PART ONE

The Plot

2

On July 1, 1933, General Butler's phone rang soon after he had had breakfast. Calling from Washington, an American Legion official he had met once or twice told Butler that two veterans were on their way from Connecticut to see him about an important matter and urged him to make time for him.

About five hours later, hearing a car pull up into his secluded driveway at Newtown Square, Butler glanced out the porch window. His lips pursed speculatively as two fastidiously dressed men got out of a chauffeur-driven Packard limousine.

At the door the visitors introduced themselves as Bill Doyle, commander of the Massachusetts American Legion, and Gerald C. MacGuire, whom Butler understood to have been a former commander of the Connecticut department.

Butler led the visitors into his study at the rear of the house, and they took chairs opposite his desk. MacGuire, who did most of the talking, was a fat, perspiring man with rolls of jowls, a large mouth, fleshy nose, and bright blue eyes. He began a somewhat rambling conversation during which he revealed that he, too, had been a Marine, with a war wound that had left a silver plate in his head. Doyle established his combat credentials by mentioning that he also had a Purple Heart.

Butler's compassion for wounded veterans made him patient as MacGuire encircled the subject of their visit in spirals that only gradually narrowed until their apex pierced the point. The point, it seemed, was that MacGuire and Doyle, speaking for a coterie of influential Legionnaires, were intensely dissatisfied with the current leadership of the American Legion. Considering it indifferent to the needs of rank-and-file veterans, they revealed that they hoped to dislodge the regime at a forthcoming Legion convention to be held in Chicago. They urged Butler to join them and stampede the convention with a speech designed to oust the "Royal Family" controlling the organization.

Their dissatisfaction with the leadership of the American Legion did not find Butler unsympathetic. He had long been privately critical of the organization's close ties with big business and its neglect of the real interests of the veterans it presumably represented. These convictions were to be made dramatically public before the year was out, but now he declined his visitors' proposal on the grounds that he had no wish to get involved in Legion politics and pointed out that, in any event, he had not been invited to take part in the Legion convention.

MacGuire revealed that he was chairman of the "distinguished guest committee" of the Legion, and was on the staff of National Commander Louis Johnson, a former Secretary of Defense. At MacGuire's suggestion Johnson had included Butler's name as one of the distinguished guests to be invited to the Chicago convention. Johnson had then taken this list to the White House, MacGuire said, and had shown it for approval to Louis Howe, Roosevelt's secretary. Howe had crossed Butler's name off the list, however, saying that the President was opposed to inviting Butler. MacGuire did not know the reason, but Bill Doyle assured Butler that they had devised a plan to have him address the convention anyhow.

Butler remained silent. He was used to oddball visitors who called with all kinds of weird requests. Curiosity, and the leisure afforded by retirement, often led him to hear them out in order to fathom their motives.

He thought about his visitors' finely tailored suits and the chauffeur-driven Packard an their claim to represent the "plain soldiers" of the Legion. The story about the rejection of his name on the Legion convention guest list by the White House struck him as more than peculiar, in view of the fact that the President had gratefully accepted his campaign help in a "Republicans for Roosevelt" drive eight months earlier. Why should F.D.R. suddenly be so displeased with him?

It crossed his mind that the purpose of the story, true or false, might be intended to pique him against the Roosevelt Administration, for some obscure reason. Keeping his suspicions to himself, he heard out his visitors in the hope of learning why they were so anxious to use him.

They explained that they had arranged for him to attend the convention as a delegate from Hawaii, which would give him the right to speak. When he still declined, they asked whether he wasn't in sympathy with their desire to oust the "Royal Family." He was, he said, because the leadership had simply been using the organization to feather their own nests, but he had absolutely no intention of attending the convention without an invitation.

His disappointed visitors took their leave but asked permission to return in a few weeks.
 

3

A month later Doyle and MacGuire returned. Without waiting to inquire whether Butler had changed his mind, MacGuire quickly informed him that there had been a change of plans. The general had been right to object to coming to the convention as just another delegate, MacGuire acknowledged. It would have been ineffective, and a waste of the general's immense prestige.

MacGuire outlined a new plan in which Butler would gather two or three hundred Legionnaires and take them to Chicago on a special train. They would be scattered throughout the audience at the convention, and when Butler made an appearance in the spectators' gallery, they would leap to their feet applauding and cheering wildly. The proceedings would be stampeded with cries for a speech that would not die down until Butler was asked to the platform.

Incredulous at the audacity with which this scheme was being unfolded to him, Butler asked what kind of speech his visitors expected him to make. MacGuire produced some folded typewritten pages from an inside jacket pocket. They would leave a speech with him to read. MacGuire urged Butler to round up several hundred Legionnaires, meanwhile, to take to Chicago with him.

Holding on to his fraying temper, Butler pointed out that none of the Legionnaires he knew could afford the trip or stay in Chicago. MacGuire quickly assured him that all their expenses would be paid. But Butler, who was constantly being approached with all kinds of wild schemes and proposals, was not prepared to take the plotters seriously until they could prove they had financial backing. When he challenged MacGuire on this point, the veteran slipped a bankbook out of his pocket. Without letting the name of the bank or the account be seen, he flipped over the pages and showed Butler two recent deposits-one for $42,000 and a second for $64,000-for "expenses."

That settled it. No wounded soldiers Butler knew possessed $100,000 bank accounts. His instincts sharpened by two years' experience, on loan from the Marines, as crime-busting Director of Public Safety for Philadelphia, warned him that there was something decidedly unsavory about the proposition.

He decided to blend skepticism, wariness, and interest in his responses, to suggest that he might be induced to participate in the scheme if he could be assured that it was foolproof. He would profess himself interested, but unconvinced as long as he suspected that there was more to be learned about the scheme. So far they had told him practically nothing except what was barely necessary for the role they wanted him to play. He determined to get to the bottom of the plot, while trying not to scare them off in the process.

