The Plots Against the President (21 page)

Chapter Thirty-seven

The Investigation

In November 1934, the House Committee on Un-American Activities met in a secret executive session in New York City. Chairman John W. McCormack and vice chairman Samuel Dickstein were the only committee members at the hearing. They called General Smedley Butler, Gerald MacGuire, and Paul Comly French to appear. Butler spoke first, providing detailed testimony about everything that had occurred beginning with the first visit from MacGuire and Doyle on July 1, 1933, through all his meetings with MacGuire and Clark.

“To be perfectly fair to Mr. MacGuire,” Butler testified, “he didn't seem bloodthirsty. He felt that such a show of force in Washington would probably result in a peaceful overturn of the government.” After he had been asked dozens of times by both MacGuire and Clark to accept the leadership of the coup d'état, Butler said, he had decided to enlist the assistance of French to gather corroborative evidence. Butler named the alleged conspirators whom he believed the committee should call as witnesses, although these names were stricken from the official record of the hearings that would be released to the public. During his appearance Butler sought especially to spark the indignation of committee chairman McCormack—a Massachusetts Democrat who, though a Legionnaire, was an avid supporter of Roosevelt and the New Deal.

Next came French, who confirmed and verified Butler's story to the letter, adding the Remington Arms connection. The congressmen, by all accounts, were stunned by the allegations raised, by the dangerous implication of an impending coup d'état, and by the sheer political and economic power of the alleged participants. They broke for lunch and reconvened in the afternoon to interrogate MacGuire. Not surprisingly, MacGuire denied all of Butler's allegations implicating MacGuire in bribery, in an effort to unseat the American Legion leadership, and in a Fascist military coup. The bond salesman who earned $150 per week insisted that all his contacts with Butler were to enlist Butler's support of a Clark-funded group called the Committee for a Sound Dollar and Sound Currency and that he merely wanted Butler to speak in support of that movement. That committee, MacGuire testified, was organized to support President Roosevelt and “his position on sound money … We were against the inflationists and the people who were trying to bring about inflation in the country.”

MacGuire denied attempting to get Butler to attend the Chicago convention and speak on behalf of the gold standard. He denied providing Butler with the speech written by John Davis and claimed never to have discussed money with Butler, nor to have shown him evidence of deposits totaling a hundred thousand dollars. He admitted that Robert Sterling Clark had paid for his trip to Europe so MacGuire could “study securities,” but denied that he'd had any discussions with Butler about European Fascist takeovers supported by veterans' armies or of any “superorganization” of veterans in the United States. He denied offering Butler eighteen thousand dollars and repudiated French's claims that he had discussed a Fascist coup.

MacGuire was “hanging himself by contradictions and admissions,” Dickstein admitted to reporters after the committee adjourned at the end of the day. McCormack refused to comment to the
New York Times
, explaining that the testimony had been given in executive session, but promised that a public hearing would be held “if the facts warrant.” Paul French had broken the story two days earlier in both the Philadelphia and New York newspapers under the headline: $3,000,000 BID FOR FASCIST ARMY BARED, which was reprinted in the country's major newspapers.

Calling Butler's allegations “a damned lie,” Grayson M.-P. Murphy told French, “I haven't been able to stop laughing. I hope you come in armed, because I may start shooting, even if this is going to be a bloodless revolution. To say a thing like this about a man who has a record like mine in the Spanish-American War, in the Philippines, in the World War, to say that a man who would serve his country like that would turn around and try to overthrow the Government, is hitting below the belt.” French reported that the tall, silver-haired Murphy, his blue eyes shining, had smiled throughout the entire interview.

Robert Sterling Clark, who had been subpoenaed by the committee, was traveling in Europe when the story broke. Reached by telephone in Paris, he told the press that he had “strongly urged” Butler “to use his influence in favor of sound money and against inflation.” But he adamantly denied that he was the sponsor of an “American Fascist movement.” Still, vice chairman Dickstein announced that both Clark and his New York attorney, who had accompanied Clark to Europe, were under surveillance in Paris. “I believe that Clark has cold feet,” Dickstein told the
Chicago Daily Tribune
. “It looks as if he were afraid to appear before our committee. But we will get his testimony. Any one can see there is something wrong in this matter.” Dickstein pointed to MacGuire's inability to explain to the committee financial transactions involving more than a hundred thousand dollars. “MacGuire is shielding somebody I believe. Probably a lot of people.”

Newspapers reported the “immediate emphatic denials by the purported plotters.” Leading the charge was General Hugh “Old Iron Pants” Johnson, who “barked” at the
New York Times
reporter. “He had better be pretty damn careful,” Johnson said, referring to Butler. “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.” Thomas Lamont, Liberty League contributor and J. P. Morgan partner, called it “perfect moonshine. Too unutterably ridiculous to comment upon!” General MacArthur was unavailable for comment, but his aides “expressed amazement and amusement.”

The committee examined various financial transactions between MacGuire and Clark and concluded that MacGuire had been the cashier for the plotters. Dickstein vowed that as many as sixteen people who had been identified by Butler, including Clark, would be subpoenaed. But as days passed without further scheduled hearings, gossip began spreading through Washington that a cover-up was under way. Despite assurances from both McCormack and Dickstein that the committee planned a full investigation of the plot, they apparently only called one more witness—Frank N. Belgrano, a San Francisco banker and president of the Transamerica Corporation who would soon become national commander of the American Legion—but apparently sent him home without taking his testimony. The committee released its eight-thousand-word “Public Statement on Preliminary Findings” on November 24, 1934. Signed by McCormack and Dickstein, it began, “This committee has had no evidence before it that would in the slightest degree warrant calling before it such men as John W. Davis, General Hugh Johnson,” and then went on to list some of the other men who had been named by Butler as accomplices. Both congressmen insisted that they were pursuing the inquiry and planned to call Clark and others. The committee “still intends to get to the bottom of a Wall Street plot to put Major Gen. Smedley D. Butler at the head of a Fascist army here,” Dickstein told the
New York Times
. “The committee's statement of the evidence … was intended only to satisfy the great public interest in the plot.” The newspaper account indicated Dickstein was eager for the statement to be seen “neither as whitewash … nor as sensationalism.”

