Franklin Delano Roosevelt vs. the Banks:
Morgan's Fascist Plot, and How It Was Defeated
Part III

by L. Wolfe

Printed in The American Almanac, July 11, 1994


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Part 1 of this article was printed in American Almanac, Vol. 8, No. 23, of June 27, 1994. Part 2 was printed in Vol. 8, No. 24, of July 4, 1994.

Despite the presence of Morgan agents in his cabinet and among his advisers, Roosevelt remained in control of policy and, from the standpoint of Wall Street, highly unpredictable.

On Nov. 16, 1933, Roosevelt recognized the Soviet Union, the first Western leader to do so. The bankers' press screamed of a potentially dangerous ``new Rapallo'' agreement with the Soviets. The fear was that if America broke Russia's isolation, British geopolitical aims, which included the unleashing of a war between Nazi Germany and the Soviet Union, might be subverted.

Six weeks later, Roosevelt announced that he would never again send American troops to Ibero-America to violate the sovereignty of nations to protect the bankers' investments.

The bankers' cabal began now to consider more drastic action to deal with their Roosevelt problem.

The keynote for what was intended was struck by none other than Morgan partner Thomas Lamont, who chose an address before the Foreign Policy Association, to heap praise on Mussolini and his methods, stating that fascism, as economic and political policy, works.

``We count ourselves liberal, I suppose,'' he told the FPA. ``Are we liberal enough to be willing for the Italian people to have the sort of government they apparently want?'' asked Lamont.

Fascism or some variant of it, he said, was not to be ruled out as policy for the United States.

On Dec. 1, 1933, MacGuire left with his family for an extended trip to Europe. He stayed more than seven months, spending time in France, Fascist Italy, Nazi Germany, London and Scotland, Holland, and, according to one report, Russia. He was later to report to Butler that he was on a ``fact-finding'' mission to study the relationship of soldiers to fascist mass movements. He was looking for something that would work in the United States.

MacGuire, in order to impress Butler with the powers that were backing his efforts to establish a fascist superorganization, stated that while in Paris, he worked directly from the offices of Morgan and Hodges. MacGuire may have indeed established contacts with various fascist organizations, and found the structure of the Masonic-led ``secret conspiracy'' of the French Croix du Feu (Fiery Cross) as a useful metaphor for the type of organization to be created in the United States. But those behind the bond salesman and manipulator MacGuire certainly did not need to learn how to create fascist ``mass'' movements, of either the left or right. They had been doing so for years.

MacGuire had gone to Europe, under Morgan instructions, and with the blessings of the cabal of U.S. British assets that included:

It is total misdirection to identify the plot as being directed by ``Wall Street.'' It was British, through and through, so much so that its banner might as well have been the Union Jack.


A Fascist Base

MacGuire sent Butler a card from the French Riviera in February. He sent another in June 1934 from Berlin.

Meanwhile, aspects of the plot that had little directly to do with MacGuire, were already in motion.

During the spring of 1934, money was being pumped into the creation of various fascist paramilitary organizations, each of which claimed to be the protection of America from the ``red menace'' and from the influences of the ``New Deal.'' Some were openly fascist, such as the Silver Shirts, the stormtroopers led by the Rev. Gerald L. K. Smith. Others, such as the Crusaders, spurned the fascist epithet, but nonetheless avowed fascist policy goals to crush organized labor and the ``Reds.'' Still others were directly funded by bankers and financiers, such as the Sentinels of the Republic, funded by the Morgan-allied Pew and Pitcarin families.

The Scottish Rite Freemasons, in the tradition of the treasonous Albert Pike, helped John H. Kirby establish the Southern Committee to Uphold the Consitution, which, like the Klan itself, was financed with ``northern money.''

In Hollywood, the actor Victor McLaglen, who was reputed to be an operative of the British Foreign Office, established the California Light Brigade, which was ready to march at a moment's notice against any threat to ``Americanism.'' He was rewarded for his efforts with an Academy Award for best actor by pro-fascist Louis Mayer's Academy of Motion Picture Arts in 1935.

All these organizations spawned cells throughout the country. They were in no way impeded in their operations by the FBI, under the direction of Masonic operative ``Gay'' Edgar Hoover.

This organizing, in the spring and early summer of 1934, took place under an intensifying media brainwashing barrage about the danger of the ``New Deal socialism'' and the threat of a ``Red'' takeover in the United States. Morgan mouthpiece Herbert Hoover called the New Deal ``class hatred ... preached by the White House.'' Hoover called New Deal policies ``universal bankruptcy.'' He urged the American people to ``rise up'' against the political menace represented by Roosevelt.