After they had left, he read over the speech MacGuire had left with him. It urged the American Legion convention to adopt a resolution calling for the United States to return to the gold standard, so that when veterans were paid the bonus promised to them, the money they received would not be worthless paper. Butler was baffled. What did a return to the gold standard have to do with the Legion? Why were MacGuire and Doyle being paid to force this speech on the convention-and who was paying them?



 

4

Butler detected an odor of intrigue. Some kind of outlandish scheme, he was convinced, was afoot. Knowing little about the gold standard, why Roosevelt had taken the country off it or who stood to gain by its restoration and why, he began thumbing through the financial pages of newspapers and magazines-sections of the press he had never had any occasion to read.

The first important fact he learned was that the government no longer had to back up every paper dollar with a dollar's worth of gold. This meant that the Roosevelt Administration could increase the supply of paper money to keeps its pledge of making jobs for the unemployed, and give loans to farmers and homeowners whose property was threatened by foreclosure. Banks would then be paid back in cheapened paper dollars for the gold-backed dollars they had lent.

Conservative financiers were horrified. They viewed a currency not solidly backed by gold as inflationary, undermining both private and business fortunes and leading to national bankruptcy. Roosevelt was damned as a socialist or Communist out to destroy private enterprise by sapping the gold backing of wealth in order to subsidize the poor.

Butler began to understand that some wealthy Americans might be eager to use the American Legion as an instrument to pressure the Roosevelt Administration into restoring the gold standard. But who was behind MacGuire?

A short while after MacGuire's second visit, he returned to see Butler again, this time alone. MacGuire asked how he was coming along in rounding up veterans to take with him to the convention. Butler replied evasively that he had been too busy to do anything about it. He then made it clear that he could no further interest in the plan unless MacGuire was willing to be candid and disclose the sources of the funds that were behind it.

After some hesitation MacGuire revealed that they had been provided by nine backers, the biggest contributor putting up nine thousand dollars. Pressed to explain their motives, MacGuire insisted that they were simply concerned about helping veterans get their bonus and a square deal.

People who could afford such contributions, Butler reflected ironically, were hardly the type who favored a two-billion-dollar bonus for veterans.

When he prodded MacGuire further, the fat veteran revealed that one of his chief backers was a wealthy Legionnaire he worked for, Colonel Grayson M.-P. Murphy, who operated a brokerage firm at 52 Broadway in New York City. Butler pointed out the contradiction between MacGuire's claim that his group was concerned with the problems of the poor rank-and-file veteran and the fact that his backers were all obviously wealthy men. MacGuire simply shrugged and frankly admitted that as far as he personally was concerned, he was primarily involved in the transaction as a businessman and was being well taken care of for his efforts. It would be equally profitable for Butler, he hinted, if the general were disposed to cooperate.

Butler pumped him about Colonel Murphy's connection with the plan. Murphy, MacGuire revealed, was one of the founders of the Legion and had actually underwritten it with $125,000 in 1919 to pay for the organizational field work. He had been motivated by a desire to see the soldiers "cared for."

When Butler questioned Murphy's motive in wanting the gold-standard speech made at the convention, MacGuire explained that he and the other backers simply wanted to be sure that the veterans would be paid their bonus in sound gold-backed currency, not in "rubber money."

He showed Butler several checks for large amounts signed by Murphy and two other men-Robert S. Clark and John Mills. Clark's name rang a bell with Butler. He had known a Second Lieutenant Robert S. Clark in China during the Boxer Campaign who had been called "the millionaire lieutenant."

The money, MacGuire said, would be used to open an expense account for Butler in Chicago. He hoped that the general would now get busy rounding up veterans to take to the convention.

Butler remained noncommittal. He intended to procrastinate as long as he could, continuing to pump MacGuire until had enough information to make a complete report to the government. The President, he felt, ought to know what schemes his rich opponents were up to overturn New Deal policies.

After the visit, Butler brooded over the implication of MacGuire's revelation that his employer, key founder and sponsor of the American Legion, was involved. Tall, heavyset, Grayson Mallot-Prevost Murphy* not only operated one of Wall Street's leading brokerage houses but was also a director of Guaranty Trust, a Morgan bank, and had extensive industrial and financial interests as a director of Anaconda Copper, Goodyear Tire, and Bethlehem Steel. A West Point graduate, Murphy was a veteran of the Spanish-American War and World War I with the rank of colonel. Butler's bushy eyebrows rose when he also learned that the financier had been decorated by Benito Mussolini, who had made him a Command of the Crown of Italy.

Butler found out that he had been one of twenty American officers who had met in Paris in February, 1919, reportedly on orders from the commanders of the A.E.F., to counter revolutionary unrest in Europe following the end of World War I, by forming a veterans' organization with the alleged purpose of looking after veterans' welfare and uniting them to defend America at home as they had abroad.

Murphy had put up $125,000 to get the American Legion going, and it had been organized in the spring with a caucus of about a thousand officers and men. The Legion had then solicited funds and support from industrialists. Swift and Company executives had written other firms, "We are all Legion, the results it will obtain, and the ultimate effect in helping to offset radicalism."

The average veteran who joined the Legion in the 1920's had been unaware that big-business men were backing it to use it as a strikebreaking agency. When workers struck against wage cuts, Legion posts were informed that the strikers were Communists trying to create national chaos so that the Reds could take over. Legionnaires were given baseball bats to break up strikes and civil rights demonstrations. The American Civil Liberties Union later reported, "Of the forces most active in attacking civil rights, the American Legion led the field."

The rank and file, however, had grown increasingly restless and impatient with the "Royal Family" that ran the Legion, especially after the Depression had left so many jobless. Veterans forced to sell apples on street corners were angered by a Legion leadership that opposed the bonus and government spending as inflationary. That was why so many thousands had bypassed the Legion to join the Bonus March on Washington.

Adding up the facts, Butler was struck by a startling contradiction. MacGuire had claimed to speak for rank-and-file discontent with the Legion's bosses and professed to want to oust them, yet he was an agent for a top founder of the Legion who was obviously one of the powers behind the throne. MacGuire had revealed that the Legion still owed Murphy part of the $125,000 foundation money he had provided and had tacitly acknowledged that Murphy "makes the kings."

