EXECUTIVE INFLUENCE AND THE BONUS QUESTION
by
CLAUD A.
HAMAKER, B. A.
A THESIS
IN
HISTORY
Submitted to the Graduate Paculty
of Texas Tech University in
Partial Fulfillment of
the Requirements for
the Degree of
BÍASTER OF ARTS
Approved
u
Accepted
May. 1976
POREWORD
The question of the veteran's bonus for those who
participated in the First World War remained an issue
of considerable controversy and importance on the American political scene from shortly after the Armistice ending the war until it was finally resolved in January,
1936«
During this period the bonus issue involved no
fewer than five presidential administrations (four of
whom vetoed bonus bills), nine congresses, numerous
veterans* and business organizations, three Bonus Karc^ee
and several million veterans*
During the debates over
the issue the bonus was not only political question of
major significance but also came to be viewed ae a symbol of fiscal irresponsibility and class legislation in
one quarter, while it represented a desperately needed
payment of a just debt long overdue to another faction.
To still another, it appeared to be a simple pajiacea for
alleviating the deleterious effects of the nation's most
severe economic depression.
The "bonus question" is actually a broadly descriptive term for several interrelated political issues concemed with the advisability, amount, timing, and method
of procuring additional coropensation for the Pirst World
War veterans.
Such payments would theoretically equalize
the military wages with civilian wages paid during the
ii
conflict.
The bonus issue may be divided into three sep-
arate categories of political activity.
The first was
the activity to obtain initial payment of some type of
major bonus payment which resulted in passage of the
World War Adjusted Compensation Act of 192^^.
The other
issues were a result of the provisions of the basic law
which required delayed payment of the bonus.
Still another
issue related to the amendatory activity aimed at increasing the loan basis of the Adjusted Compensation Certificates issued in compliance with the provisions of the basic
law,
The final and possibly most controversial aspect of
the bonus issue was the movement eind resultant political
activity in support of an early payment of the certificates
at their fully matured value.
The focus of this study is an examination of the
activities of the executive branch in dealing with the
bonus problem.
Special emphasis is placed on the roles
of the president and his secretary of the treasury in
confronting the issue.
Since no agency or individual
actor in the political process operates in a vacuum it
is necessary to exaraine that particular branch's activity
in relation to and in conjunction with the other participants in the process, namely, the members of Congress.
In the public sector there were special-interest groups,
both opposing and supporting the bonus, which atteir.pted
to influence the executive and legislative branches and
iii
the various news media.
Of the presidents taking an active
part in the bonus debate (Wilson was largely represented
by his secretary of the treasury), many similarities of
attitude and policy existed, but extreme contrasts in
strategy and tactics were also present.
These contrasts
are especially evident in the approaches of Presidents
Hoover and Roosevelt.
Since the bonus question extended
over a period of at least eighteen years of American political history it is appropriate and worthwhile to examine
and attempt to evaluate the efficacy and deficiency of
the techniques employed by each of these five administrations in confronting the various problems resulting from
bonus agitation.
Of course all five are not entirely
comparable since all were not faced with identical aspects
of the overall issue.
Although President Wilson took no
direct part in the issue, his admin.lstration, along with
those of Presidents Harding and Coclidge, battled the
initial demand for a bonus.
President Hoover was involved
with both the agitation for augmentation of the loan basis
of the certificates and the campaign for prepayment, while
the chief concem of the Roosevelt administration was only
with the latter aspect of the bonus question.
iv
CONTENTS
FOREWORD
I.
ii
EARLY BONUS ACTIVITY
II.
THE BONUS AND THE HARDING
ADMINISTRATION
III. THE BONUS LAW AND THE COOLIDGE
ADMINISTRAION
lY.
PREYPAYræNT AND THE HOOVER
ADMINISTRATION
V.
HOOVER AND THE BONUS ARMY
1
13
2?
3^
^3
VI.
ROOSEVELT AND THE BONUS
QUESTION
66
VII.
CONCLUSIONS
86
BIBLIOGRAPHY
92
CHAPTER I
EARLY BONUS ACTIVITY
The precise origin of the concept of adjusted compensation, cr the bonus, is difficult to determine.
Accord-
ing to one student of the issue, "adjusted compensation
has no exact counterpart in pension history" since it was
presented as a reward for service already rendered by
discharged veterans rather than as a pre-enlistment incentive as had been the case with previous bounties.
Some
sources attribute the origin of the idea of a bonus to the
2
American Legion
which became the most vocal and effective
advocate of the measurei however, over fifty bills had
been introduced in Congress before the newly organized
veterans• group held its first annual national convention
in November, 1919.
Before the Sixty-sixth Congress had
adjourned sine die in December, 1920, ninety-one bills and
five resolutions had been introduced providing for a bonus
in some form.
^William Pyrle Dillingham, Federal Aid to Veterans
(Gainesvillei University of Florida Press, 1952)rp.
)» p. 145.
2
Katherine r.'ayo, Soldiers. What Next (Boston and Londoni Cassell and Company, Ltd., 1934)i P« 132.
-^Dillingham, federal Aid to Veterans. p. 146.
L
U. S., Congress, House, Comraittee on Ways and N!eans,
Pavment of Ad.iusted-Coropensation Certificates, H. Rept.
1252 To Accorapany H. R. 7726, 72nd Cong., Ist sess., 1932,
p. 1.
1
The rationale supporting adjusted compensation was
quite simple and therefore had appeal not only to the
World War veterans but also to the members of Congress
who chose to support the demand.
While the veteran, so
ran the argument, had been serving his country in the
muddy trenches of France or on military installations in
the United States, his civilian contemporary had been
enjoying higher wages in the booming industrial climate
which was generated by involvement in a global war.
When the veteran returned to civilian life he found that
he was further penalized because he not only had failed
to receive the benefit of the higher wartime wages his
civilian friends had received, but also was forced to
suffer from the severe postwar depression that followed
the Arraistice.
the bonus.
The panacea to remedy this inequity was
The dollar-a-day military wages the veteran
had received would be adjusted or equalized with those
of his civilian counterpart by an additional or adjusted
compensation provided for each day of military service.^
^Dillingham, Federal Aid to Veterans. pp. 155-156i
Raymond Moley, Jr,, The American Legion Storv (New Yorki
Duell, Sloan and Pearce, 1966), p. 68| Davis R. B. Ross,
Preuaring for Ulvsses: Politics and Vetsrans During
World War II (New Yorki Columbia University Press,
1969). PP. 12-131 Dixon Wecter, When Johnnv Comes r^'arching Home (Bostoni Houghton Mifflin, 1944), pp. 350351, 446I "Soldier's Bonus," Outlook. CXXIV (April 28.
1920), 741I Louis B. Blachly, -What of the Soldier's
Bonus?" Outlook. CXXV (May 5, 1920), 18-20.
3
Although the first steps toward a bonus were taken
in Congress, the American Legion quickly endorsed the
idea.
In Minneapolis on November 12, 1919, the full con-
vention adopted a resolution from its Committee on Legislation which called for a soldier's bonus.
The veterans
elected a Philadelphia wool merchant, Franklin D'Olier,
to serve as their national commander and chief official
advocate to obtain govemmental recognition of the -obligation to all service men and women to relieve the financial disadvantages incidental to their military serviceanJ confidently expressed the belief that Congress would
not be remiss in honoring that obligation.^
Thus the
bonus demand was launched by Congress with the enthusiastic support of the majority of the merabers of the
American Legion.
The bonus advocates encountered opposition in both
houses of the national legislature (more in the Senate
tham the House), but it was the executive branch that
proved the most formidable opponent of the bonus proposal.
The proponents of the
measure encountered diffi-
cult and at times insurmountable resistance in this quarter.
From the Wilson cabinet came the first of many such
New York Times. November 13, 1919» p. 17.
'As quoted in Roger Daniels, The Bonus Marcht An
Episode of the Great Depression (Westport, Connecticuti
Greenwood Publishing Company, 1971), p. 24,
executive branch rebuffs.
In March, 1920, the House Committee on Ways and Means,
chaired by Republican Congressman Joseph W. Fordney of
Michigan, comraenced hearings on the numerous veterans*
compensation bills pending before the Sixty-sixth Congress.
On the first day of hearings, March 2, Commander D'Olier
and Chairman Thomas W. Miller of the American Legion's
Legislative Committee appeaured before the committee "asking for simple justice for the ex-serviceman.*
Numerous
other veterans' groups (including the Veterans of Foreign
Wars) and various Congressmen testified in behalf of the
many bills which ranged from outright cash bonuses to land
settlement and home and farm loan programs.
After seven days of favorable witnesses before the
committee, Secretary of the Treasury David F. Houston
appeared on Thursday, March 11, to describe the existing
economic situation and its relation to a bonus. He told
the comraittee the outlook for adjusted compensation was
not bright.
He warned that a bonus would greatly increase
o
U. S., Congress, House, Committee on Ways and ^^eans,
Hearings on Several Bills Providing Bcneficial Legislation
for Soldiers and Sailors in the World War- 66th CQn^>7 ^^^
sess., 1920, p. 30.
^lbid.. p. 433.
5
the coBt of living and that if
financed by floating
govemment bonds it would "cause a grave credit situation."
Purther the Treasury Secretary suggested that Congress
should devote itself to a reduction of federal spending
and "simplifying the tax systems . . . ."
Houston was
supported in his claims that a bonus would prove detriraental to the already shaky economy by Assistant Secretary
R. C. Leffingwell and Treasury Statistician Dr. T. S.
Adaras.
In addition to the Treasury witnesses Govemor
Williajn P. G. Harding of the Federal Reserve Board wamed
that the issuance of new government bonds to cover the cost
of a bonus would adversely affect the market value of
federal bonds which were already outstanding,
He argued
that if adjust compensation were enacted by Congress, the
government should "pay as you go** by providing additional
taxation.
Thus before Congress a major cabinet officer had condemned adjusted corapensation as the height of fiscal irresponsibility and urged the Congressmen to abandon the project,
This pattem of action on the part of the Secretary
^^lbid.. pp. 437-438.
^^lbid.. pp. 455-^96
^^lbid., pp. 447-449.
6
of the Treasury was to be repeated by succeeding Secretaries
regardless of party affiliation.
on the Treasury.
All conderaned these raids
They were among the most ardent opponents
of the bonus measure within the executive branch.
In most
cases the Treasury Secretaries had the full and wholehearted
support and consent of their respective chief executives.
This appeared to be the case with Secretary David F. Houston
and President Wilson.
As it became likely that the House
was going to disregard his previous advice, Houston, "with
the President's full approval,**13 sought to reacquaint it
with his misgivings about the issue.
He wrote to Chairman
of the Committee on Ways and Means, Joseph W. Fordney, on
May 18, 1920, that "it would be highly unfortunate for any
new obligations to be placed upon the Treasury through
enactment of the bonus proposal in any form, however
14
fineinced."
Despite administration protests a bonus measure was
brought before Congress in 1920.
The Committee on Waya
and Means drafted an omnibus bill derived from measures
previously introduced during that Congress.
The bill,
H. R. I4l57, which was introduced by Chairman Fordney,
^^David F, Houston, Eight Years Wjth Wilson's Cabinet,
Vol. II (Garden City, New Yorki Doubleday, Page and Company, 1926), p, 100. This writer was unable to find any
direct statement by President Wilson conceming the bonus.
^ U. S., Congressional Record. 66th Cong., 2nd sess.,
(may 22, 1920), p. 7504.
7
was reported on Miay 21. ^
The bill incorporated a number
of the compensation schemes which offered the veteran the
choice of one of five options,
The first option provided
for an immediate cash payment or adjusted service payraent
for domestic service at the rate of one dollar per day
with a mauciraum payment of $500 and for overseas service
at $1*25 per day of service with a maximum of $625 allowed
to each veteran.
The second option provided for a twenty
year endowment policy, which when redeemed at maturity,
would be the equivalent of the adjusted service pay augmented by a sum equal to forty percent of that amount
with an accrual of 4J percent interest compounded annually.
This option also provided for loan privileges with the
certificates to be used as loan collateral.
The remaining
options provided suras equivalent to 140 percent of the
adjusted service pay for each individual veteran to be
applied to vocational educatinn, purchase of a farm, or
participation in the proposed National Resettlement Project.
The measure was to be finainced by the so-called
"victory teixes" which were to be raised by an income
surtax on incomes over $5000, an increased sales tax on
securities, a real estate sales tax, increased taxes on
tobacco products, and a special levy on stock dividends.
^^lbid.. (May 21, 1920), p. 7457.
^^lbid,. (May 29, 1920), pp, 7930-793^.
8
The floor fight for H. R. 1415? was led by Chairman
Fordney on May 29, 1920.
The Republican Congressman
reminded his fellow chamber members how they had only
recently generously voted a $40 million bonus for govemment clerks for their diligent wartime service, but had
thus far failed to be as generous with the war veterans.
He urged the House to pass his bill which fully incorporated the provisions of the American Legion's scheme
of compensation known as the Four-Fold Plan.
After the
House had been treated to a stirring recitation of a
pro-bonus poem entitled "Backing Up Bill,- Fordney raoved
that the rules be suspended in order to take up consideration of H. R. 14157,
The motion carried and on a roll
call vote of 289 to 92 the House passed the bonus measure.
The engrossed bill was then transmitted to the Senate for
17
consideration.^
Despite the relative ease with which the bonus forces
achieved victory in the House, there seemed to be little
hope of easy passage in the upper house,
In the Senate
the fiscal conservatives on both sides of the aisle held
a firm grip upon the legislative reins,
In additon to
budgetary reluctance on the part of the conservatives,
Southern legislators opposed any measure which promised
to place a relatively large amount of ready cash in the
^"^lbid., pp. 7935. 79^0-79M,
9
hands of the predominantly Black labor force of the South,
18
Legislative activity was suspended temporsæily
while the two roajor parties met in national convention in
the summer of 1920,
Although the bonus bill had been pas-
sed under Republican leadership in the House, the measure
had achieved success through bipartisan effort,
Many Demo-
cratic members had failed to support the arguments and
wishes of their party's president as expressed by Secretary
Houston,
However, the samc cannot be said for the delegates
to the Democratic convention in July.