While this propaganda was directed at the Babbits of the American middle class, there was an outright organizing campaign for fascism directed at the leaders of American industry and finance and management level personnel in the private sector and the government. The content of this, taken from the media of the day, is all basically the same: glorification of the economic ``miracle'' of Mussolini's Italy with pointed inference that this form of fascism was just what the doctor ordered to restore order in the United States.

For example, the July 1934 issue of Henry Luce's Fortune magazine devoted its entire issue to praise of Mussolini! In an editorial by Laird Goldsborough, the British-linked foreign editor of the magazine, readers were told that ``Fascism is achieving in a few years or decades such a conquest of the spirit of man as Christianity achieved only in ten centuries.... The good journalist must recognize in Fascism certain ancient virtues of the race, whether or not they happen to be momentarily fashionable in his own country. Among these are Discipline, Duty, Courage, Glory, and Sacrifice.''


Roosevelt's Program

In June 1934, Roosevelt, for the first time in U.S. history, ordered a halt to all farm foreclosures, while using existing legislation, supplemented by other acts, to establish a system of crop parity payments. He established the Securities and Exchange Commission to end unregulated stock speculation, while establishing regulatory agencies to oversee the communications and radio industries.

But the most politically significant steps he took were to guarantee the rights of trade unions to organize, to prevent actions by employers to block unionization, and to force employers to accept collective bargaining agreements. These moves, which were to culminate in the 1935 Wagner Act, the so-called ``Bill of Rights'' for labor, strengthened and expanded, especially among industrial workers, political institutions--trade unions--which could be used by Roosevelt as a direct counter to the fascist mobilization being organized by the Morgan-allied clique.

Roosevelt, by personally taking the lead in fighting for the right to organize and for protection of workers against employers' excesses, won the political loyalty of the rank-and-file unionist. Should a fascist movement have been activated in the manner described in Butler's testimony and being planned by those behind MacGuire, Roosevelt could have and probably would have called on these layers to defend the Constitution and his presidency.

And when MacGuire returned from Europe in late July, a fascist coup was very much on the agenda.


The Plan for the Coup

On Aug. 22, Butler received a phone call from MacGuire. It was urgent that he talk to the general immediately, MacGuire said. There was something ``of the utmost importance'' that he must tell him that day. Butler, exhausted from an extended nationwide tour for the Veterans of Foreign Wars (VFW), nonetheless agreed to meet at the Bellevue Hotel in downtown Philadelphia. In a corner of the hotel's deserted restaurant, MacGuire laid out the plans that been hatched in Europe, and now apparently agreed upon by the coup plotters.

Now, MacGuire said that the time had come to ``get the soldiers together.'' He explained that the purpose of his seven-month European trip was to study ``organizations'' whose methods and structure could be adapted to American needs. He had found that veterans' organizations were the ``backbone'' of the fascist movements in Italy and Germany; however, American soliders would not go along with such a paramilitary movement, organized for an overtly political purpose.

However, in France, he said, he had found the perfect organization: The ``Croix du Feu'' of de la Rocque. This organization had functioned politically, but was organized for an economic purpose. He explained that the ``Fiery Cross'' had a core membership of about 500,000 officers and non-commissioned officers, but that each member was responsible for organizing at least 10 others, covertly, giving the organization a ``fighting strength'' of more than 5 million.

Butler asked what this new ``superorganization'' of soldiers would do. MacGuire hesitated, then answered that it would ``support'' the President; the general replied that Roosevelt didn't need such support and wondered when MacGuire and his clique had become ``supporters'' of Roosevelt.

MacGuire responded by pointing out that Roosevelt needed money to finance the New Deal programs and that money came from the sale of government bonds through the banking interests that were controlled by Morgan and his allies. ``There is not any more money to give him,'' MacGuire now claimed.

``Eighty percent of the money is now in government bonds, and he can't 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 that he does not change that method. He will not change it.''

MacGuire tried to explain that his backers were confident that they would force Roosevelt to change his policy, and the 500,000 soldiers and the millions behind them in secret organizations ``would sustain him when others assault him.''

Butler questioned how Roosevelt, who had staked his personal reputation on the New Deal, would explain such an abrupt about-face.

MacGuire explained that Roosevelt did not have to ``explain'' it.