MacGuire obviously had to be lying in his claim that he-or Murphy-wanted to topple the present leadership. Why? Perhaps it was a ruse to channel and control popular discontent in the Legion, hopefully with Butler's help, for the purposes of the nine wealthy men behind MacGuire. Butler awaited MacGuire's next move with deep intersest.



 

5
In September Butler was asked to address a convention of the Legion's 29th Division at Newark, New Jersey. On the Sunday morning he was in the city, the phone rang in his hotel room. It was MacGuire, who was in the lobby and asked to see him.

Invited to Butler's room, MacGuire reminded the general that the time for the American Legion Convention was rapidly approaching. Was Butler finally ready to take a contingent of veterans to Chicago and make the gold-standard speech?

Butler displayed increasing skepticism about the whole plan. In a gruff voice he challenged MacGuire's proposal as a bluff without any real money behind it. His visitor whipped a fat wallet out of his hip pocket, extracted a mass of thousand-dollar bills, and scattered them all over the bed. The eighteen thousand dollars, he said smugly, would amply cover the expenses of Butler and the veterans he led to Chicago.

The gesture caught Butler by surprise; losing his temper, he accused MacGuire of trying to give him thousand-dollar bills whose number had been recorded, so that once he cashed them, the plotters would have proof of his complicity. MacGuire hastily assured him that he could have smaller denominations.

In his vexation Butler snapped at the bond salesman to take back the money immediately, as he had no intention of getting involved in MacGuire's scheme. But then, as he regained control of his anger, he sought to make it appear that he was merely indignant that he was forced to deal with an emissary. He would negotiate, he told MacGuire firmly, only with principals.

After some hesitation MacGuire agreed to have him contacted by Robert S. Clark, a banker who had inherited a large fortune from a founder of the Singer Sewing Machine Company.

One week later Clark phoned Butler at his home. They arranged a meeting at the railroad station. Butler instantly Recognized the tall, gangling man, hair now steel-gray, who stepped off the train as the lieutenant he had known thirty-four years earlier.

Butler drove him home for lunch, during which they exchanged memories of the Boxer Campaign. Afterward they adjourned to the spacious, glassed-in porch, and Clark got down to the business of his visit. He was going to the American Legion convention in a private car attached to the Pennsylvania Limited, he told Butler. He planned to have the train stop at Paoli to pick the general up, and they would continue on to Chicago together. A suite of rooms had already been reserved for Butler at the Palmer House.

Clark would see to it, he told the general, that Butler was calling for a resolution demanding restoration of the gold standard. In discussing the speech, the millionaire was induced to reveal that the author was none other than John W. Davis, the 1924 Democratic candidate for President, and now chief attorney for J. P. Morgan and Company.

Butler pointed out to Clark that the speech did not seem to have anything to do with the soldiers' bonus, which was presumably the purpose of his trip to Chicago. Shrugging, Clark blandly repeated MacGuire's assurance that those supporting the speech simply wanted to be sure that the bonus would be paid in gold-backed currency, not in worthless paper.

Butler decided to draw blood and observe Clark's reaction. Sharp eyes honed on his visitor's face, he suggested that the speech had all the earmarks of big-business propaganda. The banker, taken aback, did not reply for a moment. He seemed to be debating with himself whether to deny the allegation or take Butler into his confidence. Then he astonished the general by a sudden burst of candor.

He had a personal fortune of thirty million dollars, he revealed, and he was greatly worried about losing it to a Roosevelt inflation-runaway government spending unbridled by the need to back each paper dollar with gold. He was willing to spend fully half his fortune if it would save the other half. He was confident that if Butler made the speech at Chicago, the Legion would go on record as demanding a return to the gold standard.

That would be an important step toward organizing the veterans of American to put pressure on Congress and the President for such a bill.

Why, Butler asked him curiously, did he think the President would allow himself to be pressured by such tactics? Clark expressed confidence that Roosevelt would yield because he belonged, after all, to the same social class that was solidly behind the gold standard. Once he had restored it, his fellow patricians would rally around him and defend his position against criticism.

Butler was shocked by Clark's blatant snobbery, but even more by the millionaire's assumption that the wishes of economic royalists should-and would-prevail over the democratic processes of government. Once more his anger boiled over. In a voice that cracked with indignation, he exploded that he wanted nothing to do with a scheme to exploit veterans. Furthermore, he rasped, he intended to see to it that the veterans of the country were not used to undermine democracy but to defend it.

Clark's face turned crimson. Chagrined, he reproached Butler for being stubborn and "different," hinting that such things as the mortgage on Butler's house could be taken care of for him, and in a fully legal fashion.

This crude attempt to bribe him was too much for the dumbfounded general. Bellowing his indignation, he roared an order at the millionaire to follow him into the living room. Clark meekly trailed him into a large hall resplendent with flags, banners, decorations, plaques, scrolls, citations, and other symbols of esteem that had been presented to the general during his long career in the Marines. The hall was flanked at both ends by huge canopies on tall poles-"Blessings Umbrellas" awarded by unanimous vote of the people of Chinese cities only to their greatest benefactors.

Quivering with rage, Butler pointed out to Clark that most of the awards in the hall had been given to him by poor people all over the world, and he vowed that he would never betray their faith. Ordering Clark to inspect them until he understood the enormity of his mistake, Butler stormed off to his study, pacing back and forth in an effort to simmer down.

In a few minutes a chastened Clark joined him and meekly asked permission to make a phone call to MacGuire at the Palmer House in Chicago. As Butler listened stony-faced, Clark informed MacGuire that for "excellent" reasons the general would not be coming to the convention. MacGuire was reminded that had money enough to do the job alone and could "send those telegrams." At the completion of the call, Clark then apologized so contritely that his host, mollified, forgave him.