Although the conven-
tion pledged itself to a soldiers' resettlement program,
under the leadership of conservative Senator Carter Glass,
it rejected the effort made by William Jennings Bryan to
obtain an endorsement of the bonus bill in the national
19
party platform, ^ In a similar vein the Republican delegates chose to disregard the leadership of Fordney in the
bonus effort and simply expressed gratitude to the veterans
for their wartime service,
As with the Democratic platform,
the Republicans chose to remain silent on the question of
V
20
a bonus.
^^Daniels, The Bonus March. pp. 27-28.
^^Wesley M, Bagby, The Road To Normalcvi The Presi'
dential Campaign and Election of 1920 (Baltimorei The
Johns Hopkins Press, 1962), p, 105.
20
Kirk H, Porter and Donald Bruce Johnson, eds.,
^ational Partv Platforms. 1840-1960 (2nd ed.i Urbanai
The University of Illinois Press, I96I), p. 219,
10
H, R. 14157 received no more legislative attention
until after the November national elections.
The bill
was referred to the Senate Committee on Finance
which
conducted six days of hearings in late December, 1920
and early January, 1921,
The witnesses appearing before
the committee were generally the same ones who had testified in the House in March,
Again lame-duck Treasury
Secretary Houston appeared in rebuttal to the favorable
testimony offered by the heads of veterans• groups and
interested members of Congress,
Houston informed the
committee raembers that there was an expected deficit of
one and a half billion dollars for the fiscal year 19221923.
He cautioned that "some sources of revenue are
tending to dry up" and the "exercise of the most rigid
economy" was necessary,
With this economic condition
existing it would be sheer folly to contemplate incurring
an additional debt of $2,3 billion.^^
The public was made widely aware of the administration's qualms regarding the bonus bill since the hearings,
both in the House and the Senate, were thoroughly reported
and administration officials made their view known in
22
various periodicals.
As had been predicted the Sixty-
21
U. S., Congress, Senate, Committee on Finance, Hearings on An Act to Provide Ad.iusted Compensation for Veterans
of the World War. H. R. 14157. 66th Cong., 3rd sess.. 1921.
pp. 76, 90-91.
^^New York Times. March 11, 1920, p. 61 R. C. Leffingwell, -The Soldier and his Bonus," Saturdav Evening Post.
CXCII (May 15» 1920), 6-7.
11
sixth Congress adjourned without the Senate having brought
H. R. 14157 to a vote.
While the arguments of the Secre-
tary of the Treasury had proved ineffective in stopping
the passage of the bonus bill in the House, they apparently
carried considerably more weight in the more conservative
Senate.
One reason why a majority of the Representatives
had been unresponsive to Houston's importunities may have
been that 1920 was an election year in which all members
of the House were up for reelection while only one-third
of the membership of the Senate had to run for reelection
in that year.
It would seem that many of the Congressmen
felt they could not afford the dubious luxury of alienating
23
those constituents who had donned the uniform in 1917.
In March, 1921, Warren Gamaliel Harding took the
oath of office as the twenty-ninth President of the United
States and inherited the problem which the Wilson administration had succeeded only in postponing.
The pattem of
an economy-minded Senate blocking the efforts of a more
generous House would hold in many succeeding bonus battles.
The bonus bill had not posed a sufficient concem for ain
ailing President absorbed with the infinitely raore critical
problem of League of Nations membership to speak personally
on the matter.
He had left the task of convincing the
legislators of the inadvisability of the matter to his
^^Mayo, Soldiers. What Next. p. 132.
12
Treasury Secretary.
A budget-minded Senate comprised of
both Democrats and Republicans who opposed the huge expenditures that the bonus measure would entail had resisted
efforts to present a bill for the President's signature
or veto even at the risk of losing the veteran vote.
Des-
pite differences in party affiliation the President had
found the Senate in agreement, The experiénce of the Wilson
administration is unique in bonus history in that the
President played no active public role in repudiating the
bonus measure.
As the bonus advocates became more power-
ful and insistent, the succeeding presidents felt
they could not remain publicly silent and hope to stem
the bonus tide.
CHAPTER II
THE BONUS AND THE HARDING ADMINISTRATION
Although the delegates to the Republican convention
of 1920 failed to endorse the bonus bill in their platform,
it appeared likely that their candidate favored passage of
an adjusted compensation bill.
And, on the campaign trail
Senator Warren Harding stated that the bonus -ought to
pass" but offered no firraer support of the proposal.
Although the bonus advocates sought a warraer endorsement
from the candidate, none was forthcoming during the campaign,
,In fact, in an interview with Stars and Stripes in
September, 1920, Harding retreated from his earlier tentative endorsement, voicing doubt as to the wisdom of the
bonus in view of the prevailing economic situation.
Because of the reluctance of the Republican candidate and
of the conservative leadership of the Democratic party,
the bonus failed to emerge as a significant issue on the
part of the major parties did not deter the American
Legion from announcing its "unqualified approval" of
H. R. I4l57 on September 18 as its delegates met in Cleveland for their second annual national convention.
Daniels, yhe Bonus March. p. 24.
^As reported in New York Times. September 4, I920,
p. 1.
^Daniels, The Bonus March. p. 24.
New York Times. September 29, 1920, p. 24
13
14
Bonus proponents had reason to feel optimistic as the
Sixty-seventh Congress convened.
The newly elected presi-
dent did not voice opposition to the principle of adjusted
compensation and the Republican Congressional leadership
seemed to favor the idea of a bonus.
Perhaps the bonus
advocates had the greatest reasons for optimism since the
chairmen of the appropriate committees, Ways and Means in
House and Finance in the Senate, were staunch bonus advocates.^
Very early in the first session of the Sixty-seventh
Congress the chairman of the Senate Coramittee on Finance,
Porter J. McCumber (Republican-North Dakota), introduced
Senate Bill 506.
This bill was quite similar to the one
passed by the House in the previous Congress.
Chairman
McCumber held a one day hearing on his bill on June 2,
1921, which was dominated by pro-bonus witnesses.
The
new national commander of the American Legion, F. W.
Galbraith, appeared with the vice-chairman of the Legion's
legislative coramittee, John Thoraas Taylor.
Taylor was a
skillful Washington attomey who led the Legion's bonus
and other lobbying efforts for a number of years,
One
^Daniels, The Bonus March. p. 28| Dillingham, Federal
fid to Veterans. p. 150.
"U. S., Congressional Record. 67th Cong., Ist sess.,
(April 12, 192I), p. 149.
"^U. S., Congress, Senate, Comir.ittee on Finance,
Hearings on A Bill To provide Ad.iusted Cor.pensation for
Veterans of the World v/ar. and For Other Furooses. S. 506,
67th Cong., Ist sess., pp. 6-8, 15-21,
15
political scientist attributes much of the Legion's success to the diligent efforts and adroit methods of
Taylor.
However, discordant notes began to sound two days
before the Committee on Finance reported S. 506.
On June
18 the U. S. Chamber of Commerce presented a brief in
opposition to the bonus.
The Chamber's recommendations,
which were submitted to President Harding, his Cabinet,
and members of Congress, called for budgetary restraint
in an effort to reduce the tax burden,^
On June 20 Senator
McCumbor reported his bill which dropped the land settlement and taxation provisions of the previously passed H. R.
14157,
On July 2 Secretary of the Treasury Andrew Mellon
wrote Senator Joseph S, Frelinghuysen (Republican-New Jersey), describing the official administration position on
the bonus issue.
Mellon declared that "action be deferred
upon the soldiers* bonus, . . . This is not a time to
impose several billion dollars of new liabilities on an
already overburdened Treasury."
o
Karl Schriftgiesser, The Lobbvists1 The Art and
Business of Influencing Lawmakers (BostoniLittle,Srown,
1951). PP. 50-52.
^New York Times. June 19, 1921, p. 1.
^^U. S., Congressional Record. 67th Cong,, Ist sess.,
(June 20, 1921), p. 2758,
^hbid.. (July 6, 1921), p. 3376.
16
Dcspite the wamings voiced by the Treasury Secretary, the Senate seemed determined to pass the McCumber
bill,
In an effort to prevent passage President Harding
lunched with a number of Republican Senators on July 7,
urging them to persuade their colleagues to postpone
action on the bonus bill,
He advanced the same budgetary
arguments set forth by Mellon and hinted he would make an
unprecedented personal appearance before the Senate to
argue his case that S. 508 should be recoraraitted,^^
Armed with budgetary inforraation from .Vellon, the
President appeared before the Senate on July 12,
Hard-
ing asked Congress -to pause, , , rather than break down
our Treasury,"
He argued that the bonus "would iraperil
the financial stability of our country,"^^
The public
reaction to Harding's address was quite favorable. A
number of Senators felt that the President had improperly
interfered with the legislative process but were unwilling
to proclaira publicly their outrage fearing to alienate the
14
public.
In an effort to counter the Harding arguments.
12
Robert K. Murray, The Harding Erai Warren G.
Harding and His Administration(yânneapolis1University
of Minnesota, 1969)» p. I87.
^U. S., Congressional Record. 67th Cong,, Ist sess.,
(July 12, 1921), p, 3597.
Robert K, Murray, The Politics of Normalcvi
Govemmental Theorv and Practice in the Harding-Coolidge
Era (New Yorki W. W. Norton. 1973). P P . 65. 75: New York
T mes. July l4, 1921, p. 14.
17
Legion officîals informed members of the Senate that such
statements were merely "smoke screens" and that no action
on recommital of S. 508 should be undertaken. -^ Despite
a number of pro-bonus speeches the Senate followed Harding's advice and sent the bill back to committee on July
15 by a vote of 47 to 29.^^ Although FArding drew praise
from financial circles (he receiréd
a personal letter
of thanks from J. P. Morgan),^"^ he had not seen the end
of the bonus issue.
Later conflicts would be more diffi-
cult to win.
The burying of S. 508 in comraittee only served to
strengthen the resolve of the Araerican Legion in its
efforts to obtain a bonus. The national comraander assured
the 1921 convention that he could not "conceive of a Congress so derelict of its duty. . .to be misled again in
refusing to adjust the economic balance between the man
18
who went to war and the man who did not."
On December
12, upon emerging from a conference with President Harding, the new national commander, Hanford MacNider,
l^U. S., Congressional Record. 67th Cong., Ist sess.,
(July 15. 1921), p. 3872.
^^lbid.. p. 3875.
^'^Andrew Sinclair, Th^ ^vailable Man (New Yorki
Macmillan, 1965)» P. 200.
^^As quoted in Dillingham, Federal Aid to Veterans.
p. 151.
18
informed reporters that he had been assured by Senator
KcCumber and Congressman Fordney that a bonus bill would
19
be passed in the second session,
About a month later
President Harding invited the Republicans leadership to
a dinner at the White House, including Chairmen McCumber
and Pordney.
At this time news reports indicated Hard-
ing might sign a bonus bill if Congress were to submit
such a measure to him,
On Jamuary 26, 1922, the Repub-
lican caucus advised the House Ways and Means Committee
to report one of the several bills pending before the
...
20
committee.
In early 1922 the pressure mounted within the
Republican party for the President to sign an adjusted
compensation bill, On February 13» 1922, following seven
days of House hearings on H. R. 1, Congressman Horace N'.
Towner (Republican-Iowa) wrote President Harding urging
hira to accept a bonus backed by a federai bond issue.
The Congressman informed the President that a numDer of
his House colleagues were fearful of the effect a veto
„21
would "have upon their chances of being retumed.**
l^l^fiw YQr}c Times. December 13» 1921, p. 1.
^Qjbid,. January 9. 1922, p, li Murray,
ing Era. p. 308.
^^As quoted in Murray,
p. 72.
he Har<^-
The Politics of Nor-nalcv.
19
On March 13 Chairman Fordney introduced H. R. 10874, a
bill that forced Harding to roake a decision concerning
22
the bonus issue,
Perhaps as an indication of the urgency Chairman
Fordney felt, H. R. 10874 had only one day of hearings
immediately after its introduction,
Araong the few wit-
nesses to testify were Treasury Secretary Mellon and
Govemor William P. G. Harding of the Federal Reserve
Board.
Both voiced arguments similar to those given in
earlier appearacnes in which they argued against the
23
bonus. -" Two days following the hasty hearing, Fordney
reported H. R. 10874 favorably to the House on M.arch
.
24
16, 1922,
The estimated cost of the bill was four
and a half billion dollars.
This bill eliminated the
cash option earlier measures had authorized,
The only
cash payments allowed would be adjusted service pay in
amounts of $50 or less.
Otherwise the veteran would
receive certificates that would mature in twenty years.
The options of earlier bills, i. e,, vocational aid.
22U. S., Congressional Record. 67th Cong., 2nd sess.,
(March 13» 1922), p. 3835.
-^U. S., Congress, House, Committee on Ways and
Means, Hearings on Soldiers' Adiusted Compensation,
H. R. 10874, 67th Cong., 2nd sess., pp. 3-19.
U. S., Congressional Record. 67th Cong., 2nd sess.,
(March 16, 1922), p. 3997.
20
farm or home aid, and land settlement, remained intact.
Like S. 508, the new bill contained no revenue provisions. ^
After favorable House Ways and Means Committee action,
bonus proponents discemed signs indicating the bill would
meet with the approval of the President.
Despite Harding's
V0W3 to veto any measure which did not contain revenue provisions, the Republican leadership was optimistic the President would sign the bill if it gained Congressional
approval.
The apparent cause for the optiraism felt by the
Congressraen was the widespread belief that Harding was
simply following the advice of Secretary Mellon in his
earlier opposition to the bonus.
The legislators, Speaker
Nicholas Longworth included, felt that Harding's resistance to the bonus would break down with the passage of a
bill by both houses of Congress especially since predicted
26
deficits failed to occur.
Against this background Chairman Fordney led the floor fight for H. R. 10874 on March
23.
The bill was brought up under a special suspension
of the rules which prohibited floor amendments.
