The Morgan-British Fascist Coup Against FDR

by Lonnie Wolfe

Printed in the American Almanac, February, 1999

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It is said that history repeats itself. To the extent that this is true, it is often because those of the oligarchical mindset, tend to react in the same way across generations, to events and circumstances that might challenge their power. Usually, it takes the form of a murderous rage against those who would threaten their continued power. Thus is the history of mankind repeatedly afflicted by slaughter and destruction, caused by this oligarchical beast.

Today, with their power threatened by global financial crisis, we find this financier oligarchy orchestrating a coup against their most powerful potential enemy, the American Presidency and the elected occupant of that office, William Jefferson Clinton. The ``success'' of such efforts to impose the bankers' lackey, Al Gore, as either President or co-President, must lead, as the statesman Lyndon LaRouche warns, to the slaughter of millions in a new dark age and to possible nuclear war.

The import of today's events can best be grasped, as LaRouche recommends, by looking back some 66 years to the imposition of the Hitler upon Germany, in a coup orchestrated by the same London-centered financial oligarchy and its American allies who today are attempting to destroy the American Presidency. Those actions, taken during the midst of a global financial crisis, led, in short order, to the charnel house of World War II.

But as LaRouche points out, such efforts were not restricted to Germany. Simultaneous with the Hitler coup in Germany, London-directed Morgan and Mellon interests were involved in organizing an attempted fascist coup in the United States against President Franklin Roosevelt. The coup plot, slated for full activation by no later than 1935, was exposed in Congressional testimony in November-December 1934 by Marine hero, Major General Smedley Darlington Butler (1881-1940). Earlier, in February 1933, these same networks attempted the assassination of FDR, the failure of which led to the ``blown'' coup plot option.

While at least the rudimentary facts and dates of the Hitler coup are known, the bankers' fascist plot against FDR has been, to this day, blacked out of the history books. To the extent that it is discussed at all, it has been ridiculed as the delusions of Maj. Gen. Butler, whom the coup plotters proposed for their ``man on the white horse.'' But, as we shall show, it was not only very real, but, if not for the intervention of the hero, Maj. Gen. Butler, it had a chance to succeed in creating the pretext for a fascist police state in this country.

I. The Context

It is the winter of 1932-33. The world is in the grips of the worst economic depression of the century. In Germany, in January 1933, a cabal of British-allied bankers have staged a parliamentary coup to topple the von Schleicher government to prevent it from implementing a radical economic development program that might threaten their political and financial power; Adolf Hitler, the choice of London and Wall Street, has been installed as the German Chancellor to protect interests of the bankers' cabal.

Across the ocean, in the United States, the economy and the banking system have nearly ground to a halt, as bread lines grow. A new President is about to take office: Franklin D. Roosevelt has thrashed the hapless bankers' boy, Herbert Hoover, in the November election, and has thus been given a mandate by the American people to reverse their fortunes. Roosevelt, a patrician and cousin of arch-Anglophile President Teddy Roosevelt, is viewed with distrust by those same Wall Street interests whom TR so loyally served.

Since the 1876 Species Resumption Act, but especially since Teddy Roosevelt's rule, the British-allied banking interests clustered around the Houses of Morgan and Mellon have gained increasing power over the conduct of American financial policy. Through their imposition of the Federal Reserve System, a compact of the private bankers, the Morgan-Mellon cabal has overseen an even further expansion of the power of the financier oligarchy against American national and industrial interests. Along with the Warburgs, the Meyers of Lazard Frères, Otto Kahn of Kuhn Loeb, and the Harriman interests, the Morgan-Mellon cabal at that point constituted a ``secret government'' more powerful than any President, while having a substantial numbers of Congressmen and Senators on their effective payroll. A combination of Andrew Mellon, the Secretary of Treasury, and Eugene Meyer, as Fed chairman, have dictated financial policy to the hapless Hoover. Together with their confederate, Montagu Norman at the Bank of England, and other European banking interests, they have presided over the deepening Depression collapse 1929-32[fn1].

During this century, no President had dared to challenge the power of this financial cabal. However, FDR, with his mandate from the American people, is now in a position to do so. As Governor of New York, and during the 1932 Presidential campaign, FDR has made clear his understanding of the use of the power of the executive branch of government to shape policy initiatives, and to mobilize support for them. Should Roosevelt exert the full power of the Presidency, as defined by the U.S. Constitution, including power over financial and economic policy, he could take away power from the financial oligarchy, the Morgan-Mellon led cabal, restoring a balance between financial and industrial capital.

