October 01 2012
The GI Bill
A history of how Veterans became Consumers
Master Thesis
Prof. Ruud Janssens
(2nd reader) dr. Eduard van de Bilt
MA American Studies
History Department
University of Amsterdam
Mathijs Oord
0519960
Bosenlommerplein 159C, Amsterdam
[email protected]
Table of Contents
Introduction
1
Chapter 1: Prior to World War II
6
1.1 The Aftermath of World War I: The Bonus March
1.1.1 Wilson & Harding (1913-1923)
1.1.2 Coolidge & Hoover (1923-1933)
7
8
11
1.2 The New Deal: The Foundations of the Consumers’ Republic
1.2.1 The Consumer Problem
1.2.2 The Economy Act
1.2.3 Payment of the Bonus
1.2.4 John Maynard Keynes
15
15
18
19
21
Chapter 2: War- and Postwar Planning
26
2.1 War Planning
2.1.1 The Office of Price Administration
2.1.2 War Production Board
27
28
32
2.2. Postwar Planning
2.2.1 Roosevelt
2.2.2 Public Law 16
2.2.3 The GI Bill
2.2.3.1 Title II: Education
2.2.3.2 Title V: Unemployment Allowance
36
37
40
43
45
47
Chapter 3: The GI Bill at Work
50
3.1 The beginning of the Consumers’ Republic and its GI Bill
51
3.2 Title III: Housing
3.2.1 Federal Funding
3.2.2 Market Rules
3.2.3 Local Government
54
56
57
60
3.3. Title II: Education
3.3.1 Federal Funding
3.3.2 Market Rules
3.3.3 Local Government
62
64
66
68
Conclusion
71
Bibliography
75
Introduction
“THERE IS NO MAGIC by which Legislation can build homes for Veterans,” said the title of
an advertisement in The New York Times on November 11, 1946. This advertisement, paid for
by Precision-Built Homes Corporation, praised “the technical knowledge” of the commercial
builders who had “set new records of speed and efficiency” during World War II in order to
meet the demand. As important as it was for the advertiser to emphasize the professional
attitude of commercial builders, it was to underscore how federal legislation undermined the
needs of veterans.
Interestingly enough, when the advertiser referred to ‘Legislation,’ he referred to some
rather than other federal initiatives. Reading the advertisement it becomes clear that the
problem lay with the continuous wartime housing restrictions. The ad told its readers “more
time is needed to interpret the rules than to build the house.” The argument continued with the
claim that federal housing legislation kept people in government jobs who could otherwise
have “contributed to the wealth of the nation” with the production of goods and services. Still,
the advertiser was not at all against federal interference with regard to housing. The subject of
this thesis, the Servicemen’s Readjustment Act of 1944 (popularly known as the ‘GI Bill’), and
its main implementer the Veterans’ Administration were explicitly mentioned as providers of
“important assistance” to the veteran.
The Housing Title of the GI Bill on the on side, and the federal housing restrictions on
the other, were both designed to meet the overwhelming postwar demand. What made all the
difference though, was their approach. According to the advertiser federal legislation was un-,
or even contra productive when it imposed restrictions on the production side of the housing
market. Meanwhile, when federal legislation stimulated the consumption side of that same
market, the federal government was thought to be a productive force. Coming from a
commercial housing corporation, such reasoning may not come as a surprise.1
However, the point is that for defining the federal government’s ideal role in postwar
America, the approach of this advertiser was shared by many, and also different, parties.
Consequently, after the war, the balance shifted from what could previously be referred to as
a production-oriented political economy, to a consumption-oriented political economy.
Referring to the American society that rose after the war as the Consumers’ Republic,
historian Lizabeth Cohen ascribes far-reaching consequences to this political economical
1
Precision-Built Homes Corporation (advertisement), “There is no magic: By which legislation can build homes
for veterans,” (The New York Times 14 November, 1949), 20.
1 shift. According to Cohen it changed “how Americans made a living, where they dwelled,
how they interacted with others, what and how they consumed, what they expected of
government, and much else.”2
Returning to the ad cited at the beginning of this paragraph, it is clear that the absence
of ‘magic’ first of all referred to the presence and importance of the commercial housing
market. The federal government it is believed, can either stimulate or thwart the market, but it
cannot ‘magically’ replace it. This conception stands opposed to the popular belief about the
GI Bill, that awarded sixteen million World War II veterans with a program of benefits.
Expressed by former journalist Michael J. Bennett, the popular conception corresponds to the
idea that “[q]uite literally, the GI Bill changed the way we live, the way we house ourselves,
the way we are educated, how we work and at what, even how we eat and transport
ourselves.”3
With no intention to undermine the truth that lies behind this popular claim, this thesis
will approach the GI Bill not as a game changer on its own. Instead, using Cohen’s notion of
the Consumers’ Republic, the GI Bill will be placed in a broader social economic perspective
to explain an important part of both the process of its creation, and the effects of its workings.
Still, the fact remains that as a key program of its time, the GI Bill was also the product of the
combined efforts produced by certain individuals and groups. It will be argued that their
presence was reflected in the specific way in which the bill provided millions of veterans with
the possibility to receive unemployment allowance, buy a home, set up a business, and/or get
an education. As an effort to introduce the importance of the parallel history of consumerism
to the GI Bill debate, this thesis will also concede to its explanatory limits. The conclusion
will nonetheless be that to leave out the twentieth century development of consumerism when
discussing the GI Bill is to unjustly approach the bill as part of a (‘magic’) social economic
vacuum.
In order to describe the emergence and operation of consumerism in America, the
above-mentioned notion of the Consumers’ Republic will play a central role. In her work A
consumers’ republic: The politics of mass consumption in postwar America, American
Studies Professor Lizabeth Cohen describes this notion as: the wide spread post-World War II
belief, in “mass consumption” as “the model for the world” due to its “far-reaching benefits,”
2
Lizabeth Cohen, A consumers’ republic: The politics of mass consumption in postwar America, (New York:
Knopf, Kindle e-book edition, 2003), 106.
3
Michael J. Bennett, When dreams came true: The GI Bill and the making of modern America, (Washington:
Brassey’s, 1996), 8.
2 replacing the “vitality of production and the power of producers.”4 Illustrating how the federal
government participated in this new reality, Cohen refers to the GI Bill as a “key postwar
policy” that was “designed to promote the goals of the Consumers’ Republic.”