Thus,
after limited debate the House passed H. R. 10874 by a
27
staggering margin of 333 to 70.
^^lbid..
(April 5» 1922), p. 5049.
Danieis, The Bonus March. p. 31*
^^U. S., Congressional Record. 67th Cong., 2nd
sess., (March 23, 1922), pp. 4447-5448.
21
On the following day, March 24, 1922, H. R. 10874
was referred to the Senate Committee on Finance.^^ Chairman McCumber was a stauch bonus advocate whose mail was
extremely supportive of his own views.
In addition, on
April 18 the Republican caucus instructed the Committee
on'Finance to report H. R. 10874 to the Senate -within a
29
reasonable time." ^ In response, McCumber convened the
Committee in executive session to produce its own version
of the bill.
After two weeks the Senate version was
ready, and on May 6 the chairman forwarded a copy to
President Harding.
In a covering letter McCumber urged
Harding to support the measure,
He inforraed the Presi-
dent that públic opinion appeared to be running highly
in favor of the bonus.
He also rerainded Harding that
ttid-term elections were not far off, and he feared for
Republican chances if the bonus were not enacted into
law,
To reinforce his arguments and to elicit support,
McCumber, along with Senators Lodge, Curtis and Watson,
personally called on the President.
Apparently McCumber
met with little sucoess in persuading the chiéf executive.
Harding indicated that he expected Congress to take action
on the pending tariff bill prior to any consideration of
30
the bonus bill.
^^lbid.. (March 24, 1922), p. 4503.
^Murray, The Harding Era. p. 310.
^^lbid.. pp. 310-311I Murray, The Politics of
Normalcv. p. 73.
22
Despité President Harding's position Chairir.an
McCumber reported the Senate version of H. R. 10874
on June 8.
The amended measure, which would cost an
estiraated $.3.85 billion, contained only minor variations
from the House bill.
About a week later the President
again stated his objections to taking up the bonus in
Congress prior to completion of action on the FordneyMcCumber tariff.
Although McCuuber was eager to achieve
passage of the bonus, he was forced to postpone action
at the presidential demand.
While the Senate tumed to
consideration of the tariff, the American Legion intensifiod its publicity campaign in support of the bonus.
Dire wamings were issued detailing the consequences
Congressional incumbents raight face should they fail to
pass the bonus bill.
Additionally the White House received
considerable coorespondence frora Legion chapters urging
presidential approval of the veterans' bonus.-^
In August the tariff bill was enacted and the Senate
was again ready to consider H. R, 10874.
As debate
resumed the President indicated that he would veto the
bill if it failed to carry revenue provisions,-^
Undeterred
by the presidential announcement, Chairman McCumber led the
floor debate in favor of the bill,
On August 31 the Senate
passed the Finance Comraittee's^fersion of the bill by a
^ U. S., Congressional Record. 6?th Cong., 2nd sess.,
(June 8, 1922), p, 83981 Daniels, The Bonus yarch. p. 32.
32
New York Times. August 26, 1922, p, 1,
23
roll call vote of 47 to 22, Most of the Republicans up
for reelection cast their votes in favor of the raeasure.
In all, twenty-seven Republican Senators voted for the
bill while fifteen opposed it, Following the vôte Senate
conferees were named to meet with the House managers to
affect a compromise.
The land reclaraation provisions of
the bill were dropped.
On the following day the House
passed the conference bill by a voice vote.
On September
15 the Senate, despite a large nuraber of absences,
adopted H. R. 10874 by a vote of 36 to 17.-^^
Thus the
first bonus bill passed by both houses of Congress was
laid on the desk of President Warren G. Harding.
In view of the President's previous stateraents on
the inadvisábility of a bill with revenue provisions,
there appeared to be little doubt that he would veto the
act.
Nevertheless bonus proponents such as Senators
Lodge, Kellogg, and Hale joined Commsuider Hanford MacNider
34
in urging Harding to sign the measure.-^
On September
19 Harding ended the guessing game regarding his actions.
He returned H. R. 10874 with a veto message which contended that the bonus was fiscally irresponsible and that
-^-^U. S., Congressional Record. 67th Cong., 2nd sess.,
'August 31» 1922, p. 12033» September 13, 1922, p. 12^.44,
September l4, 1922, p. 12607» and September 15» 1922;,
p. 12697.
34
-^ Murray, The Harding Era, pp. 312-313.
24
it
would undermine the confidence on which our
credit is builded and establish the precedent rf
distributing public funds whenever the proposal
and the numbers affected make it seem politically
appealing to do 60.35
On the following day, September 20, 1922, the House
voted to override the President's veto.
The vote of
258 to 54 represented forty-nine votes more than the
two-thirds majority required.
There werenumerous defec-
tors in the President's party.
In fact, the floor fight
was led by Majority Leader Frank W, Mondell in the House
and Senator Lodge in the Senate.
The attempt that after-
noon to override in the Senate proved unsuccessful.
The
vote in the Senate (44 to 28) fell four short of the
necessay majority.
While in the House, Republicans voted
more than five to one against sustaining the President's
veto, the margin was much closer in the Senate (27 to
override and 21 to sustain).
There were a number of
Senators absent during the crucial vote.
Among those
absent were five who had previously voted for the bill.-^
"^^U. S., Congressional Record. 67th Cong., 2nd sess,,
(September 19» 1922), pp, 12946-12947.
^^lbid.. (September 20, 1922), pp. 12999-13004|
Murray, The Harding Era. p. 313 and The Politic-, cf Normalcy. p. 75> Daniels, The Bonus i.'arch. pp. 31^*315. Of
the five absentees who had previously voted for the measure, three were standing for re-election.
25
The reaction to the Harding veto vauried,
lations were followed by condemnation,
Congratu-
Harding was
praised by business leaders, finainciers, and a number of
newspapers, such as the Philadelphia Ledger. the Washington Post and the New York Times.
On the other hand
veterans' organizations vowed to seek revenge at the polls
in November.
The Americam Legion met in annual convention
at New Orleans the month following Harding's victory.
The
membership condemned the President's veto and reaffirmed
their support of the bonus.^
Although Harding is considered generally to have been
a weak president, he had shown a strength and courage of
convictions that was to rival the tenacity of following
presidents faced with the bonus question.
At first he had
been characteristically vacillating in his early statements and actions.
His veto was sustained despite wide-
spread defections in his own party and the pressures
generated by the approaching mid-term elections.
His
success in no small part was due to the support he received
from southem Democrats in sustaining his veto.
It is
extremely difficult to assess the effectiveness of the
of the vows of revenge at the mid-term elections voiced
by veterans' groups.
The Republicans lost seven seats
^ Murray, The Harding Era. p. 313l Dillingham,
Federal Aid to Veterans, p. 153.
26
in the Senate, cutting their majority from twenty-four
to ten, and they lost seventy seats in the House cutting
their ma'jorityto twenty.
How much of this loss can be
attributed to the bonus vote or to other voter disenchant
ment with the economy and other issues is extremely difficult
to determine.
It appears that those who voted
for the bonus enjoyed a slight advantage in being retumed to office compared to those who voted against the
bill.^'^
^'Daniels, The Bonus r^arch. p. 3^1 Murray, The
Harding Era. pp. 315-317» V. 0. Key, "The Veterans and
the House of Rspresentatives i A Study of a Pressure
Group and Electoral Mortality," Journal Qf Folitics.
V (February, 1943), 27-40.
CHAPTER III
THE BONUS LAW AND THE COOLIDGE ADía.NISTRATICN
Although bonus measures were introduced in the third
and fourth sessions of the Sixty-seventh Congress no action
was taken on them.^
With the death of Warren Harding on
August 3, 1923, leadership of the anti-bonus forces
passed to Calvin Coolidge.
The new president minced no
words in voicing his opposition to adjusted corapensation.
In his first message to Congress Coolidge, after declaring
the bonus to be fiscally irresponsible and an unwarranted
raid on the Treasury, flatly statedi -I do not favor
granting a bonus."
Allied with the president in opposi-
tion to the measure were a number of influential businessmen and business organizations such as the National Industrial Conference Board which in August, I923, issued a
special report stating that the bonus was not -justified
on grounds of economic equity amd faimess to the
veterans or to the general population. . . ."-^
Despite these negative reactions to the proposal,
bonus proponents were not long in presenting Coolidge with
U. S., Congressional Rocord. 67th Cong., 3rd sess.,
Index. p. 15I Congressional Record. 67th Cong,, 4th
sess,, Index. p. 59.
2
Ibid.. 68th Cong,, Ist sess,, (December 6, I923),
p. 99.
3
^National Industrial Conference Board, The Soldier's
Bonus or Ad.iusted Compensation for Soldiers (New Yorki
National Industrial Conference Board, I n c , 1923), p. 36.
27
28
a bill for his approval or veto.
At the beginning of the
first session of the Sixty-eigth Congress Chairman William
R. Green (Republican-Iowa) of the House Ways and Means
Committee introduced a committee-drafted bonus bill (H. R.
7959) on March I5, 1924,
reported to the House.
Two days later the bill was
The time was ripe for passage of
the bonus bill, and on Maæch 18 it was passed by the twothirds majority (355-5^) required under suspension of the
4
rules.
On April 23, the Senate passed an amended version of
the bill by a vote of 67 to 17. A conference coramittee
was appointed and on May 1 the Senate accepted the conference report (H. Rept, 624) by a voice vote,
The House
followed suit on the next day.
H. R. 7959 did not include the numerous options previous bills had.
Provisions for vocational, farm and home
loains were stripped frora the bill,
The bill contained pro-
visions for a cash payraent of bonuses less than $50. An
adjusted compensation certificate would be issued for
amounts greater than 550.
Other features of the bill
U. S., Congressional Record, 68th Cong., Ist sess.,
(March 15, 1924), p, 43081 (.March 17. 1924), p, 4395i
(Karch 18, 1924), p, 4444,
^lbid.. (may 1, 1924), p, 76211 (May 2, 1924),
p. 7726,
29
followed closely those of previous bonus proposals,
The
adjusted compensation certificates were to be the equivalent of twenty year endowment policies,
The maxiraum
adjusted service credit allowed for domestic service
would be $500,
Doraestic service was to be calculated
at $1 per day of service,
The maximum credit for over-
seas service was to be $625 (at the rate of $1,25 per
day).
The basic credit was to draw four percent interest
compounded annually.
Adjusted compensation would be
credited only to military pay grades the equivalent of
an army captain or lower.
In addition the bill provided
for borrowing privileges after the certificate had been
in effect two years.
The bill established the Adjusted
Service Certificate Trust Fund to be administered by the
Treasury Department to finance payment of the certificates
at maturity.
An annual appropriation was established to
provide the capital required for this sinking fund.
Coolidge's veto of H. R. 7959 on May I5, 1924, came
as no surprise after his blunt stateraent regarding the
bonus in his first message to Congress.
The message was
a typically drafted Coolidge "sermon" with heavy moral
tones.
The President condemned the bill as foolhardy
U. S., Congress, Senate, Committee on Finance, Jo_
Provide Ad.iusted Compensation for Veterans of the v/orld
War. and for Other Purposes.S. Rept. 403 To Accompany
H. R. 79, 68th Cong., Ist sess., 1924, pp, 4-7.
30
economically and as blatant class legislation for the
enrichment of the few at the expense of the general
populationi
America entered the World War with a higher
purpose than to secure material gain. Not greed,
but duty, was the impelling motive. Our veterauis
as a whole responded to that motive. . . . Service
to our country in tirae of war raeans sacrifice. . . .
The property of the people belongs to the people,
The veterans as a whole do not want it, All our
American prinoiples are opposed to it. There is
no moral justification for*it,7
However, this time the pro-bonus faction felt assured
that the veto could be rather easily pverridden by Congross which was even more conscious of a coming election
than previous Congress had been,
Ignoring Coolidge's arguments, the House on Miay 17
voted 313 to 78 to override the veto,
Two days later the
Senate also overrode by a vote of 59 to 26,
Apparently
the administration had been successful in persuading five
Senators who were previously pledged to vote for the bonus
to switch their votes to sustain the veto,
The effort had
not been enough since the Senate overrode by a slim margin
of three votes.
When it was ainnounced that the veto had
been overridden, the gallery which was packed with bonus
advocates burst into applause.
'^U. S., Congressional Record.
sess., (May 15» 1924), p, 8661,
68th Cong., Ist
^lbld,. (May 17» 1924), pp, 8813-3814 and (May 19,
1924), pTTS^li Daniels, The Bonus r>:arch. p. 316.
31
After a struggle of almost six years the bonus had
been enacted into law despite the objections of businessmen, financiers, govemors of the Federal Reserve Board,
two Secretaries of the Treasury, and three Presidents.
The persistence of veterans' orgamizations such as the
American Legion and the Veterans of Foreign Wars had
been successful.
How had this bill achieved passage by a sufficient
margin to overx^ide a veto where others had not?
How had
fiscal conservativos been brought into the bonus camp?
In part, Public Law 120 was more acceptable because of
its provisions,
The device of a delayed payment in the
forra of an endowraent policy provided a compromise between
the bonus-minded and the economy-minded merabers of Congress
that allowed the bill sufficient support to override the
Coolidge veto,
Provision for a sinking fund to finaince
the bonus was also a contributing factor to passage of the
bill,
By providing that the bonus would be paid in twenty
years, the budgetary conservatives were mollified.
?y pro-
viding for an increased paiyment through the twenty-five
percent increase of the basic adjusted service pay and the
accrual of four percent interest on that sum, the supportets
were given a very tempting inducement to corapromise,
943 U. S. Statutes at Large 122-128,
In
32
addition, the American Legion had been effective in
buidling widespread and vocal grassroots support during an election year,
The efficacy of the American
Legion's program has been summarized as making -far
more noise than the number of its members warranted and
Congressional ears were peculiarly sensitive to its
eagle screams,"^^
Bonus advocates, in comproraising to receive the
delayed payment of the bonus, abandoned one of the chief
principles of the bonus rationale,
The bonus was to
equalize wages paid soldiers and civilians as soon as
possible.
