Part Two in a series; see Part One here.
Throughout Herbert Hoover’s reign, corporate America constantly assured the public that economic recovery lay right around the corner. “The fact that we have let nature take its course may augur well for the ultimate prosperity of the country,” Richard Whitney of the New York Stock Exchange concluded, treating the Great Depression like a passing thunderstorm. Charles Schwab of Bethlehem Steel encouraged Americans to “grin, go on working [and] stop worrying about the future” (advice which didn’t prevent Schwab from losing his own fortune). The oblivious optimism of their businessman-president steeled their resolve that, even amidst history’s greatest financial crisis, nothing need change.
Nonetheless, by 1932 the Depression grew far worse, and even the most blinkered businessmen realized that something had to to give. Thus many capitalists initially welcomed Franklin Roosevelt’s election, hoping that fresh leadership would stimulate the economy. Ed O’Neal of the American Farm Bureau Federation dubbed him “the Andrew Jackson of the twentieth century, championing the rights of the people.” An even more effusive Wall Street banker labeled Roosevelt “the greatest leader since Jesus Christ.” Others weren’t so blasphemous, disputing Roosevelt’s policies but realized that capitalism was critically ill and required strong medicine to survive.
Roosevelt saw his actions, however drastic they appeared at the time, in pragmatic terms. “My desire is to obviate revolution,” he explained, expanding through an analogy. “Say that civilization is a tree which…continually produces rot and dead wood. The radical says, cut it down. The conservative says, don’t touch it. The liberal compromises: Let’s prune, so that we lose neither the old trunk nor the new branches.” Thus Roosevelt defined liberalism as a middle ground between “the revolution of radicalism and the revolution of conservatism.”
This, initially, was the stance adopted by the Du Pont family. With roots in America dating back to colonial times, the Du Ponts oversaw a massive industrial empire with few peers. With massive, sprawling estates in Delaware and Pennsylvania, a near-ubiquitous corporate presence through plastics, paint, automobiles and military munitions. Delaware became their personal fiefdom; not only did their businesses operate from Wilmington, but their members had long served as Governors and Senators for the tiny state. One wag quipped, with little exaggeration, that “in Delaware schools, the children chirp George Washington, Abraham Lincoln and Pierre du Point in the same breath.”
Nonetheless, the current Du Ponts – brothers Irenee, Pierre and Lammont – showed relatively little interest in activism. Their family had been Republican for generations, and the Du Ponts evinced the noblesse oblige expected of early 20th Century tycoons, investing in public schools, charitable institutions and financially supporting African-American organizations. Their most visible protest involved a long-standing campaign against Prohibition, believing that the Eighteenth Amendment violated the rights of alcohol producers. For this reason, along with Hoover’s abject failure, the Du Ponts voted for Roosevelt and showed a willingness to cooperate with his Administration.
Initially, Pierre du Point co-chaired the National Labor Board of the National Recovery Administration, hoping to moderate Roosevelt’s more expansive tendencies. “I am a believer in the NRA and hopeful of some good results from it,” Pierre told a reporter, while admitting to concerns about Roosevelt’s support for labor unions. When some of his misgivings reached the press, he wrote the President an apologetic letter stressing that “my fears in regard to your surroundings are answered in the fact that I am now serving under one of your advisers.” Roosevelt thanked Du Pont for his “awfully nice letter” and momentarily diffused their dispute.
Yet Roosevelt’s alliance with corporate America quickly frayed, as the contours of the New Deal became evident. Early works of the New Deal – the creation of the Civilian Conservation Corps and the establishment of Social Security – met with muted grumbling from conservatives but little organized resistance. The National Recovery Administration’s efforts at controlling prices and ensuring fair competition, along with the Administration’s agricultural policies (which called for the destruction of excess grain and livestock) caused complaints from businessmen, shopkeepers and farmers directly impacted by them. Additionally, Gerald Nye’s Senate investigations into corporate profiteering from the First World War proved a massive embarrassment for corporate Americans, including Du Pont, who’d supplied the American military with arms, munitions and raw materials.