That, for the cabal, would have been bad enough; but as 1932 became 1933, Morgan's spies learned that Roosevelt might be considering more radical measures, ones that could take control of America's most precious commodity--its sovereign credit-- away from Wall Street and the London-based financial oligarchy who controlled the Morgan interests. American credit, and therefore government economic policy, had been held under the thumb of the private financial markets and their banking houses, like Morgan. Should a President Roosevelt seize control of the nation's credit, and deploy it for a recovery program based not upon continued bankers' looting, but on economic development, and should he rally the American people to that program, the power of the London-based financial oligarchs might be broken.

With their power thus threatened, the financial oligarchs were ready to choose radical action: Roosevelt had to be eliminated, and the institution of the Presidency destroyed or weakened. Thus was set in motion here in the U.S. a series of actions paralleling the overthrow of the von Schleicher government in Germany, that would have led to the American equivalent of the Hitler coup.

II. A Hail of Bullets

On the evening of Feb. 15, 1933 Roosevelt, who had been vacationing in the Caribbean prior to his scheduled March 4 inauguration, landed in Miami for political meetings. He arrived aboard the yacht of Vincent Astor, of the British-dominated Astor financial interests. A crowd of some 10,000 gathered near the waterfront, waiting to see the President-elect. As FDR, speaking from the seat of an open car, concluded brief remarks, several shots rang out. Five people on or near the bandstand directly behind the President-elect were hit, although FDR, miraculously, was not.

The man firing the shots, Giuseppe Zingara, a brickmason from New Jersey, was immediately branded an ``anarchist.'' When Chicago Mayor Anton Cermak, wounded in the hail of bullets, died three weeks after the attack, it fed speculation that he, not Roosevelt, had been the target of what was called in the press a ``mob hit.'' It was reported that Chicago mob boss Frank Nitti had put Cermak on a ``hit list'' and that FDR ``just happened to be there.''

But Zingara's own statements, prior and during the trial, made it clear that he had been targetting FDR, and that the others had been hit by mistake in the botched assassination attempt.

Contemporary newspaper accounts speak of the assassin's arm being deflected by a woman in the crowd. Her report was that the shooter had carefully prepositioned himself to have a clear shot at Roosevelt, and that the gun was pointed, at a range of less than 30 feet, directly at FDR; had she not hit his arm, FDR would have been hit, and likely killed.

With Cermak's death, Zingara was rushed to trial and execution in less than 90 days from the time of the shooting. It was, the contemporary media accounts claimed, an ``open-and-shut case''; after all, the FBI, under the personal direction of J. Edgar Hoover, had conducted an ``exhaustive'' investigation, concluding that Zingara was a ``lone assassin'' acting from an emotionally disturbed and bizarre political analysis.

No competent invesigation of the assassination attempt has ever been done. Such an investigation would have had to proceed from the question cui bono? (Who benefits?). From there, the trail would likely have led to the center of the London-Wall Street cabal, whose members had been meeting for months, in secret, to discuss how to deal with the ``Roosevelt problem.''

An even cursory examination of the evidence presented in the ``railroad trial'' shows that the FBI report was a coverup, and that many contradictions were left unresolved, even as the assassin was dispatched to the Florida electric chair. For example, given his apparent meager resources, both mental and monetary, how was it possible that Zingara was placed in a perfect position to assassinate the President-elect? How was this preplanning accomplished, and who if anyone might have assisted in this, including in providing the necessary information about the rally and the placement of the President (i.e., Zingara was aware that he was going to speak from a car and not from the bandstand)?

There is also the ample clinical evidence that Zinagra's mental state coheres with what would today be called a ``zombie assassin,'' with significant memory gaps about how he came to do what he did; the methods of creating such zombie-assassins, using political and religious belief structures, were already known and in practice in the circles of British Intelligence associated with the Freudians of the London Tavistock Clinic. The FBI report merely dismissed all talk of conspiracies as out of the question, and investigated no possible leads.

If Roosevelt had been killed, the country would have been plunged into a Constitutional crisis. No President-elect had ever died before assuming office; under such circumstances, there is no clearly specified succession. It might have been the case that a new election would have been called, and the bankers' boy Hoover might have remained in office. The paralysis and chaos would have played directly into the Morgan cabal's hands.

