The World War Adjusted Compensation Act, or Bonus Act, was a United States federal law passed on May 19, 1924, that granted a life insurance policy to veterans of military service in World War I. It was based on aggressive political lobbying by new veterans organizations. The actual payout was promised for 1945, but veterans would get a certificate immediately and they could borrow against it from banks. When the Great Depression began in 1929, demands for immediate payment escalated. Thousands of veterans marched on Washington in 1932 but were crushed by the U.S. Army.
In 1933-1936 President Franklin Roosevelt was friendlier but opposed immediate payment as demanded by Congressman Wright Patman. Congress passed it over Roosevelt's veto in 1936, and over $2 billion was given out immediately. It helped boost the overall economy. A major effort in 1944 was made to avoid a similar issue with World War II veterans, resulting in the famous G.I. Bill. [1] [2]
The act awarded veterans additional pay in various forms, with only limited payments available in the short term. The value of each veteran's "credit" was based on each recipient's service in the United States Armed Forces between April 5, 1917, and July 1, 1919, with $1.00 awarded for each day served in the United States and $1.25 for each day served abroad. It set maximum payments at $500 (approximately $8,000 in 2021 dollars) for a veteran who served stateside and $625 for a veteran who served overseas. Most officers and anyone whose service began after November 11, 1918, were excluded. [3]
It authorized immediate payments to anyone due less than $50. [4] The estate of a deceased veteran could be paid his award immediately if the amount was less than $500. [5] All others were awarded an "Adjusted Service Certificate," which functioned like an insurance policy. Based on standard actuarial calculations, the value of a veteran's certificate was set as the value of a 20-year insurance policy equal to 125 percent of the value of his service credit. Certificates were to be awarded on the veteran's birthday no earlier than January 1, 1925, and redeemable in full on his birthday in 1945, with payments to his estate if he died before then. [6] Certificate holders were allowed to use them as collateral for loans under certain restrictions. [7]
The new American Legion was a principal proponent of the legislation. [8] . It objected to the term bonus, because "bonus has come to mean 'full payment plus,' and there has not yet been full payment, or anywhere near full payment, so there cannot be any plus." [9] The Legion said that the government needed to "restore the faith of men sorely tried by what they feel to be National ingratitude and injustice." The Legion pointed out that the Wilson administration had made additional payments to government workers in 1917–18 to help offset the effects of inflation, without making any comparable provision for members of the military. [10] .
The Legion fought President Warren G. Harding as his position changed from supporting payments if paired with a revenue measure, to supporting a future pension system. [11] Harding felt so strongly about the issue that he visited the Senate to make his case against one version of the bill in 1921, and the Senate voted it down 47–29. [12] Harding vetoed another version of the Adjusted Compensation Act on September 19, 1922, and the House overrode his veto 258–54 but the Senate failed to override by four votes on a vote that split both Democrats and Republicans. [13]
Harding died before the issue was taken up again by Congress. In preliminary negotiations between Congress and President Calvin Coolidge, it became clear that the President would veto any law that proposed immediate cash payments to veterans and that the Senate would sustain that veto. The legislation, popularly called the Insurance Bill, provided the veteran instead with a variety of future payment scenarios rather than cash in the short term. [14]
On May 15, 1924, Coolidge vetoed a bill granting bonuses to veterans of World War I saying: "patriotism ... bought and paid for is not patriotism." Congress overrode his veto a few days later. [15]
Veterans were able to take out loans against their certificates beginning in 1927. By June 30, 1932, more than 2.5 million veterans had borrowed $1.369 billion. [16]
In 1936, the Adjusted Compensation Payment Act (January 27, 1936, ch. 32, 49 Stat. 1099) replaced the 1924 Act's service certificates with bonds issued by the Treasury Department that could be redeemed at any time.
Calvin Coolidge was the 30th president of the United States, serving from 1923 to 1929. A Republican lawyer from Massachusetts, he previously served as the 29th vice president from 1921 to 1923 under President Warren G. Harding, and as the 48th governor of Massachusetts from 1919 to 1921. Coolidge gained a reputation as a small-government conservative with a taciturn personality and dry sense of humor that earned him the nickname "Silent Cal".
The G.I. Bill, formally the Servicemen's Readjustment Act of 1944, was a law that provided a range of benefits for some of the returning World War II veterans. The original G.I. Bill expired in 1956, but the term "G.I. Bill" is still used to refer to programs created to assist American military veterans.
Charles Gates Dawes was an American diplomat and Republican politician who was the 30th vice president of the United States from 1925 to 1929 under Calvin Coolidge. He was a co-recipient of the Nobel Peace Prize in 1925 for his work on the Dawes Plan for World War I reparations.
Andrew William Mellon, known also as A. W. Mellon, was an American banker, businessman, industrialist, philanthropist, art collector, and politician. The son of Mellon family patriarch Thomas Mellon, he established a vast business empire before moving into politics. He served as United States Secretary of the Treasury from March 9, 1921, to February 12, 1932, presiding over the boom years of the 1920s and the Wall Street Crash of 1929. A conservative Republican, Mellon favored policies that reduced taxation and the national debt of the United States in the aftermath of World War I. Mellon also helped fund and manage Kennywood Park in West Mifflin, Pennsylvania.
The history of the United States from 1917 to 1945 was marked by World War I, the interwar period, the Great Depression, and World War II.