To lighten the strained atmosphere, then conversation now returned to the Boxer days until it was time to drive Clark to the station to catch a six o'clock train from Paoli.

Butler felt ambivalent about having revealed his true feelings. On the one hand, it made him feel better to get them off his chest; tact and restraint and subterfuge were alien to his nature. On the other hand, it seemed hardly likely that after his explosion the plotters could possibly believe they could persuade or buy him. He would have no further opportunity to ferret out their plans.

A few days later he carefully studied a newspaper account of the proceedings of the American Legion convention I Chicago. The story revealed that a huge flood of telegrams had poured into the convention urging delegates to endorse a return to the gold standard. A resolution to this effect had been proposed and carried.

Butler felt mingled amusement and disgust.



 

6

To the general's surprise MacGuire stopped off to see him, this time in a hired limousine, on the way back from the convention. The man said nothing about the contretemps with Clark, although Butler was certain he must have heard about it, and his manner was as buoyant and friendly as ever. He boasted to Butler about having put over the gold-standard resolution.

The general pointed out wryly that no action had been taken at the convention to endorse the soldiers' bonus. MacGuire airily repeated his contention that there was no point in that until the country had sound currency.

Shortly afterward MacGuire came to Newtown Square again and surprised the general with the news that a dinner had been arranged by Boston veterans in his honor. He was promised transportation in a private car, and, MacGuire beamed, Butler would be paid a thousand dollars to speak at the dinner-in favor of the gold standard, of course.

Butler was dumbfounded at MacGuire's incredible persistence. Surely the indefatigable bond salesman had realized by this time that he was barking up the wrong tree! But perhaps, the general speculated, MacGuire felt challenged to "make the sale," in much the same manner that he undoubtedly sought to overcome the sales resistance of reluctant prospects for his bonds. And apparently MacGuire was convinced that only Smedley Butler had the prestige and popularity among veterans that his coterie needed to put over the scheme.

Irked by the new attempt to bribe him, Butler rasped that he had never been paid a thousand dollars for any speech and had no intention of accepting such a sum to let words be put in his mouth. Chagrined but undiscouraged, MacGuire cheerfully promised to come up with some other more acceptable plan to utilize the general's talents as a public speaker.

In October a former Marine running for office in Brooklyn, New York, begged Butler to make some campaign speeches in his behalf. Butler was hesitant because he was about to leave on a tour of the country for Veterans of Foreign Wars, speaking for the bonus and for membership in the V.F.W. as the best way to get it. But loyalty to the men who had served under him took him first to Pennsylvania Station.

To his astonishment he was met by MacGuire. The bond salesman somehow knew where he was headed and asked to accompany him. Butler consented, more and more intrigued by the ubiquitous MacGuire who kept turning up everywhere he went like a bad penny. He found himself even growing perversely fond of MacGuire for his stubborn refusal to take No for an answer. In the Marines Butler had always had a soft spot for incorrigible rascals who brightened up monotonous routine by their unpredictable shenanigans.

Besides, he was still curious to learn more about what the plotters in the gold scheme were up to. MacGuire now revealed a new plan to involve the general through his impending lecture tour for the V.F.W. Wasn't he, MacGuire probed, going to use the opportunity to speak out on public issues important to the veterans? Butler wasn't sure whether this was simply a shrewd guess or whether MacGuire somehow had eyes and ears all over the country.

Butler declared that he believed that democracy was in danger from growing antidemocratic forces within the country and that he planned to appeal to the nation's veterans to unite against this threat. At the same time he wanted to alert them to the risk of being dragged into another war by the propaganda of organizations camouflaged with patriotic trappings.

MacGuire looked thoughtful. Then he asserted that the group he represented really had the identical objectives. He urged Butler to let him go along on the tour. He would stay in the background, enlisting veterans in "a great big superorganization to maintain our democracy."

Butler lost no time in squelching that idea. He admitted that he couldn't keep MacGuire off any train he rode, but made it firmly clear that he would not be associated with the plans of MacGuire and his rich friends in any way. He softened the reprimand by saying that he did not want to hurt the feelings of a wounded veteran, but MacGuire would have to understand that he could not be used to aid money schemes.

MacGuire said peevishly that he couldn't understand why Butler refused to be a businessman like himself. The general expressed blunt suspicions of MacGuire's real reasons for wanting to trail in the wake of this V.F.W. tour. MacGuire protested that he had no intention of doing anything subversive.

Then he made the general a new offer. If Butler would merely insert in each of his V.F.W. speeches a short reference to the need for returning to the gold standard, in order to benefit veterans when a bonus bill was passed, MacGuire and his backers would pay him $750 per speech-three times what the V.F.W. was paying him. Butler replied emphatically that he would refuse to abuse the veterans' trust in him even if the offer were for $100,000.

Frustrated, MacGuire took his departure abruptly.

Soon afterward Butler began his swing around the country for the V.F.W. He was no longer bothered-for the moment-by the persistent attentions of Jerry MacGuire, who left for Europe on December 1, on a mission for his backers.

MacGuire took his departure against the background of a steadily rising chorus of hatred for "that cripple in the White House" by big-business leaders. It was reflected in the anti-Roosevelt slant of both news and editorials in the business-oriented press. In the eyes of America's industrialists and bankers, the President, if not an actual secret Communist, was dedicated to destroying the nation's capitalist economy by the New Deal, which they labeled "creeping socialism."

Many believed that unless F.D.R. were stopped, he would soon take America down the same road that the Russians had traveled. They were horrified by his recognition of the Soviet Union on November 16, 1933, seeing it as a sinister omen. They were equally appalled by his speech six weeks later promising that the United States would send no more armed forces to Latin America to protect private investments.

Some business leaders envied their counterparts in Italy, who had financed Mussolini's rise to power. Il Duce's efficiency in "making the trains run on time" was highly lauded, along with the dictatorial control of labor unions by his corporate state. Thomas Lamont, a J. P. Morgan partner, praised the dictator for his methods of providing low-paying jobs, cutting the public debt, and ending inflation.

