The consternation had been growing in the months between Franklin D. Roosevelt’s election and his inauguration, but his elimination of the gold standard in April 1933 infuriated some of the country’s wealthiest men.
Titans of banking and business worried that if U.S. currency wasn’t backed by gold, inflation could skyrocket and make their millions worthless. Why, they could end up as poor as most everyone else was during the Great Depression.
So, according to the sworn congressional testimony of a retired general, they decided to overthrow the government and install a dictator who was more business friendly. After all, they reasoned, that had been working well in Italy.
How close this fascist cabal got, and who exactly was in on it, are still subjects of historical debate. But as the dust settles after the pro-Trump attack on the U.S. Capitol, and as it becomes clearer how close lawmakers came to catastrophe, the similarities to the Business Plot are hard to ignore.
Smedley D. Butler was a highly decorated Marine Corps general who had received the Medal of Honor twice. He was beloved by his men before his retirement, and more so afterward when he spoke in support of the Bonus Army’s fight for early bonus payments for World War I service.
“He was wildly popular and was an outspoken critic of fascism and Mussolini at a time when there was really an impulse toward that throughout the world, including in the United States,” Denton said.
Given his opposition to fascism, Butler might not have seemed like a good fit for the job of coup leader, but his support from veterans was more important to the Wall Street plotters. At the time, there were many more veterans than active-duty service members; if someone could summon them as a force of 500,000 to march on Washington, the government could fall without a shot being fired.
In the summer of 1933, a bond broker and American Legion member named Gerald MacGuire approached Butler and tried to convince him that it would be in the Bonus Army veterans’ interests to demand their payments in gold. He then offered to send Butler and a group of veterans on a lavish speaking trip, all expenses paid, in support of the gold standard.
Butler was suspicious about where the money was coming from but strung MacGuire along over several months to glean more information. Eventually, MacGuire laid it all out: He was working for a group of mega-rich businessmen with access to $300 million to bankroll a coup. They would plant stories in the press about Roosevelt being overwhelmed and in bad health. Once Butler’s army rolled in, a “Secretary of General Affairs” would be installed to handle the real governance, while Roosevelt would be reduced to cutting ribbons and such. And they would take care of Butler, too.
Additionally, they “offered college educations for his children and his mortgage paid off,” Denton said. “A lot of people would have taken it.”
But Butler wanted to know who these businessmen offering him money and power were. According to the BBC radio show “Document,” MacGuire told him they would announce themselves shortly.
A few weeks later, news of a new conservative lobbying group called the American Liberty League broke. Its members included J.P. Morgan Jr., Irénée du Pont and the CEOs of General Motors, Birds Eye and General Foods, among others. Together they held near $40 billion in assets, Denton said — about $778 billion today.
Had Butler been a different sort of person and gone along with the plot, Denton thinks it would have been successful. Instead, in the fall of 1934, he went to J. Edgar Hoover, head of what would become the FBI. Congressional hearings were launched to investigate possible fascist sympathizers.
Details of the plot soon leaked to the press, who mocked Butler and declared it all a “gigantic hoax.” If Butler wasn’t making it all up, journalists declared, then surely MacGuire was just a prankster fooling him.
The committee never released a report, but it told Congress it “had received evidence that certain persons had made an attempt to establish a fascist organization 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.”
Butler — who later published a book, “War Is a Racket,” in which he lamented that all the military conflicts he had ever been involved in were fought to benefit “millionaires and billionaires” — was somewhat vindicated. But he claimed that he had named names, and those names had been removed from his testimony that was released to the public. “Like most committees, it has slaughtered the little and allowed the big to escape. The big shots weren’t even called to testify,” he said in a radio interview.
The committee maintained the names were kept under wraps until they could be investigated and verified. But no further investigation was ever conducted.
According to journalist John Buchanan, speaking to the BBC in 2007, that was probably because Roosevelt struck a deal with the backers of the plot: They could avoid treason charges — and possible execution — if they backed off their opposition to the New Deal. Denton thinks the press may have ignored the report at the urging of the government, which didn’t want the public to know how precarious things might have been.