More controversy surrounded the Tennessee Valley Authority (TVA), a massive project to develop infrastructure, dams and electricity in undernourished Southern states. While one of Roosevelt’s most popular initiatives, it inspired staunch opposition from corporation heads and conservatives resenting government intrusion into business prerogatives. Wendell Willkie, then a corporation lawyer, earned a national reputation lambasting Roosevelt’s policy as “the most useless and unnecessary of all the alphabetical joy rides.” In early 1934 Willkie took his concerns directly to the President, only to receive a cold rebuff; afterwards, Willkie sent his wife a telegram stating, “CHARM EXAGGERATED.”
“It must have now become clear to every thinking man,” Irenee du Pont huffed, “that the so-called New Deal…is nothing more or less than the socialistic doctrine called by another name.” An effort by Pierre, always the more pragmatic brother, to reason with Roosevelt went nowhere; thus wary allies became enemies. Roosevelt’s decision to remove America from the gold standard became the final straw. Soon the family set itself on a collision course with the Government.
The Du Ponts, convinced by executive John J. Raskob that they stood “in a position to talk directly with a group that controls a larger share of industry … than any other group in the United States,” began quietly sounding out supporters. In July 1934, Irenee Du Pont chaired a meeting at the Empire State Building, along with former New York Governor Al Smith (who’d long since broken with FDR, his former protege) and others, to discuss forming an organization to formally oppose Roosevelt’s policies through political and economic action. Thus was born, amidst much fanfare, the American Liberty League.
In its early days, the League proclaimed itself non-partisan; Gerard Shouse even told reporters that it was “not inimical to the national administration” and “definitely not anti-Roosevelt.” Its public spokesmen included not only corporation heads but former politicians from both parties: Republicans Nathan Miller and James Wadsworth, respectively the former Governor and Congressman from New York, along with two failed Democratic presidential aspirants, John W. Davis and Al Smith. The New York Times offered measured praise, arguing that “if it will stand firmly for policies and principles, and eschew politics and personalities, it has a real chance to be useful.” Yet its facade of impartiality dissolved upon the thinnest examination.
Al Smith, abandoning his mantle as a progressive tribune, lambasted Roosevelt with apocalyptic Red baiting. Speaking to well-heeled Liberty Leaguers at New York’s Mayflower Hotel, Smith called his one-time protege a Communist, shouting that “it is all right with me if they want to disguise themselves as Karl Marx or Lenin…but I won’t stand for their allowing them to march under the banner of Jefferson or Jackson or Cleveland.” He added colorfully that “there can only be the clear, pure, fresh air of free America or the foul breath of Communistic Russia.” Smith’s impact was mitigated, one reporter observed, by his addressing “the largest collection of millionaires ever assembled under the same roof.”
Indeed, the organization’s claim to represent “several millions of people from all walks of life” never stood up to scrutiny. Though it claimed 125,000 members at its peak in early 1936, this rarely translated to tangible support; most Americans remained ambivalent, if not hostile towards their message. One exception was on the college campus, where the League found a strong following among conservative-minded students and academics. Even this marginal success, however, spoke to the League’s shortcomings: popular among the wealthy and educated, it failed to make a dent among mainstream Americans.
For that matter, neither Smith, who seemed more motivated by jealousy towards FDR than political principle, nor John W. Davis, a conservative Democrat in any case, disguised the organization’s blatant slant towards wealthy Republicans. At least 30 percent of the League’s funds came directly from the Du Pont family, the rest from other tycoons like John D. Rockefeller Jr. and Alfred Sloan of General Motors, plutocrats who could hardly proclaim themselves tribunes of the people. Like many conservative activist groups, its leveling rhetoric amounted to poorly-disguised Astroturf, without even a thin pretense of populism.
It didn’t help, either, that the League invariably cast its objections to the New Deal in unalloyed elitism. One leader of the League argued that “you can’t recover prosperity by seizing the accumulation of the thrifty and distributing it to the thriftless and unlucky.” Another Du Pont executive complained that “five negroes on my place in South Carolina refused work this spring…saying they had easy jobs with the government.” In more prosperous times, such rhetoric might resonate with white, middle class Americans. Amidst the Depression, it made the League’s leadership seem oblivious to the needs and suffering of their countrymen.