"We all count ourselves liberal, I suppose," Lamont told the Foreign Policy Association. "Are we liberal enough to be willing for the Italian people to have the sort of government they apparently want?"

Butler, who had not known that MacGuire: had left for Europe, received a postcard from him from the French Riviera, reporting only that he and his family were having a wonderful time. Another card came from MacGuire in June, 1934, this time from Berlin. Butler surmised that the bond salesman's long stay in Europe had to be on business, paid for by his boss or all his backers. But what kind of business? More shenanigans in connection with the gold standard?

Continuing his tour for the V.F.W., Butler observed more and more storm signals flying in the United States as he traveled around the country. The nation was rapidly becoming polarized between the forces of Left and Right. Demagogues with apparently inexhaustible funds for propaganda and agitation led "patriotic" crusades against Communists, Jews, and "Jewish bankers," who were alleged to be behind the New Deal.

That June Roosevelt further inflamed big business by a whole new series of New Deal acts that crippled stock speculation, se up watchdog agencies over the telephone, telegraph, and radio industries, stopped farm foreclosures, prevented employers from hindering unionization and compelled them to accept collective bargaining. As an epidemic of turbulent strikes broke out, the orchestration of Roosevelt hatred in the nation's press rose to a fresh crescendo.

To Herbert Hoover the New Deal represented "class hatred . . . preached from the White House," "despotism," and "universal bankruptcy." Butler was intrigued by the July, 1934 issue of Fortune, the Luce magazine read by America's leading industrialists and bankers, which devoted a whole edition t glorifying Italian fascism.

It was produced by Laird S. Goldsborough, foreign editor for Time, who asked Fortune's wealthy readers "whether Fascism is achieving in a few years or decades such a conquest of the spirit of man as Christianity achieved only in ten centuries." He concluded, "The good journalist must recognize in Fascism certain ancient virtues of the race, whether or not they happen to h momentarily fashionable in his own country. Among these are Discipline, Duty, Courage, Glory, Sacrifice."

In that summer of 1934 it was not difficult to detect the acrid smell of incipient fascism in the corporate air. Smedley Butler large hawk nose was soon to detect more than a mere whiff of it.



 

7

Resting at home after his exhausting V.F.W. tour, which had included emotionally draining visits to the casualties hidden away in eighteen veterans' hospitals, Butler received a phone call from a familiar voice. Jerry MacGuire insisted that lie had to see the general immediately because he had "something of the utmost importance" to impart.

Butler and his wife had planned to drive into Philadelphia that afternoon, so, curiosity aroused, he agreed to meet MacGuire at the Bellevue Hotel. It was August 22, 1934, three days after a German plebescite had approved vesting sole executive power in Adolf Hitler as führer of Nazi Germany.

Shortly before three o'clock Butler entered the empty hotel lobby, where he found the pudgy bond salesman waiting for him. MacGuire wrung his hand enthusiastically as though they were long-lost comrades from Butler's old 4th Battalion in Panama. Leading the way to the rear of the lobby, MacGuire took him into the hotel's empty restaurant, which was not operating for the summer.

They took a table in a secluded corner of the room, and MacGuire began describing how enjoyable his trip to Europe had been. Butler patiently waited for him to get down to business. He wondered, not without sympathy, whether it was the silver plate in MacGuire's head that made him so prolix.

MacGuire finally asked whether the general planned to attend the forthcoming American Legion convention in Miami. Butler replied curtly that he did not. He felt irritated by MacGuire's arrogant assumption that the stale scheme of using the Legion for his gold clique's propaganda was a matter of the "utmost importance" to Butler.

MacGuire then insinuated that it was time to "get the soldiers together." Butler agreed grimly, but his cryptic tone, he was sure, implied a considerably different purpose for organizing the veterans than MacGuire had in mind.

MacGuire revealed what he had been up to on the Continent (hiring the previous seven months. His backers had sent him abroad to study the role that veterans' organizations had played in working for and bringing about dictatorships. In Italy MacGuire had found that Mussolini's real power stemmed from veterans organized in his Black Shirts; they had made him dictator and were the chief protectors of his regime.

Beginning to suspect what MacGuire had in mind, Butler tried to seem matter-of-fact as he asked whether MacGuire thought Mussolini's form of government was a good example for American veterans to work toward. MacGuire didn't think so.

His investigations on the Continent, he revealed, had convinced him that neither Mussolini nor Hitler, nor the kind of paramilitary organizations they had built, could be made attractive to the American veteran. But he had discovered an organization that could be, he revealed in elation.

He had been in France during a national crisis brought about by nationwide wage slashes. Riots had erupted in Paris early in February, ending in the calling of a general strike that had paralyzed the country. Civil war had been averted only by the formation of a National Union ministry made up of all parties except Socialists, Communists, and Royalists.

A key role in ending the crisis had been played by a rightwing veterans' organization called the Croix de Feu. It was a superorganization, MacGuire explained, an amalgamation of all other French veteran organizations, and was composed of officers and noncoms. The Croix de Feu had 500,000 members, and each was a leader of ten others, so that their voting strength amounted to 5,000,000.

It occurred to Butler that if MacGuire's description was accurate, the Croix de Fen was an elitist outfit minus the democratic voice of the greatest majority of veterans-the buck privates, who were expected only to follow and obey, exactly as they had been ordered to do in wartime.

MacGuire now told Butler that his group planned to build an American version of the Croix de Fen. Asked its purpose, the fat man hesitated, then replied that it was intended to "support" the President. Butler asked wryly why Roosevelt should need the support of 500,000 "supersoldiers" when he had the whole American people behind him.

Looking petulant and impatient, MacGuire ignored the question, pointing out that the crux of the matter was Roosevelt's dilemma in not having enough money to finance the New Deal and the danger that he might disrupt the American system of finance to get it. MacGuire and his group were firmly determined that the President would not be allowed to do it.