For some months prior to the assassination attempt, Hoover and others in the Morgan-Mellon-controlled Hoover administration, at the behest of former Treasury Secretary Andrew Mellon, had been working on ``contingency plans'' for emergency measures to be taken to preserve law and order should there be a ``breakdown'' of government under the strains of the Depression. These involved suspension of sections of the Constitution, by executive order, including many provisions of the Bill of Rights, and the declaration of martial law to deal with unrest and riots. With the Morgan interests prepared to bankroll provocations, the absence of a viable Presidential authority to resist them would have presented the window of opportunity to install a Bonapartist police state in this country.

(Less than two weeks after the Miami assassination attempt on FDR, on Feb. 27, the German parliament building, the Reichstag, was burned to the ground in an arson attack. That incident was used as a pretext for a wave of terror against Nazi opponents and rivals, and it led to the activation government by decree, giving the Hitler police state its dictatorial powers.)

III. The Coup Plot Takes Shape

Roosevelt assumed office March 4, 1933 and almost immediately realized the worst fears of the Morgan-Mellon cabal. In bold actions, starting with his declaration of a bank holiday, and removal of the dollar from the credit-strangulation of the gold standard, he showed that he intended to assert the primacy of Presidential power over the whims and policies of the financial oligarchy.[fn2]

Having failed to kill him in February, some time before June 1933, a new operation against FDR and the Presidency was set in motion. This involved, as an option, the creation of an armed fascist ``people's militia,'' to be led by a ``popular'' military figure, who would move on Washington and force the resignation of the President.

On the surface, such a plot appears impractical, even impossible. However, one must remember that in 1933, outright support for fascist ideology had been promoted for a decade both by the media, and by such outright pro-fascist, mass-based organizations as the Morgan-created American Legion; thus, there were already significant numbers of armed fascist organizations.

Further, there was a large base of radicalized veterans around which to recruit forces to such a people's militia. They included most prominently the feeling of betrayal among veterans over the failure of the government to pay promised bonuses to those who fought in World War I, and the fact that Roosevelt, to battle the British effort to drain the U.S. of its gold reserve, had ended the covertability of dollars for gold.[fn3]

There is also every reason to believe that the tiny U.S. military officer corps, and especially the various state national guards, were rife with Morgan-Mellon agents and, in some cases, outright proto-fascists, linked to the Legion networks. This, along with FBI Director ``Gay'' Edgar Hoover's treasonous persuasion, which included an expressed hatred for FDR, could (and did) allow the coup plot to proceed.

While it is not likely that the plot that we describe below could ever have succeeded in ``seizing power,'' under the circumstances and conditions described, such an insurrectionary operation could create a ``Reichstag fire''-like pretext for a Bonapartist coup against Constitutional government, perhaps including a successful ``inside job'' assassination of Roosevelt. The chosen hapless leader of the insurrection were himself a likely candidate for assassination, with power then ceded to a ``coalition of national unity,'' under the thumb of the Morgan-Mellon interests.

IV. `The Man on the White Horse'

The man that the Morgan crowd chose for the role of ``The Man on the White Horse,'' Smedley Butler, seems an unlikely candidate for a coup leader. Twice decorated with the Congressional Medal of Honor, he had served with distinction in every American military action of the 20th century to the time. A Quaker from a prominent Pennsylvania family, he thought of himself as a patriot who would never betray the values embodied in the Constitution. He had been both the most distinguished serving officer in the nation, and also its most outspoken. He had even served for two years on special assignment as police commissioner of Philadelphia in 1920s, where he fought the rackets while respecting constitutionally guaranteed rights, only to be hamstrung by partisan politics.

Even more important, Butler was the loudest and most open critic of the use of the military for purposes outside the interests of the United States, for the bankers' debt collection and related policies.

In December 1929, speaking to veterans in Pittsburgh, he stated that in his deployment in 1912 in Nicaragua, he had helped rig elections in favor of the Wall Street-backed candidate. He was immediately called on the carpet by Navy Secretary Charles Francis Adams, a man whose name was later to appear on the Morgan preferred list of investors.

In August 1931, Butler, in a speech to the American Legion, declared: ``I have 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 helped make Haiti and Cuba a decent place for the National City (Bank) boys to collect revenue in. I helped rape half a dozen Central American republics for the benefit of Wall Street.... In China, I helped see to it that Standard Oil went its way unmolested.... I had ... a swell racket. I was rewarded with honors, medals, and promotions. I might have given Al Capone a few hints. The best he could do was operate a racket in three cities. The Marines operated on three continents....''

To the dismay of the bankers who directed the Legion, Butler's remarks were greeted with riotous applause.

