[CTRL] The Attempted Coup Against FDR (1 of 2)

[William Shannon]

http://www.webcom.com/ctka/pr399-fdr.html From the March-April 1999 issue (Vol. 6 No. 3) The Attempted Coup Against FDR By Barbara LaMonica The John F. Kennedy assassination represents a theme in our political history. The causes, even the inevitability, of the assassination were born out of the power struggles among the ruling elite which are consistent throughout the American story. These struggles revolve around questions of what is the proper role of government vis a vis the business community’s pursuit of its own self-interest. Is the government’s role minimal or laissez-faire? Should government only provide a stable environment of "law and order", through increased police powers, conducive to the maximization of profits and the minimization of workers wages and benefits? Or does the government have a higher purpose? Is it responsible for the common good? Is it the one entity capable of implementing justice, equality, and a partial redistribution of wealth through the regulation and taxation of corporations in order to provide a cushion against the more egregious effects of the free market? Should it ensure the worker’s share in the profits they helped to create? At various times factions of what has become known as "corporate America" have argued over which role of government is ultimately more advantageous to their own ends. Generally speaking, banking and Wall Street favor less government. Retail, light manufacturing and small to medium size corporations are more tolerant of an activist government which might put more money in the hands of their consumers, and protect small businesses against the unfair competitive practices of larger corporations. The stock market crash of 1929 and the ensuing Great Depression dramatically thrust the question of government’s role to the forefront of American political and corporate life. The election of Franklin Delano Roosevelt represented a revolutionary realignment of political power: the ascendancy of the Democratic party facilitated by new voting coalitions of rural south and industrialized north which dislodged the Republican Party’s nearly seventy-year dominance, signaling the abandonment of laissez-faire economics in favor of state regulation. The losers in this political process coalesced into right-wing Republicanism, and the next sixty years of American history is, in part, the story of their attempt to regain power, reinstitute Lassiez-faire policies, and dismantle the New Deal.1 I would like to suggest that the forces behind the assassination of President Kennedy were born in the furies which the Great Depression unleashed between these competing sectors of American political and economic life. I believe that in 1934 there was a foreshadowing of the JFK assassination. A conspiracy was uncovered in which right-wing elements of big business, namely the DuPont family and the Morgan banking interests, planned to finance and arm a veteran’s army to march on the White House and hold President Roosevelt captive.2 The conspiracy was reported by two- time Congressional Medal of Honor winner Marine Corps Major General Smedley Darlington Butler. Although the House Committee to Investigate Un-American Activities found his allegations credible, it failed to call major conspirators to testify, and the Committee deleted crucial testimony from its final report to the public. The press relegated the story to the back pages, and discredited those, including Major Butler, who tried to alert the public to the threat against republican government. No prosecutions were forthcoming from the Justice Department, in part because the main witness who would have substantiated Butler’s claims died suddenly from pneumonia at the age of 37. In short, there was a cover-up, maybe worse. Background Franklin Delano Roosevelt was elected in November 1932, three years into the Great Depression. National income was cut by more than half and five thousand banks had crashed, wiping out nine million savings accounts. More than fifteen million workers had lost their jobs. Not only was the question "What to do" being asked, but also "Who was to blame?" A Senate investigation into the machinations of Wall Street found that investors organized raids on the stock market, pulled out all their money hoping for prices to drop, and then bought low. Insiders were also afforded the opportunity to buy securities at prices much lower than the public. Financiers were lining their pockets with fantastic bonuses, and the committee found that "...the Stock Exchange was no more than a glorified gambling casino where the odds were weighted heavily against the eager outsiders."3 The severity and persistence of the Depression raised questions in the minds of the public about business leaders and capitalism itself. Underlying this questioning was the perennial debate over what role the government should take. Although Roosevelt wanted and needed the support of business, he also knew that the government must advance beyond representing the "single interest" that is big business and represent the needs of all segments of society. Such interests as farm groups and unions were to be given a voice in the government which had been previously denied them so that, as Senator Robert Wagner argued, "...the strong may not take advantage of the weak."4 Roosevelt himself felt that reforms that from time to time would impose policies distasteful to representatives of industry would be essential to lasting relief. While asking Congress to pass the Securities Act to regulate the Stock Exchange, Roosevelt stated, In the working out of a great national program seeking the primary good of the greater number, it is true that the toes of some people are being stepped on, and are going to be stepped on. But these toes belong to the comparative few who seek to retain or to gain position or riches or both by some short cut that is harmful to the greater good. Roosevelt did step on some toes. Roosevelt and the New Dealers were determined to eliminate the abuses of the financial system by subjecting it to federal regulation. Threatened by prospects of government regulation and taxation of individual wealth as well as corporate profits to fund relief programs and public works, industrialists took up the offensive. In 1934, two events aroused the wrath of the DuPonts and the Morgans. First, there were rumors that pressure was being exerted to open a Senate investigation into the munitions industry’s alleged role in America’s entry into WWI. The DuPonts were the leading armament producers in the world. They had already earned the title "Merchants of Death" because of the huge profits they made during the Civil War and the War of 1812. The DuPonts always tried to bury this fact in carefully crafted public relations euphemisms such as" DuPont - Better things for better living through chemistry." The DuPonts have always remained reticent about revealing the extent of their wealth, corporate holdings and armament productions. Certainly, a Senate investigation revealing their irregular dealings and huge profits during a time of national hardship, when many Americans were