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paranoid theory of the week :: did big business attempt a fascist coup of the united states?

maj. gen. smedley butler
with senator bernie sanders meeting with popular success in his grassroots campaign for the democratic party's nomination for president in 2016, we've been hearing a lot more about the depths to which corporate america will sink in order to maintain their control over wealth and power. of course, those with even a passing knowledge of modern history know that corporations have sunk pretty damn low in the past, in some cases using governments [and public funds] as their own army to strengthen their position. [if you're not familiar with the details, there are some in the world wide wednesdays piece on honduras that give an idea of what i'm talking about.] but what about at home? how far are corporate interests willing to go in order to maintain their privileges? not that far back, some argue that the answer appeared to be "all the way". so this week will look at the evidence surrounding the little known "business plot".

the theory ::
alarmed by actions taken by president franklin d. roosevelt, a group of wealthy businessmen hatched a plot to install a fascist dictatorship lead [in appearance] by a group of war veterans.

the origin ::
lifelong soldier and war hero major general smedley butler broke the story and said that he had been approached to head up the veterans' group that would be at the vanguard of the revolution.

the believers ::
smedley butler, who believed that the conspiracy was real enough that he went public with his allegations. the congressional house unamerican activities committee believed at least some of it after hearing his testimony.

the bad guys :: 
only one was named in the official transcript of testimony, a bond salesman named gerald macguire. but general butler testified that macguire was only the point man, working for others. that included german-born banker felix warburg, john morgan, head of the j.p. morgan financial group, robert sterling clark, heir to the singer sewing machine company, remington corporation and dupont chemical.

the evidence ::
much of the evidence in this case comes down to major general butler's testimony before the house unamerican activities committee. unfortunately, what he said was heavily redacted, because the committee deemed that it would be too defamatory to the businessmen named in the testimony. so how believable the story is ultimately depends on one's evaluation of butler as a person and as a witness.

but first, let's set the scene: it was 1933 and newly minted president franklin delano roosevelt was pushing bills through congress at record speed. he was inaugurated in the shadow of a banking crisis and america was still neck deep in the great depression. roosevelt believed that the key to getting the economy running again was to make people and businesses feel secure enough to start spending again. to that end, he implemented a large number of programs collectively referred to as the "new deal". those programs extended funding to the states to create aid programs for those most in need, but they also represented a move by the federal government into what had previously been purely business territory. the industrial recovery act encouraged [although it did not mandate] businesses to establish a code of ethics that would put limits on predatory or extremely competitive behaviour, and establish basic standards for industrial practices. the act was thrown out by a unanimous decision of the supreme court, but roosevelt had thrown his gauntlet: he introduced the securities and exchange commission to regulate wall street, established the federal deposit insurance commission to safeguard savings in the event of a bank collapse and set in motion the process to create a minimum wage [which was intended to be a living wage, in case anyone tries to tell you differently]. big business looked at roosevelt and saw someone who would place new limits on their power and profits.

does that mean that roosevelt raised the ire of some powerful business figures? yes. does it mean that they were going to stage a coup and depose him? that would be "no".

when major general butler came forward with his allegations, they were ridiculed in the press at the time as fatuous at best. and if the accusations had come from anyone other than butler, they likely would have been ignored. but butler was a hero. he had served in wars in honduras, the philippines, china, mexico, cuba and more. he'd twice been given the congressional medal of honour and twice refused to accept it, because he didn't want his individual efforts recognised at the expense of the group. nor was he a legend only within the military. he was widely known and highly respected throughout the country, possibly the best-known military man of his time. he wasn't just anyone.

butler's story was that he was approached by gerald macguire, the nobody bond manager, who claimed to be acting on behalf of a group of prominent individuals. that group wanted fdr out of office and they wanted to put someone in place they could trust and who would persuade the public to go along with their unorthodox plan. the plan was that butler would lead a group of up to half a million veterans into washington, march right up to the white house and physically pull roosevelt out of it. of course, they'd also make sure that there were adequate weapons, money and support to ensure that this didn't just end up being a freak incident that got butler and his followers killed.