Butler was an overt anti-fascist, who in 1931, openly denounced Mussolini as a murderer and thug, and warned against signing treaties with him. When the Italian government filed a protest, all hell broke loose: the Secretary of State, Henry Stimson, cabled a personal apology, on behalf of Herbert Hoover, to ``Il Duce,'' while Butler, the commandant of the Quantico Marine base at the time, was placed under arrest and told that he was to be court-martialed by direct order of the President of the United States, with the full approval of Navy Secretary Adams.

The plans for the court martial provoked a tremendous outpouring of support for Butler. The anti-fascist local press charged that the Hoover administration was kowtowing to the ``thug'' Mussolini and throwing up for sacrifice America's most distinguished military figure. Franklin Roosevelt, then the governor of New York, and a friend of Butler's dating from FDR's days as Secretary of the Navy, worked to help the General, and spoke out against what was being done. Hoover and Adams were forced to back down: the court martial was cancelled, and Butler was given only a mild reprimand. He refused, however, to retract his statement.

Such credentials would seem to disqualify Butler as a coup-plot leader, but in fact, they were precisely the kind of credible cover the plotters required: Who would even think of linking Smedley Butler to the Morgan-Mellon cabal, or to fascist ideas? Butler, who had some financial difficulties, could be enticed into their web with some money, or so the bankers' cabal thought, and with the appeal that he would be doing the country and his beloved veterans a service. Perhaps they figured that if Butler took their bait, he would wind up dead in the coup attempt.

But as with many of the oligarchical mindset, they failed to understand Butler's commitment to his country and Constitution. While ignorant of many of the forces behind the coup, Butler ``smelled a rat,'' and able to summon forth the courage to withstand the ridicule heaped upon him for ``going public'' with what he knew, for taking a step that he saw necessary to save his country.

V. The First Overtures

Butler had worked aggressively for Roosevelt's 1932 election, campaigning on FDR's behalf around the country and rallying support among veterans. He particularly attacked the idea circulated by the Legion and others that Roosevelt's election would pave the way for a socialist or communist takeover.

On July 7, speaking in New York, Butler demanded that the government be rescued from the ``clutches of the greedy and dishonest''; in remarks that were later to echo in Roosevelt's first inaugural address, Butler stated: ``Today, with all our wealth, a deadly gloom hangs over us. Today, we appear to be divided. There has developed, through the past few years, a new Tory class, a group that believes that the nation, its resources and its manpower was provided by the Almighty for its own special use and profit.... On the other side is the great mass of the American people who still believe in the Declaration of Independence and in the Constitution of the United States.

``This Tory group, through its wealth, its power and its influence, has obtained a firm grip on our government, to the detriment of our people and the well-being of our nation. We will prove to the world that we meant what we said a century and half ago--that this government was instituted not only to secure for our people the rights of life, liberty, and the pursuit of happiness, but the right to eat and to all our willing millions, the right to work.''

Four months after FDR's inauguration, the coup plotters made their first approach to Butler. It appears from evidence later presented to Congress, and from Butler's own account, that they had a three-phase approach to the recruitment of the fiery former General: first, they would win his confidence, by appearing to stage a revolt in the Morgan-controlled American Legion; then, they would plant doubt, using ``inside'' information about FDR's intentions toward the nation and its veterans; and finally, they would indicate the scope of the coup and necessity for an armed insurrectionary action.

The first people to approach Butler, on July 1, 1933, were Bill Doyle, the commander of the Mass. American Legion, and Gerald C. MacGuire, who was a former commander of the Connecticut department of the Legion.[fn4]

MacGuire was in the employ of Col. Grayson M.P. Murphy, who ran a leading New York brokerage firm that traded in stocks and international bond syndications, working with the House of Morgan. Grayson Mallet-Prevost Murphy, who was on Morgan's ``preferred lists,'' was a director of Morgan's Guaranty Trust bank and several Morgan-connected corporations. He and his banking house had played an important role in syndicating Morgan loans to fascist Italy, for which he was decorated by Mussolini.

Murphy came from a long line of traitors. The Mallet-Prevost families have run British intelligence since the eighteenth century.[fn5]

Grayson Mallet-Prevost Murphy carried on his family's tradition of treason as a high ranking officer in a private intelligence operation that reported to the Morgan cabal, and interfaced directly with British Intelligence, with a specialty in black operations. In February 1919, Murphy had been one of 200 elite U.S. officers who met in Paris with the guidance of Morgan & Company operatives to found the Legion. Murphy personally underwrote that operation to the tune of $125,000, and solicited additional funds from allies of Morgan in the industrial and financial community.

