FDR; Man on the White Horse
Just before Christmas 1934, news of a bizarre plot to install a dictator in the White House surfaced in Washington and New York, and the story—one of unparalleled significance—was promptly smothered by Congress and the establishment press.1
On November 21, 1934 The New York Times printed the first portion of the Butler story as told to the House Un-American Activities Committee, giving it front-page treatment and an intriguing lead paragraph:
The New York Times report added that General Butler, ". . . had told friends . . . that General Hugh S. Johnson, former NRA administrator, was scheduled for the role of dictator, and J.P. Morgan & Co. as well as Murphy & Co. were behind the plot."
After this promising opening, The New York Times reporting gradually faded away and finally disappeared. Fortunately, enough information has since surfaced to demonstrate that the Butler Affair or the Plot to Seize the White House is an integral part of our story of FDR and Wall Street.
GRAYSON M-P. MURPHY COMPANY, 52 BROADWAY
The central figure in the plot was Major General Smedley Darlington Butler, a colorful, popular, widely known Marine Corps officer, twice decorated with the Congressional Medal of Honor and a veteran of 33 years of military service. General Butler testified in 1934 to the McCormack-Dickstein Committee investigating Nazi and Communist activities in the United States that a plan for a White House dictatorship was outlined to him by two members of the American Legion: Gerald C. MacGuire, who worked for Grayson M-P. Murphy & Co., 52 Broadway, New York City, and Bill Doyle, whom Butler identified as an officer of the American Legion. General Butler testified that these men wanted to "unseat the Royal Family in control of the American Legion at the Convention to be held in Chicago, and [were] very anxious to have me take part in it." A scheme was outlined to General Butler: he was to come before the convention as a legion delegate from Honolulu; there would be two or three hundred American Legion members in the audience; and "these planted fellows were to begin to cheer and start a stampede and yell for a speech, then I was to go to the platform and make a speech."
Robert Clark was incidentally known to General Butler from his China campaign days. MacGuire and Doyle also offered Butler a substantial sum to make a similar speech before the convention of the Veterans of Foreign Wars at Miami Beach. According to MacGuire, his group had investigated the background of Mussolini and Italian fascism, Hitler's organization in Germany, and the Croix de Feu in France and hinted that it was time to establish a similar organization in the United States. General Butler testified to the Congressional committee about MacGuire's statement in the following words:
What would be the objective of this super organization? According to the previously cited New York Times,3 General Butler is reported to have testified that the affair was an attempted coup d'etat to overthrow President Roosevelt and replace him with a fascist dictator. This interpretation is repeated by Archer, Seldes, and other writers. However, this was not the accusation made by General Butler to the committee. Butler's precise statement concerning the projected organization, the use to which it was to be put when established, and the role of President Roosevelt is as follows; General Butler reported on his conversation with MacGuire:
In other words, the Wall Street plot was not to dispose of President Roosevelt at all, but to kick him upstairs and install an Assistant President with absolute powers. Just why it was necessary to go to the trouble of installing an Assistant President is unclear because the Vice President was in office. In any event, it was planned to run the United States with a Secretary of General Affairs, and the gullible American public would accept this under the guise of necessary protection from a communist take-over.
At this point it is interesting to recall the role of many of these same financiers and financial firms in the Bolshevik Revolution—a role, incidentally, that could not have been known to General Butler5—and the use of similar Red scare tactics in the 1922 United Americans organization. Grayson M-P. Murphy was, in the early 1930s, a director of several companies controlled by the J.P. Morgan interests, including the Guaranty Trust Company, prominent in the Bolshevik Revolution, the New York Trust Company, and Bethlehem Steel, and was on the board of Inspiration Copper Company, National Aviation Corporation, Intercontinental Rubber Co., and U.S. & Foreign Securities. John W. Davis, the speech writer for General Butler, was a partner in Davis, Polk, Wardwell, Gardner & Reed of 15 Broad Street. Both Polk and Wardwell of this prestigious law firm, as well as Grayson Murphy, had roles in the Bolshevik Revolution. Further, Davis was also a co-director with Murphy in the Morgan-controlled Guaranty Trust Co. and a co director with Presidential hopeful Al Smith in the Metropolitan Life Insurance Co., as well as director of the Mutual Life Insurance Co., the U.S. Rubber Co., and American Telephone and Telegraph, the controlling unit of the Bell System.
