Following the end of World War I, over 40,000 marchers - 17,000 veterans with families and affiliated groups, gathered in Washington, D.C. in 1932 to demand immediate cash payment of their war time service certificates. In the midst of the Great Depression, the veterans demanded immediate cash payment of the bonuses promised to them by The World War Adjusted Compensation Act of 1924. Setting up camp and refusing to leave, they were referred to as the Bonus Army.
Retired Marine Corps Major General Smedley Butler was publicly supportive of the demands of the Bonus Army and visited the encampment. Earning 16 medals during his military career, Butler was one of the most popular military figures of his time. He toured the camp, making speeches and telling veterans that they had a right to lobby Congress just as much as any corporation. President Hoover then ordered the Army to clear the encampment. Using gas, mounted cavalry and tanks, General MacArthur dispersed the crowd the next day, wounding and killing several veterans in the process.
The following year, according to Butler, powerful business interests sought to create a fascist veterans organization and use it to overthrow the American government. Funded by the Du Pont family and J.P. Morgan, the goal was to arm the veterans organization and march on Washington, D.C. with upwards of 500,000 men. President Roosevelt would be demoted to a “figurehead” role, with Butler having near-absolute power in a new “Secretary of General Affairs” position.
In 1934, Butler tells Congress of the plot and a congressional investigative committee is formed. Headed by John W. McCormack and Samuel Dickstein, the committee was called the “McCormack-Dickstein Committee,” later known as the “Special Committee on Un-American Activities.” On Nov 24 1934, the McCormack-Dickstein Committee released a preliminary report stating they are hearing Butler’s testimony on the plot and that it heavily relied on hearsay thus far. The alleged plot came under fire in the press, most notably by The New York Times and Time Magazine.
The final report is released in 1935 and takes a noticeably different tone:
In the last few weeks of the committee’s official life it received evidence showing 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.
This committee received evidence from Maj. Gen Smedley D. Butler (retired), twice decorated by the Congress of the United States. He testified before the committee as to conversations with one Gerald C. MacGuire in which the latter is alleged to have suggested the formation of a fascist army under the leadership of General Butler.
MacGuire denied these allegations under oath, but your committee was able to verify all the pertinent statements made by General Butler, with the exception of the direct statement suggesting the creation of the organization. This, however, was corroborated in the correspondence of MacGuire with his principal, Robert Sterling Clark, of New York City, while MacGuire was abroad studying the various forms of veterans organizations of Fascist character.
After the release of the final report, both The New York Times and Time Magazine reported that the congressional investigation had found evidence of a Wall Street plot to overthrow the American government, while still remaining skeptical in their editorials.
Elements of Butler’s allegations were supported by the testimony and statements of others. Paul Comly French, a reporter for the Philadelphia Record and the New York Evening Post, testified before the committee that he was told, “We need a Fascist government in this country [...] to save the Nation from the communists.” James E. Van Zandt, the Commander of the Veterans of Foreign Wars, told the press, “Less than two months” after General Butler warned him, “he had been approached by ‘agents of Wall Street’ to lead a Fascist dictatorship in the United States under the guise of a ‘Veterans Organization’.”
Extensive excerpts of testimony implicating J.P. Morgan, the Du Pont interests, Remington Arms, and others were removed from hearing transcripts by the The McCormack-Dickstein Committee. However, Committee Chairman Samuel Dickstein unwittingly granted access to the unedited transcripts to a reporter for an upcoming story, which was printed in the New Masses magazine. Despite the expunged testimony being printed in the press, full unedited transcripts of the McCormack-Dickstein Committee’s hearings cannot be found to this day.