In the first meeting with Butler, MacGuire did most of the talking, claiming that he represented a group of ``powerful'' ``influentials'' who were prepared to assist Butler in cleaning up the Legion. He asked Butler to address the upcoming Legion convention, and planted the seed that Roosevelt was blocking their efforts to get him invited. Butler declined their invitation to speak from the floor.

Another approach was made in August by the two coup plotters, this time proposing that there would be a staged demonstration, with Butler giving a ``rabble-rousing'' speech, on demand of the crowd.

``A speech about what?'' Butler asked. Butler was handed a speech that had ``Morgan'' written all over it: it was a defense of the British gold standard, featuring a demand that the Roosevelt policy severing the U.S. from gold be reversed immediately, so that the soldiers' bonuses could be paid with ``sound money.'' Butler was later to learn that the speech had been written by John W. Davis, the former Democratic presidential candidate who was chief counsel to J.P. Morgan and Company, and the personal lawyer for J.P. Morgan, himself.[fn6]

A short time later, McGuire appeared again to ask that Butler address the convention, telling him that he had a warchest assembled from powerful people. Butler, having long ago smelled a rat, played along, and demanded that he be told who the ``nine men'' backing this effort were. MacGuire would name only three, but the names were revealing: Murphy; another financier, Robert S. Clark, a member of Morgan's ``preferred list'' and an heir to the Singer Sewing fortune;[fn7] and John S. Mills, who married into the Du Pont family.

Ultimately, Butler demanded, and was allowed to meet with one of the principals. Robert S. Clark, a Morgan crony who was one of the founders of Legion, came to see the General and asked him to attend the Legion convention as his guest. He urged Butler to make the gold speech: ``I have $30 million dollars,'' Clark told him. ``I don't want to lose it. I am willing to spend half the $30 million to save the other half....'' When Butler said that Roosevelt was not about to listen to a bunch of soldiers about the gold standard or fiscal policy, Clark stated, ``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. He will run true to form. In the end he will come around. But we have to be prepared to sustain him when he does.''

When Butler exploded at being offered an outright bribe to deliver the speech, Clark backed off, and announced that he was withdrawing his own support from the effort. A new man was then brought in to head the Legion, Frank N. Belgrano, Jr., a senior vice president of the bank that handled Mussolini's business accounts in the United States and internationally, Gianinni's Bank of Italy/Bank of America.

About this time, word was communicated to the White House that an operation of some kind against FDR was underway. A former New York City detective, Val O'Farrell, got wind of what was happening from informants and sent a confidential letter to Roosevelt's personal secretary, Col. Louis Howe, detailing the offers made to Butler and praising the General for refusing them. O'Farrell indicated that it was his belief that a wide-ranging plot was underway.

VI. Putting Fascism on the Agenda

At the end of October 1933, MacGuire again approached Butler. This time he revealed that his sponsors were interested in recruiting soldiers to an organization that would supercede the Legion: ``a great big superorganization to maintain democracy.''

Morgan partner Thomas Lamont chose an address before the Foreign Policy Association to make the announcment, heaping praise on Mussolini and his methods, and stating that fascism, as an 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.'' Fascism or some variant, stated Lamont, was not to be ruled out as policy for the United States.

Articles extolling the virtues of fascism appeared throughout the Morgan-Mellon controlled media; for example, the entire July 1934 issue of Henry Luce's Fortune magazine was a paean to Mussolini! In an editorial by Laird Goldsborough, the British-linked foreign editor of the magazine, readers were told: ``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.''

As this statement indicates, there was a sizeable section of the Anglo-American establishment who were outright fascists. At the center of these pro-fascist interests were the Morgans, the Mellons, and Harrimans--the same networks who backed the Hitler coup, and who earlier had financed Mussolini's rise to power in Italy, and continued to fund his government. But beyond this core grouping, there were those who expressed a preference for fascist-like government.

For example, through the 1920s and 1930s, the overt fascist elements of the establishment were funding the creation of various proto-fascist and outright fascist paramilitary organizations. The Morgan-created American Legion that Colonels Murphy and Clark had helped found, started out as just such an organization. In the early 1930s, money started pouring in from these circles to fascist organizations, recruited in part from the American Legion and the Ku Klux Klan. Morgan operatives help insert into the propaganda stream that fed their members a virulent hatred for the ``communist'' New Deal and the ``Red-lover'' Roosevelt, America's ``new dictator.'' These groups included 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,'' and the Sentinels of the Republic, funded by the Morgan-allied Pew and Pitcairn 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 British Intelligence, 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.[fn8]

Such 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.