Fortunately for history. General Butler discussed the offer with an impartial newspaper source at a very early point in his talks with MacGuire and Doyle. The McCormack-Dickstein Committee heard testimony under oath from this confidant, Paul Comley French. French confirmed the facts that he was a reporter for The Philadelphia Record and the The New York Evening Post and that General Butler had told him about the plot in September 1934. Subsequently, on September 13,1934 French went to New York and met with MacGuire. The following is part of French's statement to the Committee:
ACKSON MARTINDELL, 14 WALL STREET
The sworn testimony of General Smedley Butler and Paul French in the committee hearings has a persistent thread. General Butler rambled from time to time, and some parts of his statement are vague, but there is obviously a lot more to the story than an innocent gathering of American Legion members into a super organization. Is there any independent evidence to confirm General Butler and Paul French? Unknown to both Butler and French, Guaranty Trust had been involved in Wall Street maneuverings in the Bolshevik Revolution in 1917, so indicating at least a predisposition to mix financial business with dictatorial politics; two of the persons involved in the plot were directors of Guaranty Trust. Also, before the hearings were abruptly halted, the committee heard evidence from an independent source, which confirmed many details recounted by General Butler and Paul French. In December 1934 Captain Samuel Glazier, Commanding Officer of the CCC Camp at Elkridge, Maryland,7 was called before the committee.
October 2, 1934, testified Captain Glazier, he had received a letter from
A.P. Sullivan, Assistant Adjutant General of the U.S. Army, introducing
a Mr. Jackson Martindell, "who will be shown every courtesy by you."
This letter was sent to Glazier by command of Major General Malone of
the U.S. Army. Who was Jackson Martindell? He was a financial counsel
with offices at 14 Wall Street, previously associated with Stone &
Webster & Blodget, Inc., investment bankers of 120 Broadway, and with
Carter, Martindell & Co., investment bankers at 115 Broadway.8
Martindell was a man of substance, living according to The New York Times,
". . . in the centre of a beautiful sixty acre estate" that
he had bought from Charles Pfizer,9 and was sufficiently influential
for General Malone to arrange a conducted tour of the Elkridge, Maryland
Conservation Corps Camp.
Captain Glazier provided Martindell with the requested camp tour and testified to the committee that Martindell posed numerous questions about a similar camp for men to work in industry rather than in forests. A week or so after the visit. Captain Glazier visited Martindell's New Jersey home, learned that he was a personal friend of General Malone, and was informed that Martindell wanted to organize camps similar to the CCC to train 500,000 young men. The overtones of this talk, as reported by Glazier, were anti-semitic and suggested an attempted coup d'etat in the United States; the organization sponsoring this overthrow was called American Vigilantes, whose emblem was a flag with a red eagle on a blue background in lieu of the German swastika. This was in part an independent verification of General Butler's testimony.
GERALD C. MACGUIRE'S TESTIMONY
Gerald MacGuire, one of the accused plotters, was called before the committee and testified at length under oath. He stated that he met General Butler in 1933 and that his reasons for visiting Butler were, (1) to discuss the Committee for a Sound Dollar and (2) that he thought Butler would be a "fine man to be commander of the Legion."
admitted that he had told General Butler that he was a member of the distinguished
guest committee of the American Legion; he had a "hazy recollection"
that millionaire Robert S. Clark had talked to Butler, but "denied
emphatically" making arrangements for Clark to meet Butler. MacGuire
admitted sending Butler postcards from Europe, that he had had a conversation
with the general at the Bellevue-Stratford Hotel, and that he had told
Butler that he was going to the convention in Miami. However, when asked
whether he had told Butler about the role veterans played in European
governments, he replied that he had not, although he stated that he had
told Butler that in his opinion "Hitler would not last another year
in Germany and that Mussolini was on the skids."10
MacGuire further testified that he worked for Grayson Murphy and that Robert S. Clark had put up $300,000 to form the Committee for a Sound Dollar.
