Bonus Act of 1924
The Bonus Act of 1924 was a significant piece of legislation addressing the economic challenges faced by World War I veterans in the United States as they transitioned back to civilian life. Following the war, many veterans struggled to find employment in a slowing economy while experiencing hardships that contrasted sharply with the wartime profits enjoyed by non-veterans. The push for federal financial support gained traction in the early 1920s, driven by advocacy from organizations like the American Legion and some states that had already begun providing aid to veterans. After an initial veto by President Warren G. Harding, the Act was passed by Congress and signed into law in May 1924, despite a subsequent veto by President Calvin Coolidge, who raised concerns about the implications of such financial rewards.
Under the Bonus Act, veterans were entitled to receive $1.25 for each day of service overseas, with a maximum payout of $625. However, the payment structure involved delayed compensation for most, as only those owed $50 or less would receive immediate payment, while larger sums were issued as long-term certificates redeemable starting in 1945. This arrangement left many veterans feeling dissatisfied, particularly as the Great Depression unfolded, exacerbating their financial struggles. The widespread discontent eventually led to the formation of the Bonus Army in 1932, a group of veterans who marched on Washington to demand immediate compensation, ultimately influencing subsequent legislation in 1936 to provide more direct financial support.
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Subject Terms
Bonus Act of 1924
Identification: The Law: Federal law providing financial compensation, primarily in the form of certificates for future payment, to World War I veterans
Also known as: Soldiers’ Bonus; World War Adjusted Compensation Act
Date: Enacted on May 19, 1924
The Bonus Act represents one of many ways in which the United States grappled with the lingering economic effects of World War I. The protracted debates over the legislation underscored the difficult transition back to civilian life experienced by many veterans and the question of whether their service had been fully appreciated or properly rewarded.
The Bonus Act of 1924 was the culmination of a sometimes acrimonious national dialogue on the obligation owed to World War I veterans in the United States. Many of these men found adjustment back to civilian life challenging, especially finding jobs in the slowing postwar economy. Their economic hardships were particularly vexing in view of the increased wages and enhanced profits that workers and businesses at home had enjoyed during the war, when soldiers were earning just one dollar per day for their service. Furthermore, veterans and nonveterans alike had to shoulder the financial burdens of the war in the form of increased taxes.
Demand for a federal remedy gained momentum in the early 1920s, due in part to lobbying by the American Legion, the veterans’ organization formed at the end of the war, and by the example of a number of states approving small stipends for their own veterans. A bill passed by Congress in 1922 was vetoed by President Warren G. Harding as fiscally irresponsible. The bill returned, however, and was passed into law in May of 1924, this time with both houses of Congress overriding President Calvin Coolidge, who in his veto message memorably asserted, “Patriotism which is bought and paid for is not patriotism.”
The Bonus Act provided for veterans to be paid $1.25 for each day of wartime service overseas in excess of sixty days, up to a maximum of $625. Those owed $50 or less were to be paid immediately; however, in order to mitigate the financial impact on an already strained federal treasury, veterans entitled to more than $50 were to receive a twenty-year “adjusted service certificate,” redeemable with interest starting in 1945, and valid in the meantime as collateral on bank loans.
Impact
Many veterans were dissatisfied with the provisions of the Bonus Act, which essentially gave them a government-issued IOU, and this dissatisfaction deepened dramatically with the onset of the Great Depression in the following decade. Although veterans took out millions of dollars in loans against the adjusted service certificates, in 1932 they would organize a so-called Bonus Army to march on Washington, D.C., and demand immediate payout, leading eventually to the Adjusted Compensation Payment Act of 1936, which replaced the service certificates with U.S. Treasury bonds redeemable for cash.
Bibliography
Keene, Jennifer D. Doughboys, the Great War, and the Remaking of America. Baltimore: Johns Hopkins University Press, 2001.
Pencak, William. For God and Country: The American Legion, 1919–1941. Boston, Mass.: Northeastern University Press, 1989.