VI. The League of Treason

The umbrella organization for the establishment, at the heart of the coup plot, encompassing both the hard and soft-core fascists, was the American Liberty League. Set up in August 1934, this ``League of Treason'' included some of the coup plotters, along with others who backed the fascist goals of the coup; all were unified in their hatred of FDR and the New Deal.

The two people running the League were, Jouett Shouse, a protágá of Du Pont lawyer and Morgan operative, John J. Raskob. 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 banker's 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, insuring 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.

The League's initiating executive committee were Morgan-allied stooges: Morgan's lawyer, John W. Davis, the former Democratic presidential candidate; Iránáe 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 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. This group 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 compatriots was an open admirer of Mussolini, and who was later to become a partner with Mussolini's son in a Hollywood production company, R.A.M. (``Roach and Mussolini'') Films, Inc..

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

The League was active, with a high profile, attacking FDR and the New Deal, especially through 1934-35. With the exposure and collapse of the coup plot, it soon disappeared from the political map.

VIII. Marching Orders

The coup plotters sent MacGuire to Europe for seven months, starting in December 1933. There he met with fascist leaders in Italy, Germany, and France and consulted with Morgan operatives in Paris and London. By the time he returned, the plan for an American fascist coup was well advanced.

One month later, he approached Butler again, this time revealing details of an elaborate strategy to take power, and effectively oust Roosevelt.

Meeting in a deserted restaurant in the Bellevue Hotel in Philadeplhia, MacGuire told Butler that the time had come to assemble an army. In Europe, ex-soldiers were the backbone of ``fighting'' political organizations, Here, he said, that might not work. Instead, he proposed that an organization mimic the French ``Fiery Cross'' which had been organized around 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.

MacGuire revealed that Wall Street was about to cut off credit to the New Deal. ``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.'' This will force a collapse of the New Deal programs; the new fighting organization would ``sustain'' the President when he abandoned the New Deal, MacGuire stated. When Butler questioned such logic, MacGuire responded: ``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 they had hoped that the pro-fascist Gen. Hugh Johnson, who 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.''

MacGuire told Butler that, within a year following 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. 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 then 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 that 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, playing 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 ``$3,000,000 to start with, on the line, and we can get $300,000,000 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.

Butler tried to probe further, asking when there would be signs of the coming together of a larger and more 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. That organization was the American Liberty League.

IX. Exposing the Plot

When the Liberty League appeared on the scene some two weeks later, just as MacGuire had promised, Butler believed it urgent to expose the plot. Realizing that the Morgan interests would slander him and try to deny their influence over events, he now sought help in gaining some independent collaboration of what he had been told.

Butler turned to Tom O'Neill, the city editor of the Philadelphia Record, who assigned his star reporter, Paul Comley French, to investigate the story. French, who also wrote for the New York Evening Post, 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 1934, 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.

``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.

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 towards the then astronomical levels of 5% 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.

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. The committee had, through their own sources, heard of a plot to overthrow the government that had involved the General. It was arranged for General Butler to testify in executive session on Nov. 20, when the committee was in New York.

Three days before Butler 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.

X. The General Names the Names

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 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 Massachusetts, who was later to become Speaker of 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 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, who 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.

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

The New York Times led a furious campaign to ridicule the charges, quoting a string of denials from the prominent people the General named.

The next day, MacGuire entered the committee room with his lawyer, and the doors were closed once again. Once again he denied all charges that he had approached General Butler with plans for a fascist coup, or that he had asked him to lead an army of ex-soliders to march on Washington.

Emerging from the hearing room, Committee co-chair Rep. Samuel Dickstein (D-N.Y.) told reporters, supposedly off the record, after MacGuire's testimony that the bond salesman was ``hanging himself'' by contradictions in his account of events and by forced admissions when confronted with evidence developed by investigators.

The Times and those who dictated its policy were clearly upset by what was occurring and didn't think it sufficient to merely mangle and manage the news. Its lead editorial the following day was entitled, ``Credulity Unlimited,'' and began: ``A Washington correspondent asked: `What can we believe?' Apparently, anything, to judge by the number of people who lend a credulous ear to the story of General Butler's 500,000 Fascists in buckram marching on Washington to seize the government. Details are lacking to lend verisimilitude to an otherwise bald and unconvincing narrative.... The whole story sounds like a gigantic hoax. General Butler himself does not appear to more than half credit it. He and some others, however, ask us to follow the famous saying of Tertullian: `I believe it because it is impossible.' It does not merit serious discussion, but if the army and the navy authorities, or the Congressional committee can develop any `facts' about, let them do so quickly, so as to prevent this nation from appearing as gullible as were the Germans in the case of the Hauptmann von Kopenick [the innocent person the Nazis blamed for the Reichstag fire].''