The American Legion, commonly known as the Legion, is an organization of U.S. war veterans headquartered in Indianapolis, Indiana. It comprises state, U.S. territory, and overseas departments, in turn made up of local posts. It was established in March 1919 in Paris, France, by officers and men of the American Expeditionary Forces (A.E.F.). It was subsequently chartered by the 66th U.S. Congress on September 16, 1919.
The Bonus Army was a group of 43,000 demonstrators – 17,000 veterans of U.S. involvement in World War I, their families, and affiliated groups – who gathered in Washington, D.C., in mid-1932 to demand early cash redemption of their service bonus certificates. Organizers called the demonstrators the Bonus Expeditionary Force (B.E.F.), to echo the name of World War I's American Expeditionary Forces, while the media referred to them as the "Bonus Army" or "Bonus Marchers". The demonstrators were led by Walter W. Waters, a former sergeant.
The Economy Act of 1933, officially titled the Act of March 20, 1933 (ch. 3, Pub. L. 73–2, 48 Stat. 8, enacted March 20, 1933, is an Act of Congress that cut the salaries of federal workers and reduced benefit payments to veterans, moves intended to reduce the federal deficit in the United States.
Veterans of Future Wars (VFW) was a satirical political organization initially created as a prank by Princeton University students in 1936. The group was conceived as a parody of the Veterans of Foreign Wars and the movement for early payment of a bonus to veterans of World War I that had been originally scheduled for disbursement in 1945 when the World War Adjusted Compensation Act was passed in 1924. The group jokingly advocated the payment of a similar $1,000 "bonus" to future veterans of a coming European conflagration while the recipients were young enough—and alive—to enjoy it.
Rexford Guy Tugwell was an American economist who became part of Franklin D. Roosevelt's first "Brain Trust", a group of Columbia University academics who helped develop policy recommendations leading up to Roosevelt's New Deal. Tugwell served in FDR's administration until he was forced out in 1936. He was a specialist on planning and believed the government should have large-scale plans to move the economy out of the Great Depression because private businesses were too frozen in place to do the job. He helped design the New Deal farm program and the Resettlement Administration that moved subsistence farmers into small rented farms under close supervision. His ideas on suburban planning resulted in the construction of Greenbelt, Maryland, with low-cost rents for relief families. He was denounced by conservatives for advocating state-directed economic planning to overcome the Great Depression.
The Second New Deal is a term used by historians to characterize the second stage, 1935–36, of the New Deal programs of President Franklin D. Roosevelt. The most famous laws included the Emergency Relief Appropriation Act, the Banking Act, the Wagner National Labor Relations Act, the Public Utility Holding Company Act, the Social Security Act, and the Wealth Tax Act.
The Adjusted Compensation Payment Act was a piece of United States legislation that provided for the issuance of US Treasury Bonds to veterans who had served in World War I as a form of economic stimulus and relief. The act is sometimes considered to be part of the "New Deal" though it was not supported by then President Franklin D. Roosevelt, and the law was one of several pieces of United States legislation popularly known together as the "Bonus Act," which was enacted after Congress overrode President Franklin D. Roosevelt's veto on January 27, 1936.
In the United States, the farm bill is a comprehensive omnibus bill that is the primary agricultural and food policy instrument of the federal government. Congress typically passes a new farm bill every five to six years.
Herbert Hoover's tenure as the 31st president of the United States began on his inauguration on March 4, 1929, and ended on March 4, 1933. Hoover, a Republican, took office after a landslide victory in the 1928 presidential election over Democrat Al Smith of New York. His presidency ended following his landslide defeat in the 1932 presidential election by Democrat Franklin D. Roosevelt, after one term in office.
Warren G. Harding's tenure as the 29th president of the United States lasted from March 4, 1921, until his death on August 2, 1923. Harding presided over the country in the aftermath of World War I. A Republican from Ohio, Harding held office during a period in American political history from the mid-1890s to 1932 that was generally dominated by his party. He died of an apparent heart attack and was succeeded by Vice President Calvin Coolidge.
The New Deal was a series of domestic programs, public work projects, and financial reforms and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1938, with the aim of addressing the Great Depression, which began in 1929. Roosevelt introduced the phrase upon accepting the 1932 Democratic presidential nomination, and won the election in a landslide over Herbert Hoover, whose administration was viewed by many as doing too little to help those affected. Roosevelt believed that the depression was caused by inherent market instability, and that massive government intervention was necessary to stabilize and rationalize the economy.
Frank Thomas Hines was a United States military officer and head of the U.S. Veterans Bureau from 1923 to 1945. Hines took over as head of the Veterans Bureau after a series of scandals discredited the agency. He was considered a "man of stern honesty." In response to the scandals, the field service was "centralized to establish strict controls and accountability."
Calvin Coolidge's tenure as the 30th president of the United States began on August 2, 1923, when Coolidge became president upon Warren G. Harding's death, and ended on March 4, 1929. A Republican from Massachusetts, Coolidge had been vice president for 2 years, 151 days when he succeeded to the presidency upon the sudden death of Harding. Elected to a full four–year term in 1924, Coolidge gained a reputation as a small-government conservative. Coolidge was succeeded by former Secretary of Commerce Herbert Hoover after the 1928 presidential election.
The presidency of Herbert Hoover began on March 4, 1929, when Herbert Hoover was inaugurated as the 31st president of the United States, and ended on March 4, 1933.
John Thomas Taylor was an American lawyer and soldier best known for being a lobbyist for the American Legion from 1919 to 1950. During his time as a lobbyist he was able to have over six hundred bills passed by the U.S. Congress that benefited veterans and was on the cover of Time magazine.