By agreeing to the endowment policy the
veterans abandoned, at least temporarily, the principle
of imraediate compensation.
With the approach of the
Great Depression and its attendant economic dislocation
this principle would be wholeheartedly re-embraced.-^^
President Coolidge's position of righteous indignation had proved ineffective,
Coolidge's arguraents of
econoraic folly, class legislation amd the possibility of
establishing a dangerous precedent that might be utilized
. Schriftgiesser, The Lobbvists. p, 49,
Dillingham, Federal Aid to Veterans. pp, I55-I561
Daniels, The Bonus March. p, 40i Irving Bernsteinf The Lean
Yearsi A Historv oi' the American Worker. 1920-1933
(Bostoni Houghton iVifflin, p. 437.
33
by the veterams of future wars were to prove more effective for Coolidge's successors than they had been for
him.
Yet, they would only serve to delay rather than
to dispatch new bonus demamds.
CHAPTER IV
PREPAYMENT AND THE HOOVER ADMINISTRATION
The loan provisions of Public Law 120 allowed the
veteran to borrow against his Adjusted Compensation Certificate at a commercial bank,
The use of the certi-
ficates as loan security was not authorized until the
law had been in effect for two years or Jamuary 1, 1926,
The loan basis of the certificates was not to exceed
90?S of the reserve value of the certificate, that is,
the value of the certificate less any interest yet to be
accrued,
In the first six months after loam provisions
becarae effective almost 465,000 loans were made with commercial bamks,
On Mairch 3, 1927, President Coolidge
signed H. R. 16886 which authorized the Director of the
Veterams' Bureau to make loans on Adjusted CoHipensation
Certificates from the Government Life Insurance Fund
not to exceed $25 million at an interest rate of four
percent per amnum,
Public Law 672 had authorized these
loans by the Bureau because of an apparent reluctance
of banks to make laons using the certificates as security,
Less than three months after the authority was granted,
the Bureau had made in excess of 225,000 loans on the
bonus certificates.
^43 U. S. Statutes at Large 126-128; Dillingham,
Federal Aid to Veterans, p. 158| 44 U. S. Statutes at
Large 1389-1390.
^^
35
With the fall of the stock mairket in October, 1925,
and the ensuing depression, pressures began to mount for
early payment of the certificates at their matured
value,
The proponents of prepayment argued that the debt
was owed to the veteran in 1919 and that the 1924 law
was simply a compromise to obtain guarantee of eventuaú.
payment of a debt they felt to be long overdue.
The
veteran needed his bonus in 1930 more desperately than
he had during the camparatively mild recession of 1919.
Concurrent with the movement for prepayraent was the
attempt to increase the loan basis of the certificates
in order to at least obtain a portion of what the veteran
2
felt due him,
The Hoover administration expressed great dissatisfaction both with attempts to increase the loan basis and
to obtain prepayment of the bonus.
President Hoover took
the opportunity to express disapproval during his address
to the national convention of the Americam Legion at Boston on October 6, 1930i
There is , , . a deep responsibility of citizenship , , ., that the demand upon the Govemment
should not exceed the measure that justice requires
amd self help can provide • , , . If we shall overload the burden of taxation, we shall stagnate the
economic progress and wc shall by the slackening
^lrving Bemstein, The Lean Years
Houghton Mifflin, 1960), p. 437.
(Bostoni
36
of this progress place penalties upon every
citizen.J
By the strength of President Hoover's appeal and
the efforts of the anti-prepayment forces within the
Legion, led by former national commander Hanford MacNider amd Theodore Roosevelt, Jr., the convention was
dissuaded from adopting a resolution calling for prepayment or an increase in the loan basis of the certi4
ficates.
The President had deterred the convention
but Congress was not to be as subraissive.
The House Ways and Means Committee conducted
hearings on some forty-three bills advocating prepayment of the bonus in 1931.
Treasury Secretary Andrew
Mellon appeared before the comraittee to argue the
administration's viewpoint that the proposed measures
were economically unwise and discrirainatory. î<'.ellon
noted on the opening day of the hearings, January 29,
1931, that "this is no time for the reckless and unwarramted abuse of the public credit."
Mellon was followed
by Herbert Case, Chairman of the Federal Reserve Bank of
New York, who contended that prepayment "would depreciate
outstamding govemment issues."
Roy A. Young, govemor
^Raymond Moley, Jr., yhe Araerican Legion Storv
(New Yorki Duell, Sloan and Pearce, I966), p. 100.
37
of the Federal Reserve Bank of Boston, felt payraent of
certificates would result in "deliberate inflation on a
vast scale, . . .-
However, on February 3, 1931, Cwen
D. Young, vice-president of General Electric, appeared
to urge passage of a bill authorizing an increase of
the loan basis of the certificates to 50% of the face
or matured value as a stimulamt to the failing economy,^
Hoover's White House aides viewed Young's testimony as
"a breaking down of the committee's resistamce and a
new impetus toward passage of a bonus bill."
On Feb-
ruary 7, the President informed the Republicam leadership
in Congress that if the bill were passed he would veto
it,
On February 14, Secretary Mellon wrote Chairr.an
Willis C, Hawley (Republican-Oregon)
of the Ways and
Meams Committee that funds were not available for payment of such loans and that diminishing revenues would
make "finamcing extraordinarily difficult,"'
^U. S., Congress, House, Committee on Ways amd
Means, Hearings on Pavment of Soldier's Ad.iusted Corapensation Certificates. various bills, 71st Cong.,
3rd sess., 1931. PP. 6, 38, 367-38O.
^Williara Starr Myers and Walter H. Newton, Ihe.
Hoover Administratiom A Documentary Narrative (New
Yorki Charles Scribner's Sons, 1936), p. 65.
Ibid.i U. S., Congressional Record. 71st Cong.,
3rd sess., (February 16, 1931)» P« 5082.
38
Despite the wamings of the possibility of dire consequences made by the President and other administration
spokesmen, the House was determined to pass the loan bill.
The leadership on both sides of the aisle supported the
measure.
H. R. 17054 was reported out of committee under
suspension of the rules which limited debate to forty
minutes and barred floor ajnendments. After this very
limited debate the House passed the bill by the staggering vote of 363 to 39.
H. R. 17054, which had been
drafted in committee and introduced by Hawley, provided
for the 50^ loan basis suggested by Owen Young.
Three
days later the Senate eagerly passed the bill by a roll
call vote of 72 to 12.
Of the Senate's fifty-six Repub-
licans only eleven supported the President by voting
against H. R. 1705^.^
Hoover's veto was fully expected as a result of
his earlier statements and his waming to Congressional
leaders.
He retumed H. R. 1705^ with his veto message
to the House on February I6, 1931.
He estiraated the cost
of the raeasure to be approximately one billion dollars.
He notedi
There not being a penny in the Treasury to
meet such a demand, the Govemraent must borrow
this sum through the sale of reserve fund secur-
^U. S., Congressional Record. 71st Cong., 3rd sess.,
(February I6, 1931). p. 5082, and (February 19. 1931). p.
53861 Daniels, The Bonus March. p. 45
39
ities. . • . The need of our people today is a
decrease in the burden of taxes and unemployment,
yet they (who include the veterans) are being
steadily forced toward higher tax levels and lessened employment by such acts as this.5
Immediately after receipt of the veto message the
House, by a vote of 328 to 79. chose to override.
On
the following day, February 27, the Senate reconsidered
the bill and overrode by a vote of 76 to 17.^^ H. R.
1705^ became Public Law 743 providing for a loam basis
of 50^ of the face value of Adjusted Compensation Certificates at an interest rate of 4J percent.
The increase
in the loan basis of the bonus certificates generated
over two million loans amounting to approximately $800
million in the four months after enactment.
Yet, this
had little effect on the demands for full prepayment.
The ultimate goal of bonus advocates still remained
immediate payment of the certificates at the matured
value.
The chaunpion of this cause was Congressmam Wright
Patman (Democrat-Texas) who in his freshamn year intro-
^U. S., Congressional Record. 71st Cong., 3rd sess.,
(February 26, 1931). PP. 6168-6169 and (February 27,
1931). P. 6230.
''lbid.
^^46 U. S. Statutes at Large
Federal Aid to Veterans. p. 162.
1429-1430| Dillinghara,
40
duced a bill to provide for immediate payment.
Patman
introduced H, R. 3493 on May 28, I929, and although the
bill was referred to the House Ways and Means Committee,
it was not reported during the Seventy-first Congress.
Patman, himself a veteram amd member of the American
Legion, proved to be am incessant campaigner for the
bonus prepayment.
He addressed his colleagues in the
House, made speeches to the nation by radio, and fought
for adoption of resolutions at the American Legion
national convention in support of his bill,
On intro- .
ducing H. R. 3493 he stressed the need of the veteran
and that the loan system employing the certificates as
collateral was of little benefit to the veteran because
the interest charged would cause the evaporation of the
compensation he was to receive.
He aorgued, "It will
not cost the Govemment a great deal more to liquidate
this indebtedness now rather than wait over a period of
12
years.""'
In 1931 again President Hoover received am invitation from the Legion to address the amnual convention,
As he had in 1930 he utilized the opportunity to
repeat his call for the Legionnaires to display their
^12
^ U . <? - ' nftnpp^eggjonal Record. 7 1 s t Cong.» I s t
sess
., (May 28,T929yr7prH4572480.
41
patriotism by not pressing their deroands for immediate
payment of the Adjusted Service Certificates.
Before
over fourteen hundred delegates Hoover urged the veterans
to refrain from "any additional demands upon the nation
until we have won this war against the world depression."
Despite the efforts of the bonus supporters led by délegate Wright Patman, the convention supported the stance
of the President by endorsing the report of the Legislative
Committee which called for the Legion to "refrain from
placing unnecessary financial burdens uon the nation. . ."
by avote of 902 to 507.^-^
However, individual members of Congress felt no
such corapunction amd no less than thirty-four immediate
payment bills were introduced in the first session of
the Seventy-second Congress.
forefront of the battle.
Again Patman was in the
His bill drew fire from con-
servative members not only because it proposed imraediate
payment of the bonus, but also because of the method of
payment Patmsm chose to employ,
H. R. 7726 proposed to
pay for the bonus by the issuance of unsupported fiat
currency.
Patman félt
that this inflationary measure
would spur the depression-ridden economy into some sem-
•^^Nftw York Times. September 22, 1931. p. 18i
Moley, The Amerjc?n Legion Storv. p. 200.
rmmii
14
of life.
42
President Hoover declared it to be "unthink-
able that the govemment of the United States should
resort to the printing press and the issuance of fiat
currency as provided in the bill."^
As the Depression worsened support among veterams
grew for Patman's bill.
The desperation induced by the
sorry state of the economy created the climate for one
of the most unusual social amd political events to
occur in Twentieth Century America.
A new "Coxey's
Army" was converging on the nation's capital, determined
to lobby for the passage of Patmam's bill.
14
^^U.
S., gpngressional Record. 72nd Cong., Ist
sess., Index, p, 10 and (june 15. 1932). p. 13020.
^^New York Times, September 15. 1932, p. 4,
CHAPTER V
HOOVER AND THE BONUS ARMY
A group of 250 veterans departed Portland, Oregon,
for Washington on May 11, 1932, hoping to deraonstrate
support for the speedy passage of the Patman bill. Araong
the veterans was Walter W, Waters, a former artillery sergeant, who had exhausted his savings during one and a
half years of unemplyment.
He, like the other men, had
chosen to leave home and family in an áttempt to secure
the passage of araeasurewhich, at best, would offer only
temporary relief from the economic hardships of the Depression.
He secured the assistance of unwilling rail-
roads amd state govemors eager to move the Bonus Marchers
out of their respective states. Waters displayed great
skill in cajoling, imploring, and coercing assistance
in transporting his "troops."
The veterans left Port-
land with practically no money or provisions but were
extremely successful in obtaining assistamce from local
charities and veterams' groups en route.
While the
national convention of the American Legion had not endorsed payment of the bonus that year, the Portland veterams
encountered local support for the Patman bill in their
travels.
The Portlamd marchers generated considerable
national publicity in their battles with the railroads
which had the effect of enlisting still other Bonus
Marches in other parts of the country with the sairae
43
44
goal amd destination as the Portland Group.
Waters arranged and shaured the rude transportation
of his "troops,"
They rode in railroad boxcars, cattle
cars, and trucks owned by the National Guard and provided
by govemors eager to get theraarchersover the state line,
The Portland Bonus Army arrived at Washington on í^ay 29,
1932.
They were greeted by fellow maurchers from other
states, who having heard of the leadership techniques of
Waters, offered leadership of the combined force to the
former artilleryman.
Cn May 31» after exacting a prorr.ise
from the other groups that their raen would conform to his
demanding stamdards of discipline, Waters accepted the
title of "Commander of the Bonus Expeditionaxy Force."
Charged with maintaining order within the District
of Colurabia was General Pelham D. Glassford, newly appointed
Superintendent of Metropolitan Police,
Glassford was him-
a veteran and had been the Army's youngest brigadier
general during the First World War.
Upon retiring from
the Army Glassford accepted the position of Superintendent
of the District Police and had proved himself to be effective amd popular during his short tenure in office.
He had
shown good judgment in his handling of the Coramunist îiunger
Marchers who had descended upon the Capital eaælier that
year.
The Hunder March had been sraaller and briefer in
duration tham the Bonus March, but it was an adequate dress
^W. W. Waters and William C. White, B. S. F.i The
Whole Storv of the Bonus Arrav (New Yorki The John Day
rr^mpany. 1Q33). pp. 1-6^1 Time Magazine. XIX (June 6,
1932), 15.
45
rehearsal for the Superintendent.
Glassford's approach to
the Bonus March was humae, friendly, and compassionately
fairi
the veterans carae to call him their "friendly
enemy."
The Superintendent
the incoming veterans.
arranged food and shelter for
During their two month stay he
sponsored benefit shows to raise money, sought donations
from his friends, and contributed much of his own money
to the Bonus Army Coraraissary Fund,
General Glassford never lost sight of his raain
objective which was to get the veterans to leave the Capital voluntarily without violence or bloodshed.
