s home mortgage would be paid and there would be additional financial benefits as well: “Why do you want to be stubborn? Why do you want to be different from other people? We can take care of you.” He then tried to goad Butler into acquiescing by telling him that he was not the only person being considered for the job to lead the veterans. “Although our group is for you, the Morgan interests say that you cannot be trusted, that you are too radical … They are for Douglas MacArthur,” Butler said MacGuire told him. “You know as well as I do that MacArthur is [Edward] Stotesbury’s son-in-law … Morgan’s representative in Philadelphia.” Stotesbury, an investment banker worth more than a hundred million dollars, was a partner in J. P. Morgan and Company and a Philadelphia Quaker. Butler later realized that the “Morgan interests” to which Clark referred also included Thomas Lamont and Grayson M.-P. Murphy. Butler told Clark that they had better choose MacArthur and angrily drove him back to the train station.

  A few weeks later, Butler read in the newspaper that the American Legion convention had received a flood of telegrams urging delegates to endorse a return to the gold standard. A resolution to that effect was passed. He noted that MacArthur did not address the convention.

  Chapter Thirty-five

  Coup d’État

  In November 1933, shortly after the American Legion convention in Chicago, Gerard MacGuire turned up “like a bad penny,” as Butler put it, and informed Butler that a group of Boston veterans were hosting a dinner in his honor. They would transport Butler from Philadelphia by private car, and he would receive a thousand dollars for making remarks in support of the gold standard. Butler testily rebuffed him yet again, but MacGuire remained strangely unflappable, saying, “Well, then, we will think of something else.” MacGuire’s perseverance flabbergasted the reluctant general, as the sweaty bond salesman continued his overtures. He was relentless in trying to convince Butler that it was pointless to support the soldiers’ bonus until the country had a sound currency.

  There followed a string of proposals over a period of months in which Butler was offered exorbitant fees for speaking before veterans’ organizations. After Butler’s lecture agent contracted for a national speaking tour for appearances before numerous Veterans of Foreign Wars (VFW) groups, for which Butler would be paid $250 per speech, MacGuire suddenly materialized and offered him an additional $750 per speech if he would insert an endorsement of the gold standard in each one. Again, Butler brushed him off.

  The fall of 1933 saw an increase in the vitriolic anti-Roosevelt rhetoric, which reached a crescendo with FDR’s November 17 diplomatic recognition of the Soviet Union. The United States had supported the White Russians in their civil war and had then ignored the victorious Bolsheviks since 1917. The Soviet Union had had an economic office in the United States for several months, but the actual exchange of embassies set off alarm bells in America’s anti-Communist circles. It had been Roosevelt’s personal initiative, begun with a letter to Soviet president Mikhail Kalinin stating that he had “contemplated the desirability of an effort to end the present abnormal relations between the hundred and twenty-five million people of the United States and the hundred and sixty million people of Russia.” A survey showed that 63 percent of the nation’s 1,139 newspapers supported it, with the hopes of opening a market for American exports. But an even greater resolve took hold of Roosevelt when Hitler withdrew from the League of Nations, and Roosevelt sought the Soviet Union as an ally in the event of German expansion.

  During a series of covert negotiations over a nine-day period, Roosevelt and Soviet emissary Maxim Litvinov, who had traveled to Washington at Roosevelt’s invitation, exchanged eleven letters and one memorandum signaling the countries’ agreement with each other. “A great many people at the time regarded this event as of earthshaking importance,” wrote one Roosevelt biographer.

  Roosevelt’s right-wing enemies were not amo
ng those who saw the move as a great boon for America. Already furious at his “Socialist” leanings, they were now confirmed in their suspicions that the president was a full-blown “Red” who was instituting the Bolshevik experiment in the United States. Business leaders saw a dangerous shift toward Soviet-style Communism at a moment when they were looking enviously at Italy and its dictator, if not also at Germany and Hitler. Their Italian counterparts had financed Mussolini’s rise and staged a bloodless coup, and the end result was a highly efficient corporate Fascist state enjoying economic prosperity in the midst of a global depression. Just weeks later, as part of the “Good Neighbor” policy he had mentioned in his inaugural address, Roosevelt announced that the United States would no longer be sending troops to Latin America to protect private investments. The new policy sent more shock waves to America’s business community, which had vast financial interests in Latin America and had long depended on U.S. military protection in the region. But Roosevelt unequivocally abandoned the policy of military intervention in the affairs of any other state.

