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The American Liberty League vs. Gen. Smedley Butler

Wall Street’s Failed 1934 Coup

by MICHAEL DONNELLY

“In the last few weeks of the committee’s official life it received evidence showing that certain persons had made an attempt to establish a fascist organization in this country…There is no question that these attempts were discussed, were planned, and might have been placed in execution when and if the financial backers deemed it expedient.”

– Report of the McCormack-Dickstein Committee

A Patriot, not the Traitor they wanted

You know the coup plot they teach all young Americans about in 10th Grade History class? Oh yeah…

In November 1934, famed double Medal of Honor winner Marine Gen. Smedley Butler gave secret testimony before the McCormack-Dickstein committee – a precursor to the House Committee on Un-American Activities. In it, Butler told of a plot headed by a group of wealthy businessmen (The American Liberty League) to establish a fascist dictatorship in the United States, complete with concentration camps for “Jews and other undesirables.”

Show Me the Money

Butler had been approached by Gerald P. MacGuire of Wall Street’s Grayson M-P Murphy & Co. MacGuire claimed they would assemble an army of 500,000 mostly unemployed WWI veterans and march on DC.  The plutocrats wanted Butler to lead the coup, thinking that, like the Bolsheviks, taking one major city (DC as Petrograd) would lead to the fall of the government.  They promised to put up $3 million as starters and dangled a future $300 million as bait. Butler went along with the plot until he could learn the identities of all the schemers. Not a one of them was ever called to testify or was charged with Treason. Virtually all of them were founding members of the Council on Foreign Relations (CFR).

The League was headed by the DuPont and J.P Morgan cartels and had major support from Andrew Mellon Associates, Pew (Sun Oil), Rockefeller Associates, E.F. Hutton Associates, U.S. Steel, General Motors, Chase, Standard Oil and Goodyear Tires.

Money was funneled thru the Sen. Prescott Bush-led Union Banking Corporation (yes, those Bushes) and the Prescott Bush-led Brown Brothers Harriman (yes, that Harriman) to the League (and to Hitler, but that’s another story). The plotters bragged about Bush’s Hitler connections and even claimed that Germany had promised Bush that it would provide materiel for the coup. This claim was entirely believable: a year earlier, Chevrolet president William S. Knudsen (who himself had donated $10,000 to the League) went to Germany and met with Nazi leaders and declared upon his return that Hitler’s Germany was “the miracle of the twentieth century.” At the time, GM’s wholly-owned Adam-Opal Co. had already begun producing the Nazi’s tanks, trucks and bomber engines. James D. Mooney, GM’s vice-president for foreign operations was joined by Henry Ford and IBM chief Tom Watson in receiving the Grand Cross of the German Eagle from Hitler for their considerable efforts on behalf of the Third Reich.

The Whitewash

While the Committee found that Gen. Butler was telling the truth, discrediting such a stalwart was problematic for the plotters. Quickly, the corporate press weighed in and sought to raise doubts about the war hero, settling on branding him naive. The discredit Knudsen meme was: “it was all idle cocktail party chatter.” This red herring was trumpeted under the Associated Press headline “The Cocktail Putsch.” New York Mayor Fiorello LaGuardia dismissed the plot as “someone at the party had suggested the idea to the ex-Marine as a joke.”

From 1934 through 1936, the League got thirty-five pro-League front page stories in the New York Times. TIME ridiculed Butler in a Dec. 3, 1934 cover story, even though Butler’s story was corroborated by VFW head James E. Van Zandt, who also said he was approached to lead the coup.  Though, TIME did put a footnote on an early 1935 article stating; “Also last week the House Committee on Un-American Activities purported to report that a two-month investigation had convinced it that General Butler’s story of a fascist march on Washington was alarmingly true.”

Solely, the Scripps-Howard papers backed FDR and presented the truth.

Whatever Happened to the “Economic Royalists?”

President Franklin D. Roosevelt labeled the plotters “economic royalists” and survived their, thankfully, ham-handed efforts. Jan. 3, 1936, FDR blasted the American Liberty League before a joint session of Congress where he announced the ban on military exports to Italy.

“Our resplendent economic aristocracy does not want to return to that individualism of which they prate, even thought the advantages under that system went to the ruthless and the strong. They realize that in thirty-four months we have built up new instruments of public power. In the hands of a people’s government this power is wholesome and proper. But, in the hands of political, puppets of an economic aristocracy, such power would provide shackles for the liberties of the people. Give them their way and they will take the course of every aristocracy of the past – power for themselves, enslavement for the public.”