Ke raade
transportation for a distance of fifty miles out of the
city available for nay veterams desiring to retum home.
But he never attempted to browbeat or coerce the veterans.
He used kind treatment and subtle persuasion in his attempts
2
to achieve his objective.
Glassford arranged for the billeting of the yarchers
throughout the city.
The men were placed in abandoned
federal buildings, such as the partially razed Treasury
buildings on Third and Pennsylvania Avenue, until the influx
of veterans becaune so great they had to be billeted in outdoor camps.
The largest of these was on the bamks of the
Fleta Campbell Springer, "Glassford and the Siege of
Washington," Harper's Magazine. CLXV (November, 1932),
641-645.
46
Anacostia River.
The Anacostia Flats camp, which was one
of the five outdoor cajnps, was najned for the captain of a
nearby police precinct and was referred to as Car.p Mairks.
Camp Bartlett was located six railes from the city and was
the only Bonus Army encampment on private rather tham
federal property.
Glassford requested the use of Army
mobile kitchens and tents, but Secretary of War Patrick
J;. Hûrléy refused to lend them on the grounds they would
be used by civilians, which was illegal.
Finally, tents
were obtained from National Guard units in nearby states.
The Bonus Marchers dug latrines and constructed crude
shelters frora discarded packing crates, scraps of lumber,
and whatever materials they could find and use.^
In another area of Washington, Hoover and members of
the adrainistration refused to acknowledge publicly the
Bonus Army.
An exairaple of Hoover's attitdue toward the
Marchers can be seen in an episode involving Glassford.
Soon after the arrival of the veterams in Washington
Glassford visited the White House to request the President
to use his influence in getting the bonus bill out of committee.
The Superintendent felt that the veterans would
leave the city sooner if the bill were brought to a vote
-^Constance McLaughlin Green, Washingtoni Capital
Citv. Vol, IIi 1879-1950 (2 vols.; Princetoni Princeton
University Press, 1963). pp. 368-369.
47
as quickly as possible.
Upon departing the 'rv'hite House
Glassford was accosted by reporters who wanted to know
the purpose of his visit.
Glassford answered truthfully.
Upon retuming to his office, he received a telephone
call from the President's secretary, Theodore Joslin,
stating that Glassford's press interview "was embarrassing
the Administration."
Joslin suggested it might have been
prudent to have stated some other purpose for the visit.
The President, it might be observed, did not wish to be
linked in any way to the Marchers.
The administration assumed the fundamental attitude
that the Bonus Ft'arch was not a matter that should concern
the federal government.
Rather, the administration informed
the District Commissioners and the Superintendent of Police
that the presence of the B. E. F. was purely a local matter.
Although the President would not even acknowledge the presence of the veterans by granting their leaders an interview, he by no means felt secure with them encamped within
the District.
The longer the veterans reraained, the greater
grew the uneasiness of the administration.
Springer, "Glassford and the Siege of Washington,
644-645.
^Mauritz A. Hallgren, "The Bonus Army Scares Mr.
Hoover." Nation. CXXXV (July 27, 1932), 71-73.
48
The President's attitude toward the bonus bill was well
known from the statements he made in opposition to the
increase in the loam basis of the bonus certificates.
He
viewed the demamds of the Bonus Marchers as totally unreasonable.
Hoover was appalled by the bonus bill because it
represented two principles to which he was completely
opposed.
They were class legislation for the benefit of a
vocal but small minority and the issuance of fiat currency
to finance the demand.
Why the President failed to restate
his arguments while the B. E. F. was encamped in Washington
is not known.
Perhaps Hoover feaured the Matrchers were a
potential source of revolutionary activity and did not want
to antagonize the assembled veterans.
Array intelligence
was constantly receiving reports that the veterams were
contemplating arraed rebellion.
to the President.
These reports were relayed
Although such reports were later found
to be completely false, they may have had am iraportamt
influence on the President's attitude amd conduct toward
7
the Bonus Array.
Another factor that influenced Hoover's attitude
Gilbert V. Seldes, The Years of the Locusti Araerica.
1929-1932 (Bostoni Little, Brown and Company, 1933)» p.
174.
"^Donald J. Lisio, "A Blunder Becomes Catastrophei
Hoover, the Legion, and the Bonus Army," Wisconsin
Magazine of Historv. LI (Autumn. 1967), 40-4l; Hallgren,
"The Bonus Array Scares Mr. Hoover," pp. 71-73«
49
toward the Bonus March was a perceived Communist infiltration of the movement.
At the instruction of a repre-
sentative of the Communist Intemational, merabers of the
Aroerican Communist Party were ordered to exploit agitation for the bonus prepayment.
Although the Comraunists
had no hamd in the orgamization of the original movement
to promote payment of the bonus, they were determined to
capitalize on the strong sentiments the prepayment question had generated.
The Party had no real interest in
the issue itself, but wamted to precipitate a violent
confrontation with the authorities.
They felt that the
calling out of troops would be of enorraous propaganda
value in recruiting new members for the Party.
To
achieve this end the Workers Ex-Serviceraen's League was
formed on May 19 to march to Washington and attempt to
infiltrate amd radicalize the groups that would soon be
aa*riving to deraonstrate in favor of the bonus payment.
The League set June 8 as its target date for arrival at
the Capital.
The leader of the Communist group was John Pace, a
building contractor and labor agitator from Detroit.
Benjamin Gitlow, The Whole of Their Lives (New
Yorki Charles Scribner's Sons, 1948), pp. 230-23I1
Harris Gaylord Wairren, Herbert Hoover and the Great
Depression (New York: Oxford University Press, 1959).
p. 229.
T./^* í£Ch LiBKAKl
50
Estimates of the number of men under Pace's command vary,
One writer estimated that Pace led no more than 210 members.
Accounts in the New York Timea of demonstrations
led by Pace seem to verify this estimate.
Time Magazine
claimed that perhaps 50O of the 20,000 men who rallied in
Washington were Communists,
Administration sources never
gave an exact numerical estimate of the Communist strení:th,
but President Hoover believed it to be considerable and
their influence to be great.
Hoover later wrote that the
Bonus March was one of "two glaring exaraples of actual
Soviet interference in the United States, , . ."
Undoubt-
edly the President was greatly influenced by the erroneous reports he received frora Army intelligence sources,^
Despite his belief in the Comraunist leadership of the
Bonus Army President Hoover made no effort to have the
Communists investigated and isolated from the raain group
of veterans,
This lack of action by the President
resulted frora his desire to avoid violence.
Q
Springer, "Glassford and the Siege of Washington,'
647l New York Times, July 20, 1932. p. 7 and July 12,
1932, p. li Tirr.e Magazine. XIX (August 8, 1932), 53i
Herbert Clark Hoover, r'^emoirs of Herbert Hoover. Vol.
IIII The Great Depression. 1929-1941 (3 vols.i New
Yorki Macmillan, 1952). pp. 225-226. 36Ii Lisio. "A
Blunder Becomes Catastrophe1 Hoover, the Legion, and
the Bonus Army," 4o-4l.
Don Lohbeck, Patrick J. Hurley (Chicagoi
nery, 1956), p. II5.
H. Reg-
51
The Communist group v/as by no meams welcoir.ed by the
other veterans.
In fact, they were segregated in a camp
of their own amd were virtually ostracized by Waters. A
great deal of Police Superintendent Glassford's time was
consumed in protecting the Communists from the members of
the Waters group who did not appreciate the inflammatory,
Marxist rhetoric of the members of the Workers ExServiceraen's League.
One observer noted that "the Com-
raunists. instead of seizing the B. E. F. and sta^ing a
revolution, barely survived by police sufferance."
With each day more veterams arrived at the camps to
"lobby" for passage of the Patman bill.
Not only did more
veterans pour into the city. but they were also joined by
their wives and children.
Estimates vary as to the num-
ber of Bonus Marchers coming to Washington. but most
sources set the figure at approximately 20.000. Waters
claimed to have registration records for over 28.000 members of the B. E. F.
The veteran population was never
12
stable with groups arriving and departing daily.
Regardless of the estiraates of the exact strength of the Bonus
^^Waters and White. B. E. F.. pp. 90-102i Bernstein.
The Leam Years. p. 447,
^^Waters and White, B..E. F.. pp. 257-259i Springer,
"Glassford and the Siege of Washington." 651; Green,
Washington, II, p. 368.
5^
Army, it is readily apparent the leadership was capable
of rallying a formidable nuraber of demonstrators in behalf
of the Patman bill.
The veterans had arrived too late to influence the
House Ways and Means Committee hearings which took place
in late April and early May,
On the first day of hearings.
April 11, 1932, Congressman Patmam appeared in support of
the measure which was one of twenty bills being considered
by the comraittee.
Patraan, citing the statistic that over
two million veterans were unemployed. urged the cor.mittee
to report his bill calling for the immediate payment of the
bonus in fiat currency.
On the following day the "Radio
Priest" Father Charles E. Coughlin appeared to urge passage
of the bonus as a means
of abandoning the gold standard.
Patman presented a number of petitions which he had
received that called for imraediate payment.
On Wednesday
the Coraraander-in-Chief of the Veterans of Foreign Wars,
Darold D. DeCoe, representing a number of veterans'
organizations, called for imraediate payment.
opponents of prepayment were heard.
A week later
They were led by
General Charles G. Dawes, President of the Reconstruction
Fiance Corporation, who felt the Patman bill's enactment
would result in the "devastating effects of a consequent
loss of general confidence through inflation of our currency. . . . "
James A. Emery of the National Association
of Mamufacturers warned the Congressmen that "the country
53
looks to you for steadiness, not recklessness."
Secre-
tary of the Treasury Odgen Mills, representing the administration directly, wamed of the deficit the Treasury
faced if the bill were passed and indicated that the
bonus could not be paid from existing revenues.
He pre-
dicted that passage of the Patraan bill would prove "a
severe blow to public confidence. . . ."^^
On May 7» 1932, theraajorityof the Ways and î.:eans
Committee reported Patman's bill, H. R. ^^'^.(^, adversely.
The bill had been held by the Rules Committee until Patman began circulation of a discharge petition.
tion was successful on June 14.
The peti-
The Patman bill was
ordered discharged by a vote of 226 to 175.
The veterans
commenced daily appearances at the Capitol to urge Congressmen and Senators to accept the Patman bill.
Massive
demonstrations begam on June 7, when 8000 veterans paraded
down Pennsylvania Avenue.
The pressure to discharge
H. R. 7726 frora the Rules Comraittee seems to have been
generated largely from the demonstrations the veterams
able to mount. Waters staged orderly demonstrations in
13
"^U. S., Congress, House, Committee on Ways amd Means,
Hearings on Pavraent of Ad.iusted Service Certificates. various bills, 72nd Cong., Ist sess., pp. 2-6, 46-50, 89-9I,
382, 487, and 606.
54
which his veterams were able to advertise their cause.^^
After the bill was discharged a vigorous debate commenced in the House.
In fact, one Congressraan, Edward
Eslick (Democrat-Tennessee), while speaking in favor of
the measure, collapsed on the floor of the House and
within ten minutes was dead. Members of the B. E. F.
served as pallbearers and honor guard at the Congressmam's funeral. The efforts of Eslick and the veterans
were rewarded on the following day, June 15, when the House
approved the Patman bill by a roll call vote of 209 to
176.
The Senate vote on H. R. 7726 came two days after
the House action.
Over 8OOO veterans led by Waters
asserabled on the Capitol steps while 10,000 at the Anacostia camp were thwarted in their attempts to join
their comrades at the Capitol when the police raised
the Eleventh Street drawbridge that connected the city tc
Anacostia Flats.
In expectation of possible disturbances
within the carap, a navalrainesweepercruised the river
and raoored opposite the carap with its guns trained on
the makeshift dwellings.
on H. R. 7726.
At 9»30 P. M. the Senate voted
The bill failed to pass by a roll call
vote of 18 to 62,
After hearing the vote Waters returned
U. S., Congress, House, Committee on Ways and Means,
Pavment of Ad.iusted-Compensation Certificates. H. Rpt. 1252
To Accompany H. R. 7726, 72nd Cong., Ist sess.. 19;2, pp.
l-5i U. S., Conriressional Record. 72nd Cong.. Ist sess.,
(June 14, 1932), pp. 12911-129381 Waters and White,
B. E. F.. pp. 257-259.
55
to his men waiting on the Capitol steps and informed
them of the defeat of the measure they had journeyed
across a continent to see enacted.
At the suggestion
of Hearst reporter Elsie Robinson, Waters asked his
"troops" to sing "Araerica" prior to quietly forraing
ranks and dejectedly raarching back to their camps.^^
The Patman bill had failedi yet, many of the
veterans vainly remained in Washington in hope that the
Senate would reconsider the bill prior to adjournment.
On July 14, Congress appropriated $100,000 to provide
train tickets amd seventy-five cents per diem subsistence allowance so that the veterans might return to
their horaes.
The joint resolution, H. J. Res. 473,
was introduced at the request of Fresident Hoover who
félt that providing transportation for the veterams
would alleviate sorae of the pressures that were building.
The raeasure was totally unsuccessful in that regard.
Approxiraately 5000 men accepted the tickets despite
the fact they had to be fingerprintéd before they could
receive the loam.
However, great raany of the veterams
resold the tickets and remained in the city.
Since the
price of the tickets and the subsistence allowance were
1 *î
"^U. S., Congressional Record. 72nd Cong., Ist sess.,
(June 14, 193277 PP. 129 I-12939, (June 15. 1932). p.
13054, (June 17. 1932), p. 132741 Time r>:a.Tazine. XIX
(June 27, 1932), 15I Gene Smith, The Shattered DreaTu Hor
bert Hoover and the Great Derression (New Yorki v.'illiaun
Morrow, 1970) pp. l44-l45i Elsie Robinson, I Wanted Out
(New Yorki Farrar and Rinehart, 193^)» PP. 272-273.
