Hi all, this is part one of a two-parter. The Podcast episodes typically run between 20 – 25 minutes. I expect this one will take over an hour to tell.
This week’s tale opens on a ‘Hooverville’ – a makeshift village of the dispossessed; all in attendance hit hard by the Great Depression of 1929. The location? A swampy, muddy field in Anacostia Flats – near downtown Washington DC. It is July 17th 1932. A shantytown on a mission, this camp holds ten thousand American military veterans. They’ve gathered together, under the leadership of one Walter Waters – a former sergeant from Portland, Oregon – to demand the Government keep a promise made to them years ago. Hailing from all across the USA, many have hiked the length or breadth of the country to be here. Others have freight-hopped boxcars, like characters in a Steinbeck novel. They’re mostly veterans of the First World War. All are members of the Bonus Army.
As fighting men, they were promised a sizeable bonus for their part in World War One – but when the bill came due in 1924, the Government deferred payment. Though the Great Depression was a few years off, the boom which preceded it was still a year away and money was tight. The veterans would have to make do with promissory notes for the amount agreed; plus compound interest – to be paid in 1945. This seemed reasonable to many at the time; but now, with one in four working Americans jobless, millions homeless – close to half the nation’s banks insolvent – that money was needed more than ever. The men of the bonus army were tough and resourceful, but were struggling – often in jobs hit hard and early by the depression. Besides, many felt they had done their bit, and then some. They made the world safe for democracy and capitalism, and in their time of greatest need, was it really too much for democracy and capitalism to come through for them, and hand over the two billion dollars collectively owed them?
Some politicians listened. A bill was introduced, and passed through Congress to grant the men an early payout. But then President Herbert Hoover threatened if it went through, he would use his powers to veto it immediately. He didn’t need to – the Senate did the dirty work for him, killing the proposal stone dead. The Bonus Army were tired, dejected, and much in need of an inspirational leader to revive their spirits. On the podium on July 17th, one such leader; Major General Smedley Butler.
Butler was a retired Marine Major General with one of the most impressive records in Marine history – more on that later. A soldier’s general, he spent much of his career fighting alongside the men – in 120 battles – mostly south of the border and throughout Asia. He was well known as a guy who always had the soldiers’ backs. A guy who would never ask another to do something he wasn’t willing to do himself. On retirement, Butler joined the public speaking circuits, as a vocal advocate for soldiers’ rights. The Bonus Army asked him, as an ally, if he could come to Anacostia Flats and speak with the men. He gladly obliged.
Onstage, a worked up Butler addressed the men in his gruff, booming voice that belied his small, wiry frame.
“It makes me so damn mad a whole lot of people speak of you as tramps. By God they didn’t speak of you as tramps in 1917 and 18.” He exclaimed, in response to media commentary the men were an unkempt rabble. “You are the best-behaved group of men in this country today. I consider it an honour to be asked to speak to you”.
Furthermore, he called on the men to remain peaceful – the people will be on their side so long as they kept to the rules.
“Don’t make any mistake about it, you’ve got the sympathy of the American people – Now don’t you lose it!”
He called on the Bonus army to keep it together, and continue their fight for the bonus. If they lost this battle don’t despair – they hadn’t lost the war. Recalling a recent personal experience of defeat “I ran for the Senate on a bonus ticket, and got the hell beat out of me”
Many of these men were then considering a free train ride home, a government bribe aimed at thinning out the crowd. The army would then swoop in and break up the camps. No doubt Butler knew this. knowing many who had a home to return to would take that ticket, he advised –
“When you get home, go to the polls in November and lick the hell out of those who are against you. You know who they are… Now go to it!”