It should be acknowledged then that the theoretical relation between the GI Bill and
the Consumers’ Republic is not altogether new. Still, as far as it comes to explaining the
creation and the workings of the GI Bill, it becomes obvious that Cohen’s concerns lay
somewhere else. Her book was set up to introduce, explain and legitimize the Consumers’
Republic as a notion. Apart from other critics, 5 Cohen herself states that inevitable
abstractions at times “obscure from view the agency of individual actors and social groups.”6
This means that her analysis of the GI Bill is as incomplete as Bennett’s account which
focuses predominantly on the creators and their intentions with the bill.
While the GI Bill debate has produced more balanced accounts then Bennett’s When
dreams came true, none of these works have adopted the parallel history of consumerism with
comparable seriousness as Cohen. Other parallel histories that have been incorporated in GI
Bill accounts are; the tradition and development of state power (Frydl); New Deal politics
(Altschuler & Blumin, Ortiz); civic political participation (Mettler); and most prominently,
discrimination on the basis of gender, class and race (Altschuler & Blumin, Frydl, Mettler).7
All of these accounts stretch beyond the simplicity of pointing to the GI Bill as the sole
engine pushing for postwar changes within American society, but have chosen not to
elaborate on the rise of consumerism.
Moreover, all above-mentioned accounts appeared after A Consumers’ Republic was
published in 2003. Accordingly, references to Cohen’s work within the GI Bill debate almost
exclusively mention the book to be critical on the veteran-benefits law, leaving the main
argument of the book about consumerism not discussed. For instance, in their book The GI
Bill: A New Deal for Veterans, historians Glenn Altschuler and Stuart Blumin call upon A
Consumers’ Republic only when summarizing earlier works, arguing it to be illustrative of
4
Cohen, A consumers’ republic, 104, 330.
Joy Cushman, “A Consumers’ Republic: The Politics of Mass Consumption in Postwar America by Lizabeth
Cohen,” (The Economic History Review 56-4, 2003), 806; Meg Jacobs, “A Consumers’ Republic: The Politics of
Mass Consumption in Postwar America by Lizabeth Cohen,” (The Journal of Interdisciplinary History 35-1,
2004), 167; George Ritzer, “A Consumers’ Republic: The Politics of Mass Consumption in Postwar America by
Lizabeth Cohen,” (American Journal of Sociology 109-4, 2004), 1022-1023.
6
Cohen, A consumers’ republic, 184.
7
Kathleen J. Frydl, The GI Bill, (New York: Cambridge University Press, 2009); Glenn C. Altschuler, and Stuart
M. Blumin, The G.I. Bill: A new deal for veterans, (Oxford: University Press, 2009); Stephen R. Ortiz, Beyond
the Bonus March and GI Bill: How veteran politics shaped the New Deal Era, (New York: University Press,
2010); Suzanne Mettler, Soldiers to Citizens: The G.I. Bill and the making of The Greatest Generation, (Oxford:
University Press, 2005).
5
3 what they call “something of a backlash against the GI Bill as a popular icon.”8 Furthermore,
historian/political scientist Suzanne Mettler in the introduction of her work Soldiers to
Citizens, refers to Cohen solely for her “claim that the G.I. Bill merely bestowed privilege on
already privileged veterans.”9 Where the rest of the book mainly emphasises on veterans and
their relation to citizenship, it is al the more surprising that only when it comes to the position
of women after the war, Mettler calls upon the specific implications of the Consumers’
Republic.
Having addressed the aim of this work in relation to the contemporary GI Bill debate,
the question of how to achieve this remains. As said, this thesis will not stop at referring to A
Consumers’ Republic as a mere critical work. Rather, it will use the reasoning behind the
proclaimed central position of mass consumption in postwar America for a better
understanding of both the creation and the workings of the GI Bill. Divided into three
chapters, the first chapter discusses the history leading up to the GI Bill. Covering the
interbellum, two developments will stand at the center of attention in this chapter. First, as the
most recent predecessor, government’s treatment of World War I veterans should count as a
fair starting point to discuss the development of veteran politics leading up to the subject of
this thesis. Second, starting with the end of World War I means a short run remains before the
first signs of the Consumers’ Republic began to emerge during the Great Depression of 1929.
The main argument of this chapter will be that, taken together, both developments supported
common perspectives on America’s political economy. The desired role of the federal
government herein can simply be described as active instead of passive.
As will be described in the second chapter, perspectives on America’s political
economy that had emerged during the interbellum further developed with World War II as
their catalyst. Consensus with respect to the desired role of the federal government developed
accordingly. Its activity was deemed to serve everyone’s interest when it acted on the
consumer, rather than the production side of the market. At the same time, recovering from
the Great Depression the newly established infrastructure for veteran politics was charged
with the job to provide a fitting solution for the sixteen million servicemen returning to
society. It will be argued that the GI Bill, that was signed by Franklin D. Roosevelt on June
22, 1944, was the product of both the established intentions of its creators and the new
emerging perspective on America’s political economy.
8
9
Altschuler, The GI. Bill, 4.
Mettler, Soldiers to Citizens, 9.
4 After its signing it would still take a few years for the bill to be actively used by
veterans. Accordingly, before the third chapter will come to discuss the workings of the GI
Bill it will start with a brief consideration of the amendments made to the bill, and, the
postwar development of the Consumers’ Republic. Hereafter, the main part of this chapter
will focus on the two titles of the bill that have received by far the most scholarly attention.
Accordingly, with respect to the changes in postwar American society, the housing and
education titles have been credited as the two most influential aspects of the GI Bill. It will be
argued that both the creators’ intentions and the emerging Consumers’ Republic characterized
the workings of these titles. To substantiate the validity of this assumption, this chapter will
come to discuss both titles at three different levels, namely: federal funding, market rules and
local government.
5 Chapter 1: Prior to World War II
The official description of the GI Bill given by its creators read: “AN ACT: To provide
Federal Government aid for the readjustment in civilian life of returning World War II
veterans.”10 However natural and obvious this may seem now, the federal government’s
obligation towards the readjustment of returning veterans in society has not been accepted at
all times. Most importantly as its predecessor, the treatment that veterans of the previous
World War received was an example of this. This first chapter therefore explores the factors
that could have been responsible for the change in treatment that World War II veterans
enjoyed. It will be argued that two developments unfolding during the interbellum are of
upmost importance to explain this change in treatment.
The first one tells the story of how, over the whole period of time, veterans of the First
World War came to be strongly represented in American federal politics. One could argue
that not in spite, but due to the maltreatment of the former doughboys, veteran politics grew
as strong as it did during the interbellum. Most GI Bill scholars point to the Bonus March in
itself as the most important development in veteran politics of this period. According to them,
the Bonus March represented a ‘historically freighted symbol,’ something that had to be
prevented from happening again at any cost. However, equally important was the preceding
slower shift towards increased federal representation of veterans by organizations like the
American Legion and the Veterans of Foreign Wars. Furthermore, historian Stephen R. Ortiz
claims to fill a gap in the history of both the GI Bill and the New Deal. He argues that also
after the Bonus March, during the presidency of Franklin D. Roosevelt, veteran politics
continued to be of the utmost importance.11 All in all, it will be argued that the development
of veteran politics during the interbellum demanded a more active stand of the federal
government with respect to the veterans’ cause.