56
to be deducted from the veterans' compensation pay-.ents,
may felt this to be the only way to pry, at least, s
sroall amount of their money from the government.^^
On July 12, a Califomia group of two hundred veterans under the leadership of Royal Robertson arrived at
the Capital tp protest the failure of Congress to pass
the Patman bill.
The Robertson group decided to camp
out on the Capitol grounds but was frustrated in this
attempt when the Architect of the Capitol David Lynn had
his groundkeeping staff turn on the lawn sprinklers,
The
Californiams responded to this treatment by constantly
parading single file along the Capitol walks.
This pro-
test carae to be called the "Death March" and a nur.ber of
the Waters group joined the California marchers in their
sixty-hour demonstration.
Apparently Vice-president
Charles Curtis viewed the "Death Mau?ch" with some alarm
frora his office in the Capitol, for he called out two
detachraents of Marines toraaintainorder.
General Glass-
ford intervened and convinced the Vice-president to withdraw his guard.17
U. S., Congressional Record. 72nd Cong., Ist sess.,
(July 6, 1932). p. 14725 and (July 14, 1932). pp. 153^3»
15351I ^7 U. S. Statutes at Large 654i New York Times.
September 12, 1932, p. 1.
17
Springer, "Glassford and the Siege of Washington,"
648-650.
57
On July 16, 17,000 veterans who had not left the District assembled again at the Capitol as Congress prepared
to adjoum sine die.
The presence of this mass of bonus-
seekers was sufficient to keep the President frora paying
the traditional visit to the adjouming Congress,
General
Glassford had cleared demonstrators from the aurea around
the White Housei yet, Hoover failed to raake his announced
appearance to sign final bills,
The Presidential limou-
sine waited outside the White House for over two hours,
but the President did not leave his quarters that day.
The White House offered no explamation for the President's
failure to keep his appointmeftt. Obviously Hoover felt
that an appearance at the Capitol with the mass of veterans
present would further aggravate the already tense situa..
18
tion.
After adjoumment there remained no concrete reason
for the Bonus MÆirchers to stay in the city.
3ut many of
the veterans had vowed to stay "until 19^5."
Others had
no place to go, amd the seat of govemment seemed as good
or bad a place as amy to wait out the Depression.
On July
17, Waters issued a bulletin calling for his followers who
^^lbid.j Waters and White, B. E. F.. pp. 167-171i
Hallgren, "The Boraus Array Scares Mr. Hoover," p. 71.
58
had homes to return to them.
Despite this request Waters
could still claim approximately 15,000raembersencamped in
the city as late as July 26.
On July 21, the Board of Coramisioners of the District of Columbia ordered Glassford to evict all Eonus
Marchers frora all federal buildings ny might, July 22.
The Treasury Departraent wished to resume razing the partially gutted buildings.
It is not known if President
Hoover was behind the request to have the building vacated.
However, it seems significant that work was not
resumed on the buildings for severalraonthsafter the buildings were actually vacated by the veterans.
Glassford prevailed upon the Coraraissioners to rescind their order on the following day so that the possibility of "blood and riot"
in attempting to evict the
two thousand veterans raight be lessened.
However, on
July 26, Waters was summoned to a conference with Secretary of War Patrick Jay Hurley and General Douglas
MacArthur, Chief of Staff of the United States Army,
at the Secretary's office.
Waters was informed that the
Treasury Department wished to proceed with the destruction of the buildings.
Further, Waters was "told that his
followers would be evicted and allowed to join the others
at the outdoor camps,
He was assured that all would be
given sufficient time to gather their belongings prior to
eviction. On the following day V/aters informed the veterams
59
of the results of his meeting with the Army officials
and told them they should prepare for peaceful eviction
from their billets.
He met with considerable opposition
and expressed doubt as to whether the veterams would leave
the condemned buildings.
Nevertheless, Waters made pre-
parations to transfer the occupants of the Treasury buildings to Camp Bartlett on the outskirts of the city where
plans were being forraulated to raake the site a permanent
encampment for the homeless among the veterans.^
At 10 A. M. on July 28, 1932, Treasury agents accompanied by members of the Metropolitan Folice arrived at
the buildings on Third Street and Pennsylvania Avenue to
evict the two hundred veterans residing at the site. The
The veterans refused to leave their billetsi they were
soon joined by colleagues from the other caunps. Approxiraately one thousamd veterams now confronted the officers
and the Treasury agents.
The situation grew exceedingly
tense and soraeone in the crowd threw a brick at am officer,
The first brick led to raore, and the throwing spree lasted
for about five minutea until Glassford, who was hit by one
of the missiles, urged everyone to desist for lunch.
As
^^Waters and V/hite, B. E. F.. pp. 176-179. 192-2061
New York Times. July 22, 1932, p. 1. July 23, 1932. p. 2,
and July 28, 1932, p. li Lohbeck, Fatrick J. Hurley. p.
109i Russell D. Buhite, Patrick J. Hurley and Ar.orican
Foreign Policy (Ithaca and Londoni Cornell University
Press, 1973)» PP. 47-48.
60
stramge as it may seem, that call for the noon meal was
sufficient to end the skirmish.
After the first skirmish Glassford's men were reinforced to about nine hundred, but over half this number
was drawn off to supplement the President's White House
Guard.
After things had quieted at the eviction site,
Glassford went to inform the Commissioners of what had
tramspired.
He noted that the situation was in hand. but
he felt that if the eviction effort were expanded it wouid
be necessary to call out federal troops.
Glassford
returned to the site of the disturbance. while the Coraraissioners decided to request intervention by federal
troops.
As Glassford arrived back at the Treasury build-
ings he was unaware that the Coraraissioners were already
requesting aid of the President.
The disturbances were renewed in the afternoon when
two veteransatterapted to join the men in the buildings.
There was some scuffling and two policemen were either
knocked down or fell downi the two opened fire on the
veterans who were menacingly surrounding them.
One
veteran, William Hushka, died imraediately, while the other,
Eric Carlson, was mortally wounded and died a few days
later.
One of the policeraen who had done the rhooting
appeared dazed (perhaps from a thrown brick) amd almost
shot Glassford as he shouted for the shooting to stop.
Order was again restored to the area, and at that time
a reporter informed Glassford that the President was send-
61
ing troops to the area.
On receiving Commissioner L. H. Reichelderfer's request by telephone for federal troops to intervene in tne
matter, President Hoover advised him that his request had
to be in writing.
Meanwhile, Hoover called Secretary Hur-
ley and advised him to prepare to dispatch troops,
Hoover
indicated that the veterans should removed from the federal
buildings and transferred to the Anacostia camp until the
govemment could investigate amy possible Communist connections or previous criminal records on the part of the
véterans,
Hoover's suspicious that the veterams wer con-
templating and planning mob violence apparently had been
confirraed.
He felt that the Comraunist and "criminal" ele-
ments within the B. E. F. had seized control from the
moderate leaders and were posing a threat "to the authority
21
of the United States Govemraent. . . . "
Reichelderfer 's
written request for federal troops was received and Secretary Hurley issued am order for General MacArthur to
deploy troops into the area of the disturbamces to assist
the District Police.
^^Waters and White. B. E. F., pp. 207-215; Spri.ager.
"Glassford and the Siege 6f Washington," pp. 653-654|
New Uork Times, July 1932, p. 1.
'^^Theodore Joslin, Hoover Off the Record (Garden
City, New Yorki Doubleday, Doran, 1934). pp. 267-271i
Herbert Hoover. The State Papers of Morbert Hoover. Vrl.
II, ed. by Williara Starr Myers. (2 vols.i Garden City,
New Yorki Doubleday, Doran, 193^). P. 245.
62
General MacArthur chose to take tactical comir.and of
the eviction operation hiraself.
He ordered deployment of
about seven hundred troops in full corabat uniform.
The
eviction force consisted of one battalion of infantry,
one squadron of cavalry, and a platoon of six tanks in
additon to several raachine gun units.
Second in commamd
of the operation was General Perry L. Kiles.
Major
George S. Pattom, who had been drilling his men and
horses in the use of tear gas amd mob control tactics
since the arrival of the Bonus Army, was in charge of
the cavalry unit.
Major D'.vight D. Eisenhower assisted
the Chief of Staff in operations.
He advised MacArthur
that he felt the general's presence at the scéne of a
potential riot was "highly inapproriate."
Nevertheless,
MacArthur assembled his troops in the Ellipse jsut east
of the White House and shortly after 4 P. M. began the
march down Pennsylvania Avenue.
Thús the "Battle of
Washington" and the concommitant demise of the Bonus
22
Expeditionary Force begam.
Through the use of tear gas and a display of unrelent
Joslin, Hoover Off the Record. pp. 268-271;
George S. Patton, The Patton Paperst 1885-1940. ed. by
Martin Bluraenson (Bostoni Houghton Mifflin, 1972), p.
895I D. Clayton Jaraes, The Years of MacArthur i SSO-19'a
(Bostoni Houghton r.:ifflin, 1970) pp. 079-682; Dwir^r.t D.
Eisenhower, At Easet Stories I Tell To Friends (Garden
City, New YorkT Doubleday amd Company, 1967). pp. 2152I81 James F. and Jean H. Vivian, "The Bonus r.'.arch of
19321 The Role of General Van Horn F.oseley," Wisconsin
Magazine of History, LI (Autumn, 1967), 33-3^.
63
ing force, the eviction of the veterans fro- the federal
buildings was achieved without serious injury to veterans
or troops.
Once the eviction had Begun it was expanded
beyond what Hoover had ordered.
The President sent word
by Deputy Chief of Staff General George Van Horn Moseley
that he did not wish to force the evacuation of the Anacostia carap amd other outdoor caLmps at that time. However, apparently MacArthur felt that by preceding with
the eviction of all the veterans immediately the task
could be accomplished with less effort and less likelihood of bloodshed.
At any rate the veterans smd their
farailies were driven frora their outdoor camps out of
the District.
The eviction of the .Anacostia carap
began at approxiraately 9 P. M.
The shacks of the vet-
erans wer fired, but each side accused the other of
starting the fires.
Regardless of who was guilty,
there is photographic evidence that both participated
23
in the bumings. ^ At Camp Marks an eleven week old
infant, Bernard Myers, who had been born in the camp
and subsequently had taken ill, died within a week of
eviction as a result of the aggravation of his con24
dition by tear gas inhalation.
^New York Tiir.es. July 29, 1932, pp. 1-3; Vivian and
Vivian, "The Bonus March of 1932i The Role of General Van
Horn f'oseley, " 33; Eennett :>: Rich, Presidents and Civil
Disorders (Washingtoni The Brookin^s Institution, r9-i-l).
pp. 150-163.
24
Paul Y. Anderson. "Republican Handsprings," Nation
CXXXV (August 31, 1932), 188.
64
The inhabitants of the various camps were driven
out of the District in the dead of night.
ívayor Eddie
McCloskey of Johnstown, Pennsylvania, invited the Eonus
Marchers to make a temporary camp at an abandoned arausement park in his city until he and President Daniel
Willard of the Baltimore and Ohio railroad could arramge
transportation home,
Judge John H. Bartlett had with-
drawn his property for use as a permanent encampment at
the
request of Hoover White aides.
One national news
magazine noted, as the trains loaded with veterams and
their farailies departed Johnstown. that "the B. E. F.,
25
as a national unit of restless, jobless men, was no more." -^
On July 29, 1932, President Hoover stated that a
"challenge to the authority of the United States Govemment had been met, swiftly, and fimly."
A report by the
Attorney General inSeptember noted that "the Bonus Army
brought to the city of Washington the largest aggregation
of criminals. • ." ever assembled at one tirae in the city
26
and that Communists had gained control of the movement."
^Springer, "Glassford and the Siege of Washington,"
655i Time Magazine. XIX (August 15, 1932). 9-10i Thom.as
L. Stokes. Chip Off Mv Shoulder (Princetoni Princeton
University Press. 1940). pp. 113-114.
26
Herbert Hoover. The State Papers of Herbert Hoover.
II, p. 2451 David Hinshaw, Herbert Hoover. A::erican Quaker
(New Yorki Farrar, Straus and Company, 1930), pp. 2132161 New York Times. September 12, 1932, p. 1; Douglas
MacArthur, Reminiscenes (New Yorki :>:cGraw-Hill, 1964),
pp. 92-97.
"
65
In contrast to this view most writers claim "the Comrcunists' merabers and influence were inconsequential. "^*^
The charge that most were not veterans is refuted by a
report by the Adrainistrator of the Veterans Bureau stating that 94 percent of theraerabers01 the Bonus Army who
applied for transportation loans were indeed veterans.
Purther, if the ranks of the B. E. F. were glutted with
criminals, why were no convictions or for that matter
no indictments obtained?^®
The eviction of the Bonus Army placed Hoover in the
unenviable position of having to defend his actions and
the actions of his subordinates in the fast approaching
presidential campaignof 1932.
To an electorate already
disgusted with the Hoover approach to solving the problems generated by the Great Depression,
the eviction and
rout of the Bonus Array was yet another itera to be added
to a long list of discontent with the perforraance of
the President.
27
'^James, The Years of MacArthur, p. 388.
^^Tirae Magazine, XIX (August 15, 1932), 10.
CHAPTER VI
ROOSEVELT AND THE BONUS QUESTIO."
At seven-thirty on the raoming of July 29, I932,
Rexford Tugwell responded to a summons from presidential
norainee Franklin Roosevelt.
.He enetered teh govemor's
bedroom to f ind him poring over the Nev/ York Tir.es
account fo the eviction of the Bonus Army fro^. their
Anacostia Flats camp.
Roosevelt described the incident
as "scenes from a nightmare" and reminde his aide that
they had planned to speak raore about Hoover on the campaign trail,
However, he doubted the necessixy of such
tactics since "I.:acArthur and the array had done a good
job of preventing Hoover's re-election, . . . " Tugwell
left the raeeting firraly convinced that the rout of the
Bonus Array removed all doubt from the Democratic candidate's raind as to his victory in Noveraber.
Despite Roosevelt's disapproval of Hoover's methods
of evicting the bonus-seekers, his attitude toward Fatmans's bill was similar to Hoover's.