Two weeks’ later, the army did break up the camps, sent in by General Douglas MacArthur. There was an ugly, messy, tear gas filled stoush. Cavalry officers, men with bayonets, even six tanks and machine guns were rolled out to move the unarmed protesters – many of whom had nowhere else to go at this point. Two protesters from the Bonus Army were killed. The Bonus Army continued their fight however – and in November 1932 the voting public – sick and tired of President Hoover’s callous, ineffectual management of the depression – emphatically voted for the Democrat, Franklin Delano Roosevelt. In his first 100 days, FDR brought in a raft of policies to lift the economy out of the doldrums. Given multi-letter acronyms, some referred to his plans as ‘Alphabet Soup’. One policy – and this is very pertinent to our tale – was to uncouple paper money from the Gold Standard.
Under the gold standard all money must be backed by an equivalent sum in gold. By dumping this, moving the economy towards ‘fiat money’ – money was realigned more as a current reflection of the expected future value of the wider economy. Politicians could much more easily speculate on a brighter future under Fiat money. The term a riff of the Latin ‘Fiat Lux’, ‘Let there be light’, one could proclaim “let there be money”, and treasury could print the money needed to pay workers to literally rebuild the nation. Amid the wide-ranging public works, vast infrastructure projects kicked off – many of which paid huge future dividends. Projects like freeways, schools, city halls, wastewater plants – even the Hoover Dam – started prior to Roosevelt’s New Deal was completed on New Deal funding – owed much to FDR’s plans. People were working, paying taxes and spending. This created virtuous circles. The USA was on it’s way towards resuscitating the nation’s economy by the eve of World War Two.
A move from the gold standard was in no small part also meant to put the brakes on rich Americans or investors in the American economy, exchanging all their paper money for gold – as is often the case in times of recession – then moving that wealth offshore for the foreseeable future.
The downside to this plan? – it drove inflation, lowering the value of each solitary dollar. This was also a threat to anyone still wealthy enough to have millions of dollars in cash stored away. How would America’s wealthiest citizens react to this? We’ll come to that, but for now, back to Smedley Butler.
On the morning of July 1st 1933, General Butler took a phone call from an acquaintance at the American Legion – a large servicemen’s organisation that, unlike the Bonus Army, regularly took the businessman’s side. Legionnaires were often used as strike breakers in industrial actions. The call was to advise a couple of war veterans from the Legion were on their way to meet with him. Five hours later a chauffeur driven limousine pulled up outside. Two well dressed men got out. These men were Bill Doyle, commander of the Massachusetts division, and Gerald MacGuire, former commander of the Connecticut chapter and, by day, bond broker on Wall Street. Butler was wary of the Legionnaires’, but always happy to give any old soldier a hearing. He warmly welcomed the men in.
After small talk on adventures and war wounds, the visitors got to their point. They represented a shadowy group of veterans who were tired of the Legion’s leadership. They hoped to roll them in the upcoming convention in Chicago, and needed Butler’s help. They asked Smedley to take to the stage at the convention, and call for the ouster of the ‘royal family’ – as they referred to the leadership.
Though no fan of the ‘royal family’, Butler had no interest whatsoever in getting involved. It was none of his business who ran the legion.
The men countered – would he at least attend as an honoured guest? Well, not an honoured guest exactly… They could sneak him in as the delegate from Hawaii? Again he demurred. The two men returned to their limo and left.
This would be far from the last time they would meet – MacGuire especially. A month later they returned to the Butler household with a new plan. Butler could gather three hundred legionnaire friends of his, then travel to Chicago by train. The men would holler for Butler till the Royal Family had to let him speak. The men had a written speech for the general to deliver. Butler pointed out most of his friends in the legion didn’t have the money for a ticket to Chicago. The men replied they had sufficient funds to pay for that, showing Butler proof of a $100,000 operational budget.
Butler was a man with a ferocious temper; he was a hair’s breadth from letting rip at the men.
But he was also curious as to their endgame. Playing it cool he told the men he’d think about it. He could be interested in their scheme, but needed to know much more before he could commit himself.
Once Doyle and MacGuire left, Butler read through the speech. It demanded the legion lobby government for a return to the Gold Standard. Their reasoning? bonus payments should be backed by something far more tangible than fiat money.