  On December 1, 1933, as yet unbeknownst to Butler, MacGuire left for Europe to study how veterans’ organizations had brought about dictatorships. He spent two months in Italy evaluating the Black Shirts and their role in installing Mussolini. From there he went to Germany to witness the Nazi phenomenon firsthand. Robert Sterling Clark was the sponsor of his junket, he would later tell Congress. He sent enthusiastic postcards to Butler from Italy, Germany, Spain, and France. He had determined that the Italian and German examples were not feasible to institute in the United States because American veterans were too freedom-loving and would never embrace such absolute rigidity. But in France he had found a perfect model: the right-wing veterans’ group called the Croix de Feu (Cross of Fire). He wrote a letter back to his benefactors. “Gentlemen,” he addressed them anonymously. “I just returned from a trip to Brussels, Rotterdam, Amsterdam, Hamburg, Copenhagen, Berlin, Prague, Leipzig, Vienna, Munich, Zurich, Basle, Geneva, and thence back to Paris.” He reported, “There is a Fascist Party springing up in Holland under the leadership of a man named Mussait, who is an engineer by profession and he has approximately 50,000 followers … It is said that this man is in close touch with Berlin, and is modeling his entire program along the lines followed by Hitler in Germany.” In a second letter to the “Gentlemen,” MacGuire said, “Everywhere you go you see men marching in groups and company formation.”

  Upon arriving back in the United States in the spring of 1934, MacGuire excitedly related his findings to Butler when the two men met in a remote corner of the lobby at the Bellevue-Stratford Hotel in Philadelphia. MacGuire told him about the “superorganization … an amalgamation of all other French veteran organizations … composed of officers and noncoms.” An insurrection by this Croix de Feu had successfully toppled the government of Prime Minister Édouard Daladier, MacGuire claimed, and could be duplicated in the United States. It was time to “get the soldiers together” for a peaceful military takeover of the Roosevelt presidency, MacGuire told Butler.

  MacGuire claimed to already have three million dollars available to launch the effort and said the promoters were prepared to spend as much as three hundred million. The men behind the putsch projected that it would take a year for Butler—the most popular and charismatic military leader in the nation—to assemble five hundred thousand veterans who would be paid between ten and thirty-five dollars per month, depending on their rank. They had chosen Butler, MacGuire told him with an apparent lack of irony, because Butler’s unrelenting anti-capitalist, anti-imperialist criticism would strike a chord with the angry half million Bonus Army veterans who would do anything Butler told them to do.

  The plot was stunning in its presumption and simplicity. “Did it ever occur to you that the President is overworked?” MacGuire asked Butler. He explained that it did not require a constitutional change to authorize a “Secretary of General Affairs” to take over the details of the office of the presidency. The man the plotters had in mind for this task was Brigadier General Hugh S. Johnson, Roosevelt’s head of the National Recovery Administration, who, according to MacGuire’s purported inside information, was about to be fired by Roosevelt. “We have got the newspapers. We will start a campaign that the President’s health is failing. Everybody can tell that by looking at him, and the dumb American people will fall for it in a second.”

  The veterans’ army, led by Butler, would march on Washington and induce Roosevelt to step aside because of bad health. Vice President Garner, in the line of succession, would refuse the office because he didn’t want to be president, and Secretary of State Cordell Hull—next in line—would decline based on his age, or so the plotters’ reasoning went. After the “coup,” General Johnson would take Hull’s place as a sort of “Super Secretary” who would be the de facto president and immediately reinstitute the gold standard. America needed a “man on a white horse,” MacGuire told Butler, “… a dictator who would come galloping in.” It was the only way to “save the capitalistic system.” It was all perfectly “constitutional,” as MacGuire and his cohorts saw it.