The McCormack-Dickstein Committee was able to confirm the fact that Robert Sterling Clark transmitted money to MacGuire for political purposes:
In its New York press release the committee noted several discrepancies in MacGuire's testimony on receipt of funds. The section reads as follows:
The committee then asked MacGuire an obvious question: whether he knew Jackson Martindell. Unfortunately, an equally obvious error in MacGuire's answer was allowed to pass by unchallenged. The committee transcript reads as follows:
So, in brief, we have three reliable witnesses—General Butler, Paul French, and Captain Samuel Glazier—testifying under oath about plans of a plot to install a dictatorship in the United States. And we have contradictory testimony from Gerald MacGuire that clearly warrants further investigation. Such investigation was at first the committee's stated intention: "The Committee is awaiting the return to this country of both Mr. Clark and Mr. Christmas. As the evidence stands, it calls for an explanation that the Committee has been unable to obtain from Mr. MacGuire."15
But the Committee did not call either Mr. Clark or Mr. Christmas to give evidence. It made no further effort—at least, no further effort appears on the public record—to find an explanation for the inconsistencies and inaccuracies in MacGuire's testimony, testimony that was given to the committee under oath.
SUPPRESSION OF WALL STREET INVOLVEMENT
The story of an attempted take-over of executive power in the United States was suppressed, not only by parties directly interested, but also by several institutions usually regarded as protectors of constitutional liberty and freedom of inquiry. Among the groups suppressing information were (1) the Congress of the United States, (2) the press, notably Time and The New York Times, and (3) the White House itself. It is also notable that no academic inquiry has been conducted into what is surely one of the more ominous events in recent American history. Suppression is even more regrettable in the light of the current trend toward collectivism in the United States and the likelihood of another attempt at a dictatorial takeover using supposed threats from either the left or the right as a pretext.
by the House Un-American Activities Committee took the form of deleting
extensive excerpts relating to Wall Street financiers including Guaranty
Trust director Grayson Murphy, J.P. Morgan, the Du Pont interests, Remington
Arms, and others allegedly involved in the plot attempt. Even today, in
1975, a full transcript of the hearings cannot be traced.
The testimony of Paul French was also censored by the House Committee. Witness the following extract from French's testimony referring to John W. Davis, J.P. Morgan, the Du Pont Company, and others in Wall Street and which strongly corroborates General Butler's testimony:
John L. Spivak, the reporter who unearthed the suppression in the Congressional transcripts, challenged Committee Cochairman Samuel Dickstein of New York with his evidence. Dickstein admitted that:
The fact remains that the committee did not call Grayson Murphy, Jackson Martindell, or John W. Davis, all directly accused in sworn testimony. Further, the committee deleted all portions of the testimony involving other prominent persons: J.P. Morgan, the Du Ponts, the Rockefeller interests, Hugh Johnson, and Franklin D. Roosevelt. When Congressman Dickstein pleaded his innocence to John Spivak, it was inconsistent with his own letter to President Roosevelt, in which he claims to have placed restrictions even upon public distribution of the committee hearings, as printed, "in order that they might not get into other than responsible hands." The final report issued by the committee in February 15, 1935 buried the story even further. John L. Spivak sums up the burial succinctly: "I... studied the Committee's report. It gave six pages to the threat by Nazi agents operating in this country and eleven pages to the threat by communists. It gave one page to the plot to seize the Government and destroy our democratic system."20
The role of leading newspapers and journals of opinion in reporting the Butler affair is equally suspect. In fact, their handling of the event has the appearance of outright distortion and censorship. The veracity of some major newspapers has been widely questioned in the last 50 years,21 and in some quarters the media have even been accused of a conspiracy to suppress "everything in opposition to the wishes of the interest served." For example, in 1917 Congressman Callaway inserted in The Congressional Record the following devastating critique of Morgan control of the press:
In the Butler affair the accused interests are also those identified by Congressman Callaway: the J.P. Morgan firm and the steel and powder industries. General Butler accused Grayson Murphy, a director of the Morgan-controlled Guaranty Trust Company; Jackson Martindell, associated with Stone & Webster, allied to the Morgans; the Du Pont Company (the powder industry); and Remington Arms Company, which was controlled by Du Pont and the Morgan-Harriman financial interests. Further, the firms that appear in the suppressed 1934 Congressional testimony are J.P. Morgan, Du Pont, and Remington Arms. In brief, we can verify 1934 Congressional suppression of information that supports the earlier 1917 charges of Congressman Callaway.