So… Who was Smedley Butler?
Smedley Darlington Butler was born on July 30th, 1881 to a distinguished, largely pacifist Quaker family – Largely, as both grandfathers fought for the Union army in the American Civil War. His family were previously active in the fight against slavery in the underground railway network – helping runaway slaves to freedom – and when war broke out, they felt they too must play their part. They were politically active and influential – his lineage including Congressmen. His own father, Thomas Butler, was one such politician.
As a child, Smedley dreamt of becoming a soldier. Aged 12 he joined up with the Boy’s Brigade – giving him at least some sense of military life. The Battleship USS Maine exploding in Havana Harbour on February 15th 1898 gave Smedley the reason he needed to sign up. Prior to the Maine incident, a war of independence between Cuba and their colonisers, Spain, had been in full swing for several years. The Maine was stationed in the harbour to protect American business interests in Cuba. A boiler had malfunctioned, causing a catastrophic explosion, but speculation ran rife the Spanish had blown the ship up. A large number of Americans were livid with Spain and called for a declaration of war. The politicians soon obliged. Many young men, including a sixteen year old Smedley Butler, enrolled in the armed forces to fight the Spanish. Butler signed on as a Marine.
Cutting his teeth in Cuba, he returned home in 1899. Promoted to lieutenant, he was then deployed to the Phillipines, where he led a battalion. This war was a continuation of the war with Spain, taking place on another of their colonies. Showing the kind of derring do that later became his trademark – he led an assault on the heavily armed stronghold of Noca-leta – battling through a rain of heavy gunfire to capture the enemy base. In downtime he had a massive tattoo of the Marine corps emblem tattooed onto his chest, which made him deathly ill for a time, as the tattooist had used a dirty needle.
From the Philippines, Butler fought alongside a multi-national peacekeeping force against The Boxer Rebellion in China. America, of course, had business interests in China that needed protection – a constant of Butler’s service. One of his first missions was to protect an American compound near Tientsin against fifty thousand Boxers. He was in charge of a considerably smaller force. At one point in the conflict he risked his own life by weaving through enemy gunfire to rescue an injured Marine private. Remarkably, the Marines broke the siege, sending the Boxers running. He was shot in the thigh by a stray bullet, while taking out the high-walled Boxer compound at Tientsin, but fought through the injury. While healing from the battle, he was promoted to captain. He went on to fight at Peking, his leg injury not yet fully healed.
In 1902 Butler was in Panama. In 1903 a revolution erupted in Honduras, and Butler was sent in to protect America’s banana exporters. He continued to serve with distinction, and in 1908 was promoted to Major. 1909 saw him stationed in Panama, then Nicaragua, both hot spots with American business interests. In the latter mission, he protected a highly unpopular government – who had seized power – but who also had the virtue of being friendly to American businesses.
One tale from Nicaragua – in 1912, Major Butler was sent in to liberate a captured railway line with a crew of 100 men. The train was being guarded by a much larger force. Rather than risk being outgunned, Butler turned to asymmetrical warfare – putting his own life on the line. walking towards the rebel forces with two cloth sacks in hand, he demanded the rebels hand the train over to him. He told the rebels if anyone tried to stop him taking the train, he was carrying two bags full of dynamite. Get in his way they’d all be blown to kingdom come. His bluff worked.
He briefly rose to governor of the district of Granada In Nicaragua. This mission sat particularly uncomfortably with Butler. He knew this time, in no uncertain terms, the majority of the population detested the conservative government of Adolfo Diaz. He was becoming increasingly aware of his role – in his own words “A high class muscle man for Big Business… a racketeer, a gangster for Capitalism”. Later that year he was ordered to, and successfully carried through, the rigging of a governmental election in Diaz’ favour.
In 1914, Butler was sent to Mexico. He served in the midst of their rebellion both as spy, carrying out reconnaissance work, and a soldier. By 1915 he was stationed in Haiti.
