The Great Depression and the Makings of the Wall Street Putsch

It is 1933. America is on its knees. The stock market crash of 1929 has sent the economy into a death spiral. Unemployment has skyrocketed to an eye-watering 16 million, and the number keeps ticking up like a bad odometer. Farmers are losing their land by the hundreds of thousands. Five thousand banks have failed, taking people’s life savings with them. Social safety nets? Nonexistent. No unemployment insurance, no Social Security, no Medicare. It’s a bleak time, folks.

The Great Depression didn’t just bring economic ruin—it ushered in a tidal wave of paranoia, anger, and finger-pointing. Extremist voices, from populists like Huey Long to anti-Semitic radio firebrand Father Charles Coughlin, stoked fears of socialism and global conspiracies. William Randolph Hearst added fuel to the fire with his “America First” slogan, which, spoiler alert, wasn’t about patriotic unity so much as thinly veiled fascist sympathies.

Against this backdrop of despair and distrust, Franklin Delano Roosevelt took the oath of office on March 4, 1933. Over 100,000 people braved the grim skies to watch him deliver his inaugural address, while sharpshooters and machine guns lined the streets, ready for riots that many feared were imminent. The nation was a powder keg, and FDR’s New Deal was about to light the match.

Roosevelt was convinced the government should do something radical to intervene in the failing economy. He proposed unprecedented measures to address poverty, curb unemployment, and redistribute wealth. These ideas didn’t just rankle the upper class; they sent them into a full-blown panic. To them, FDR wasn’t a reformer—he was a revolutionary, a “traitor to his class.” At one Washington dinner party, a respectable citizen muttered, “What that fellow Roosevelt needs is a .38-caliber revolver at the back of his head.”

This wasn’t just idle grumbling. It was the kindling for a bona fide coup attempt.

Growing Discontent and the Rise of Fascism

By 1933, the rise of fascist regimes abroad was making waves at home. Figures like Hitler and Mussolini were viewed by some American elites not as cautionary tales, but as inspirations. Charles Lindbergh and Henry Ford openly admired the Nazi regime, while JP Morgan Jr. was busy lending millions to Mussolini’s government and refusing to pay income taxes. In this climate, it’s not hard to see how a conspiracy to overthrow FDR found fertile ground.

Enter Smedley Butler. If you were a veteran in the 1930s, you probably idolized Butler. A decorated Marine Corps general and bona fide war hero, he was the kind of guy who could rally a crowd just by clearing his throat. Butler wasn’t just a soldier’s soldier; he was a man of principle, famously saying, “I spent most of my time being a high-class muscle man for big business, for Wall Street and for bankers. In short, I was a racketeer for capitalism.”

At the time of his death, Smedley Butler held the distinction of being the most decorated Marine in U.S. history. Over the course of his career, he earned sixteen medals, including five for acts of heroism. Remarkably, he remains the only Marine to have been awarded both the Marine Corps Brevet Medal and two Medals of Honor, each for separate acts of extraordinary bravery.

So, when Butler claimed that a group of Wall Street financiers had approached him to make a fascist coup attempt against FDR, Washington paid attention.

The Scheme

The following information comes from Butler’s testimony to Congress about the so-called Business Plot/Wall Street Putsch. In it, he provided detailed accounts of his meetings with Gerald MacGuire, the man tasked with recruiting him for what would later be called the Business Plot or the Wall Street Putsch. MacGuire, a former World War I soldier turned banker, approached Butler multiple times with a proposal that grew more audacious at every turn.

Initially, MacGuire invited Butler to take over the leadership of the American Legion at its upcoming convention that September. Butler declined, pointing out that he hadn’t even been invited to the event. MacGuire, undeterred, claimed he could arrange for Butler to attend as a special guest from Hawaii, leveraging his position on the delegation committee. When Butler refused again, MacGuire offered to send 300 to 400 men to disrupt the convention and demand Butler take the stage.

Startled but intrigued, Butler decided to play along to uncover the full scope of the plot. When he expressed doubts about the logistics—how they would transport struggling veterans to Chicago—MacGuire reassured him that money was no obstacle. He revealed that his organization, the Committee for Sound Currency, had prepared a speech for Butler and even provided bank statements showing over $110,000 (nearly $2 million today) earmarked for “expenses.”

The Gold Standard and the Millionaires

Butler understood that he was to speak about the bonus that had been promised to World War I veterans. When MacGuire handed the speech, however, he realized it wasn’t just about soldiers’ bonuses; it heavily emphasized returning to the gold standard. When Butler questioned the focus, MacGuire explained that it had been written by John W. Davis—former Democratic presidential candidate, Ambassador to the U.K., and, at the time, legal counsel for J.P. Morgan & Co. Davis’s involvement hinted at the high-level connections behind the scheme.