Does such suppression extend to major news journals? We can take two prime examples; The New York Times and Time magazine. If such a combination as Callaway charges did exist, then these two journals would certainly be among "25 of the greatest papers involved in the 1930s." The New York Times reporting of the "plot" opens up with a front-page headline article on November 21, 1934: "Gen. Butler Bares 'Fascist Plot' to Seize Government by Force," with the lead paragraph quoted above (p. 143). This Times article is a reasonably good job of reporting and includes a forthright statement by Congressman Dickstein: "From present indications Butler has the evidence. He's not going to make any serious charges unless he has something to back them up. We'll have men here with bigger names than his." Then the Times article records that "Mr. Dickstein said that about sixteen persons mentioned by General Butler to the Committee would be subpoenaed, and that a public hearing might be held next Monday." The Times also includes outright and sometimes enraged denials from Hugh Johnson, Thomas W. Lamont, and Grayson M-P. Murphy of Guaranty Trust.
The following morning, November 22, the Times made a major switch in reporting the plot. The disclosures were removed to an inside page, although the testimony now concerned Gerald MacGuire, one of the accused plotters. Further, a decided change in the attitude of the committee can be discerned. Congressman McCormack is now reported as saying that "the committee has not decided whether to call any additional witnesses. He said that the most important witness, aside from Mr. MacGuire, was Robert Sterling Clark, a wealthy New Yorker with offices in the Stock Exchange Building."
While the Times reporting was consigned to an inside single column, the editorial page, its most influential section, carried a lead editorial that set the tone for subsequent reporting. Under the head "Credulity Unlimited," it contended that the Butler charge was a "bald and unconvincing narrative. ... The whole story sounds like a gigantic hoax ... it does not merit serious discussion," and so on. In brief, before the 16 important witnesses were called, before the evidence was on the record, before the charge was investigated. The New York Times decided that it wanted to hear nothing about this story because it was a hoax, not fit to print.
The next day, November 23, the Times changed its reporting still further. The headlines were now about Reds and Red Union Strife and concerned alleged activities by communists in American trade unions, while the Butler testimony and the developing evidence were secreted deep within the reporting of Red activities. The resulting story was, of course, vague and confused, but it effectively buried the Butler evidence.
On November 26, the hearings continued, but the committee itself now had cold feet and issued a statement: "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, General James G. Harbord, Thomas W. Lamont, Admiral William S. Sims, or Hanford MacNider."
should be noted that these names had come up in sworn testimony, later
to be deleted from the official record. The Times pursued its
Reviewing the story of the Butler Affair in the Times 40 years after the event and comparing its story to the printed official testimony, itself heavily censored, it is obvious that the newspaper, either under its own initiative or under outside pressure, decided that the story was not to be made public. Consistent with this interpretation, we find that The New York Times, the "newspaper of record," omits the Butler testimony from entries in its annual index, depended upon by researchers and scholars. The Times Index for 1934 has an entry "BUTLER (Maj Gen), Smedley D," but lists only a few of his speeches and a biographic portrait. The Butler testimony is not listed. There is an entry, "See also: Fascism-U.S.," but under that cross-reference there is listed only: "Maj Gen S.D. Butler charges plot to overthrow present govt; Wall Street interests and G.P. MacGuire implicated at Cong com hearing." The only significant Wall Street name mentioned in the index is that of R.S. Clark, who is reported as "puzzled" by the charges. None of the key Morgan and Du Pont associates cited by General Butler is listed in the Index. In other words, there appears to have been a deliberate attempt by this newspaper to mislead historians.
Time magazine's reporting descended to fiction in its attempts to reduce General Butler's evidence to the status of absurdity. If ever a student wants to construct an example of biased reporting, there is a first-rate example in a comparison of the evidence presented to the McCormack-Dickstein Committee by General Butler with the subsequent Time reportage. The December 3rd 1934 issue of Time ran the story under the head "Plot Without Plotters," but the story bears no resemblance at all to the testimony, not even the censored testimony. The story portrays General Butler leading a half-million men along U.S. Highway 1 with the cry, "Men, Washington is but 30 miles away! Will you follow me?" Butler was then depicted as taking over the U.S. government by force from President Roosevelt. The remainder of the Time story is filled with dredges from Butler's past and an assortment of denials from the accused. Nowhere is there any attempt to report the statements made by General Butler, although the denials by J.P. Morgan, Hugh Johnson, Robert Sterling Clark, and Grayson Murphy are cited correctly. Two photographs are included: a genial grandfatherly J.P. Morgan and General Butler in a pose that universally symbolizes lunacy—a finger pointed to his ear. The reporting was trashy, dishonest, and disgraceful journalism at its very worst. Whatever our thoughts may be on Nazi propaganda or Soviet press distortion, neither Goebbels nor Goslit ever attained the hypnotic expertise of Time's journalists and editors. The fearful problem is that the opinions and mores of millions of Americans and of English speakers around the world have been molded by this school of distorted journalism.