“The press … handled the Butler affair with its tongue in its journalistic cheek,” one historian wrote of the marginalization of the story. The press campaign against Butler got off to a quick start, with
Time
magazine leading the way with a caricatured version of the plot called “Plot Without Plotters.” In
Time
's satirical imagining, Butler is carried to Washington by an imaginary white horse, where he then forces his way into Roosevelt's office—“his spurs clinked loudly”—and orders the president to relinquish his office to Butler and his five-hundred-thousand-man army. “Such was the nightmarish page of future United States history pictured last week in Manhattan by General Butler himself,”
Time
reported. “No military officer of the United States since the late tempestuous George Custer has succeeded in publicly floundering in so much hot water as Smedley Darlington Butler.”

“What can we believe?” asked the
New York Times
. “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 … It does not merit serious discussion.”

No American newspaper published the entire testimony, many newspapers suppressed the story altogether, and the large majority ridiculed it. The nation's leading newspapers' dismissal of allegations by a U.S. marine general that an alliance of Legionnaires, bankers and stockbrokers had tried to hire him to overthrow the government was mystifying. While neither the public nor much of the press seemed to take Butler seriously, the McCormack-Dickstein Committee apparently did. The few Washington newsmen who had been following the story were not satisfied with the brief initial findings and closely pressured the committee to release the hearing transcripts. When it finally published its 125-page report three months later, it was vividly marked “EXTRACTS.” Stunningly, the committee stated that it “was able to verify all pertinent statements made by 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 City, while MacGuire was abroad studying the various organizations of Fascist character.” The committee summarized its conclusion: “Evidence was obtained showing that certain persons had made an attempt to establish a fascist organization in this country. There is no question but that these attempts were discussed, were planned, and might have been placed in execution when and if the financial backers deemed it expedient.”

As shocking as the findings were, the committee added a further announcement attached to the end of the document in boldface type:

In making public the foregoing evidence, which was taken in executive session in New York City from November 20 to 24, inclusive, the committee has ordered stricken therefrom certain immaterial and incompetent evidence, or evidence which was not pertinent to the inquiry, and which would not have been received during a public hearing.

Rumors immediately swirled through Washington that the investigation was halted and the testimony redacted because it threatened national security. Some speculated that the committee bowed to pressure from the conspirators themselves, who were not only among the richest men in America but who were high-level political figures as well, such as John W. Davis and Al Smith, who had each headed the Democratic Party and were onetime presidential candidates. Deleted from the official report were references to the American Liberty League as well as the identities of nearly all the alleged plotters. While the committee's desire to protect the reputations of innocent people was considered laudable, the destruction of evidence and testimony only served to fan the flames of suspicion for decades to come. If not for French's copyrighted exposé, the only conspirator to ever be publicly identified would have been the low-level Gerald MacGuire.

Despite the committee's findings that a Fascist plot had been confirmed, no further action was taken. “The Congressional Committee investigating un-American activities has just reported that the Fascist plot to seize the government … was proved,” Roger Baldwin, the director of the American Civil Liberties Union, said in a publicly released statement. “Yet not a single participant will be prosecuted under the perfectly plain language of the federal conspiracy act making this a high crime.” When the committee's authority to subpoena witnesses expired at the end of 1934, the U.S. Justice Department did not initiate a criminal investigation. When the committee asked the House of Representatives to extend its term to January 1937, the House refused and the committee died in January 1935. The untimely death of MacGuire at thirty-seven eliminated the only witness who could have testified against the alleged plotters in the event that the investigation continued.

After the committee died, John Spivak began writing a series of articles about the investigation, and Dickstein provided him access to the official files. Apparently inadvertently, the committee's secretary turned over Butler's complete testimony as well as other internal documents and evidence that had been deleted from the committee's published findings. But Spivak's sensational exposé, although meticulously researched and informed by the committee's evidence, was predictably ignored, appearing as it did in the Communist publication
New Masses
.

For his part, Butler was satisfied that the coup had been thwarted, but he never missed an opportunity to blast the committee for “bowing to the power of Wall Street and for censoring his remarks.” In a radio broadcast in 1935 he denounced the committee for suppressing his testimony and failing to follow up with interviews of the conspirators.

Historians disagree about the veracity of Butler's claims, though not about his personal or professional credibility. He had reasons for hating Wall Street, and his increasingly defiant self-righteousness was off-putting. By 1933 he was sounding a perpetual cry about class conflict and seemed to thrive on drama. After retirement he wrote to a former aide that “you and I were cut out to be pirates and the civilized drone-like life is not to my liking.”

Even though MacGuire contradicted or denied Butler's testimony, the committee found corroborating evidence through bank records, MacGuire's letters from Europe discussing Fascist organizations, and other circumstantial details confirming MacGuire's claims about the inner workings of the American Liberty League. Butler's claims were also corroborated by Paul French, who had extensively interviewed MacGuire. Even so, French's testimony was heavily reliant on what MacGuire had told him, and MacGuire was a problematic witness who had perjured himself numerous times and whose credibility was slippery from the start. Still, Butler's personal integrity and trustworthiness were never challenged. Though a firebrand, Butler's patriotism and pro-defense stand were not doubted, and he maintained an admirable independence from partisan organizations that sought his support.