FDR was never able to bring any of the plotters to justice. He wasn’t even able to rein in Prescott Bush until 1942 when the government seized the assets of Bush’s pro-Nazi enterprises – garnering Bush a $1.5 million windfall once the assets were returned in 1951! It’s obvious that the fascist mindset of the “economic royalists” has never gone away and is the driving force behind the modern-day ascent (and the ultimate demise of) of the American Empire, the attacks on worker’s rights and pensions, the attacks on our minimal safety nets, etc.

In its day, the League promoted itself as a bastion of all concerned about “burdensome taxes imposed upon industry for unemployment insurance and old age pension.” The League sought to “combat radicalism” and to “teach respect for the rights of persons and property, and generally to foster free private enterprise.”

J.P. Morgan and Chase are now one. The fortunes of the Mellon, Rockefeller, DuPont, Pitcairn (Pittsburgh Plate Glass) and Pew families have sky-rocketed. Pew and Rockefeller have morphed into a cabal of foundations that fund/neuter progressive grass roots efforts.

1936’s Occupy Movement

William S. Knudsen was the sole inside plotter who turned against the plot, renounced Hitler and is credited with pushing GM into a settlement of the Flint Sit-Down Strike . Underpaid, overworked workers took over and stayed in their plants, starting with Flint’s Fisher Body #3 and fought off attacks by GM-controlled police and hired goons. FDR and Michigan Gov. Frank Murphy called out the National Guard, not to roust the strikers, but to form a cordon between the strikers and the goons. Murphy’s father and grandfather had been hung by the British as Irish revolutionaries and many of the strikers were ethnic Irish laborers, so he as very sympathetic.

After 44 days, Knudsen, now GM vice-president, declared that “Collective Bargaining’s time has come” With his ally, two-time Flint Mayor, life-long civic booster/philanthropist, GM’s top shareholder and fellow board member C. S. Mott assisting; GM settled, leading the way to the 40-hour work week, overtime pay, union organizing rights, pensions, etc. Mott even saw to it that health clinics were set up in the factories for the workers and their families. Coup plotter/GM President and Chairman Alfred P. Sloan, who had wanted to reclaim the plants with guns blazing stepped partly aside as GM head and Knudsen replaced him as president. GM went on to become the world’s top corporation for 40 years, the country saw the rise of a middle class and wealth disparity was at the lowest levels ever in the US.

It likely was not entirely altruistic of Knudsen, as two years later FDR put Knudsen in charge of the National Defense Advisory Commission. On his watch, some $12 billion in armament contracts were awarded to GM by the U.S. War Production Board, which also was conveniently chaired by Knudsen. At the same time, GM’s Opal factories built most of Hitler’s trucks and bomber engines. This part of the “win-win” did not lead to any charges against Knudsen or GM. Instead, it led to the Danish immigrant Knudsen becoming the first civilian commissioned as a U.S. Army General.

The Lesson

The take-away lesson to never forget is that, as Roosevelt noted, economic royalists have their own decidedly non-populist agenda.  Since they paid no price at all for their coup attempt, they have never wavered from their elitist ideology. They now simply rig elections, set up massive “security” apparatuses and roust anyone who stands up to their dominance.  (NY Mayor Michael Bloomberg, the 12th richest American worth $19.5 billion, recently bragged: “I have my own army in the NYPD, which is the seventh biggest army in the world. I have my own State Department, much to Foggy Bottom’s annoyance.”)

Union busting goes on unabated. The US has a greater percentage of its people incarcerated than any country at any time in history. And, thanks to recent Supreme Court decisions, no one can match the political clout of the financiers. The “royalists” now own the government, as well as the press and their own armies. War profiteering still tops the agenda, followed closely by attacks on workers’ wages, pensions, health care… FDR and the Sit-Downers’ hard-won safety net is under assault.

As the great populist Sen. Robert La Follette, Jr. said at the time, the American Liberty League (and all its following incarnations) cannot “be expected to defend the liberty of the masses of the American people. It speaks for the vested interests.”

The other lesson is: Occupying the Means of Production gets the goods.

MICHAEL DONNELLY lives in Salem, OR. He can be reached at pahtoo@aol.com