Germany had economic interests in the island nation – at an unsettled time in which four regimes ruled that year alone. Washington DC worried if a revolution broke out, Germany would swoop in and establish a naval base. The marines were sent in to protect the American sphere of interest and restore order. It was coincidental American business interests – banks particularly – had money tied up in the nation? Butler was sent after the Cacos – precursors of Papa Doc Duvalier’s Tontons Macoute. At times the marines were outnumbered 20 to one, but Butler’s marines prevailed, battling through fields of sugar cane and taking out compounds in the middle of the night. Butler was put in charge of the Haitian police force for a time – a role he reprised in the 1920s, as the police chief of Philadelphia. By 1916, now Lieutenant Colonel Butler, he became increasingly worried of his role in other nation’s affairs – to quote Butler
“War is a racket…in which the profits are reckoned in dollars, and the losses in lives”.
When the USA entered the First World War, Butler begged to be sent. After much lobbying he was sent, but to Camp Pontanezen, a French camp through which most American soldiers came and went. Promoted to General, for once he was not in a combat role – but he did have responsibility for some strategically important, and at the time poorly maintained real estate. Butler soon had the camp orderly, and won the respect of many of the soldiers passing through the camp. The First World War seemed futile to the seasoned warrior. He later wrote “what on earth (are) these American boys …doing getting wounded and killed and buried in France?”.
Smedley Butler served for some time postwar. In 1927 he was stationed in China, as that nation fell apart, amid battling warlords. He was sent into Shanghai, to protect the interests of the Standard Oil Corporation. All up he saw action in eleven countries – in excess of 120 battles or armed conflicts. Back home by 1930, people were starting to question just what the marines had been doing in some of those occupations in Central and South America. Butler, near retirement, shed light on some of those activities – the 1912 interference in a Honduran election top of his list. The most awarded soldier in American history in his own time, he had quite a reputation to preserve. He was increasingly willing to tarnish that reputation, if it meant keeping future marines safe from being sent into conflict for the sole benefit of big business. By the early 1930s, Smedley Butler was a popular advocate of soldiers rights and a notable anti-war campaigner.
In 1931, he was passed over for the top position in the Marine Corps, then slipped up at a speaking engagement. Speaking on the need to still keep a defence force, for protection against foreign invaders – he shared a story of a friend’s armoured car ride with Benito Mussolini. The two men flew through the countryside at a constant seventy miles an hour. The pace was constant as they shot through any towns or villages in their way. Coming to one settlement Mussolini’s car ran straight over a young child without even attempting to brake, much less stop to check on the victim. Horrified, Butler’s friend screamed, only to be lectured by Mussolini. The child “was only one life, and the affairs of the state could not be stopped by one life”. Smedley Butler wanted a far less interventionist military – but as long as monsters like Mussolini existed, the USA had to keep a defence force. The speech caused an international incident. Italy demanded Butler be court-martialled. He was arrested and charged with conduct unbecoming his position. The public were furious over Butler’s arrest – and the wave of anti-Mussolini sentiment was so palpable, Il Duce asked for the charges against Butler to be dropped. Butler went free.
Mussolini’s request didn’t kill the story as he hoped. Butler’s friend, the journalist Cornelius Vanderbilt, confirmed the tale, adding Mussolini patted his knee immediately after, stating “Never look back, Mr Vanderbilt – Always look ahead in life”.
As the Great Depression bit, citizen Butler – a lifelong Republican – gave his support to the Democrat, Roosevelt. This was not just at the ballot box, but through his public speaking. In one speech he proclaimed himself “a member of the Hoover for Ex-President league” Whether Butler would have done this unprompted is mere speculation – the fact is the ‘Roosevelt Republican Organisation’, a political pressure group something akin to The Lincoln Project in Trump’s time, approached him for support. He was happy to oblige them.
We really should rejoin Butler in 1933, as he tours the nation giving public lectures and speeches.