Each felt the
certificates should be paid only at maturity in 19^5.
believing that early paiyment would result in a dangerous deficit if paid from Treasury funds.
Neither was
^Rexford Guy Tugwell, The Brains Trust (.^ew Yorki
Viking Prees. I968), pp. 357-35«. 359.
66
67
willing to resort to "printing press" money to secure
early payraent, as a depression relief measure, since
it would benefit only a relatively small segraent of
the total population.
In April, 1931, Roosevelt had declared that payment
of the bonus was unthinkáble while the federal treasury
was running a deficiti
however, Roosevelt the candidate
had been reluctant to express publicly views he had made
known privately.
V/hen Huey Long telephoned hir. from the
Chicago convention that endorsement of the bonus would
"clinch the nomination" he had responded that such a
statement was not possible since he did not favor the
bill.^
During the campaign Roosevelt was urged by supporters of both sides of the issue to abamdon his reticence and make a clear statement favoring one position
or the other.
On September 16, 1932. the "Radio Priest"
Charles Coughlin wrote the candidate urging him to endorse
the bonus as a means of taking the nation off the gold
standard.
Coughlin offered his network of twenty-six
Franklin D. Roosevelt. The Public Fapers and Addres^es
of Franklin D. Roosevelt, Vol, I, ed, by Samuel I, Rosenman
(13 vols.i New lorki DÔubleday, 1950), p. 809; New Yor:<
Times, Septeber 22, 1931, p. 18.
^Sarauel I. Rosenman, Working with Roosevelt (New
Yorki Harper and Brothers, i952), p. 69.
68
radio stations in support of such a position.
Roosevelt
thanked the priest for his letter but failed to take any
action on the suggestion.
The Republican press in turn
called for the Democrat to state flatly that he would
veto the Patraan bill and thus "kill the bonus as a
political issue."^
Roosevelt's response carae in his
campaign address on the federal budget delivered at
Pittsburg on October 19, 1932.
Roosevelt chose to
repeat his April, 1931, statement that the federal government
could not "consider anticipation of bonus pay-
raent until it has a balance budget. . . with a surplus
of cash in the treasury."
This rather indefinite state-
ment failed to pacify his Republican opponents who felt
that he had left the door open for a future approval of
the bonus should he be elected.
In a letter to Walter
Lippraann on October 26 Felix Frankfurter expressed the
opinion that Roosevelt had tactfully handled the situa-
4Sheldon Marcus, Father Coughlini The Tumultuous
Life of the Priest of the Little Flower (3ostonj Little,
Brown and Company, 1973). p. ^7; Charles Tull, Father
Coughlin and the New Deal (Syracuse, New Yorki Syracuse
University Fress, 1965), pp. 12-13.
^"The Bonus Borab Bursts Into the Carapaign," Literarv
Digest. CXIV (September 24, 1932). 12.
Roosevelt, The Public Papers. I, p. 8091 **v;here
Roosevelt Stands on the Bonus," Literarv Digest. CXIV
(October 29, 1932), 5"6.
69
tion and that he had "put the ki-bosh on the bonus."'^
Despite Republican protests Roosevelt issued no stronger
statement before the election.
It Í8 difficult to determine how much Roosevelfs
stand on the bonus question affected his election, but
his position seems to have been sufficiently vague not
to have alienated bonus adherents.
At any rate the
Hoover position and tactics were a matter of record
while Roosevelt seemed to be less rigid in his stand.
On the eve of his inauguration, yarch 3, 1933, the
President-elect issued a radio message to all veterans
requesting their cooperation and support, implying that
postponement of bonus demands would be in the spirit of
their wartime service and sacrifice."
Roosevelt was
supported temporarily in this request by Father Coughlin
who asked veterans to be patient until the President had
resolved other pressing problems.
'^Franklin D. Roosevelt and Felix Frankfurter, Roose'
velt and Frankfurten Their Correspondence. 1928-1945.
ed., Max Freedman (BostoniLittle,Erowa-and Corapany,
1967), p. 90".
p
Roy V. Peel and Thomas C. Donnelly, The 1932 Campaignt An Analvsis (r;ew Yorki Farrar and Rinehart,
1935). P. 56.
Q
^Roosevelt, The Public Papers. II, p. 18.
David 'n, Bennett, Demagogueg in the Depressioni
American Radicals and the Union Farty. l^':-2-1936 (iNew
Brunswick, New Jerseyi Rutgers University Fress, 1969),
p. 40.
70
Needless to say bonus agitation did not cease as a res lt
of these appeals.
Indeed, after his inauguration Roose-
velt was confronted by a second Bonus Arr.y. Like rr.ost
sequels this one was not as grandiose as the original.
Presidential Secretary Louis K. Howe was assigned the
duty of dealing with the new group of marchers.
The
Veterans' Lisison Comraittee corresponded with the V.'hite
House requesting that housing and food be provided by
the federal govemraent while the group held its convention
in the capital city.
Howe attempted to persuade the vet-
erans to limit their delegation to two hundred merr.bersi
however, on May 2, 1933, the Committee replied that this
compromise was unacceptable to their membership.
Roose-
velt instructed Howe to inform the veterans that facilities would be available for the full group.^^
The vanguard of the second Bonus Army began to arrive
on May 9, 1933«
Arrangeraents had been raade to garrison
the estimated nine thousamd at Fort Hunt, Virginia, an
abandoned installation about ten miles from Washington.
The Veterans' Administration, under a special allocation
of previously appropriated funds, provided meals prepared
by reassigned veterans' hospital cooks,raedicalcare by
Yorki
Alfred B. Rollins, Jr,, Roosevelt and Howe (New
Alfred A. Knopf, I963), pp. 386-387.
71
V. A. doctors, and shuttle bus service from the camp to
the veterans' convention center at the Washington Auditoriura.
On May 11, Roosevelt signed an executive order authorizing 25,000 veterans to be accepted in a special contingent of the Civiliam Conservation Corps with the two thousand veterans at Fort Hunt being given preference.
The
fôrt was to serv-e as a training center for the new enlis-
tees. ^
The President instructed Howe to visit the camp amd
make the veterans feel welcome and that government officials
were taking an interest in their problems.
Since the First
Lady ordinarily took the ailing Howe on afternoon drives,
on May 16 he instructed her to drive in the country until
they arrived at Fort Hunt.
The Presidential SecretsLry
informed Mrs. Roosevelt where they wer smd asked her to
make an inspection tour of the camp amd to "be sure to
tell them that Franklin sent you.*"
Howe reraained in the
^^New York Tiraes. May 11. 1933, p. ^.
^^lbid.. May 12, 1933. p. 3 and May 15. 1933,
p. 3.
14
Lela Stiles, The Man Behind Roosevelti The 3torv
of Louis N:cHenrv Howe (Cleveland amd New lorki World
Publishing Corapany, 195^+). p. 265.
72
automobile while the First Lady trekked through the mud
on her tour of the facilities.
The veterans invited her
to eat lunch with them while they serenaded her with
World War I barracks ballads.
After the meal :.'rs. Roose-
velt was given a tour of the raedical facility and returned
to find Howe napping in the car.
Howe asked if any of the
veterans intended to accept the President's offer to enlist
in the C. C. C , but none of the men seemed too enthusiastic
about the dollar-a-day wages of the Corps. Vxs, Roosevelt
and Howe were wished hearty farewells and iVjrs. Roosevelt
later wrote that she felt her impron.ptu outing had "had
a good effect."^
The differences in the approaches of Presidents
Hoover and Roosevelt could not have been better exemplified
than in the handling of their respective Bonus Armies.
Where Hoover had alraost failed to recognize the very existence of the veterans until the eviction, Roosevelt invited
a committee of the Army's leaders to the White House for
a discussion of their grievances.
On May 19 three of the
leaders were granted a thirty-five minute interview with
Roosevelt while approximately one-third of the three thousand inhabitants of Fort Hunt paraded peacefully in front
^Anna Eleanor Roosevelt, This
Remember (New Yorki
Harper and Brothers, 1949), pp. 112-113; :;ew York Times.
May 17, 1933, p. 10.
74
smaller group than Hoover.
A New York Tir.es editorial
on May 25 noted the new President's policy consisted
of a "rational and friendly and human way of dealing
with a human problera.
Perhaps also the President had
learned soraething from theraistakesof his predecessor."^^
The second Bonus Army left the city but the issue
remained.
The Patman bill which was introduced as H. R.
1 on March 9, 1933, five days after Roosevelt took office,
was pendirig béfore Congress v/hen the President appeared
before the amnual convention of the American Legion at
Chicago on October 2, 1933*
The President informed the
assembled Legionnaires of the government's attempts to
balance the budget and that veterans could not expect
20
to receive preferential treatment.
The bill was
referred to the House Committee on Ways and I«:eams where
it died in the first session of the Seventy-third Congress.^^
H. R. 1 posed no threat while it was
ho^^eâ
^^New York Tiraes. May 25, 1933. p. 18
^^lbid.. October 3, 1933. p. 20
^^U. S., Congressional Record. 73rd Cong., Ist sess.,
(March 9. 1933). p. 85.
75
down in committee, but during the second session it became apparent that Patman was going to attempt to have
the bill discharged as he had done previously.
On Feb-
ruary 16, 193^. as the discharge raotion seemcd iraminent,
Roosevelt sent a memorandum to the Speaker declaring
that if the measure were passed "I would veto the bill,
and I don't care to whom you tell this."^^ On March 12
the bill was discharged by a vote of 3I3 to 104.
The
bill was then proraptly approved by voice vote despite
23
the presidential adraonition. ^ Two days later the President informed a news conference that he felt the enactn-.ent
of the bomus measure might prompt still other groups to
24
make similar demands on the govemment.
This renewed legislative activity and the treatn^ent
of the second Bonus Army were probably responsible for the
third veterans' raarch to Washington in r.:ay, 1934.
This
group totaled no raore than six hundred and fifty and were
told by Howe that the governraent no longer subsidized
veterans' conventions.
However, since the change in
policy had not been publicized, he would make an exception in their case.
After their ten-day stay 568 of the
^^lbid.. 73rd Cong., 2nd sess., (:<'arch 12, 1934),
p. 4294
^^lbid., pp. 4298-4337.
24
Franklin D. Roosevelt, The Complete prosidential
Press Conference of Fr^nkl.in D. Roosevelt. Vol. III, (2i;
vols.i N'ew Yorkj Da Capo Press, 19?2), p. 237.
76
raarchers joined the C. C, C.^^
On June 6 the Senate C O T -
mittee on Finance reported H. R. 1 adversely and no further
action was taken on the bill.^^
On October 25 the American Legion, meeting in convention at Miarai, endorsed the Patman bill by a vote of
27
987 to I83.
On January 14, 1935. Congressman Fred Vinson (Democrat-Kentucky) and Patman introduced H. R. 3896
and on March 22- the House passed the measurc by a vote
2Q
of 319 to 90.
Among the staunchest opponents of this
bill was Secretary of the Treasury ^-ienry iVorgenthau.
As an administration spokesmam, he opposed early payment
of the bonus under amy condition of payment much less by
unbacked currency as H. R. 3896 proposed.
Morgenthau feared Roosevelt might waver if an orthodox method of financing were substituted, i. e., the issuamce of interest-bearing government bonds.
Despite the
Secretary's opposition a number of his younger assistants
^Rollins, Roosevelt and Howe. p. 388; New York
Tiraes. May 19. 1934, p. 14.
^^U. S.. Congressional Record. 73rd Cong., 2nd sess.,
(June 6, 193^). P. 10556.
^"^New York Times. October 26, 193^, p. 1.
28
U. S., Congressional Record. 74th Cong., Ist
sess., (January l4, 1935). p. ^29 and (march 22, 1935).
p. 4314.
77
within the Treasury Department felt that payir.ent of the
bonus was inevitable and these subordinates favored a
high inheritance tax to finance the measure.
Further
they argued that iraraediate payment might stirr.ulate the
depressed economy.
They felt that payment of the $4.8
billion bonus in 1945 might "precipitate runaway inflation. , ," if the econoray wer booraing.
Morgenthau was
not convinced by these arguments since he felt the
econoray had to recover through private construction
and investment,
Therefore, he reraained unalterably
opposed to the bonus in any form. "
At a cabinet raeeting on May 3, 1935. Vice-president
John Namce Garner informed the President that the bonus
bill would very likely pass the Senate.
He indicated that
it might be politically wise to allow the President's
veto to be overridden since the bill had considerable
Republican support and the issue would be removed prior
30
to the election of 19j6.^
On May 6 Roosevelt told
29
^John Morton Blum. From The Niorgenthau Diaries.
Vol. Ii Years of Crisis. 1928-1Q38 (2 vols.; Bostom
Houghton yifflin, 1959), pp. 249-250.
30
Harold L. Ickes, The Secret Diary of ^^^arold L.
ckes. Vol. I: The First Thousajid Days. 1^33-1-15
(3 vols.I New Yorki Simon and Shuster, 1953). p. 356;
John T. Flynn, The Roosevelt :'vth (New Yorki DevinAdair, 1948), p.""M:
Morgenthau he had been convinced by Garner's argurr.ent
and that he intended to consider the possibility of
"acquiescing" to an overridden veto.-^^
On :*:ay 7 the Senate
passed the bill by a vote of 55 to 33.^^ However, when
Morgenthau visited the White on the evening of rviay 16
he was greatly relieved that the wavering Roosevelt had
again chamged his mind.
He had decided to disregard
the advice the Vice-president had given and to write a
strong veto message as Morgenthau wished.
V/ith the
assistance of the Treasury Secretary, President Roosevelt
dictated a message that would leave no doubt as to the
seriousness of his intention.
To eraphasize the convic-
tion of his veto, Korgenthau suggested the President
broadcast the message to the nation prior to submitting
it personally to Congress.
On r.:ay 7 Roosevelt discussed
the proposed broadcast with ?*:orgenthau, Steve Early, ?.:arvin Mclntyre, and Rayraond [.:oley. Early argued Congress
would take offense if the President took his case to the
nation before he delivered his vetoraessageto them.