  James Van Zandt, the national commander of the VFW, had already agreed to serve as a leader in the veterans’ army, according to MacGuire—a charge that Van Zandt would later vehemently deny, although he would later corroborate Butler’s story and reveal that he too had been approached by “agents of Wall Street” intent on overthrowing the government. In addition to this “superorganization,” an elite paramilitary group would be created, which would be led by General MacArthur.

  Staggeringly, MacGuire portrayed the zany plot as an attempt to “support” Roosevelt in his hour of need. Butler challenged him: “The President doesn’t need the support of that kind of an organization; and, besides, since when did you become a supporter of Roosevelt? The last time you were here you were against him.”

  “Don’t you understand?” MacGuire responded. “The set-up has got to be changed a bit. We have the President with us now. He has got to have more money … Eighty percent of the money now is in Government bonds and he cannot keep this racket up much longer … He has either got to get more money out of us or he has got to change the method of financing the government, and we are going to see to it that he isn’t going to change that method. He will not change it. He is with us now.”

  If Roosevelt acceded to their demands, they would allow him to remain as a powerless figurehead “analogous to Mussolini’s handling of the king of Italy,” as one account put it. If Roosevelt “was not in sympathy with the Fascist movement,” then he would be “forced to resign.”

  “We want to ease up on the President,” MacGuire told Butler.

  “You want to put somebody in there you can run; is that the idea?” Butler was incredulous at both the naïveté and grandiosity of the scheme. “The President will go around and christen babies and dedicate bridges and kiss children? Mr. Roosevelt will never agree to that himself.”

  Butler was by now convinced that the prospective putsch, wacky and delusional as it was, constituted treason. He considered whom or which government agency he should alert. If such powerful financial magnates and high-level military officials were truly conspiring, as MacGuire alleged, he needed to be careful in how he proceeded. “His protagonists in the present scrap—Wall Street brokers, their legal counselors, and shrewd political operatives—were backed by a supporting network that extended into veterans affairs, politics, and the rightwing press,” said a military historian of Butler’s dilemma. He considered taking the story to J. Edgar Hoover at the Division of Investigation, to a carefully chosen member of Congress, to the media, or directly to the White House.

  MacGuire asked Butler for a commitment. Stalling for time, Butler said he needed to think about it a little longer.

  MacGuire said that an umbrella organization had already been created to support the objectives of the plotters and that widespread publicity about the group would soon emerge. “You watch,” MacGuire told hi
m, “in two or three weeks you will see it come out in the paper. There will be big fellows in it … These are to be the villagers in the opera.” At that point it would be imperative for Butler to decide whether he was in or out.

  Two weeks later, Butler read in the newspaper about the creation of the American Liberty League—a heavily funded organization formed “to combat radicalism, to teach the necessity of respect for the rights of persons and property, and generally to foster free private enterprise” and to oppose the destruction of America by New Deal policies. Formed by displeased moguls of finance and industry, the Liberty League attacked Roosevelt for “fomenting class hatred” by using such terms as “unscrupulous money changers,” “economic royalists,” and “privileged princes of these new economic dynasties.”

  Butler read the list of the Liberty League’s 156 sponsors with a combination of disbelief and trepidation. All the founding supporters contributed sizable cash amounts to the new organization and together controlled assets worth nearly forty billion dollars. The first name he looked for on the long list was “treasurer.” He was unsurprised: Grayson M-P. Murphy—Gerald MacGuire’s boss. The rest of the names read like a who’s who of American capitalism and reactionary politics, of organizations and individuals long associated with avowed anti-labor and pro-Fascist policies: Robert Sterling Clark, John W. Davis, Irénéé and Lammot du Pont, Alfred E. Smith, Sewell Avery, Alfred P. Sloan, S. B. Colgate, Elihu Root, E. F. Hutton, John H. Raskob, and J. Howard Pew, among many others.

  For the first time it struck Butler that MacGuire’s revelations about a “plot to seize the White House were no crackpot’s fantasy.”

  Chapter Thirty-six

  The Bankers Gold Group

  “There was definitely something crazy about the whole affair,” wrote J. Edgar Hoover’s biographer Curt Gentry. “Butler, who had gained prominence for speaking out against fascism, [was] being asked to become an American duce.”