Despite MacGuire's exasperating circumlocution and the twists in his logic, a fresh pattern was becoming clear to Butler. Far from "supporting" Franklin Delano Roosevelt, MacGuire and the interests behind him were obviously planning to compel the President to yield to their demands about American finances.

The American version of the Croix de Fen was intended to be a powerful paramilitary organization to enforce those demands. But when Butler pressed him on its purpose, MacGuire denied emphatically any intention to frighten the President. In fact, he explained, the whole idea was really to support and help Roosevelt, who was obviously overworked, by providing him with an "Assistant President" to take details of the office off his shoulders. It was quite constitutional, MacGuire insisted. The aide would be called a Secretary of General Affairs.

According to MacGuire, the President himself had been grooming an aide for such a role-General Hugh S. Johnson, controversial administrator of the National Recovery Administration (N.R.A.). But, MacGuire confided, Johnson had been too loose-lipped to suit Roosevelt, and as a result was slated to be fired within three or four weeks.

Pressed to explain how he acquired this information, MacGuire assured Butler that his group was close to the White House and had advance information on all such secret matters.

Confused, Butler didn't know quite what to make of these oddly faceted revelations, but he was subsequently reminded of MacGuire's prediction when Johnson resigned in pique from the peace administration soon afterward and began attacking Roosevelt and the New Deal in a syndicated column for the Scripps Howard press.

Butler did not have to feign new interest in MacGuire's proposals; obviously much more was now involved than simply lobbying efforts for restoration of the gold standard. MacGuire, interpreting the general's absorption as an omen of cooperation, grew more candid about the plan of his group. They would work up public sympathy for the overburdened President, he explained eagerly, by a campaign explaining that Roosevelt's health was failing. The "dumb" public would accept the need to give him "relief" by having a Cabinet official take the chores of patronage and other routine worries of the office off his shoulders. Then the President's status would become like that of the President of France, a ceremonial figurehead, while the Secretary of General Affairs ran the country.

Thus, at one stroke, the country would be rid of Roosevelt's misrule and would be put back on the gold standard. And now, MacGuire concluded triumphantly, how did the general feel about heading the new "superorganization" that would be the power behind bringing about these sweeping changes?

Unable to contain himself any longer, Butler exploded that if MacGuire and his backers tried to mount a Fascist putsch, he would raise another army of 500,000 veterans to oppose them and the nation would be plunged into a new civil war.

Upset, MacGuire hastily assured the general that he and his group had no such intentions, but only sought to ease the burdens of the Presidency. Butler sarcastically expressed doubt that Roosevelt would appreciate their concern and turn his executive power over to their "Secretary of General Affairs," while limiting himself to ceremonial functions. Besides, Butler pointed out tersely, any attempt to build a huge paramilitary army of half a million men would require enormous funds.

MacGuire revealed that he now had $3 million in working funds and could get $300 million if it were needed. He added that in about a year Butler would be able to assemble 500,000 veterans, with the expectation that such a show of force would enable the movement to gain control of the government fully in just a few days.

Butler was stunned. Either MacGuire was a madman, psychotic, or fantastic liar, or what he was describing was a treasonous plot to end democracy in the United States.

He demanded to know who was going to put up all the money. MacGuire replied that Clark was good for $15 million and that the rest would come from the same people who had financed the "Chicago propaganda" about the gold standard at the American Legion convention, and who were now behind the planned march on Washington.

What plans, Butler wanted to know, did they have to take care of the veterans? The "superorganization," MacGuire said, would pay privates ten dollars and captains thirty-five dollars a month for one year, and after that it would no longer be necessary. But how did the plotters plan to manage the legal aspects of setting up an Assistant President in the White House? MacGuire explained that the President would be induced to resign because of bad health. Vice-President Nance Garner, who didn't want to be President, would refuse the office. By the rule of succession, Secretary of State Cordell Hull was next in line, but he was far too old and could easily be set aside to make way for a Secretary of General Affairs to take Roosevelt's place as President.

MacGuire again urged Butler to head the paramilitary army. The scale of the plot, as it was unfolding to him, took Butler's breath away. It occurred to him now that MacGuire's backers had been contemplating the creation of a Fascist veterans' army at the time MacGuire had first approached him to "get the soldiers together" behind their gold-standard campaign. That explained why MacGuire had wooed him so persistently, despite the general's obvious reluctance and outbursts of temper when patriotic indignation overcame his attempts to play along and learn what the plotters were up to.

No false modesty prevented Butler from recognizing that he was perhaps the best-known, and certainly the most popular and charismatic, military figure in the United States. He also suited the plotters' plans perfectly because he was noted for a brilliant, hard-hitting style of oratory that, they undoubtedly reasoned, could be put to the service of demagoguery in the same spell binding way Hitler and Mussolini had magnetized millions into following them. His rasping voice and fiery spirit captured audiences and held them hypnotized.

His reputation for fearless honesty, for speaking his mind bluntly no matter whose corns he trod on, also made him the ideal candidate to sell the plotters' propaganda to the nation's veterans, if he could be persuaded to view their scheme as ultrapatriotic. A combination of these reasons had unquestionably inspired Jerry MacGuire's insistent campaign to win him as the head of the putsch. It explained why MacGuire had refused to lake No for an answer, counting on his persuasive powers as a I bond salesman to break down Butler's sales resistance by camouflaging the raw nature of the conspiracy, and tempting him into the plot with the biggest bribe ever offered to any American. The opportunity to become the first dictator of the United States. In a word, MacGuire was convinced that with Smedley Butler as their Man on the White Horse, the plotters would have their greatest chance of success.

Increasingly uneasy and on guard, Butler now resolved to play along carefully until he had penetrated the full secret blueprint of the conspiracy. Keeping his voice cordial, he expressed interest in MacGuire's scheme, but exhibited enough doubts to induce him to reveal more in the effort to reassure Butler and win him over.

Butler became convinced that if MacGuire was telling the truth, far richer and more powerful men than just Robert S. Clark had to be involved. Clark had told Butler that he had been willing to spend $15 million of his fortune in the plotters' schemes to restore the gold standard. But MacGuire had revealed that the people behind him could, and would if necessary, raise $300 million for the putsch.