``Did it ever occur to you that the President is overworked?'' MacGuire asked. He said that the ``overworked President'' needed help and that an ``Assistant President'' was needed. This ``assistant President'' would take over much of Roosevelt's job and could take the blame for the change of policy.

MacGuire said that it ``wouldn't take any constitutional change to authorize another cabinet official, somebody to take over the details of the office--to take them off the President's shoulders.'' He mentioned that the position would be sort of a ``super secretary'' or what he referred to as a ``secretary of general affairs.'' MacGuire claimed that the American people would be more than willing to swallow this: ``We have got all the newspapers. We will start a campaign that the President's health is failing. Everybody can tell by looking at him and the dumb American people will fall for it in a second.''

MacGuire then indicated that Roosevelt was already surrounded by allies of the Morgan coup plotters. He said that the pro-fascist Gen. Hugh Johnson, whom Roosevelt had put in charge of the National Recovery Administration and who had expressed admiration for Mussolini, was the man the Morgan group would have preferred as this general secretary. But, according to MacGuire, Roosevelt was going to fire him because he ``talked too damn much.'' (Roosevelt did ``fire'' Johnson, just as MacGuire said he would, the next month. After his forced resignation, Johnson was given a regular column by the Scripps-Howard newspapers, for the express purpose of attacking the President, which he did, in the most vitriolic manner possible.)

Butler asked MacGuire how he knew so much about what was going on inside the White House and the administration. ``Oh, we are in with him all the time,'' came the reply. ``We know what is going to happen.''

MacGuire told Butler that, within a year from this discussion, the coup plotters wanted him to march his army of 500,000 people into Washington. He stressed that there would be no revolution, that everything would be constitutional: It had all been worked out, in advance. The Secretary of State, Cordell Hull, would resign, as would Vice President John Nance Garner; the sense given was that both these figures were ``in'' on the plot, or minimally, that Morgan and their allies had enough ``chits'' to call in that they could be counted on to do what they were instructed, under the circumstances. According to MacGuire, Roosevelt would allow the plotters to appoint a new secretary of state. If Roosevelt, with 500,000 men occupying Washington, was willing to ``return to his class,'' he would be allowed to remain on as President.

``We'd do with him what Mussolini did to the King of Italy,'' MacGuire told Butler, saying that the President's function would become ceremonial much like the President of France.

But, if Roosevelt refused to go along, MacGuire insisted, he ``would be forced to resign, whereupon under the Constitution, the presidential succession would place the secretary of state in the White House.'' Butler was to tell a congressional committee that MacGuire thought that all this could take place bloodlessly--a ``cold coup.'' All that was needed was a ``show of force in Washington'' and then he, Butler, would be ``the man on the white horse'' who would ``ride to the rescue of capitalism.'' An armed show of force was the ``only way to save the capitalist system,'' MacGuire asserted.

Butler, trying to play along with MacGuire to discover who was behind this plot, said that what was being proposed would cost a great deal of money. He was told not to worry. MacGuire already had ``$3 million to start with, on the line, and we can get $300 million if we need it.'' He reminded Butler that the banker Clark had told the general that he was personally willing to commit as much as $15 million.

He then told Butler that even more powerful people than Clark stood directly behind the plan. When he was in Europe, he reported, he had held meetings at the Paris office of Morgan & Hodges, Morgan's Paris operation. He claimed that the Morgan group had strong reservations about Butler, fearing that he might try to double cross them. He stressed that the others involved, however, had gotten the Morgan interests to agree that Butler was the best man to ``get the soldiers together,'' implying that Grayson Murphy, Clark, and himself had backed the general. MacGuire claimed that the Morgan interests would have preferred Gen. Douglas MacArthur, whose wife was the daughter of Morgan's partner at Drexel in Philadelphia; if not MacArthur, they preferred the former Legion national commander and former ambassador to Canada and confidant of MacKenzie King, Hanford MacNider. Both later denied having been approached by the plotters, although it is likely that Butler was not the only choice to head the ``superarmy.''

Butler tried to probe further, asking when there would be signs of the coming together of a larger and powerful organization which would provide public backing for this plot. He was astonished when he was told that ``within a few weeks'' there would be an organization of some of the most powerful people in the land who would come together to ``defend the Constitution.'' MacGuire explained the manner in which this organization, which he would not name, would function using a musical analogy: It was to serve the purpose of ``the villagers or chorus in an opera,'' establishing the setting and the scene, for the great action to take place.

