A Plot to Overthrow FDR?

In my previous posting, "What are the Executive Powers of the President of the United States?" I used the actions of President Franklin Roosevelt during the "First 100 Days" of his "New Deal" as an example of how a president could force an agenda onto the American public without their consent. Today I'd like to tell you about an incident that is rarely, if ever, mentioned in historical accounts of the New Deal: an alleged plot to replace the Roosevelt Administration with a fascist dictatorship.

On the afternoon of November 20, 1934 readers of the New York Post were shocked by a page one headline:

$3,000,000 Bid for Fascist Army Bared

"(New York City) - Major General Smedley D. Butler revealed today that he has been asked by a group of wealthy New York brokers to lead a Fascist movement to set up a dictatorship in the United States.

"General Butler, ranking major general of the Marine Corps until his retirement three years ago, told his story today at a secret session of the Congressional Committee on Un-American Activities."

In the remainder of the story, Butler related to reporter Paul Comly French how he (Butler) had been approached by Gerald MacGuire, an employee of a New York-based municipal bond trading firm, in an attempt to recruit the general to lead a "spontaneous movement" of veterans that would essentially force Roosevelt to accept Butler as "co-president." According to Butler, MacGuire had told him that the financial backing for this planned coup de etat was being provided by a group of Wall Street financiers who were furious over Roosevelt's economic policies; particularly the decision to abandon gold as the basis of support for the American dollar

Roosevelt issued Executive Order 6102 ("Forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates") on April 5, 1933. It required all persons to deliver on or before May 1, 1933 all gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve. Violation of Executive Order 6102 was potentially punishable by fine up to $10,000 and/or ten years in prison. The reasoning behind this action requires a bit of explanation.

Under the Gold Standard Act of 1900 paper money could be exchanged for gold upon demand according to a fixed ratio of gold for dollars. This meant that the amount of money in circulation could never exceed the total fixed value of the nation's gold reserves.

One of the critical components of Roosevelt's New Deal were programs that would place substantial numbers of the unemployed on the government payroll as workers on various federally-funded projects. Since these newly-employed workers would have to be paid, the simplest solution would be to print more money. The Gold Standard Act, however, limited the extent to which the New Deal could "create" money. The simplest solution to this dilemma? Get rid of the Gold Standard Act!

As you can imagine, this did not sit well with the banking and financial communities. This dissatisfaction with Roosevelt's policies establishes the motive behind the plot against FDR.

In his testimony before the House Special Committee on Un-American Activities, Butler stated that he had been approached several times by MacGuire and others claiming to represent some of the richest, most financially well-connected men in the country. During those meetings, he contended, the details of a plot to replace the Roosevelt Administration with a regime modeled on those then-currently ruling in Italy and Germany. While all those who Butler claimed discussed the plot with him testified before the Committee, each and every one denied that a plot of any stripe was ever mentioned.

After hearing testimony from a variety of sources the Committee released its report on February 15, 1935:

"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 government 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.

"This committee received evidence from Maj. Gen Smedley D. Butler (retired), twice decorated by the Congress of the United States. He testified before the committee as to conversations with one Gerald C. MacGuire in which the latter is alleged to have suggested the formation of a fascist army under the leadership of General Butler.

"MacGuire denied these allegations under oath, but your committee 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. This, however, was corroborated in the correspondence of MacGuire with his principal, Robert Sterling Clark, of New York City, while MacGuire was abroad studying the various forms of veterans' organizations of Fascist character."

No prosecutions were initiated as a result of the Committee's findings. This, quite naturally, resulted in cries of "cover-up" and "conspiracy." The reasons for the failure to bring anyone to trial in the matter are actually quite simple.

In order to convict an individual on a charge of treason Article III Section 3 of the Constitution mandates that

"Treason against the United States, shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort. No person shall be convicted of treason unless on the testimony of two witnesses to the same overt act, or on confession in open court[emphasis added]."

It has always been the opinion of the court that the right of free speech trumps the government's power to charge an individual with treason simply because that individual "talked treason." There must be an overt act committed in order to indict.

In the documented history of the plot against FDR there is nothing, other than unsubstantiated hearsay, to corroborate an indictment.

To paraphrase one of the most profound statements to have been made in the field of historical research, "Evidence is not proof." By combining this adage with the fundamental legal doctrine "innocent until proven guilty," there was simply insufficient evidence to establish legal proof of the existence of the alleged 1933-1934 to overthrow FDR.