Morgenthau agreed with this evaluation, and it was decided
-^^Blum, From The Morgenthau Diaries. I, p. 25I.
^ U. S., Congressional Record. 74th Cong.. Ist sess.,
(May 7, 1935), p. 7068.
79
that the message would be delivered before a joint session which would be siraultaneously broadcast.^^
Later
that day Roosevelt inforraed the White House press corps
of his intention.
He made it clear that his veto was
in eamest and that he had every hope that it would be
sustained by vowing that "the bill is going to be vetoed.
It is going to be vetoed as strongly as I can veto it."-^
At twenty minutes past noon on May 22, 1935,
Roosevelt arrived at the House of Representatives chanber
of the Capitol to deliver his veto message of H. R. 3896
before a joint session of Congress and nationwide radio
raicrophones. He declared that enacting the bill into
law wasI
to abandon the principle of government by
and for the American. people and to put in its place
goyernment by and for political coercion by rr.inorities. . . . The complete failure of the Con.-^xess
to prôvide additional taxes for an additional
expenditure of this magnitude would of itself and
by itself alone warrant disapproval of this measure.35
Iramediately folowing the departure of the Fresident
and the members of the Senate, the House voted to over-
33
-^^Blum, Frora The Morgenthau Diaries. I, pp, 25I252,
34
Roosevelt, The Complete Presidential Press Con'
ference, V, p, 289,
35
^^Roosevelt, The Fublic Paners. IV. pp. 191-192.
80
ride 322 to 98.
The vote in the Senate carae im.Tediately
after that chamber had been informed that the :^ou8e ha^
voted to override.
However, the vote in the Senate wac
54 to 40 which feell short of the required two-thirds
• 36
margin.^
The Roosevelt veto was favorably received in conservative circles but the response among those who supported the bonus was naturally extremely antagonistic^
Perhaps the most vitriolic attack came from Father Coughlin, who, before a howling crowd of 23,000 in Madison
Square Garden, denounced Roosevelt for using "a money
changer's feeble argument pronounced by the same person
who promised to drive the money changers from the
o O
temple. "-^
Although Roosevelt's first veto of the inflationary
bonus bill was sustained, there were two irr.portant factors contributing to his inability to win a similar vote
^^U. S., Congressional Record. 74th Cong., Ist
sess., (May 22, 1935), pp. 7996 and 806?.
^"^Carlton Jackson, Presidential Vetoesi 1792-1945
(Athensi University of Georgia, 1967), p. 211,
38New York Times. May 23, 1935, p. 18.
81
when presented with another bonus bill in the followino'
year.
The first factor was a fundamental change in the
bill itself and the second was the neamess of the I936
presidential and congressional elections.
The American Legion met in St. Louis for its 1935
covention.
There the veterans decide to divorce the
bonus demand from the currency manipulation scheme
advocated by Patman.
The convention overwhelmint^ly
endorsed a resolution disavowing any interest on the
method by which the bonus was to be financed.-^^
The President again seemed to be wavering on the
issue of the bonus since there seem.ed to be little
doubt that a second veto could be owerridden.
n
September 4, 1935, Morgenthau wrote Roosevelt urging
him to raake no announcement of his decision on the
bonus issue until January.
On Novemeber 16 as it
becarae eVen raore apparent there was going to be a
bonus law enacted by Congress, Morgenthau requested
that the Treasury Department be allowed to finance the
4o
measure through the sale of government bonds.
^^ bid.. September 27, 1935, p. 12.
40 Blum, From The Morgenthau Diaries. I, pp. 256-257.
82
On January 7, 1936, Congressman Fred Vinson introduced H. R. 9870 which called for the immediate pavment
of the Adjusted Compesation Cerificates at the n.atured
rate to be financed through the means suggested by Secretary Morgenthau.
Three days later the bill was passed
in the House by a vote of 356 to 59 and sent to the
Senate.4l
The Senate.followed the lead of the lower house by
passing the Vinson bill by a vote of 74 to 16 on January
,42
201
Roosevelt was considering the matter of a veto of
H. R. 9870 when he received a letter frora Felix Fránkfurter on January 17 advising him "to stand pat" on his
previous veto.
He advised this soft approach was the best
means to alienate the smallest number of voters.43^ At
one o'clock on the raorning of January 23 Roosevelt corapleted his brief, hamdwritten veto raessage. He had been
uncertain as to whether he would veto or sign the day
before and had instructed Early to prepare a press release
44
to cover either continguency.
^^U. S., Conp:ressional Record. 74th Cong., 2nd sess.,
(January 7. 1936), p. 153 and (January 10, 1936). p. 292.
^^lbid., (January 20, 1936), p. 702,
"^Roosevelt and Frankfurter,
f u r t e r . p. 313.
fioosevelt
44
Ickes, The Secret Diarv. I, p. 5^5.
and Frank-
B3
In his short veto raessage he referred to his earlier
action and noted, "M.y convictions are as impelling today
45
as they were then. Therefore I camnot chamge them."
The House voted to override on January 24 cy a vote of
326 to 61,
The Senate followed suit on January 27 by
46
a vote of 76 to 19 thus enacting H. R. 9870 into law,
Public Law 425 provided for immediate payraent of
Adjusted Corapensation Ceritificates at face (matured)
value effective June 15, 1936.
Any loans outstanding
against the certificates were deducted frora theface
value of the certificates,
Any interest on bank loans
made after October 3I, 1931, was paid by the Administrator of Veterans' Affairs.
The payment was n.ade to
certificate holders in $50 bonds that were imraediately
redeemable,
Differences between the total payraentand
the amount paid in $50 bons were paid in cash,
The bons.
if not redeemed would mature in nine years and would
47
draw three percent interest per year,
The political issue whicn nad arisen with the onset
of'the Depression was resolved,
The economic impact of
the bonuB appears to have been miniraal since the econ-
'^^Roosevelt. The Public Parers. V. p, 6?.
^ S . 3.. rnnp-rP<.^ÍQnal Record. 74th Cong.. 2ni ses.,
tJanuary 24, 1936), p. 976 and (January 27. 1936). p. 1 0 0 .
^"^49 U. S. Statutes at Large
109^-1102.
84
oray was experiencing a temporary upswing in 193£ and the
búlk of the bonus money, some $1,430,000.000 in cash and
redeemed bonds, went into savings rather than concentrated consumer spending which wouid have been required
to show any visible effect on the economy.
in bônds were not redeemed immediately.
$335,000,000
Almost one and
a half billion dollars of Adjusted Compensation payraents
went to repay outstanding loans. The raost immediate
effect of the bonus payment was the $3.25 biilion drain
on the Treasury to finance the payment.48
The Roosevelt position throughout the bonus affair
appears to have been a guarded, tactful oppositio.'^i. ^-^is
stand seems to have been ultimately consistent if not
always forceful.
Roosevelt did not regard the bonus as
a sufficiently imprtant issue to adopt an uncharacteristically
unbending stance agåinôt it.
He realized that
there was little to be gained from such a posture.
There seeras to have been little difference in the
positions of Roosevelt and Hoover, but Roosevelt consistently handled the situation with understanding, tact,
and political skill. This cautious approach delayed
enactraent of the bonus for four years. When the infla-
Dillingham, Federal Aid to Veterans. pp. l67170.
85
tionary provisions of the bonus bill were removed, a
great deal of opposition was also removed.
Roosevelt
*
realized that passage was assured and that his veto
would most certainly be overridden.
Therefore, he
made no sustained amd ultimately futile fight gainst the
measure but rather quietly restated his previous objections and let the inevitable come to pass.
CHAPTER VII
CONCLUSIONS
An exaraination of the bounus issue provides an
excellent opportunity to study the methods and techniques of executive influence employed by five separate
presidential administrations in attempting to deal with
the same basic issue. The general issue of the bonus
may be divided into two aspects. The first question
related to the actual enactment of the Adjusted Compensation Act. The second area dealt with prepayraent of the
promised bonus.
The administrations of presidents Wilson. Harding
and Coolidge were concemed with blocking passage of
the bonus measure. In each adrainistrations the secretary of the treasury played a vital role in making the
administration's viewpoint known to the lawraakers and
the public. In the case of the Wilson administation
Treasury Secretary David F. Houston led the fight
almost singlehandedly since President 'Vilson was
occupied with matters of greater importance. In addition the bonus adherents in congress had not become
stong enough to warramt the special atténtion of the
President. Houston never attacked the bonus on moral
grounds. His opposition was strictly on budgetary
grounds. He felt the bonus would prove detrimental to
the national economy amd the fiscal integrity of the
86
87
federal governraent.
President Harding felt it necessary to take raore posi
tive action than President Wilson had.
Despite statements
by the President and Treasury Secretary i.'.ellon, the Senate
appeared to be determined to pass the measure.
Harding
felt so strongly about the raatter that he was obliged
to take the unprecedented step of appearinc before the
upper chamber and asking its members to table the bill.
No doubt could have been left in the minds of the 5enators about ::arding*s determination to stop the bonus.
But the Congress appeared to be jsut as determined.
Arraed with data provided by Secretary î^ellon the President
was finally forced to veto H. R. 10874.
;îarding's hand-
ling of the bonus issue appears to be a bright spot in
the record of a man generally considered to be a weak
amd ineffective president.
No small measure of this suc-
cess can be attributed to Mellon.
The Secretary was a
constant and vigorous opponent of the bonus.
His state-
ments to the press and testimony before congressional
coraraittees are replete with arguraents pointing to fiscal irresponsibility of such a measure.
The main thrust
of his arguments, like those of Houston amd later secretaries, were generally budgetary.
Only occasionally
did he declare the bonus seekers to be corapelled by
ignoble motives.
Mellon was to serve two other presi-
dents in the bonus battlefield.
His arguments were much
86
the same with each appearamce on Cpitol Hill.
Generally
his subordinates at the Treasury Departraent and various
memebers of the Federal Reserve echoed his reservations
in regard to the payraent of a bonus.
President Calyin Cooldige did not defy tradition as
his predecessor had donei yet, he was no less adajnant in
his opposition to the bonus.
ances before Congress,
He made no personal appeaor-
That would have been in contra-
diction to the Coolidge image and personality,
Secre-
tary Mellon gain carried the administration's position
to the members of Congress,
V/hen H. R. 7959 was retumed
to Congress it was accompanied by a moral lecture by
Coolidge in veto form.
moral indignation.
The vetoraessagewas filled with
Coolidge accused the veterans of sup-
porting the measure because of their overwhelmingly
unpatriotic greed.
Depsite the strong language of the
veto it was ineffective in deterring a Congress up for
re-election.
Of the three chief executive concemed with initial
passage of the bonus, Haurding was the most active in his
opposition.
Prior to his election he dropped the hint
that he probably would oppose the bonus in view of the
state of the economy.
Laxer he met on a number of occa-
sions with members of Congress to maike his opposition
known.
Generally public opinion supported his bold
appearance before the Senate and his strong veto of the
ov
bill that Congress later passed.
Coolidge left the tulk
of the opposition to Secretary Mellon.
Althouth he
retumed the bill with a strongly worded veto (rruch
stronger than Harding's), it was overrriden with considerable ease.
The possibility of passage appeared
remote to the Wilson administration and therefore intervention by the President was deemed unnecessary.
The second'aspect of the bonus issue was the
question of prepayment,
Two administrations were en-
volved with this facet of the bonus question.
The
positions of Hoover and Roosevelt in regard to prepayment were almost identicali yet, theirraethodsof
execútive influence in the legislative process vary
greatly.
President Hoover comraunicated with Congress
through his Secretaries of the Treasury Andrew ;/.ellon
amd Ogden Mills.
On the other hand Roosevelt comrauni-
cated directly with the leadership amd was pleased to
have his feelings on the subject of the bonus passed
on to the members.
Hoover was effective in his appear-
ances before the conventions of the American Legion.
Roosevelt truly excelled in his use of the relatively
new medium of radio.
His appearance before Congress
and a national radio audience to deliver his veto of
H. R. 3896 was nothing short of brilliant.
Also, as
previous presidents had relied heavily on their sec-
90
retaries of the treasury, Roosevelt was extremely dependent upon Morgenthau.
He sought to keep Roosevelt firm
in his opposition to the bonus.
The two presidents also varied greatly in their
handling of public opinion.
When the first Bonus Army
arrived in Washington, Hoover chose to ignore the very
presence of the B..E. F.
Roosevelt no only acknowledged
the presence of'his Bonus Army by sending his wife to
the camp but also granted an interview to the leaders
of the bonuseers.
Perhaps Roosevelt had leamed from
Hoover's mistakes, but differences in philosophy of
Hoover and Roosevelt contributed to Roosevelt's success.
Roosevelt was less dogmatic and had the ability to reach
the common citizen that Hoover lacked.
Hoover felt the
federal govemment had no business providing aid to the
indigent since that was the role of local amd state
govemments,
Since the federal government had no respon-
sibility in that regard it would be wrong to acknowledge
the presence of the B. E. F.
Rooaevelt felt the prepay
ment issue to be wrong for the same reasons Hoover did,
They felt that it was class legislation which would only
benefit a small segment of Society.
Even though Roose-
velt felt their aims to be wrong, he could sympathize
with the plight of the veterams.
Finally, in general the role of executive influence
in regard to the bonus question seems to have been most
91
effective when the chief executive and his secretary of
the treasury worked together throughout the entire length
of the legislative battle,
Harding, Hoover, and Roosevelt
were all effective in delaying passage of the bonus or
prepayment,
In all three of these cases the role of the
President seeras to have been to influence public opinion
as well as congressional opinion.
Both Harding amd Roose-
velt used unprecedented raeans of cor.rr.unicating their
feelings on the raatter, Harding defied tradition in his
Senate appearance as did Roosevelt in his delivery of a
veto meesage before a joint session of Congress and the
national radio audience.
Despite the efforts of these
chief executives and the correponding efforts of tlieir
treasury secretaries the bonus was only delayed.
In each
instance a bonus bill passed Congress and the veto was
overridderi, it was an election year.
Congress was r-.ore
respnsive to potential voters than they wer to the wishes
of the executive branch.
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