Like most forms of politics, veteran politics were to a large extent determined by
financial considerations. The second development therefore has to do with America’s political
economy. According to Cohen, from the start of the Great Depression in 1929, all the way
through the New Deal the foundations of a new political economy (the Consumers’ Republic)
began to be laid. Two different perspectives on America’s consumers came to prevail and
“competed for dominance” during this period. On the one hand, the “citizen consumer”
perspective regarded the necessity of government to protect the consumer against the hazards
10
11
United States, Government, “Servicemen Readjustment Act of 1944,” (P.L. 78-346, 58 Stat. 284m), 284.
Ortiz, Beyond the Bonus March, 2.
6 of the free-market. On the other hand, the “purchaser consumer” perspective was less
concerned with the individual rights, as with the collective purchasing power of the consumer.
This standpoint figured that the common-good of society could best be helped by stimulation
of consumers’ purchasing power by the government.12 The important point is that both
perspectives emphasized the role of the consumer instead of the producer with respect to
America’s political economy.
In order to bring arguments concerned with veteran- and economic politics together,
the first part of this chapter will discuss aspects of both developments from the end of World
War I up to and including Herbert Hoover’s presidential years. After the consecutive
Republican presidencies of Harding, Coolidge and Hoover the second part of this chapter will
discuss Franklin D. Roosevelt’s New Deal period. However, while not exclusively, this
periodization will mean that the focus of the first paragraph will predominantly lay with the
development of veteran politics, just as the second paragraph will be on the rise of
consumerism.
1.1 The Aftermath of World War I: The Bonus March
When one tries to address the development of veteran politics during the interbellum period,
two opposing ideal-types offered by historian Kathleen Frydl are useful. The first model bears
recognition with America’s situation after WWI, and is called the Athenian system. This
model rests on the belief “that service in the military is a duty of all citizens. In its most
severe form, warriors receive no pay while in service, furnish their own arms, and return
home to perform a solitary inspection of what is left of their lives.” While WWI soldiers did
not have to buy their own arms, the able-bodied, as will be discussed later on, did come back
home with next to no support from their federal government. The merits of this system,
according to Frydl, are its “inward-turning aspects.” In other words the model prefers
authority in local communities over a strong central state. Originally, proponents of this
system have argued for “sectional interests and, in particular, the defence of slavery.”
The Roman model, on the other hand, sketches the opposite. In Rome the capite censi,
or landless citizens, had no money to acquire arms for themselves so “Rome initiated the
practice of furnishing armaments to its soldiers.” The furnished arms together with a just
reward for returning veterans, marks the Roman model as “a model of citizenship that
12
Cohen, A consumers’ republic, 274.
7 compelled a citizen to do less and featured a state that did more.”13 It will be argued that
World War I veterans seeking recognition due to political representation counted as an
important stimulation, enforcing a shift from an Athenian- towards a Roman model for
veteran politics.
A simple reason for the increased political sensitivity for veterans’ needs is found in
their growing political presence. Writing in 1930, journalist Oliver McKee Jr. already
declared that the “veteran of the World War has won a secure foothold in American politics.”
To illustrate his statement, McKee pointed to the fifteen senators, sixty-three members of
Congress, and multiple Cabinet members in office that had served in the Great War.14 In
addition to this argument, GI Bill historians Altschuler and Blumin conclude that veteran
politics had never before been influenced so strongly by the presence of veterans from a
previous war. By the time the WW II veteran’s debate started in 1940, veterans of the former
war were in their forties and fifties, being “at or near the peak of their activity and influence
in their communities and in the larger world of Washington politics.”
Moreover, besides their physical presence, it is broadly acknowledged that whereas
former doughboys suffered from the consequences of correcting an excessive Civil War
pension system, WWII veterans enjoyed a more generous treatment due to the lessons learned
after WWI.15 One lesson that stands out particularly is the 1932 Bonus March.
1.1.1 Wilson & Harding (1913-1923)
Before America was confronted with the Great Depression in 1929, control over veteran
policymaking was still in the hands of Congress and the President. On October 6, 1917, six
months after the United States officially entered the war, Congress passed the War Risk
Insurance Act (WRIA). Almost exclusively focused on the rehabilitation of disabled veterans
and relief for relatives of soldiers who died during the war, the act signalled to able-bodied
veterans that they should not expect much from their federal government.16 Some dismissed
servicemen, Frydl strikingly remarks, “found their discharge pay of $60 barely enough to buy
a train ticket home.”17 Still, former President Theodore Roosevelt endorsed the act claiming
its features put “the United States where it ought to be, as standing in the forefront among the
nations in doing justice to our defenders.” While not as forceful as during the Great
13
Frydl, The GI Bill, 40-42.
Oliver Jr. McKee, “The Political March of the Veterans,” (The Commonweal November 12, 1930), 40-42.
15
Altschuler, The GI Bill, 36-37.
16
Ortiz, Beyond the Bonus March, 13-14.
17
Frydl, The GI Bill, 47.
14
8 Depression, opposition to this claim started almost as soon as the war ended. Ortiz describes
this opposition to be active “as early as 1919, [when] sympathetic members of Congress
already had introduced fifty-five different plans granting veterans some form or another of
retroactive adjusted compensation.” Believing in a more or less Athenian system, President
Woodrow Wilson opposed any Bonus plan that exceeded a $60 discharge pay.18
While conservative when it came to his stand towards veteran politics, Wilson’s
thoughts on consumerism could be described as progressive. A perspective that can be
referred to as an early version of the later to become dominant ‘purchaser consumer’
perspective is articulated by Wilson in his address to a hall full of salesmen in Detroit in 1916.