Asked for more information, MacGuire would only reveal that one of the new group's spokesmen would be the 1928 Democratic presidential candidate Al Smith, who until that time had backed Roosevelt and the New Deal. It was explained that Smith, who edited New Outlook magazine, would within weeks, break with Roosevelt and launch attacks on the New Deal and administration. It had all been arranged, he told Butler, who still refused to make a commitment to the plot.

MacGuire got up to leave, telling Butler that he was headed for Miami and the American Legion convention to agitate for the gold standard and to organize the soldiers into the ``superarmy.''


The League of Treason

As MacGuire and Butler met in Philadelphia, Jouett Shouse, a protégé of du Pont lawyer and Morgan operative John J. Raskob, had assembled the press to his office in Washington, D.C.'s National Press Building to announce the formation of a new policy advocacy group, the American Liberty League.

A former congressman from Kansas and assistant secretary of treasury during the Wilson administration, Shouse had gained the reputation of a political ``fixer,'' much like the present-day Robert Strauss. In 1928, the bankers' operative Raskob, a former director of General Motors, was moved into the chairmanship of the Democratic National Committee, running the disastrous election campaign of Al Smith, ensuring a Hoover victory. Not wishing to give up control of the party to the political machines, Raskob brought in Shouse as the executive director of the national committee.

As soon as Roosevelt was in a position to do it, he moved to get rid of both of these ``inside'' men.

Now, in the heat of the summer of 1934, Shouse announced that the Liberty League would be a mass-based movement, whose intention it was, as the next day's headline on the front page of The New York Times declared, ``To Scan New Deal, `Protect Rights.'|'' The Morgan rag, The Times printed the entirety of Shouse's statement, that had been prepared in conjunction with Raskob. This new organization would, according to Shouse, ``unite several millions of people from all walks of life who are now without organized influence in legislative matters.''

There were, said Shouse, ``no covert purposes. There is no object sought beyond the simple statement in our charter.'' He stressed that there was no partisan purpose, that the group was not ``anti-Roosevelt.''

``The League aims to do just what is outlined in its charter, to organize those who believe in upholding property and constitutional rights into a vocal group,'' Shouse told the press. ``It is not intended to be antagonistic to the administration. We intend to try to help the President.'' Asked how such a group could ``help'' the President, Shouse replied: ``If a tendency towards extreme radicalism developed which the President wished to check we might be most helpful with our organization in which we expect to enlist 2,000,000 to 3,000,000.''

Shouse announced that a group had been self-selected to serve as the League's initiating executive committee. All of them were Morgan-allied stooges: Morgan's lawyer, John W. Davis, the former Democratic presidential candidate; Irenee du Pont, who ran the du Pont fortune now controlled by the Morgan interests; Nathan Miller, the former GOP governor of New York and a Morgan preferred-client list member; Rep. James Wadsworth of New York, a Republican and supporter of the gold standard; and Al Smith, the ``happy warrior'' who had been totally corrupted by Morgan money and who had headed the corporation that built and ran the Empire State Building.

Shouse showed the press letters from financiers, business leaders, and politicians from all over the country applauding the League's formation.

A few weeks later, the chorus of ``villagers,'' as MacGuire had described them, was expanded to include additional prominent leaders of finance and business, with a heavy emphasis on Morgan allies. On its advisory council were, among 200 others: Dr. Samuel Hardin Church, who ran the Carnegie Institute in Pittsburgh, and who was a mouthpiece for the Mellons; W.R. Perkins of National City Bank; Alfred Sloan, the man the Morgans selected to run General Motors; David Reed, a U.S. senator from Pennsylvania, who in May 1932, said on the floor of the Senate, ``I do not often envy other countries and their governments, but I say that if this country ever needed a Mussolini, it needs one now''; E.T. Weir of Weirton Steel, who was also known as a supporter of fascism. On its executive committee was Morgan stooge and former New York Supreme Court Justice Joseph M. Proskauer, the general counsel to the Consolidated Gas Company; J. Howard Pew of Sun Oil and the funder of the openly fascist Sentinels of the Republic; and Hal Roach, the Hollywood producer, who, like many of his peers, was an open admirer of Mussolini, and who was later to become a partner with Mussolini's son in a Hollywood production company, RAM (``Roach and Mussolini'') Films, Inc.

The league's treasurer was none other than Grayson Mallet-Prevost Murphy!