Butler determined to find out who they were. He demanded assurances from MacGuire that reputable and important people were really behind the plan to create an American Croix de Feu, pointing out that he could not afford to risk his reputation by getting involved in any second-rate adventure.

Convinced that at last he was on the verge of winning the general's support, MacGuire eagerly sought to impress him with the caliber of the influential movers and shakers of America who were involved in the plot. He revealed that in Paris he had made his headquarters at the offices of Morgan and Hodges. Butler tried to conceal his astonishment.

There was only one Morgan in the financial world-J. P. Morgan and Company. MacGuire left no doubt in his mind that the nation's biggest financiers were, indeed, involved. According to the bond salesman, there had been a meeting in Paris to decide upon the selection of the man to head the superorganization. MacGuire and his group had held out for Butler, but the Morgan interests distrusted the general as "too radical," preferring Douglas MacArthur instead.

MacArthur's term as Chief of Staff expired in November, and the Morgan interests felt that if Roosevelt failed to reappoint him, he would be bitter enough to accept their offer. Butler observed that MacArthur would be likely to have difficulty in lining up veterans behind him, because his dispersion of the Bonus Army had made him highly unpopular.

MacGuire indicated that the Morgan coterie's second choice was Hanford MacNider, an Iowa manufacturer who was a former commander of the American Legion. But MacGuire emphasized that his own group was still insisting that Butler was the only military leader in the country capable of rallying the veterans behind him. The Morgan interests had acknowledged Butler's immense prestige and popularity, he revealed, but were apprehensive that as head of the paramilitary force Butler might lead it in the "wrong direction."

Butler observed that MacNider would have no more popular appeal than MacArthur because he had gone on record as opposing the bonus. MacGuire then revealed that MacNider would be cued to change his stand, and would do so. Butler remembered this prediction when, three weeks later, MacNider suddenly reversed his position and came out in support of the bonus.

If Butler could not be persuaded to head the new superorganization, MacGuire said, the offer would definitely be made to MacArthur, whether or not the latter was reappointed Chief of Staff. He confided that there would be an administration fight over MacArthur's reappointment, but he would get it because he was the son-in-law of Philadelphian Edward T. Stotesbury, a Morgan partner.

It was a bold prediction, since never before in American history had a Chief of Staff been allowed to succeed himself. Butler was all the more startled and impressed with MacGuire's sources of information when his prediction came true several months later.

MacGuire also informed Butler that James Van Zandt, the national commander of the V.F.W., would be one of those asked to serve as a leader of the new superorganization. He would be approached by one of MacGuire's envoys at the forthcoming V.F.W. convention in Louisville, Kentucky.

Butler asked when the new superorganization would surface and begin functioning, and what it would be called. MacGuire said that he didn't know the name of it yet but that the press would announce its formation in two or three weeks and that the roster of its founders would include some of the most important men in America. One of them, MacGuire revealed, would be none other than former New York Governor Al Smith, who had lost the 1928 presidential race to Hoover as the candidate of the Democratic party.

Butler raised his bushy eyebrows in astonishment. It seemed incredible that the derby-hatted "happy warrior," who had grown up in New York's East Side slums, could be involved in a Fascist plot backed by wealthy men. But he knew that Smith was now a business associate of the powerful Du Pont family, who had cultivated him through Du Pont official John J. Raskob, former chairman of the Democratic party. Under their influence Smith had grown more and more politically conservative following his defeat, while still remaining a Democrat.

Could it really be possible that a leading standard-bearer of the Democrats was committed to help overthrow the chief Democrat in the White House? In slight shock Butler asked MacGuire why Smith was involved. MacGuire replied that Smith had decided to break with the Roosevelt Administration and was preparing a public blast against it which would be published in about a month.

Pressed for more information about the new superorganization, MacGuire told Butler that it would be described publicly as a society "to maintain the Constitution." Butler observed dryly that the Constitution did not seem to be in any grave danger, then he bluntly asked what MacGuire's stake was in the enterprise. MacGuire shrugged that he was a businessman, and besides, he, his wife, and his children had enjoyed a long, expensive stay in Europe, courtesy of his backers.

Taking his leave, MacGuire said that he was going to Miami to agitate again for the gold standard, as well as to get the new paramilitary organization rolling. He promised to contact Butler again after the Legion convention.

After he had gone, the bemused general was almost tempted to dismiss the whole plot as the product of a disordered imagination-his or MacGuire's. But a grim sense of foreboding told him that he was in the eye of a gathering storm.

There were too many things that MacGuire had told him that rang true, and could not possibly have been invented. Even as Butler brooded over the affair and wondered what to do about it, another of MacGuire's uncannily accurate predictions materialized two weeks after their talk.

In September, 1934, the press announced the formation of a new organization, the American Liberty League, by discontented captains of industry and finance. They announced their objectives as "to combat radicalism, to teach the necessity of respect for the rights of persons and property, and generally to foster free private enterprise."

Denouncing the New Deal, they attacked Roosevelt for "fomenting class hatred" by using such terms as "unscrupulous money changers," "economic royalists," and "the privileged princes of these new economic dynasties."

Butler's eyes widened when he read that the treasurer of the American Liberty League was none other than MacGuire's own boss, Grayson M.-P. Murphy, and one of its financiers was Robert S. Clark. Heading and directing the organization were Du Pont and J. P. Morgan and Company men. Morgan attorney John W. Davis was a member of the National Executive Committee-the same Davis that Clark had identified as author of the gold-standard speech MacGuire had tried to get Butler to make to the American Legion convention in Chicago.

Heavy contributors to the American Liberty League included the Pitcairn family (Pittsburgh Plate Glass), Andrew W. Mellon Associates, Rockefeller Associates, E. F. Hutton Associates, William S. Knudsen (General Motors), and the Pew family (Sun Oil Associates). J. Howard Pew, longtime friend and supporter of Robert Welch, who later founded the John Birch Society, was- a generous patron, along with other members of the Pew family, of extremist right-wing causes. Other directors of the league included A1 Smith and John J. Raskob.