Commenting on the speech, historian Victoria de Grazia notes:
By insisting that salesmanship and statesmanship were “interrelated in outlook and scope,” Wilson
infused contemporary statecraft with a strikingly modern consumer sensibility. “The great barrier
in this world is not the barrier of principles, but the barrier of taste,” he went on to say. Given that
“certain classes of society” find “certain other classes of society distasteful to them” because of
their poor dress, uncleanliness, and other unpleasant habits, “they do not like to consort with them
. . . and therefore, they stand at a distance from them and it is impossible for them to serve
them.”19
Though these words of Wilson clearly mark a shift in thought towards the Consumers’
Republic, actual changes in policy are meager. To put it differently, efforts to increase
society’s common prosperity by empowering consumers were scarce. The emphasis on ‘taste’
shows sensibility for consumers’ wants, but rather as a tool for business, stimulating national
prosperity through production power. Legislation reflecting the idea that consumers needed
protection in a production-centered society was also lacking, albeit, not totally absent. For
instance, earlier during the Progressive Era, in 1906, The Pure Food and Drug Act, and the
Meat Inspection Act were passed, protecting consumers by setting some basic requirements
for food processing businesses. Later, in 1914, the Federal Trade Commission Act was set to
protect consumers against monopolies.20
On the citizen-side of the state-citizen relation, grass-root consumer protests made
more convincing efforts to enhance a ‘citizen consumer’ perspective. In this respect, historian
Dana Frank gives the example of, “the burst of violent street protests against the high costs of
18
Ortiz, Beyond the Bonus March, 25.
Victoria de Grazia, Irresistible empire: America’s advance through 20th-Century Europe, (Cambridge: The
Belknap Press of Harvard University Press, 2005), 1-2.
20
Cohen, A consumers’ republic, 340.
19
9 living” by thousands of migrant Jewish women in New York City, in 1917.21 Another
example examined by Frank tells the story of the Seattle American Federation of Laborprotests, starting in 1919. Relying on their combined purchasing power “consumption was
crucial to the story of labor in the 1920s. [Frank’s] examination of Seattle revealed an
extensive sphere of grassroots activism in which workers use consumption politically as part
of the labor movement.”22 Whereas a shift on both sides of the state-citizen spectrum can be
noted, concluding on the status of America’s political economy of the 1920s, Cohen argues
that: “Manufacturers, distributors, and advertisers essentially enjoyed free rein in the
increasingly national mass marketplace. During this business-dominated decade, consumers’
political consciousness was not high.”23 The same can be said about veteran politics. Still,
representative organizations for veterans stood eager to challenge their marginal position.
While Congress and the administration were leading, another political force (re-)
emerged during the first years after the war. In 1919 in Paris, members of the American
Expeditionary Force 24 formed a new veteran representative group named the American
Legion. Together with the Veterans of Foreign Wars (VFW), a group that was formed after
the Spanish-American war, the American Legion formed a political factor that would grow in
importance when it came to veteran politics. During the early years both groups fought for
expanded medical benefits, construction of veteran hospitals, and the reducement of red tape
that disabled veterans experienced when applying for benefits. Most politically controversial
however, the American Legion and VFW were in favour of Bonus legislation that would
exceed the limits set by Wilson. While their programs overlapped, two differences between
both groups should be mentioned. Firstly, whereas the American Legion enabled all American
World War veterans with a honourable discharge to join, the VFW was only open to veterans
who fought in foreign countries. Secondly, next to the fact that the American Legion grew
larger and more influential from the beginning thanks to this unselective approach, its
leadership consisted of “a group of men drawn from the nation’s political and economic
elite,” referred to as, “the kingmakers.”25
Completing the “iron triangle” of veteran politics is the Bureau of War Risk Insurance
(BWRI), charged with implementing the War Risk Insurance Act. Under pressure of both
21
Dana Frank “Housewives, socialists, and the politics of food: The 1917 New York cost-of-living protests,”
(Feminist Studies 11-2, 1985), 256.
22
Dana Frank, Purchasing power: Consumer organizing, gender, and the Seattle labor movement, 1919-1929,
(Cambridge: University Press, 1994), 4.
23
Cohen, A consumers’ republic, 366.
24
The Armed Forces of the United States that were sent to Europe to fight during World War I.
25
Ortiz, Beyond the Bonus March, 17-20, 25. 10 veteran representative groups and a special report of Congress articulating cases of corruption
and veterans complaints of having to deal with at least three and up to as much as eight
separate government agencies, in 1923 President Warren G. Harding reformed the BWRI into
the more extensive Veterans’ Bureau. The newly appointed administrator, General Frank T.
Hines mirrored the change. According to Frydl, Hines embodied “the picture of bureaucratic
punctiliousness,” deserving credit for clearing the agency of corruption and restoring its good
name. But before the agency once more changes in form and name in 1930 (becoming the
Veterans Administration), most important are the interactions between Congress,
administration and the veterans’ representative organizations.26
1.1.2 Coolidge & Hoover (1923-1933)
Like Harding, the newly installed President Calvin Coolidge rejected proposals articulating a
Bonus for the former doughboys, complementing his veto with the words: “patriotism that is
bought and paid for is not patriotism.”27 This Athenian thought only partly prevailed when
Congress overrode the President’s veto and passed the Adjusted Compensation Act in the
election year 1924. Hovering between veteran lobbyist groups and the administration,
Congress passed an act that undermined Coolidge moral reasoning but it did take into mind
his fiscal arguments. After years of Progressive-era growth, the “Republican call for tax
reduction and government contraction” did not match the implications that the immediate pay
of a Bonus to all WWI veterans would have. So instead, the Adjusted Compensation Act
declared that veterans would receive their Bonus well into the future, in 1945. Until that time
the Bonus, by average about $1,000, could be used by veterans to take out a loan of 22.5
percent administered by the Veterans’ Bureau. With 4.1 million veterans applying for a loan
under this construction, the need for such a measure seamed justified. With the stock market
crash of 1929, and the following Great Depression, a loan on the Bonus suddenly became
insufficient. Instead, veterans started to demand immediate payment of the whole bonus.28
Unfortunately for them, the Roman approach in the form of a promised Bonus was not yet to
be combined with a Keynesian belief in deficit spending.
Formerly referred to as one veterans lobby, the American Legion and the VFW both
came to choose different paths after 1929. The chief difference between the two comes with
their respective approaches towards the state-citizen, or to be more precise state-veteran
26
Frydl, The GI Bill, 48-50.
Ibid., 51.
28
Ortiz, Beyond the Bonus March, 25-28.
27
11 relation in times of crisis. While sentiments in favour of immediate payment of the Bonus
never vanished, the Depression, more clearly than before, underscored its economic relevance
for the individual veterans. The question if a Bonus was either good or bad for the nation as a
whole started to divide veterans and veterans’ organizations. On the one hand the American
Legion far from unanimously decided to follow the route set out by “kingmakers” like
Hanford MacNider and Stephen Chadwick who argued against “the selfishness of
individuals” and saw the “ex-servicemen and his program as a burden upon the country.” In
line with this argument the Republican National Committee released a statement claiming that
if the Bonus was to be paid out immediately, “we can expect a business depression and a
period of acute human suffering the like of which this country has never known.” According
to Ortiz these perspectives fit well into the “pro-business conservative orthodoxy of the
Republican era,” following the Progressive-era.