once the dust had settled, macguire promised that butler would be given a position at the head of government for life, while roosevelt was demoted to a figurehead with no real power. he would receive millions of dollars for his work and could then basically sit on his exemplary rump and let things unfold as they might. not a bad retirement offer, especially since social security hadn't been invented yet. [roosevelt got around to that a couple of years later.]

as an ally, butler seemed to tick all the corporate revolutionary boxes: he was popular [although he'd failed in a senate bid in 1932], he was a republican and hence opposed to roosevelt on political grounds, he had a reputation that was beyond reproach. but as it turned out, his unsuccessful foray into politics had made butler question a lot of his ideas. in fact, he'd started to turn very definitely towards the left. he'd become a severe critic of u.s. foreign policy and war profiteering and, while he had criticised democratic party policies with regards to veterans, that didn't run as deep as macguire and his co-conspirators might have hoped. he'd supported roosevelt in the 1932 election and by 1933 had started to voice many concerns over the capitalist system as a whole.

in november 1934, the mccormack dickstein committee, aka the house unamerican activities committee [originally tasked with finding fascists, but much more famous for trying to find communists after the second world war] opened hearings into the allegations. butler testified, but the "big" names he mentioned were removed from the official record and none of them were ever questioned because the committee felt that the testimony that implicated them was hearsay. butler was furious and said publicly that the committee had had a responsibility to let the public know the names mentioned. [in fact, the names filtered down to us anyway because a reporter for a communist paper, john spivak, published them anyway.]

gerald macguire
the committee did interview macguire and found that he was a member of the union-busting american legion and an official with the committee for a sound dollar and sound currency, a group backed by j.p. morgan and other financiers demanding that the american dollar be returned to the gold standard. he had spent time in europe studying how veterans' groups could be used in political movements, which connects him to one of the named conspirators and does sound suspiciously like he was researching the exact same thing butler was accusing him of doing.

given the way that the well-known names were hushed up, you would expect that the committee returned a report that dismissed butler's accusations as the product of a feverish imagination. not quite. in fact, while they did not pursue charges against anyone, or even investigate any further, the committee was convinced that butler was telling the truth, and that there had been some plot to organise fascists within america. because butler had only ever met with macguire, the verifiable evidence stopped with him. the committee was not convinced that a coup had been imminent, or even in the advanced planning stages, but they were persuaded that butler had been approached about something. and if, as butler and spivak alleged, the committee had attempted to whitewash the events, that in itself is a pretty substantial admission.

a few months after the commission submitted its report, gerald macguire died suddenly at the grand old age of thirty-eight. five years later, before the u.s. was even involved in the second world war, general butler died after the acute onset of an upper gastrointestinal tract infection, which ultimately proved to be cancer. he was only fifty-eight at the time.

with their deaths, the story of the so-called "business plot" faded entirely and today it's pretty much an unknown story outside far-left publications and conspiracy fan circles.

likelihood :: 8/10
butler's testimony, however limited, was evidently persuasive enough that even a government committee felt that there was something to his claims. and since the overwhelming bulk of our knowledge is based on what he said, it seems reasonable to assume that he's a reliable witness.

what can't be proven is how far along things had actually come. was this just idle chatter among angry right-wingers trying to impress each other by throwing around names of business connections and implying that they could be counted on for support? was it something that had been discussed half-seriously at higher levels? a lot of that hinges on a greater knowledge of the messenger, gerald macguire, which is unfortunately not forthcoming.

needless to say, the men named in spivak's article as involved in the conspiracy denied knowing anything about it. but that is the expected reaction. we'll never know how a more detailed investigation would have incriminated or exonerated them. [i haven't gotten into the links that some prominent industrialists had with fascist regimes in germany, italy and spain and with fascist movements in other parts of the world, but those links did exist, whether or not they implied support for the political movements, or an openness to doing business with any paying customers.]

by definition, the plot entered the realm of conspiracy when macguire contacted butler. even if the plan had existed only in his head, the attempt to recruit someone else makes it a conspiracy. so there is something there. it's one of those theories that's tantalizingly close to being verified: we're pretty damn sure something happened, but we lack the evidence to confirm it was tied to much larger interests.

what we can say is that there was some type of conspiracy to remove roosevelt from office and that there was an attempt made to get a very prominent person to join the effort. how close it came to actually happening is still very much a subject for debate. 

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