MacGuire returned for a third and final time as a witness on Nov. 23. MacGuire now claimed that he had only spoken to Butler about financial backing for a contracting concern. In the face of overwhelming evidence to the contrary, MacGuire maintained his complete innocence of all charges made by Butler. He denied anything and everything that he could, and then feigned loss of memory on what couldn't be denied.

On Nov. 26, the Committee released an 8,000 word statement summarizing the testimony and providing details of the plot. In discussing the evidence, it showed that MacGuire swore several times his denial of the details of Butler testimony about the expenditure of monies for purposes described in the General's testimony, only to have committee investigators substantiate each of the General's claims.

Rep. Dickstein had sent Roosevelt a copy of the report, and FDR sent the Congressman a reply on Nov. 30: ``I am very interested in having it,'' wrote the President. ``I take it that the Committee will proceed further.''

The plotters ordered an intensification of the ridicule of General Butler. The vehicle chosen was Time magazine, the Luce interest's mass circulation ``current events'' rag. Under the headline, ``Plot without Plotters,'' the December 3 Time ran an artfully crafted parody of Butler's testimony as its lead article. After mocking the details of the plot and the Morgan involvement, Time opined, ``Such was the nightmarish page of future United States history pictured last week in Manhattan by General Butler himself to the Special House Committee investigating un-American Activities. No military officer of the United States since the late tempestuous George Custer has succeeded in floundering in so much hot water as Smedley Darlington Butler.''

Interviewed 27 years later by author Jules Archer, the still-feisty Rep. McCormack commented: ``Time has always been about as filthy a publication as ever existed. I've said it publicly many times. The truth gets no coverage at all....''

XI. Damage Control

The Morgan interests now turned their efforts to make sure that the charge of the Committee would not be renewed and the investigation shut down. It would have taken direct intervention from the White House to force the issue, but no such intervention was forthcoming.

On Feb. 15, 1935, the Committee published its findings in a report submitted to the House on its full investigation. The section dealing with the Butler testimony began with the following paragraphs:

``In the last few weeks of the Committee's official life, it received evidence that certain persons had made an attempt to establish a fascist organization in this country.

``No evidence was presented and this committee had none to show a connection between this effort and any fascist activity of any European country.

``There is no question that these attempts were discussed, were planned, and might have been placed in execution when and if the financial backers deemed expedient.

``The committee received evidence from Major General Smedley D. Butler (ret.), twice decorated by the Congress of the United States. He testified before the committee of conversations with one Gerald C. MacGuire in which the latter is alleged to have suggested the formation of a fascist army under the leadership of General Butler.

``MacGuire denied these allegations under oath, but your committee was able to verify all the pertinent statements of General Butler, with the exception of the direct statement suggesting the creation of the organization. This however was corroborated in the correspondence of MacGuire with his principal, Robert Sterling Clark of New York, while MacGuire was abroad studying various forms of organizations of fascist character....''

The committee had thus stated that it had confirmed a plot to seize the government of the United States by force, organized by interests whose control by Morgan and allied circles was already widely established.

The Morgan-controlled media proceeded to ``bury'' the story. It would have stayed buried had not the journalist John L. Spivak, who wrote for the Communist-linked magazine New Masses, been ``inadvertently'' given the full transcript of the closed hearings, which he proceeded to publish in an expose of at least part of the treasonous plot. Through such efforts, and through the speaking and radio appearances of Butler, the ``Morgan Fascist Coup Plot'' was kept before the American people, such that despite the censorship of the Morgan controlled media, its broad outline is remembered by many an FDR supporter who lived through that troubled time.

When Butler died in 1940, Roosevelt led the nation in mourning. ``I grieve to hear of Smedley's passing....'' he wrote to his widow. ``My heart goes out to you and the family in this great sorrow.''[fn9]

XII. Conclusion

In the darkest days of the Depression, the London-financial interests attempted two coups. The one in Germany succeeded in installing Adolf Hitler and his Nazi police state as their instrumentality. The one in the United States failed in its design for a fascist police state. The courageous actions of the republican patriot Smedley Butler brought the plot to the light of day; from the moment of its exposure, it could not take place as planned.