On the other hand the VFW one-dimensionally continued to fight for immediate
payment. To backup their claim, VFW Commander Paul Wolman not only referred to the
veterans as deserving, but also used a proto-Keynesian argument by stating that the Bonus
would be a “marvellous stimulant to existing economic conditions.”29 Members of the VFW
seemed to believe in a Roman model, where government is expected to invest in its citizens in
order to stimulate the common-good of the society. Just as important to note however, the
VWF said to believe that stimulating the purchasing power of the veteran as consumer to be
the just way to achieve this ideal. The ‘purchaser consumer’-reasoning behind this argument,
while often overlooked or thought to be of minor importance by GI Bill scholars, would come
to be of decisive political importance later on.
The final chapter before reaching the Bonus March showed the intensification of
existing patterns. Firstly on February 12, 1931, a new act was passed over President Herbert
Hoover’s veto, raising the percentage that veterans could borrow against their Bonus from
22.5 percent to 50 percent. Like the three Presidents before him Herbert Hoover rejects the
Bonus, and in this case the 50 percent act, on both ideological and fiscal reasons.
Ideologically Hoover notes: “The patriotism of our people is not a material thing.” Moreover,
according to Ortiz, “he warned that paying the Bonus threatened the moral fiber of the
country by eroding the virtues of self-reliance and self support.” Fiscally, Hoover rejected the
idea that loans would stimulate business noting that he did not believe the money veterans
might spend to be of “assistance in the return of real prosperity.” This argument fitted in with
29
Ortiz, Beyond the Bonus March, 38-39.
12 Wilson’s earlier mentioned belief in production over consumption as the single most
important stimulant for national prosperity.
Furthermore, later in 1931, conventions held by both the VFW and the American
Legion once more clearly displayed the differences between the two. With Herbert Hoover
personally addressing the Legion delegates, the Bonus vote was decided in the President’s
advantage, with 902 against and 505 in favour. A few weeks later, VFW leaders again spokeout their belief that the Bonus would stimulate “purchasing power” and help end the
Depression.30 While a citizen-, or one might even say a consumer-centered approach was
being ventilated through the by then established ‘iron-triangle’ of veteran politics, the
veterans themselves, without the direct help of any specific veteran organization, where about
to join the conversation in person.
On May 10, 1932, a group of three hundred disappointed veterans lead by Walter W.
Walters departed from Portland, Oregon, to arrive in Washington nineteen days later. Dubbed
the Bonus Expeditionary Force (BEF), by June as many as 40.000 veterans, many with their
families, had set camp in Washington. Unfortunately for them, the bill pending in Congress in
favour of immediate payment of the Bonus, known as the Patman Bonus bill, was decisively
defeated in the Senate on June 17. With the BEF claiming that they would not leave
Washington until they got their bonus, the federal government ordered the veterans to leave
the city on July 28, 1932. This order ultimately led to the violent collision between U.S. Army
troops, under the command of General Douglas McArthur and the BEF.31
Attempts to characterize the meaning of the complete story of the Bonus March
emphasize a shift in public opinion. For instance, Frydl states that: “this orchestrated
defamation campaign undoubtedly had an effect,” in addition she argues, “the Depression
itself exerted a far greater influence in turning public sympathy for the Bonus Army into
weariness [and] disapproval.”32 In line with this argument Ortiz notes: “As Americans began
to reassess the role of federal government, for many the Bonus March came to represent the
country’s unmet obligations to its citizens.”33 Furthermore, in a more conservative account on
the GI Bill, former reporter Michael J. Bennett argues the Bonus March to have “dramatized
the nation’s economic and political situation. First Hoover, then FDR would find abstract
economic arguments weren’t so persuasive anymore.” 34 Finally, looking back on the
30
Ortiz, Beyond the Bonus March, 39-42.
Ibid., 49-50, 56-57.
32
Frydl, The GI Bill,53.
33
Ortiz, Beyond the Bonus March, 57.
34
Bennett, When dreams came true, 59.
31
13 aftermath of this particular moment in history himself, Hoover does not seem to be aware of
such a shift when he states:
I was portrayed as murderer and an enemy of the veterans. A large part of the veterans believe to
this day that men who served their country in war were shot down in the streets of Washington by
the Regular Army at my orders – yet not a shot was fired or a person injured after the Federal
government took charge. And it was I who, as President, provided more for World War I veterans
in need than any previous President, as I placed all needy and sick veterans on disability
allowances.35
Still holding on to his belief in a system where the federal government ought to take care only
of disabled and sick veterans, Hoover missed out on a shift in public opinion resulting in
citizens, and thus veterans, demanding more of their government. As Ortiz notes, the Bonus
from its early request, should be seen as a critique on America’s political economy, a critique
on what was earlier referred to as the ‘pro-business conservative orthodoxy of the Republican
era.’
In this respect, the Bonus March, just like the earlier mentioned Labor protests in
Seattle and Jewish women protests in New York City, was an utterly visible manifestation of
dissatisfaction. Or, as Ortiz notes: a struggle “where ordinary Americans faced off against the
wealthy and powerful who continued to exert an unchecked and damaging influence on the
polity.”36 The way General Douglas McArthur tried to end the demonstration of the Bonus
Expeditionary Force without doubt caused much bad publicity for Hoover. However,
probably more important was Hoover’s stand towards citizen-demands for both veteran
politics according to the Roman model, and consumer-politics stressing the importance of
purchasing power and consumer protection. His choice to stick with the established
Republican thought would probably have rendered him changeless during the upcoming
elections anyway. Meanwhile, ready to capitalize on Hoover’s failure to react to popular
demand was Franklin D. Roosevelt. However, while a solid foundation of expansive veteran
politics infrastructure was laid in the form of the ‘iron triangle,’ veterans and their respective
organizations soon came to find out that the new President had no plans of treating veterans in
any special way. The consumer on the other hand, enjoyed more special concern. Still, it
would take till the late 1930s for New Deal liberals to come up with a policy that resembles
the consensus on political economical issues that would last as far as the GI Bill and beyond.
35
Herbert Hoover, The memoires of Herbert Hoover: The Great Depression 1929-1941, (Madison: Macmillan,
1952), 229.
36
Ortiz, Beyond the Bonus March, 57. 14 1.2 The New Deal: The Foundations of the Consumers’ Republic
In line with the basic assumption of this thesis that in order to understand the workings of the
GI Bill one needs to address the broader development of consumerism, historian Alan
Brinkley, states the following about Roosevelt’s New Deal period:
The story of the New Deal is not simply the story of the important legislative and administrative
accomplishments of the presidency of Franklin D. Roosevelt. It is also a story of ideological
adaptation: the story of how a broad community of New Dealers and their liberal allies made
choices among a wide range of policy prescriptions, and how in the process they helped define an
agenda for future liberal efforts.
