The Wall Street Putsch
-Chrissie
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On Tuesday, 29 October 1929, the New York Stock Exchange crashed, dragging with it many other businesses and, eventually, the rest of the world, into the Great Depression. Different countries reacted to these events in different ways, but American President Herbert Hoover and American business interests, like Ford Motor, were of the opinion that it was not the place of the government to aid the people in such situations. Because of this ideal, Hoover and his fellow Republicans found themselves out of power after the 1932 election. Franklin Delano Roosevelt easily defeated Hoover with a promise of “A New Deal” to pull the country out of the Depression. When he came into office on 4 March 1933 it was with a list of ideas for government interventions which would help the average person to simply survive. Many of these, like temporarily taking the country off the Gold Standard, instituting a minimum wage, and legalizing unionization, were seen by business interests as detrimental.
He had been labeled a socialist by his opponents, a term that meant something different in the United States than pretty much everywhere else in the world; they hoped to connect FDR in people’s minds to the post-Civil War Reconstruction efforts in which the federal government had tried to alleviate the suffering of the recently freed slaves by taxing their former owners. This was what defined socialism in the American mind, not the idea of the general good of society that defined it in Europe. Reconstruction was ended, in part, because such interests played on the racism of the era, convincing white people that the government was taking money from them to give to Black people. Some elements of the New Deal, like the Works Progress Administration, which did not segregate by race, were cited to echo those fears. In some circles, the opposition to FDR went so far as to advocate for his overthrow and replacement with a dictator, in the way that Italian King Victor Emmanuel III had been overthrown by Benito Mussolini, whose pro-business Fascism they admired. They needed a leader who would inspire the people and, more importantly, the military, to follow their lead in this obviously unconstitutional coup, and so they looked to retired General Smedley Butler.
A casual review of Butler’s service record would cause anyone to think he would be the perfect candidate: he was well-liked by many soldiers and veterans (in part because he had advocated for the Bonus Army) and was intimately familiar efforts by the United States to overthrow governments in Central and South American and the Caribbean. But, by the time he was approached by Wall Street bond salesman Gerald McGuire in , his attitude about these activities had changed. Butler had been at the heart of American imperialism for most of his military career, which began during the Spanish American War at the newly established base at Guantanamo Bay, Cuba. He was then sent to the Philippines, as part of the US occupation, after which he was assigned to China, as part of the show of force from the US and Britain which forced the Chinese to accept outside trade. His next assignment put him at the heart of what are now called the Banana Wars in Central America and the Caribbean, the purpose of which was to assure the continuation of governments friendly to American business interests, most notably the United Fruit Company (now Chiquita Brands). While there, he was also involved in maintaining US control of the Panama Canal. In 1915, he led a contingent of Marines to Haiti after its pro-US president was assassinated, which began a nineteen-year occupation during which many Haitians were essentially enslaved by the US military for various tasks. During World War I, he commanded a base in France, after which he was given command of various Marine bases around the country until his retirement in 1931. He took a leave of absence in 1924 and 1925 to head up the Philadelphia Department of Public Safety, which he militarized and then used to shut down hundreds of speakeasies and other places where the Prohibition laws were being broken. In his retirement, he began to write and speak about the illicit connections between businesses and US military power, saying that most of his time in the Marines was spent “as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer; a gangster for capitalism.”[1] He published a book on his experiences called War is a Racket in 1935.
Despite his outspoken criticism of the American military and vehemently anti-Fascist views, the people involved in the Business Plot (also known as the Wall Street Putsch) thought him the perfect candidate to head up their unapologetically Fascist plans. He met with McGuire in August 1934, who offered a hefty bribe alongside a promise that Butler would be given control of an army of at least a half-million men and, when their coup proved successful, the office of Secretary of General Affairs, a newly-created office whose occupant held absolute power over the country. Butler’s reported response was that his “one hobby is maintaining a democracy” and that he would organize an equally large army to fight against “anything smelling of fascism.”[2] The retired general then took this information to Congress.
Investigation of the potential conspiracy was given to a Congressional Committee led by John W. McCormack and Samuel Dickstein, whose investigation was cursory at best. They took testimony from Butler and McGuire but refused to call any others who were said to be involved, claiming such involvement were mere hearsay. They concluded that while there was evidence of people who sought to create a fascist organization in the United States, there was no evidence that these groups were connected with ideologically similar organizations or governments in Europe nor that they were planning a coup. There were mixed reactions in the public and the press, some seeing the whole thing as a hoax perpetrated by Butler, others praising him for stopping such a dangerous plan. The bankers questioned about their interest or potential funding all denied knowledge of the group and the plot, and General Douglas McArthur, who had allegedly been the back-up plan if Butler refused to lead the army, said it was laughable. It isn’t known if McArthur had been approached by the group. VFW Commander James Van Zandt said he was approached by the group after having been warned by Butler about the possibility.
There is no reason to believe that this plot wasn’t at least considered, though it was likely not as drastic a situation as Butler believed. There was no shortage of people who disliked FDR and his programs and there certainly were (and are) people who think that a dictatorial government is better than a collective one, but there are also those who are willing to call them to account.
[1] From an article in the November 1935 issue of Common Sense, quoted in Hans Schmidt’s Maverick Marine: General Smedley D. Butler and the Contradictions of American Military History.
[2] Johnathan Katz, Gangsters of Capitalism, quoted in Rolling Stone, 1 January 2022, at https://www.rollingstone.com/politics/politics-features/coup-jan6-fdr-new-deal-business-plot-1276709/