To keep our criticism in perspective, it must be noted that Time was apparently impartial in its pursuit of lurid journalism. Even Hugh S. Johnson, administrator of NRA and one of the alleged plotters in the Butler Affair, was a target of Time's mischief. As Johnson reports it in his book:
AN ASSESSMENT OF THE BUTLER AFFAIR
most important point to be assessed is the credibility of General Smedley
Darlington Butler. Was General Butler lying? Was he telling the truth?
Was he exaggerating for the sake of effect?
Does the evidence support or reject Butler? Reporter Paul French of The Philadelphia Record wholly supports Butler. Evidence by Captain Glazier, commander of the CCC camp, supports Butler. In these two cases there is no discrepancy in the evidence. The statements of MacGuire made under oath to Congress do not support Butler. We have therefore a conflict of sworn evidence. Further, MacGuire was found at fault on several points by the committee; he used the evasion of "do not recall" on a number of occasions and, in major areas such as the financing by Clark, MacGuire unwillingly supports Butler. There is a hard core of plausibility to the Butler story. There is some possibility of exaggeration, perhaps not untypical for a man of Butler's flamboyant personality, but this is neither proven nor disproven
Without question, the Congress of the United States did a grave disservice to the cause of freedom in suppressing the Butler story. Let us hope that some Congressmen or some Congressional committee, even at this late date, will pick up the threads and release the full uncensored testimony. We may also hope that the next time around, in some comparably important matter, The New York Times will live up to its claim to be the newspaper of record, a name it justified so admirably four decades later in the Watergate Investigation.
Jules Archer, The Plot to Seize the White House (New York: Hawthorn
Books, 1973) Archer's book is "the first effort to tell the whole
story of the plot in sequence and full detail."
2. House of Representatives, Investigation of Nazi Propaganda Activities and Investigation of Certain Other Propaganda Activities, Hearings No. 73-D.C.-6, op. cit., p. 17.
3. The New York Times, Nov. 21, 1934.
of Representatives, Investigation of Nazi Propaganda Activities and Investigation
of Certain Other Propaganda Activities, Hearings No. 73-D.C.-6, op. cit.,
6. House of Representatives, Investigation of Nazi Propaganda Activities and Investigation of Certain Other Propaganda Activities, Hearings No. 73-D.C.-6, op. cit., p. 26.
7. Ibid., Parts 1-2. Based on Testimony before the McCormack-Dickstein Committee.
8. 120 Broadway is the topic of a chapter in this book and a previous book, Sutton, Bolshevik Revolution, op. cit. Stone & Webster is also prominent in the earlier book.
9. The New York Times, Dec. 28, 1934.
10. House of Representatives, Investigation of Nazi Propaganda Activities and Investigation of Certain Other Propaganda Activities, Hearings No. 73-D.C.-6, op. cit., p. 45.
11. Ibid., p. 45.
12. Press release. New York City, p. 12.
13. Ibid., p. 13.
14. House of Representatives, Investigation of Nazi Propaganda Activities and Investigation of Certain Other Propaganda Activities, Hearings No. 73-D.C.-6, op. cit., p. 85.
15. Press release, New York City, p. 13.
16. See Jules Archer, The Plot to Seize the White House, op. cit.
17. George Seldes, One Thousand Americans, op. cit, p. 288.
18. Ibid., pp. 289-290.
19. John L. Spivak, A Man in his Time (New York: Horizon Press, 1967), pp. 311, 322-25.
20. Ibid., p. 331.
21. See Herman Dinsmore, All the News That Fits, (New Rochelle: Arlington House, 1969).
22. Congressional Record, Vol. 55, pp. 2947-8 (1917).
23 Hugh S. Johnson, The Blue Eagle from Egg to Earth, op. cit., p.267