Two organizations affiliated with the league were openly Fascist and antilabor. One was the Sentinels of the Republic, financed chiefly by the Pitcairn family and J. Howard Pew. Its members labeled the New Deal "Jewish Communism" and insisted "the old line of Americans of $1,200 a year want a Hitler."

The other was the Southern Committee to Uphold the Constitution, which the conservative Baltimore Sun described as "a hybrid organization financed by northern money, but playing on the Ku Klux Klan prejudices of the south." Its sponsor, John H. Kirby, collaborated in anti-Semitic drives against the New Deal with the Reverend Gerald L. K. Smith, leader of the first Silver Shirt squad of American storm troopers.

"The brood of anti-New Deal organizations spawned by the Liberty League," the New York Post subsequently charged, "are in turn spawning Fascism."

Butler was stunned by this fulfillment of MacGuire's prediction. As he later testified, just at the time MacGuire had said it would, the American Liberty League had appeared and was all that MacGuire had said it would be. And it was obviously no coincidence that Grayson M.-P. Murphy, Robert S. Clark, and the Morgan interests were deeply involved.

Even yet another of MacGuire's predictions came true a fortnight later, when A1 Smith published a scathing attack on the New Deal in the New Outlook, breaking publicly with the President over economic policies.

If Butler had had any lingering doubts about the authenticity of MacGuire's claim to have inside knowledge of what American big-business leaders were up to, the appearance of the American Liberty League on schedule, and A1 Smith's break with the White House, convinced him that MacGuire's revelations of a plot to seize the White House were no crackpot's fantasy. MacGuire had called the shots every time.

Butler was now genuinely alarmed. For the first time it dawned upon him that if the American Liberty League was, indeed, the "superorganization" behind the plot that it seemed to be, the country's freedom was in genuine peril. Such money and power as the men behind the League possessed could easily mobilize a thinly disguised Fascist army from the ranks of jobless, embittered veterans and do what Mussolini had done in Italy with the financial support of the Italian plutocracy.

Getting in touch with Van Zandt, Butler told the V.F.W. commander that he had been approached to lead a coup as head of a veterans' army. He warned that the conspirators intended to try to involve Van Zandt, too, at the V.F.W, convention in Louisville. Thanking him for the warning, Van Zandt assured Butler that he would have nothing to do with the plotters.

Butler was tempted to leave for Washington immediately to warn the President or his advisers. He now knew enough to expose the whole plot. But he was pragmatist enough to realize that on his unsupported word, without the slightest shred of evidence, he was likely to be greeted with polite skepticism, if not ridicule. Heads would shake. Poor Smedley Butler. How sad-a fine, brave Marine general like that, losing touch with reality. Too many campaigns, too many tropical fevers. At best they might believe that MacGuire had, indeed, told him all those fantastic things, but then MacGuire, obviously, had to be some kind of psychotic nut. And Butler would have to be an idiot to have taken him seriously, to have believed that many of the nation's greatest leaders of the business and financial world would get involved in a conspiracy to depose the President and take over the White House!

MacGuire, of course, would deny everything. So would Robert S. Clark. So would everyone connected with the American Liberty League-if this was, indeed, the superorganization MacGuire had revealed was behind the plot.

The enemies Butler had made among the military brass during his colorful career would help the press ridicule his revelation. "Old Gimlet Eye," they would scoff, "is at it again-stirring up a storm, making headlines. Worst publicity hound that ever wore a uniform!"

But Smedley Butler had never in his life backed off from his duty as he saw it. Convinced that the democracy he cherished was in genuine danger, he steeled himself for the ordeal of public mockery and humiliating attacks that he knew would follow his exposure of the conspiracy. He was enough of an expert tactician, however, to know that he couldn't win his battle without supporting troops. He would need corroborative testimony by someone whose word, when combined with his own, would have to be respected and force a full-scale investigation.

Butler confided in Tom O'Neil, city editor of the Philadelphia Record. Observing that the whole affair smacked of outright treason to him, he asked O'Neil to assign his star reporter to dig into the story. O'Neil agreed, and reporter Paul Comly French, whose news features also appeared in the New York Post, was instructed to seek confirmation of the plot. Butler knew and respected French, who had done an intelligent and honest job of covering his fight against crime and corruption in Philadelphia ten years earlier.

French set about determining whether MacGuire and his group were operating some kind of racket to extort money out of the rich by selling them political gold bricks, or whether a cabal of rich men, enraged by the President and his policies, was putting up big money to overthrow F.D.R. with a putsch.

In view of the powerful people the general had named in connection with the plot, French knew that his assignment was a keg of dynamite. Even if he could somehow confirm the existence of the plot and identify the conspirators, he and the general were bound to meet with incredulity when they sought to expose the blueprint for treason and the traitors.

Much would depend upon establishing and documenting the credibility of Smedley Butler, the chief witness. If the general's career showed him to be given to gross exaggeration or chronic lying, or to be an officer of dubious character whose word could not be trusted, then his sworn testimony against those he charged with treason would be held worthless.

If, on the other hand, an examination of his life and career proved that he was a man of incorruptible character, integrity, and patriotism, then his testimony would have to be given the gravest consideration, especially when supported and corroborated by the findings of French's investigation.

Whatever the outcome, the reporter knew that the denouement would be a stormy one. To Butler's enemies he was a highly controversial, unorthodox fighting man whose irrepressible temper and tongue kept him in the headlines. To his friends he was a patriotic war hero with strong convictions about democracy and a deserved reputation for bluntly speaking out the truth, regardless of consequences.

What kind of man, actually, was the Marine general who was accusing many of America's leading financiers and industrialists of seeking him as the indispensable man for their Fascist plot to seize the White House?


* The Grayson Mallet-Prevost Murphy referred to here and throughout the book died on October 19, 1937.