Despite all the publicity and statements from Shouse, the league never recruited large numbers of people, nor was it really intended to. It was a sham, intended to give the appearance of mass resistence to Roosevelt, and to offer a constant attack on his policies.

Those involved in its creation knew the league's role as a ``villagers chorus,'' working to establish the climate for the larger fascist plot. That was made clear in a series of pre-meetings in July that created the league from the shards of another Morgan-linked operation, the Association Against the Prohibition Amendment, which had been directed by Raskob and Shouse. Attending the planning sessions in the offices of Al Smith in New York were Raskob, Shouse, Morgan partner Lamont, members of the du Pont family, including Irenee du Pont, and Morgan lawyer John W. Davis.

One week earlier, Shouse had gone to the White House to brief the President on the new organization, and determine the President's advance knowledge. Roosevelt played things very close to the chest, telling Shouse that he welcomed open debate and that he would not come out and denounce the formation of the league. In fact, he told Shouse, he would be willing to give it a short statement expressing his approval. Roosevelt said he would be on vacation on the day that the league was to be formed, so he told his secretary to prepare such a statement.

On Aug. 22, Shouse called the White House, hoping for the promised statement. He was told that no one knew about it, since the President's secretary had gone with him. Neither the secretary nor Roosevelt could be reached and the White House would make no supportive comment, he was told.

Roosevelt returned to Washington on Aug. 24 and held his weekly press conference. He had avoided all comment on the League until them, but when asked he had a ready reply. The Liberty League, he told the press, was founded ``to uphold two of the Ten Commandments,'' the ones nominally dealing with protecting property. It said nothing about protecting the average citizen, or of helping the unemployed and others in need. In short, said the President, it didn't deal with anything that was covered by that most important Commandment, ``Thou shalt love thy neighbor as thyself.'' The league was fine as far as it went, he said, but it was stopping short of doing what was Christian and necessary. He couldn't support it because of that problem, but whether other people want to or not, is ``none of my business,'' he said laughing.

The league's attack on Roosevelt started in late November, after the fall congressional elections. In the last four months of 1934, it spent about $94,000; the next year it was to spend just under $390,000, mostly on the publication and circulation of pamphlets, leaflets, and bulletins attacking Roosevelt's policies. The league also received millions of dollars in free publicity for its ``authoritative'' views from a very friendly press and radio networks. This operation, in all its forms, was the most sophisticated multi-media smear campaign in history up to that point.


Exposing the Plot

Butler had once thought that perhaps MacGuire was a ``loose cannon,'' operating without the sanction of those whom he professed were in on the plot.

However, after the Aug. 22 meeting, and the quick succession of events that MacGuire had matter of factly ``forecast,'' including the appearance of the Liberty League, Butler became convinced that a network, centered around the powerful Morgan interests, had indeed launched a ``live'' coup operation against the government in Washington.

General Butler decided that it was his duty, regardless of the consequences that might befall him and his family, to expose the plotters, to the extent of his knowledge of that plot. Butler had been both controversial and in the public eye for some time; he realized that all those involved in the plot would simply deny it, using their influence over the press to ridicule him for publicity seeking. He therefore decided to take a risk, and seek help in at least corroborating some of the key information, before he went public.

Butler turned to Tom O'Neill, the city editor of the Philadelphia Record with whom he had become friends during his stint fighting the underworld as the city's appointed anticrime czar in the 1920s. O'Neill was flabbergasted by the report of the coup plot, but knowing how the Morgan interests operated in his own city, he didn't doubt that they were capable of treason. He assigned his star reporter, Paul Comley French, to investigate the story. French, who also wrote for The New York Evening Post and who was later to become the director of the Committee for American Relief in Europe (CARE), was set up by Butler to talk to MacGuire, posing as an intermediary to discuss the general's further participation in MacGuire's plans.

In early September, French went to see MacGuire at his offices on the premises of Grayson M.P. Murphy and Company in New York. In the meeting, French was able to substantiate every allegation about the plot that Butler had attributed to MacGuire. But the bond salesman chose to be even more frank with French than he had dared to be with the general. He made it clear that those backing the coup were interested in destroying the presidency and in creating an American form of fascist government.

