The Business Plot: A General's Testimony About a Fascist Coup

The Story

Smedley Butler was, in the words of a 1935 House report, 'twice decorated by the Congress of the United States,' and by 1933 a retired Marine major general with a large following among veterans. That is why, according to his sworn testimony, someone came calling.

In a public statement released November 24, 1934, the House committee investigating Nazi and other propaganda summarized what Butler told it. About July 1, 1933, he testified, a telephone call from Washington to his home near Philadelphia asked for an interview with two Legionnaires. That day he was visited by Gerald C. MacGuire of New York and William Doyle of Boston.

'There is no question but that these attempts were discussed, were planned' (House committee report, 1935)

At first, by Butler's account, the pitch was about the American Legion: run for national commander, or at least go to the October 1933 convention in Chicago. MacGuire came back several times and urged Butler to make a speech there for a resolution calling for the United States to return to the gold standard. Butler testified that he answered: 'I don't know a damn thing about gold.' On that visit, he said, MacGuire showed him a bank book indicating deposits of about $42,000.

Butler said that over the following year the conversations moved from gold to something bigger. He testified that MacGuire, who had traveled in Europe studying veterans' organizations, proposed forming a large veterans' organization in the United States, with Butler as its leader. In its 1935 report, the committee described this as conversations 'in which the latter is alleged to have suggested the formation of a fascist army under the leadership of General Butler.' Butler testified that he was interested but would not commit to leading it, and warned that if such a group pushed anything that smelled of fascism he would raise more men to fight it.

MacGuire, a bond salesman, testified too and denied it under oath. The committee was not persuaded. Its report to the House, dated February 15, 1935, says it 'was able to verify all the pertinent statements made by General Butler, with the exception of the direct statement suggesting the creation of the organization.' Even that, the report says, 'was corroborated in the correspondence of MacGuire with his principal, Robert Sterling Clark, of New York City.' The report quotes one of MacGuire's letters from France praising the Croix de Feu, a French veterans' league.

The committee's conclusion is the line that keeps this story alive: 'There is no question but that these attempts were discussed, were planned, and might have been placed in execution when and if the financial backers deemed it expedient.'

The same record also sets limits. In November 1934 the committee said it had no evidence that would 'in the slightest degree' justify calling John W. Davis, Gen. Hugh Johnson, Thomas W. Lamont and other prominent men whose names had appeared in newspaper accounts, and that it would not 'take cognizance of names brought into the testimony which constitute mere hearsay.' The 1935 report found no link to any European fascist movement. No organization was formed and no move against the government was made.

So the verdict stays 'Disputed.' A congressional committee said, on the record, that planning happened and that Butler's account checked out. How serious it was, and how far it might have gone, the record does not settle.