The history of the New Deal is replete with evidence of how outside forces shape the behaviour of
the state.37
Addressing the New Deal period using the work of Brinkley to complete Cohen’s argument,
this second part will come to argue that the development of a ‘new’ liberal thinking on
political economy emerged as a product of both: popular demand expressing the ‘citizen
consumer’ perspective; and, a broad and at times inescapable growing political resonance of
the ‘purchaser citizen’ perspective. Furthermore, discussing New Deal veteran politics will
show that after an initial setback, “the iron triangle” would prove to be successful in pursuing
a more Roman model of veteran politics. A useful starting-point to come to this all would be
Robert S. Lynd. As a Columbia University sociologist and member of the Consumer
Advisory Board under Roosevelt, Lynd was particularly concerned with the problems and
needs of consumers.
1.2.1 The Consumer Problem
The National Industrial Recovery act of 1933, as a keystone program of the first New Deal,
sent out a positive message with regard to the representation of consumers as ‘citizen
consumers’ in national politics by establishing a Consumer Advisory Board (CAB). However,
competing with established boards representing the interests of business and labor, CABmembers experienced difficulty in receiving recognition from the overarching National
Recovery Administration-officials. Cohen argues this to be typical for much early New Deal
37
Alan Brinkley, The end of reform: New Deal Liberalism in Recession and War, (New York: Alfred A. Knopf,
1995), 8, 12.
15 legislation. 38 Addressing the broader problem behind this difficulty, Robert S. Lynd,
described what he, in 1934, calls “the consumer problem”. According to Lynd, from the
perspective of the consumer this problem is about the following:
[The consumer] stands there alone, a man barehanded, against the accumulated momentum of
43,000,000 horse power and their army of salesmen, advertising men, and other jockeys. He
knows he buys wastefully in terms of time, energy, and money, that his desires and insecurities are
exploited continually, that even his Government withholds from him vitally important information
by which both it and industry save millions of dollars annually in their purchasing; but he needs an
over-coat, or his wife a dress, and he must somehow get on with the cluttered business of living, so
he pays down his money and hopes the purchase will turn out all right.39
Without proper representation in government the consumer stands no chance against “the
accumulated momentum” of businesses, the argument goes. Believing that this problem
demands special attention of government to protect their citizens as consumers, the ‘citizen
consumer’ perspective received increased attention from the beginning of the New Deal
period on. However, similar to the argument on veteran politics mentioned above, the
development of the ‘citizen consumer’ perspective during the New Deal period was more a
story of increased recognition and attention then it was of actual measures and legislation.
As early as May 22, 1932, Roosevelt spoke out his belief in a more consumer minded
society when he stated: “I believe that we are at the threshold of a fundamental change in our
popular economic thought, that in the future we are going to think less about the producer and
more about the consumer.”40 According to Cohen it is likely that the President’s perspective
on this matter “grew out of a rumbling consumer discontent that had begun in the mid-1929s
and intensified as the depression worsened in the early 1930s.”41 Concerned with the grassroot consumer movement of the 1930s historian Lawrence B. Glickman argues that this
movement can be traced back to the 1927 publication of Your Moneys Worth by Stuart Chase
and F. J. Schlink.
Referred to by Lynd as “Uncle Toms Cabin of the consumer movement,” the main
message of the book reflected Lynd’s earlier mentioned vision on consumers and is described
by Glickman as the feeling that: “Ordinary consumers – ignorant of the workings of the large
38
Cohen, A consumers’ republic, 285.
Robert S. Lynd, “The Consumer Becomes a ‘Problem’,” (Annals of the American Academy of Political and
Social Science 175-May, 1934), 6.
40
Franklin D. Roosevelt, “Address at Oglethorpe University in Atlanta, Georgia,” (May 22, 1932, via:
www.presidency.ucsb.edu).
41
Cohen, A consumers’ republic, 404.
39
16 corporations that produced the nation’s consumer goods – were being systematically bilked.”
As an effort to correct the misfortunes of consumers, Chase and Schlink formed Consumers'
Research (CR). Referred to as the first “professional consumer organization” by Business
Week, according to Glickman the main function of CR was “performing laboratory tests on
advertised products to determine how the facts about the products squared with the hype of
the ad men.” While grass-root in the sense that it was born outside of the realm of politics and
business, CR stood for a technocratic approach towards consumerism. Chase and Schlink
distrusted the wisdom of the individual consumer and believed they should be educated. A
more truly grass-root initiative came with the founding of The League of Women Shoppers
(LWS), in 1935.42
Challenging the technocratic approach of CR, members of The League of Women
Shoppers (LWS) argued that consumers themselves should become conscious of their actions.
For instance, not on the basis of laboratory tests, but rather based on moral grounds did LWS
mobilize women for a boycott of silk imported from expansionist Japan.43 Furthermore,
Cohen devotes a considerable amount of space describing African American consumerprotests during the Depression decade. With the self-explaining campaign-title “Don’t buy
where you can’t work,” African-Americans fighting against Jim Crow-rules is probably the
most apparent example of the mixture of consumer-, and citizen-rights.44
While obviously different in their approach, all three efforts challenge the uncritical
celebration of mass-consumerism, and try to revise a social, economical and political way of
thinking that predominantly focuses on the production-side. According to Glickman, the
direct results of individual movements were rather insignificant because for the most part the
“voice of protest” that argued in favour of the ‘citizen consumers’ was “a conflicting
medley,” rather than a “clear and understandable chorus.”45 More important, however, was
their combined effort to articulate new demands. Citizens from all varying backgrounds
demanded that their government acknowledged their vulnerable position as consumers in a
society, predominantly focused on the production-side. Returning to the development of
veteran politics during the same period, similar demands can be said to rise under veterans.
42
Lawrence B. Glickman, “The Strike in the Temple of Consumption: Consumer Activism and TwentiethCentury American Political Culture,” (The Journal of American History 88-1, 2001), 106-107.
43
Glickman, “The strike in the temple,” 113-114.
44
Cohen, A consumers’ republic, 806.
45
Glickman, “The strike in the temple,” 111.
17 1.2.2 The Economy Act
Veterans hoping that after Hoover’s defeat in 1933, Roosevelt would take care of the Bonus,
were soon to be disappointed. With the Economy Act enacted on March 20, a $460 million
reduction in veteran pensions and benefits became fact. In order to defend this bold action,
shortly hereafter, Roosevelt announced his commitment to disabled veterans at the annual
American Legion convention, but added: “no person, because he wore a uniform, must
thereafter be placed in a special class of beneficiaries over and above all other citizens.”