MacGuire then mentioned his direct employer, Colonel M.P. Murphy, a multi-millionaire financier and one of the American Legion’s founding backers. Murphy, along with another financier, Robert S. Clark, was ready to bankroll the operation. MacGuire even offered Butler checks from both men as an advance to organize the effort.

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Butler knew Clark from their time in China during the Boxer Rebellion. Dubbed the “millionaire lieutenant,” Clark was the heir to the Singer Sewing Machine fortune and had since established himself as a prominent financier. When MacGuire brought up the idea again during a surprise visit to Butler’s hotel, Butler expressed doubts that the conspirators actually had the funds they claimed. MacGuire, unfazed, pulled $18,000 in thousand-dollar bills from his wallet and tossed them on Butler’s bed.

Still skeptical, Butler demanded to speak directly with Clark. Shortly before the American Legion Convention, Clark visited Butler at his home. After reminiscing about their shared past, Clark laid out his case: he had $30 million at his disposal and was willing to spend half of it to protect the other half. He insisted that Roosevelt’s policies—particularly his move away from the gold standard—threatened the financial stability of the nation’s wealthiest. If Butler gave the speech and rallied the veterans, Clark believed they could force Congress and the president to reverse course.

A Dictatorship in the Making

The conspiracy’s ultimate goal became chillingly clear during Butler’s final meetings with MacGuire. MacGuire met Butler at a secluded table in a hotel restaurant. Over the course of their conversation, MacGuire revealed that he had spent the past year studying fascist regimes in Europe. He spoke admiringly of Mussolini’s Blackshirts, France’s Croix de Feu, and the growing Nazi movement in Germany.

“When times are desperate and people are frustrated, anything could happen.”

— John McCormack

MacGuire explained the plan: establish a new position in the U.S. government—a “Secretary of General Affairs”—who would effectively wield dictatorial power while relegating the president to ceremonial duties. And who better to fill this role than Smedley Butler? With the backing of 500,000 veterans and $300 million (over $5 billion today), MacGuire’s group was confident they could take control of the country.

Butler was horrified. While the conspirators viewed veterans as pawns in their power grab, Butler saw them as men who had already sacrificed too much for their country. He refused to play along. Furious, MacGuire attempted to entice him with offers of money, even suggesting they could pay off Butler’s mortgage. Butler, indignant, marched his guest to his study and pointed to the medals and honors adorning the walls—symbols of a career spent defending democracy, not undermining it.

Exposing the Plot

Despite his rejection of the scheme, Butler couldn’t shake the gravity of what he had learned. He reached out to journalist Paul French, who helped him gather evidence. French later testified that MacGuire had openly discussed the need for a fascist government in the United States to “save the nation from communists.” According to French, MacGuire envisioned Butler as a “dictator galloping in on his white horse,” supported by an army of loyal veterans.

The conspiracy gained further credibility when the American Liberty League (ALL) went public. Many of the individuals MacGuire had named—Murphy, Clark, Davis—were prominent members. The ALL, ostensibly formed to “protect the Constitution,” was a thinly veiled coalition of business elites and political figures united in their opposition to the New Deal.

Butler testified before Congress in late 1934, detailing the plot and naming names. His revelations sent shockwaves through Washington, though the national press largely dismissed it. The New York Times dismissed it as a “gigantic hoax.” Gerald MacGuire was subpoenaed and denied the allegations, but Butler’s testimony and the corroborating evidence gathered by French painted a damning picture.

The Aftermath

While the coup never came to fruition, the plot highlighted the fragility of democracy in times of crisis. The congressional investigation confirmed that “certain persons had made an attempt to establish a fascist organization in this country,” but the names of the wealthiest conspirators were conspicuously absent from the final report. Butler himself lamented this, accusing the committee of protecting the powerful while punishing only the pawns. He said, “The big shots weren’t even called to testify. Why was all mention of these names suppressed?”

Since then the Wall Street Putsch has largely faded into obscurity. Historians have since debated just how serious the threat really was. Arthur M. Schlesinger Jr. later suggested that the gap between “contemplation and execution” was significant, but others aren’t so sure.

Some historians speculate that FDR struck a deal with the conspirators, letting them off the hook in exchange for their support—or at least their silence. If true, it was a shrewd move. But others, like presidential biographer Sidney Blumenthal, argue that Roosevelt should’ve played hardball: prosecute first, deal later.

Lessons from the “Wall Street Putsch”

The 1933 coup attempt remains one of the most bizarre and underappreciated chapters in American history. It’s a tale of hubris, paranoia, and the dangers of concentrated wealth in a time of crisis. As Congressman John McCormack, who led the investigation, put it: “When times are desperate and people are frustrated, anything could happen.”

And, as history has shown, sometimes it almost does.

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