In so doing, Butler had given the greatest American President of this century, Franklin Delano Roosevelt, the time needed to make America ``coup proof,'' despite the fascist intent of the financier interests centered around the House of Morgan and its allies. Where the Hitler coup plotters used the weaknesses of the Weimar Constitution to destroy Germany[fn10], Roosevelt used the strengths of the U.S. republican Constitution, in the powers given the President, to launch a revolution against the power of the financial oligarchy.

While stopping short of destroying the power of the Morgan interests and their allies, FDR was able to hold them in check, through various banking reform measures, such as the Glass-Steagall Act and the creation of the Securities and Exchange Commission. Most importantly, Roosevelt revolutionized the Democratic Party, making it the bulwork for defense of such policies by bringing in labor, minorities, and others, around the principle that government has the responsibility to act to preserve the General Welfare of each of its citizens, leaving as his legacy a social safety net that includes the minimum wage and social security.

If Roosevelt had been eliminated, as the plotters desired, who knows what would have been possible. In 1971, the former Speaker of the House, John McCormack told Jules Archer that Roosevelt and the nation owed General Butler a debt of gratitude for his exposure of the Morgan plot: ``If General Butler had not been the patriot that he was, and if they [the plotters] had been able to maintain their secrecy, the plot certainly might very well have succeeded, having in mind the conditions existing at the time.... If the plotters had gotten rid of Roosevelt, there is no telling what might have taken place....''

Today, once again in the middle of a global financial crisis, a new coup is in progress, one that would destroy the Presidency, the social policy that is the legacy of FDR, and the consitutuency-based Democratic Party, which represents the political bulwork against a banker's dictatorship. Through deregulation, they have already ripped away many of the fetters that Roosevelt put on the bankers' power. As Lyndon LaRouche has warned, that coup must be defeated to defend our republic from a fate even worse than envisioned by Morgan coup plotters back in 1933. To accomplish this, we must, as LaRouche calls for, rally the forces to rebuild the Democratic Party in the image of the party of FDR.


1.See Lyndon H. LaRouche, Jr., ``Al Gore and Adolf Hitler,'' EIR, Jan. 8, 1999.

2.For a discussion of Roosevelt's battle with the Morgan interests, and more generally his fight against the British imperial system, see L. Wolfe, New Federalist, July 4-July 27, 1994 and Aug. 28, 1995.

3.In late July 1932, a Bonus Army of thousands of starving, out-of-work veterans descended on Washington to demand that the Congress pass the Bonus Bill, giving them their promised bonus for World War I. By the time the bill was defeated in the GOP-controlled Senate, the veterans had set up an encampment. At the urging of various Morgan-Mellon operatives within his administration, and FBI director Hoover, the President ordered the Army to drive the veterans from Washington. The bloodshed and brutality of the armed eviction shocked the nation--and provided impetus for recruitment of veterans to anti-government, fascist paramilitary organizations.

4. The quoted conversations between Butler and the coup plotters, and all similar conversations are taken from the book The Plot to Seize the White House, by Jules Archer (Hawthorne Books, 1973). Archer had obtained hitherto secret transcipts of testimony before the House Un-American Activities Committee, which investigated the coup plot and heard from Butler and other witnesses. Archer was also able to obtain records of the Committee's investigators. His reporting was reviewed by the former Speaker of the House and the co-chair of the HUAC committee investigating the plot, Rep. John McCormack (D-Mass.).

5. For more information on the Mallet-Prevost family, see Anton Chaitkin, Treason in America, EIR, 1999.

6. Davis also headed the ``Committee for a Sound Dollar,'' organized by Morgan interests to lobby for the British gold standard. This group, as Congressional investigators found, was used as a conduit of funds for the coup plot.

7. Historian Anton Chaitkin recently discovered that Marty Peretz, chief personal adviser to Al Gore, and owner and publisher of The New Republic, married the great-niece and heir of Robert Sterling Clark, fascist protagonist of the coup plot against FDR.

8. For more about how Hollywood served as a fascist propaganda machine during this period, see is L. Wolfe, ``Don't Entrust Yours Kids to Walt Disney, The New Federalist, Jan. 16, 1995.

9. As FDR began mobilizing the nation in the late 1930s to fight fascism in Europe, there was an outright break between the President and Butler, with Butler espousing isolationist policies. However, despite Butler's ``leftist'' attacks on FDR as being a puppet of ``Wall Street arms racketeers,'' Roosevelt never attacked Butler.

10. For example, the Weimar Constitution provided for ``rule by emegency decree,'' with the approval of the President. This was the provision was used by Hitler to establish the Nazi police state.

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