It developed to overthrow the French Third Republic, led by the Popular Front government, an alliance of left-wing groups. La Cagoule was founded by Eugène Deloncle. Among others, the founder of the cosmetics company L'Oréal, Eugène Schueller, bankrolled the clandestine movement.
The group performed assassinations, bombings, sabotage of armaments, and other violent activities, some intended to cast suspicion on communists and add to political instability. Planning a November 1937 overthrow of the government, La Cagoule was infiltrated by the police, and the national government arrested and imprisoned about 70 men. At the outbreak of World War II, the government released the men to fight in the French Army. Some supported other right-wing organizations and participated in the Vichy government; others joined the Free French of Charles de Gaulle. It was not until 1948 that the government tried surviving members for the charges of 1937.
The group was founded in 1936-1937 by Eugène Deloncle. Because most of its members were bourgeois ,the group enjoyed privileged relations within industrial circles (National Federation of ratepayer, Company Lesieur, L'Oréal, etc).
An important member was Joseph Darnand, who later founded the Service d'ordre légionnaire (SOL), the forerunner of the Milice, the Collaborationist paramilitary of the Vichy regime. His nephew Henri Charbonneau was also a member. Jean Filliol was a member. He was appointed as the head of the Milice in Limoges, and fled to Spain at the end of World War II, where he worked in the Spanish subsidiary of L'Oréal. Gabriel Jeantet, who was a lover of a sister of François Mitterrand who later recommended him for the Francisque. Dr. Henri Martin, a medical doctor who is suspected of having forged the Pacte Synarchique, and worked for the Organisation armée secrète (OAS) after World War II. Mohammed El Maadi, head of La Cagoule for French Algeria, creator of the antisemitic newspaper Er Rachid, and organizer of the North-African Brigade, known as SS-Mohammed, in 1944.
The group drew most of its members from Orléanists disappointed by the lack of action by Action Française, which was founded by Charles Maurras. They were opposed to the Popular Front government, created from an alliance of left-wing groups. Historians believe many low-level members were recruited in the belief that it was an auto-defense organization, intended to fight against a Communist takeover.