The Wooing Continues…
As an influential man; a man with the ear of an army’s worth of dispossessed soldiers; a man who recently took a public stand against a sitting president – Smedley Butler appeared worthy of pursuit to Gerald MacGuire and his masters. As we’ll discuss in part two, they had a particular interest in winning over an army’s worth of soldiers. Who else could they call on for that? Douglas MacArthur? He’d ordered the attack on the Bonus Army, so was persona non grata at the time. Throughout the remainder of 1933, MacGuire pursued Butler at every opportunity.
In September, while Butler was in Newark, New Jersey on a speaking engagement, MacGuire dropped by his hotel room. When Butler asked him was there really any real money behind this shadowy organisation – MacGuire threw $18,000 in notes on the bed. This was just loose change, but could get him and a gang of legionnaires to Chicago. Butler demanded he pick the money back up immediately – was he trying to get him arrested? The moment he tried to do anything with any of those thousand dollar notes, he’d leave a traceable footprint tying him to the scheme. MacGuire countered he could arrange smaller denominations.
Moving forwards, Butler advised him, he would only speak to the backers directly. Arrangements were made for a face to face meeting in Chicago with Robert Sterling Clark, a millionaire banker and heir of a founder of the Singer sewing machine company.
Butler knew Clark, as it happened. As a young man Clark was a Marine Lieutenant who fought alongside Butler in the Boxer campaign. The two men spoke on the phone, then met face to face, at Butler’s house. In their talk, Clark let slip the writer behind the gold standard speech was none other than John W. Davis. Davis had been a Solicitor General for Democratic President Woodrow Wilson from 1913 to 1918. After a brief stint as Ambassador to Britain, he ran as the Democratic nominee for President in1924, losing to the Republican Calvin Coolidge. As a private citizen, Davis returned to the law – defending big business interests. Though now remembered – if at all – as the guy who argued against school desegregation in the landmark Brown v Board of Education case, he was then the head counsel of the mogul J.P. Morgan.
As they talked in his study, Butler challenged Clark head on – this speech had very little to do with soldiers, still unpaid, getting their bonus. It felt like another racket, another big business plot. What was his interest in all this? Clark briefly hesitated, took in a deep breath, then honestly answered. He was a wealthy man, with a $30 million fortune to think about. The movement away from the Gold Standard was driving up inflation, which would massively devalue of his fortune. Clark was convinced Roosevelt would beggar him, and was willing to spend half of his fortune to force the country back onto the Gold Standard.
But why would Roosevelt give in to pressure if a group of old soldiers started making some noise over this? Clark answered Roosevelt was a blue blood like him – He had class loyalties to people like him, and would bow to pressure given half a chance. When he did, the blue bloods would descend to offer their support, and all would be forgiven.
Butler told Clark he wouldn’t let veterans be used to undermine democracy. He wanted no part in this scheme. Clark countered. Butler was working because he had to – all his years of service may have brought a wealth of experience, but no great financial fortune. Butler had a large mortgage still to pay. If Smedley was willing to do this, the cabal would pay his mortgage for him.
Butler was enraged – and though he knew he should stick to the plan – just keep on collecting evidence on these people – he lost it with Clark, hollering at him to go out into the hallway. Go look at all the mementos of his long career – all on display out there. They were rewards for loyalty to his nation, and to his people. He would not risk that reputation for anything. Buddy you picked the wrong guy.
Minutes later, Clark sheepishly returned, and asked if he could use Butler’s phone. He made a call to MacGuire to advise him go with plan B. In Chicago the Royal Family would be inundated with telegrams demanding they back a return to the gold standard. He then left.
Days later, Butler read in the papers – they indeed had been inundated with such telegrams. He may have been excused if he thought this was the last he’d hear of the shadowy cabal… but what kind of tale would that make?
Sorry all, this will have to be a two-parter. Readers, podcast listeners – my own slowly growing ‘bonus army’ please return in two week’s time and we’ll conclude this tale.