``We need a fascist government,'' French was to quote MacGuire as saying in his testimony before a congressional committee, ``to save the nation from the Communists.'' MacGuire repeated this theme several times during his conversation with French. Taking the bait that French was operating as Butler's ``agent'' in negotiations, MacGuire told him that his backers would have no problems coming up with $1 million immediately to organize Butler's ``army.'' MacGuire said that all he needed to do to get the money was place phone calls to Morgan attorney John W. Davis and W.R. Perkins of National City Bank, and to some other people of similar status. MacGuire also revealed that several national commanders of the American Legion, including Louis Johnson, Henry Stevens, and the present commander, the banker Belgrano, were all in favor of the plot and would back it.

MacGuire, seeing that French was more interested in questions of policy than the crusty General, informed French that his backers had already devised a plan to end unemployment: ``It was the plan that Hitler had used in putting all of the unemployed in labor camps or barracks--enforced labor. That would solve it [the unemployment problem] overnight.'' He also claimed that they would force all people in the nation to ``register'' and carry identification papers. ``He said that would stop a lot of these communist agitators who were running around the country,'' French later told the congressional committee.

MacGuire reported that those behind him were going to create a deliberate financial crisis for the administration. They were prepared to choke off credit to the New Deal programs, force interest rates higher, and force the rates that the government would have to pay to borrow up toward then-astronomical level of 5 percent or more. This, MacGuire said, would produce a ``new crash.'' He then described how the crash would unleash the ``left,'' creating new agitation and disruptions, especially among the growing numbers of new unemployed. With the nation consumed in chaos, the time would be right for the ``man on the white horse'' to ride into Washington, force the overturning of the elected government, the end of ``presidential rule'' and the start of a new, fascist era for the nation.

MacGuire told French that it would be no problem getting the soldiers army weapons from the du Pont-controlled Remington Arms Company; the du Pont interests were fully in support of the plans, MacGuire stated.

French went to see MacGuire once more, on Sept. 27, again at the offices of Grayson M.P. Murphy and Co. in New York. In a brief meeting, MacGuire said that things were moving along nicely. ``|`Everything is coming our way' is the way he expressed it,'' French told the committee.

With corroboration in hand, Butler felt it now was necessary to go public. Before he could make his decision on how to proceed, he was approached by investigators for the Special House Committee to Investigate Nazi Activities in the United States.

That committee was quickly to have its Congressional mandate changed to focus primarily on ``Reds,'' evolving still later into the House Un-American Activities Committee, which became even more noxious under the leadership of Rep. Martin Dies. But at this moment, its leadership was controlled by allies of Roosevelt. The committee had, through its own sources, heard of a plot to overthrow the government that had involved General Butler. It was arranged for General Butler to testify in executive session on Nov. 20, when the committee was in New York.

Butler welcomed the chance to testify, but was concerned that it was going to be behind closed doors. This would allow for managed news coverage, that would be leaked to the media from the committee staff. It would also mean that, with the plotters controlling the press, there could be no assurance that his story would ever be made known to the American people. Butler and French decided on an insurance policy: Three days before he was to testify, French broke the coup story simultaneously in The Record and The Post, under the banner headline ``$3,000,000 Bid for Fascist Army Bared;'' the story featured direct statements from Butler, naming most of the names he was later to reveal in his testimony.


Butler Names the Names

Butler traveled from Paoli to New York to testify on Nov. 19. By the time the hearing started at the offices of the Bar Association the next day, the temperature was already well on the way to a record 74 degrees F, the hottest day for any November in history. Butler was prepared to add to that ``heat.''

As the hearing opened, Butler thought it necessary to make a brief statement concerning his involvement in the plot: ``May I preface my remarks, by saying sir, that I have one interest in all of this and that is to to try to do my best to see that democracy is maintained in this country?''

Cutting him short, committee co-chair Rep. John McCormack, Democrat of Massachussets, who was later to become Speaker of the House, stated, ``Nobody who has either read or known about General Butler would have anything but that understanding.''

Butler then proceeded to tell the story, in the great detail, that we have described above. As he proceeded, he was asked for clarification on several points. The general provided what additional details he could, but never ventured into speculation, sticking to the statements made directly to him by those involved in the conspiracy.

He was followed as a witness by Paul Comley French, who, from his own direct contact with MacGuire, was able to corroborate all the pertinent details of the fascist plot, and added additional details revealed by MacGuire, including the fascist policies preferred by the coup's backers. In all, their testimony lasted approximately two hours.

