The year 1933 saw several consequential worldwide events brewing. Adolf Hitler was appointed chancellor of Germany. Engelbert Dollfuss dissolved the Austrian parliament and assumed dictatorial powers as Chancellor of Austria. Alejandro Lerroux came to power in the Spanish general election, igniting a brief and bloody insurrection attempt committed by the anarchist National Confederation of Trabajo.
Across the Atlantic, a similar insurgency attempted to destabilize the United States earlier that year. The Business Plot of 1933 was a failed attempt to overthrow FDR and install a dictator. And it was not led by a fringe group of working-class radicals, but covertly bankrolled by a Wall Street coalition of affluent businessmen.
Leading up to the Business Plot, Western powers had been scrambling to alleviate the devastating effects of the 1929 stock market crash on tens of millions of workers. At the time, Farm Bureau Federation president Edward O'Neal famously told a Senate committee that "unless something is done for the American farmer, we will have revolution in the countryside in less than twelve months."
Thousands of unemployed World War I veterans were among those stifled by the Depression and the limited government intervention. In July 17 1932, tens of thousands of veterans and their families descended on Washington, D.C. to set up tent camps and demand immediate payment of the bonuses promised to them by the World War Adjusted Compensation Act of 1924.
The veterans were dubbed the Bonus Army by the media, and after 11 days, US Attorney General William D. Mitchell ordered that they be removed from all government property. Resistance ensued.
Major General Smedley Butler, a popular and decorated military figure at the time, appeared at the Bonus Army marches. Butler had emerged as a fervent public advocate against capitalist exploitation of the masses by that point. In the 1932 presidential election, he backed Roosevelt over Hoover.
Many conservative businessmen were upset by Roosevelt's election because of his campaign promise to have the government provide jobs for the unemployed. Wealthy businessmen were concerned that he would introduce reckless spending and economic socialism. Roosevelt’s New Deal policies, which addressed almost every sector of the economy in the form of regulations, social programs, and financial reforms, made him an ever-growing problem in the eyes of big business and banks.
Furthermore, the United States' adherence to the gold standard deteriorated with the onset of the Great Depression, even after Western European countries abandoned it. Roosevelt officially removed the United States from the gold standard when he signed the Gold Reserve Act of 1934, which made most forms of gold illegal for the general public to possess. The end of the gold standard was said to have shocked Wall Street because they saw a currency that was not solidly backed by gold as inflationary, undermining both private and business fortunes. The 1973 book The Plot to Seize the White House notes that “Roosevelt was damned as a socialist or Communist out to destroy private enterprise by sapping the gold backing of wealth in order to subsidize the poor.”
This formidable class of disproportionate money and influence began plotting to take action for their grievances, a scheme that finally unraveled before public eyes in November 1934. In a series of allegations, General Smedley Butler revealed the existence of a political conspiracy by business leaders to depose President Roosevelt. A special House committee heard his testimony in private.
Butler testified under oath that Gerald P. MacGuire approached him about leading a private army of 500,000 ex-soldiers funded by $300 million provided by a group of wealthy businessmen. MacGuire, a bond salesman with Grayson M-P Murphy & Co. and a member of the Connecticut American Legion, told Butler that he was to lead this coup d'état to overthrow the United States government and replace it with a system more favorable to big business interests.
According to Butler, Roosevelt was to be deposed and replaced by General Hugh S. Johnson, former head of the National Recovery Administration, with the J.P. Morgan banking firm financing the plot. The number of veterans outnumbered active duty service members at the time, and it was thought that such a large force could swiftly pull off a coup of that magnitude.
Butler and MacGuire's meetings began in July 1933 and lasted until the first half of 1934. MacGuire's initial proposal seemed innocent; he asked Butler to run for National Commander of the American Legion, a well-known veterans' organization. When MacGuire steered the conversation toward getting the American Legion to pass a resolution in favor of restoring the gold standard, Butler’s suspicions grew. According to Butler, MacGuire's reasoning was that the gold standard was a veterans' issue because their bonuses would be "worthless paper'' if the currency was not backed by gold.
Eventually, MacGuire revealed the extent of the true plot to Butler. In return for his participation, Butler's mortgage and his children's college education would be paid for. MacGuire allegedly told Butler's former personal secretary that the plot's conspirators would meet at a Veterans of Foreign Wars convention to plan their next steps, which Butler passed on to Veterans of Foreign Wars commander James E. Van Zandt.
Butler alleged that the entire scheme was backed by a new conservative lobbying group called the American Liberty League. This group included J.P. Morgan Jr., Irénée du Pont, and the CEOs of General Motors, Birds Eye, and General Foods, among others, with nearly $40 billion in assets—equivalent to $778 billion today.
In addition, the list of alleged conspirators included former presidential candidate John W. Davis, J. P. Morgan partner Thomas W. Lamont, Prescott Bush, and numerous military leaders. Butler named Bill Doyle, the commander of the Massachusetts American Legion, as a co-conspirator, as Doyle apparently attended the first few meetings. Butler also gave the name Robert Sterling Clerk, who served as a second lieutenant under Butler during the Boxer Rebellion in China. He came from a wealthy family and was the heir to the Singer Corporation fortune, earning him the nickname "the millionaire lieutenant."
Instead of following through with MacGuire’s instructions and personal favors, Butler turned to the head of the FBI, J. Edgar Hoover, in the fall of 1934.
All parties alleged to be involved, however, publicly denied Butler's story, dismissing it as a joke, fantasy, or slander. But Butler, a distinguished veteran and two-time Medal of Honor recipient, was the most decorated Marine in US history at the time and had no apparent motive to lie.
After hearing Butler out and collecting additional information, the congressional committee informed 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.”
There were no further investigations or prosecutions. At the time, the plot was completely dismissed by the news media, with a New York Times editorial calling it a "gigantic hoax" and a "bald and unconvincing narrative." However, the publication swiftly changed its tune after the congressional committee released its last report. Today, most historians agree that the Business Plot was real. The only question is whether it was ever as close to execution as Butler claimed, or if it was merely a harebrained scheme brought up in discussions that never gained traction.
Butler was well-known for his book War Is a Racket, published shortly after the events of the Business Plot, in which he stated that he had named names, and that those names had been removed from his testimony before it 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 stated in a radio interview.