Furthermore Roosevelt referred to service as a “basic obligation of citizenship.” Commenting
on this statement Frydl argues that Roosevelt’s veto rested on a different belief than the
vetoes of Coolidge and Hoover. When the last two used the ‘citizen first argument,’ they
meant that government owed them nothing. Roosevelt however believed that veterans no
more or less than other citizens deserved “the guarantee of basic security” from government.46
Perhaps thanks to Roosevelt’s special attention, the American Legion, not altogether
uncritical, again decided to adopt a conciliatory position, while the Veterans of Foreign Wars
(VFW) actively opposed the new Economy Act. Similar to the above mentioned ‘citizen
consumer’ perspective expressed by grass-root consumer organizations, their rose under
veterans a sentiment that the early New Deal administration predominantly worked in the
interest of “Big business, [as] represented by the National Economy League (NEL) and
Chamber of Commerce of the United States.” This sentiment was best articulated and
stimulated by the VFW. For instance the New York State Department of the VFW published a
pamphlet titled, “An Expose of the National Economy League,” stating: “Don’t be fooled […]
success of the National Economy League program means the destruction of the entire veteran
rehabilitation structure!” 47 Furthermore Ortiz refers to “a wave of revisionist history
throughout the 1920s and 1930s” claiming that America’s involvement in the Great War had
its origins in the financial ties between the financials institutions of both the United States and
Great Britain. Explaining this Ortiz states:
According to this interpretation, American involvement in the Great War secured the House of
Morgan’s loans48 and created thousands of new millionaires in the economic boom while veterans
risked life and limb for little over a dollar a day. For this reason, figures that personified the
46
Frydl, The GI Bill, 53-54.
Ortiz, Beyond the Bonus March, 66, 73.
48
For more on the financial involvement of the House of Morgan in WWI see: Ron Chernow, The House of
Morgan: An American banking dynasty and the rise of modern finance. (New York: Grove Press, 2010), 183205.
47
18 influence of wealth and power on the American political and economic system, such as J.P.
Morgan, Bernard Baruch, and Andrew Mellon, received a disproportionate share of veterans’
vituperation.49
The idea that “Big business” was making money due to life-risking efforts of veterans, made
the NEL’s proposal to cut on veteran relief (prior, but similar to the Economy Act) even more
unpopular. Whether or not Ortiz is right when he argues that a year later the “second
Independent Offices bill” (reversing most of the Economy Act) was the product of
Congressmen who were scared to lose the “soldier vote” facing re-election, is only of
secondary importance here.50 What is more important than the presumed effect of the ‘soldier
vote,’ is the meaning behind it. Just like the consumer-protests, the soldier vote was a vote
against an administration predominantly occupied with (although not in necessarily in favour
of) the production-side of the economy. With Roosevelt famously delivering his veto of the
1935 Patman Bonus bill personally before a joint session of Congress, veterans waiting for
their Bonus had to wait still another year.51
While not yet able to turn their perspectives into state-policy, both veteran- and
consumer-movements articulate clearly what citizens during the 1930s were coming to expect
of their government. Connecting this to changes in state-policy, Brinkley in his account on the
politics of New Deal liberalism argues: “Above all, [“new liberalism”] developed because, as
in all eras, political ideas were constantly interacting with, and adapting to, larger changes in
the social, economic, and cultural landscape.” Moreover, when describing the larger changes
that influenced late-30s’ politics, Brinkley above all refers to “the idea and the reality of mass
consumption […] becoming central to American culture and the American economy,
gradually supplanting production as the principal focus of popular hopes and commitment.”52
Some believed that the immediate payment of the Bonus would stimulate mass consumption
and show the positive effects of Keynesian economics, others, Roosevelt included, did not.
1.2.3 Payment of the Bonus
Arguments that pre-war deficit spending measures marked an economic milieu growingly in
favour of vast consumer-side supportive measures like the GI Bill are rarely found in GI Bill
accounts. Still, Ortiz proves to be the exception by pointing to the payment of the Bonus in
49
Ortiz, Beyond the Bonus March, 84.
Ibid., 96-97.
51
Ibid., 143.
52
Brinkley, The end of reform, 4.
50
19 1936 as an example and a lesson for later to come consumer-supporting initiatives. While the
payment of the Bonus in 1936 may count as a lesson for later economic stimulation programs,
the Bonus saga as a whole, perhaps more importantly, signals the perseverance behind the
veteran-movement.
From the moment the Adjusted Compensation Act was enacted in 1924, veterans have
constantly pushed for direct payment of the Bonus. It began modestly in the first years,
growing more forcefully after 1929, and reaching its activist top with the 1932 Bonus March.
But the legacy of the Bonus saga does not stop with the Bonus March as a ‘historically
freighted symbol.’ After the election of Roosevelt, first the Economy Act and soon hereafter
new initiatives for the direct payment of the Bonus once again exposed strong veteran
sentiments in society. Above all, the persistent articulation of these sentiments by certain
members in Congress (especially Texas Democratic House member Wright Patman), and by
representative organizations as the American Legion and VFW, finally resulted in the passing
of the Vinson-McCormack-Patman Bonus bill in 1936. The momentum behind the measure
proved so powerful that this time, Roosevelt’s veto could not override Congress’ decision.
Whether, as American Legion commander Ray Murphy observed, “the psychology of
Congress” was favourable for the bonus, or members were just busy securing the veteran vote
for their re-election, the passing of the Bonus bill in 1936 signals twelve years of continued
veteran activism.53
As said, Ortiz additionally stretches the historical meaning of the Bonus to a point of
economical significance. With its combined volume of $1.9 billion, the “Bonus payment
operated as the most efficient and direct of any federal fiscal stimuli.” Furthermore, Ortiz
argues: “The vibrancy of the 1936 economic recovery, then, can be traced almost exclusively
to the Bonus payment, not the public works projects of the WPA or any other relief and
recovery effort.” Both the Bonus bill’s neutralizing effect on veteran activism, and its
stabilizing effect on the economy showed their significance in time for the 1936 presidential
election. Turning to Roosevelt’s ‘compensatory fiscal program’ of 1938, Ortiz concludes that
until the recession of 1937, Roosevelt had ignored the Bonus bill’s lesson on “deficit
spending as a method for economic stimulation.”54
Whether or not the payment of the Bonus convinced the members of the Roosevelt
Administration to apply Keynesian economics is questionable. However, a transition in
economic policy during the later years of Roosevelt’s New Deal is often signalled by
53
54
Ortiz, Beyond the Bonus March, 166. Ibid., 176, 186.