Or they resorted to personal insults against Roosevelt, especially his physical infirmity. Eugene Talmadge of Georgia took to labeling the President “that cripple in the White House”; another conservative wrote FDR, “if you were a good honest man, Jesus Christ would not have crippled you.” Few Roosevelt haters matched the industry of George Gundelfinger, a disgraced Yale Professor who self-published a quarterly magazine bashing the “Wooden-Head Son of a Bitch.” Readers of this delightful periodical encountered tales of FDR bursting into mad laughter at press conferences and “limping about the capital” with a cane made from “living human bones.”
Even worse, the League associated itself with violent reactionary groups. Irenee du Pont befriended Hiram Evans, Grand Wizard of the Ku Klux Klan, and encouraged his colleagues to embrace the Klan. When Jouette Shouse objected to Irenee’s courting Klansmen, Du Pont insisted that Evans “wishes to improve the reputation of the Klan by adopting an objective which will make it more popular and…has come out for the Constitution.” This plea perplexed Irenee’s brothers, considering the Klan’s full-throated support for Prohibition, and infuriated Al Smith, whose presidential prospects had once been torpedoed by Klan bigotry.
All of this before the bombshell dropped by Smedley Butler, Marine General turned progressive activist, in November 1934. Butler announced to a shocked congressional committee that in August 1933, he’d been approached by Gerald C. MacGuire, a bonds salesman for Grayson Murphy & Company, with offers to join a conspiracy to overthrow President Roosevelt. “We need a fascist government in this country,” MacGuire had already told one associate, and “the only men who have the patriotism to do it are the soldiers and Smedley Butler is their ideal leader.”
To prove his bona fides, MacGuire showed Butler bank deposits from J.P. Morgan and records of arms sales through Remington (then a Du Pont subsidiary), hinting darkly that corporate interests backed his scheme. “In two or three weeks, you will see it come out in the papers,” MacGuire assured the skeptical general. This coincided with the founding of the Liberty League, which Butler interpreted as proof of the conspiracy. In future meetings, MacGuire elaborated his plans to enlist the American Legion and the Veterans of Foreign Wars as foot soldiers. He further explained that Roosevelt would remain a figurehead president, like Italy’s King Victor Emmanuel under Mussolini, while a board of directors ran the country.
After months of correspondence and meetings, Butler decided he’d had enough. When MacGuire sounded him out again, pledging support from the American Legion, Butler laid down a challenge. “If you get the 500,000 soldiers advocating anything smelling of fascism,” he warned, “I am going to get 500,000 more and lick the hell out of you.” He then reported the plot to J. Edgar Hoover and the FBI, along with friendly congressmen who found Butler’s charges persuasive and alarming. In fall of 1934 John W. McCormack and Samuel Dickstein convened a House committee to investigate, with Butler and James Van Zandt, director of the Veterans of Foreign Wars, as their star witnesses.
Butler’s accusations, remembered as the “Business Plot,” endured more for their sensational implications than the few verifiable details. Later, more exaggerated accounts even connect capitalist bogeymen like John D. Rockefeller Jr. and future Senator Prescott Bush (then a banking executive at Brown Brothers) to the plot, based on little beyond their wealth and notoriety. Skeptics might also wonder why right wing plotters would approach Butler, who’d long since renounced his history as a “racketeer for capitalism” to become an antifascist, anti-capitalist rabble rouser, rather than confirmed conservatives like Douglas MacArthur or George Van Horn Moseley, who served as willing cat’s paws in later plots.