already questioning whether financiers really had the national interest at heart, could be disastrous for industrialists like the DuPonts. It could only lead to more popular support for the reforms Roosevelt was trying to implement.5 The second event that alarmed the big financiers, striking directly at the heart of the Morgan empire, was the passage of the Securities Acts of 1933 and 1934. This legislation proposed federal supervision of securities traded over state boundaries, and established the Securities and Exchange Commission empowered to enforce the regulations. Some of the abuses that the commission was to address were insider trading, bear raiding, and manipulating stocks to create the illusion of activity. One of the most alarming propositions was that companies selling stocks would have to reveal their financial histories to the public. In choosing a chairman for the Securities and Exchange Commission, Roosevelt needed a man who would strike a balance between the more radical, anti-business theorists of the New Deal, and the entrenched business interests whose support Roosevelt needed. Confiding to his advisors with the cavalier phrase "I’ll set a thief to catch a thief," Roosevelt appointed Joseph P. Kennedy as the first Chairman of the Securities and Exchange Commission.6 With this appointment Kennedy became responsible for drafting legislation which would regulate the business dealings of his former Wall Street colleagues. Furthermore, an alliance between the Roosevelt and Kennedy families was indelibly printed upon the minds of reactionary elements of business. I will return to this Kennedy-Roosevelt alliance and its repercussions later. The Coup During this same period, retired Marine Corps General Smedley Darlington Butler was approached by two members of the American Legion: Bill Doyle, and Gerald C. MacGuire (who was also a bonds salesman for a Morgan concern). The American Legion, ostensibly a veterans’ benevolent society, was founded by wealthy industrialists who used the Legionnaires as strike busters.7 The men invited Butler to address an upcoming Legion convention. They were dissatisfied with how the organization was being run, and hoped Butler’s influence would help them oust the present leadership. Butler politely listened, but refused, saying he did not wish to get involved in Legion politics. A short time thereafter the two men called upon Butler again. They seemingly disregarded Butler’s former refusal to attend the convention. They had a new plan. Butler would now bring a few hundred Legionnaires with him to the convention and scatter them throughout the audience. MacGuire assured Butler that the Legionnaires’ expenses would be covered as he showed him a bank book with deposits totaling over $100,000. When Butler appeared in the spectator gallery, the Legionnaires were to leap to their feet demanding he speak. MacGuire then produced the prepared speech he wanted Butler to give. The speech urged the convention to adopt a resolution calling for Roosevelt to return to the Gold Standard. Up until that time the dollar was backed by gold, meaning the US Treasury could only print as much money as there was gold reserve backing that money in Fort Knox. Going off the Gold standard allowed for more money to printed and pumped into the economy, partially to fund the proposed relief programs. Those who had a lot of money were opposed to going off the Gold standard for fear their money would have less value. So Butler was to convince the veterans, who were due a second bonus payment, that if they were not paid in money backed by gold, their bonuses would be compromised. Butler became suspicious. Who was trying to use him in this way? Where did MacGuire get all this money and for whom was he really working? And wasn’t the Gold Standard argument merely a means to alienate the veterans from Roosevelt by convincing them his policies would render their money worthless?8 Feigning interest in order to learn more about the purpose of the intrigue, and who was behind it, Butler said he might be interested, but he needed to know the plan was foolproof. Butler also said he wanted to talk to the top man, and not intermediaries. After some hesitation MacGuire revealed that Singer Sewing Machine heir Robert Sterling Clark was instrumental, as was Grayson M.P. Murphy. Murphy ran a Wall Street brokerage house, was a director of Guaranty Trust, a Morgan Bank, and also had interests in Anaconda Copper, Bethlehem Steel and Goodyear Tire.9 Other meetings followed. At one point MacGuire took out his wallet and threw down 18 $1000 bills saying he wanted to pay Butler for his help. Robert Sterling Clark himself paid Butler a visit, and hinted at such things as Butler’s mortgage payments. Finally MacGuire revealed their real plans: he wanted Butler to lead an insurrection army to march on the White House, "force" Roosevelt to resign, and install a Secretary of General Affairs to take Roosevelt’s place and reinstate the Gold Standard. Why would the plotters choose Butler? Butler, a two-time congressional medal of honor winner was one of the few well-loved military men. Only Butler could induce veterans, who would ordinarily have nothing to do with insurrection to follow him. The plotters felt they could seduce Butler with money and power. They misjudged him. Butler was an extraordinary man. Of Quaker stock, he served for thirty years in the Marines and enjoyed great popularity among the men he commanded as well as among the rank and file veterans. His military experiences in China, Nicaragua, Haiti, and Cuba eventually led him to suspect that these interventions were nothing more than scouting expeditions for big business. He felt that the lives of American boys were being sacrificed for the profits of United Fruit. In retirement Butler become very outspoken about this. He went on speaking engagements, and even penned a book entitled "War is a Racket".10 He was also one of the few military men to support the Bonus Marchers. These veterans had camped outside the capital demanding the money owed them, only to have their tents burned down by the likes of Generals MacArthur, Patton, and Eisenhower acting on orders from President Hoover. Butler was still unconvinced that there was a real plot; however, MacGuire made some starling predictions. He predicted there would be an announcement in the press about the formation of a new organization, the American Liberty League. The American Liberty League, funded by the DuPonts, was to complement the coup by functioning as a propaganda organ to discredit the overthrown Roosevelt in the public’s mind (a technique which should be all too familiar to students of the character postmortem on JFK).11 MacGuire was also able to predict, well in advance, important personnel changes in the White House. This apparent forecasting ability indicated to Butler that conspirators were even within the New Deal administration. Butler, now taking the conspiracy seriously, approached some of his friends in Congress and the media. The House Committee to Investigate Un-American Activities, chaired by Congressmen John McCormack and Samuel Dickerstein, agreed to hear Butler’s testimony.12