Butler and French were followed in the afternoon by Gerald MacGuire, the employee of Grayson M.P. Murphy who had served as the intermediary for ``the higher ups'' to General Butler. MacGuire meekly claimed that he was merely a $150-a-week bond salesman, and denied that there was any plot. He told the committee that he had merely gone to talk to the general about buying some bonds. He denied ever showing Butler 18 $1,000 bills in Newark, and spending the amounts Butler claimed he had spent to get a gold standard resolution passed at the 1933 American Legion convention. MacGuire claimed that his seven-month sojourn to Europe was merely ``a family vacation.'' When questioned about where he got the money for it on his supposedly meager salary, he changed his story to say that it was also a ``business trip'' to sell bonds, although he couldn't remember the name of a single contact he had made in Europe!

Committee investigators produced evidence that the bond salesman MacGuire handled funding for various operations outside ``normal business'' for the banker Robert S. Clark, for whom he did not work. It was revealed that he was the treasurer for the Committee for a Sound Dollar, Inc., which was widely known to be a front for Morgan and other large financial interests. Caught in his own lies, MacGuire offered no explanation of how he became involved in this activity, but claimed that it had nothing to do with any conversations with General Butler, whom he described as a ``personal friend.''

Several times, under direct examination, MacGuire denied asking Butler to lead any organization of soldiers or of discussing any plans to march ``troops'' on Washington.

Members of the committee found MacGuire's denials unconvincing; they ordered him to return the next day for further questioning.

Reporters crowded the steamy corridors outside the hearing room, looking for a story. When the witnesses, including the committee co-chairs, emerged, they provided the press with bare outline of Butler and French's testimony. Within hours, the story, which had been broken by French three days earlier, was out all over the country. Knowing what was in store, the plotters now tried damage control, using, as Butler had expected, ridicule as their main weapon against the truth.

On Nov. 21, The New York Times, a paper that Heywood Broun once described as ``black with the shoepolish of Morgan,'' took the lead in this campaign, with a front-page two-column article under the headline: ``General Butler Bares `Fascist Plot' to Seize Government by Force.'' Having already put the words `fascist plot' in quotes, the paper led with:

``A plot of Wall Street interests to overthrow President Roosevelt and establish a fascist dictatorship backed by a private army of 500,000 ex-soldiers and others, was charged by Major General Smedley D. Butler, retired Marine Corps officer, who appeared yesterday before the House Un-American Activities Committee, which began hearings on the charges.''

The Times avoided providing on the front page an account of the charges as given by the committee co-chairs and instead, citing ``sources in Philadelphia,'' the paper claimed that Butler had named Morgan and Murphy as being behind a plan under which the former NRA administrator Hugh Johnson ``was scheduled for the role of dictator.''

What followed then on the front page was a string of denials or ridicule of the charges from those prominant people named: ``Perfect moonshine! Too utterly ridiculous to comment upon,'' said Morgan partner Thomas Lamont. ``A fantasy! I can't imagine how anyone could produce it or any sane person believe it. It is absolutely false as far as it relates to me and my firm, and I don't believe there is a word of truth in it with regards to Mr. MacGuire,'' said Grayson Murphy. ``It's a joke! A publicity stunt! I know nothing about it. The matter is made up out of whole cloth. I deny it completely,'' said Gerald MacGuire. ``He had better be pretty damn careful. Nobody said a word to me about anything of this kind and if they did, I'd throw them out the window. I know nothing about it,'' said Hugh Johnson.

Only on the jump, did one find some details of what Butler charged, and statements by committee co-chair Rep. Samuel Dickstein, Democrat of New York, that Butler had substantiated much of what had been attributed to him in previous press reports. ``From present indications,'' Dickstein is quoted as saying, ``Butler has the evidence. He's not going to make these charges unless he has something to back them up. We'll have names here with bigger names than his.'' The congressman said that he planned to subpoena about 16 people whom Butler had named and that there would be a public hearing the following week.

The article ended with another denial by Grayson Murphy of any involvement, terming reports of his involvement ``an absolute lie.''

Butler was amused by The Times report, whose mangled contents were put on the wire services and then fed out to the rest of the country. When he arrived back home in Pennsylvania the next day, he was besieged by reporters wanting to know more details. He referred them to the reports in The Record and The New York Post by French, and told them that he was certain that there would be more revelations as the committee called the various prominent people named in his testimony.

To be continued.


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The preceding article is a rough version of the article that appeared in The American Almanac. It is made available here with the permission of The New Federalist Newspaper. Any use of, or quotations from, this article must attribute them to The New Federalist, and The American Almanac.


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