Despite ridicule by the press and denials from businessmen, McCormack and Dickstein found Butler and Van Zandt’s testimony credible but yielded to corporate pressure not to push too far. Historians still wrestle with the Business Plot’s plausibility and true contours. Robert F. Burke, in his study of the Du Ponts, surmises that “the accusations probably consisted of a mixture of actual attempts at influence peddling by a small core of financiers with ties to veterans organizations and the self-serving accusations of Butler.” Butler biographer Hans Schmidt expresses skepticism about the affair, branding MacGuire “an inconsequential trickster whose base dealings could not possibly be taken alone as verifying such a momentous undertaking.”
It’s also possible that the Du Ponts, rather than covering up a potential coup, instead wanted to discourage further investigation of their legal but morally dubious company practices. Newspapers later revealed the Du Ponts negotiated a sensitive trade deal with Nazi Germany around this time; this, along with Senator Nye’s earlier investigations into war profiteering, threatened immense embarrassment for their company. It seems unlikely that the Business Plot was as far-reaching or serious as Butler feared; but it’s equally implausible that the General invented it from whole cloth.
Regardless, Butler’s testimony further poisoned the Liberty League’s reputation. After initially ignoring them, Roosevelt blasted the Liberty League in no uncertain terms. He denounced them as “economic royalists,” enemies of the common man and even American democracy. “Give them their way,” he warned, “and they will take the course of every aristocracy of the past – power for themselves, enslavement for the public.” The cooperative language of earlier days was long gone; Roosevelt declared war on big business, and reaped the benefits.
The 1934 midterm elections provided a sweeping vindication of the New Deal’s popularity: “[Roosevelt] has been all but crowned by the people,” William Allen White concluded. The Democrats gained nine seats in the Senate, increasing their majority to an unassailable 69 to 25; they dominated the House with a similarly commanding margin of 322 to 103. Fissures in the Democratic coalition – between Northern liberals and Southern conservatives, isolationists and internationalists, racial progressives and Dixiecrat bigots – weren’t yet broadly evident. FDR, it seemed, had won; certainly the Liberty League and its allies had lost.
1935 saw a brief uptick in the League’s fortunes. The Supreme Court declared the NRA, already foundering from business opposition and administrative overreach, unconstitutional and revoked its influence. Republicans also attacked the National Labor Relations Act, which recognized the union rights of employees. This moved Roosevelt’s opponents to renewed fervor; the Liberty League worked with the National Association of Manufacturers, the US Chamber of Commerce and other corporate entities found it an unbearable infringement upon the rights of big business. Roosevelt’s support of labor unions, the Liberty League warned, “would do violence to the Constitution, stimulate industrial strife and give one labor organization a monopoly in the representation of workers without regard to the wishes of another.”
Even now, however, the efforts of the Du Ponts and their allies faltered as they struggled to sell their message. It was all well and good for W.C. Mullendore of the Chamber of Commerce to argue that “we cannot have both systems – that is, both the governmentally-controlled and directed and the free enterprise system.” But what did that mean to a poor American who subsisted on welfare, found work through the WPA or enjoyed newfound labor protections? High-minded appeals to constitutional law availed little; as Senator William Borah observed, “People can’t eat the Constitution.” Conservatives were still a long way from refining their appeals beyond a narrow audience of millionaires and aspiring plutocrats.
The Liberty League puttered along for several more years, failing to make a lasting impact. The Du Ponts threw their tepid support behind Alf Landon’s presidential campaign; the Kansas Governor’s moderate platform proved uninspiring to conservatives, and FDR won reelection in a landslide. If the League felt vindicated by the second-term struggles of FDR – the backlash against his efforts to pack the Supreme Court, in particular – it mattered little to the Du Ponts, who began to minimize their involvement in politics, particularly after Pierre’s prosecution for income tax evasion. By 1940 the Liberty League folded, irrelevant and unmourned.
Ultimately, the League faltered due to poor messaging and limited appeal. “It served as a perfect symbol of opposition to the New Deal,” historian Kim Philips-Fein remarks; “a rearguard fight by a handful of shortsighted, small-minded, self-interested rich men against the programs that were feeding the hungry, succoring the suffering and saving the nation.” This failure of elitist opposition to the New Deal left the door open to more popular, though often cruder and even violent, methods of resistance, headed by demagogues even less scrupulous.