20 historians. According to Brinkley, one broad assumption especially important to the First New
Deal (1933-1934) was: “the assumption that the nation’s greatest problems were rooted in the
structure of modern industrial capitalism and that it was the mission of government to deal
somehow with the flaws in that structure.” As argued above, while this assumption was
accompanied by awareness of the existence of consumer demands, the concerns related to the
production side of ‘modern industrial capitalism’ effectively ruled legislation. With the rise of
the ‘purchaser consumer’ perspective however, the assets rather than the demands of the
consumer were recognized. Replacing liberalism’s old assumption, over a period of time
stretching from the Second New Deal (1935-1936) to well beyond World War II, was a new
assumption: the idea that the state was “to compensate for capitalism’s inevitable flaws.”
Liberals spoke less of restructuring/reforming the economy, and more of efforts to provide “a
healthy environment in which the corporate world could flourish.” The idea that financially
stimulating the combined purchasing power of the consumers could mean the answer to the
Depression slowly gained momentum after the start of the Second New Deal and on.55
Two years before payment of the Bonus became fact, Consumer Advisory Board
member Robert S. Lynd, anticipated correctly that the consumer-centered perspective would
evolve during the coming years by stating: “We may fail to accept the recurrent idea of an
economy controlled for consumption ends. We may brush it aside as we brushed it aside in
1919. But the problem is here to stay, and the tide will bear the idea back again and again
until it too will be here to stay as a new commonplace in a changing world.”56 This idea of
“an economy controlled for consumption ends” would later come to be embraced by most
Americans in the form of a ‘new liberal’ perspective.
1.2.4 John Maynard Keynes
Tracing the roots of this new perspective, one man is often referred to as its most important
influence, the British economist John Maynard Keynes. Summing-up Keynes advice to
Roosevelt in an open letter published in The New York Times as early as 1933, John Kenneth
Galbraith (Canadian-American economist and Vice President of the Office of Price
Administration during World War II) states: “before all, the importance of increasing
aggregate purchasing power by public expenditure financed by public borrowing – by
55
56
Brinkley, The end of reform, 5-7.
Lynd, “The consumer becomes a ‘problem’,” 6.
21 deliberate resort to deficit financing. Nothing else counts in comparison with this.”57 By
distilling two assumptions about the economy out of Keynes’ argument, Brinkley offers a
useful starting point for discussing Keynesian economic thinking in pre-war America:
The foundations of what would eventually become known as the “Keynesian approach” were two
broad assumptions about the economy, neither of them entirely new, but both of them gaining
strength and offering powerful challenges to traditional economic notions. One was the belief that
consumption, not investment, was now the principal engine driving the industrial economy and
hence the principal social goal toward which public efforts should be directed. The other was the
conviction that public spending was the best vehicle for fighting recession and economic
stagnation.58
So it is with the fusing of the prevalence of consumption over investment, and the belief that
public spending is the best remedy for economic recession, that a ‘new liberal’ conviction
gets articulated. It is important to acknowledge though that by the time a new recession struck
in 1937, other political beliefs standing opposed to one or both Keynesian-assumptions (for
instance, ‘anti-monopolists’ and ‘business confidence stimulators’) were still actively present.
However, going into them in detail would lead us of too much away from the main point.59
Continuing with the ‘new liberal’ perspective, according to Brinkley and Cohen the
reasoning behind both of Keynes’ assumptions were put together in public policy deliberately
for the first time with, however imperfectly, Roosevelt’s “compensatory fiscal program” of
1938. In addition to the earlier mentioned remark of Roosevelt on May 22 of 1932, four
months later the presidential candidate more clearly then before showed his early prevalence
for stimulating consumption rather than investment:
Our industrial plant is built. […] Our task now is not discovery or exploitation of natural
resources, or necessarily producing more goods. It is the soberer, less dramatic business of
administering resources and plants already in hand, of seeking to reestablish foreign markets for
our surplus production, of meeting the problem of underconsumption of adjusting production to
consumption, of distributing wealth and products more equitably, of adapting existing economic
organizations to the service of the people.60
57
John K. Galbraith, “Keynes, Roosevelt, and the Complementary Revolutions,” (Challenge 26-6, 1984), 6.
Brinkley, The end of reform, 66.
59
For more on the pre-war ‘anti-monopolist’ see: Ellis W. Hawley, The New Deal and the Problem of
Monopoly: A Study in Economic Ambivalence, (New York: Fordham University Press, 1995).
60
Franklin D. Roosevelt, “Campaign address on progressive government at the Commonwealth Club in San
Francisco, California,” (September 23, 1932, via: www.presidency.ucsb.edu).
58
22 However, structurally reforming the production side by imposing regulation on it (‘planning’)
rather than direct fiscal stimulation on the consumption side was thought to enhance demand.
According to Brinkley, a keystone agency of the first New deal performing ‘planning’-policy,
the National Recovery Administration, had as its real legacy not a blueprint of an “ordered
economic world,” but rather an insight into the many obstacles attached to ‘planning’.61
Failure to prevent the recession of 1937 from happening marked the urgency for other
perspectives on political economy than ‘planning’ to be heard.
Within one specific part of government, The Federal Reserve Board, one such
perspective that can be described as Keynesian, was present and evolved from the beginning
of 1934 when Marriner S. Eccles was made chairman. In 1939 Eccles claimed that his “own
viewpoint has sometimes been erroneously identified with that of Mr. Keynes.” Still,
discussing Eccles achievements and rhetoric, economist Dwight Israelsen, nonetheless
suggests him to be “the most important figure in the introduction of ‘Keynesian’ economic
policies in the United States.” One of many quotes revealing this, according to Israelsen,
stems from 1936: “The government must be looked upon as a compensatory agency in this
economy to do just the opposite of what private business and individuals do. The latter are
necessarily motivated by the desire for profit. The former must be motivated by social
obligation.” For Eccles, flaws of business are inherent necessities that demand compensation
rather than structural reform. And this compensation should come from, Eccles leaves no
doubt, the government.62 While an important promoter of Keynesian economics within the
New Deal administration, according to Brinkley, Eccles was not the “intellectual leader.”
Instead, it can be argued that Eccle’s special assistant Lauchlin Currie deserves that
title. Writing a paper entitled “Causes of the Recession,” and presenting its content to the
President in November 1937, Currie had an important say in the later to come “compensatory
fiscal program”. In his paper, Currie points to the financial lesson that, Ortiz argued, the
Bonus saga taught. Addressing the 3-year “period of sustained progress” just before the
recession, Currie states: “the largest single factor in the steady recovery movement was the
excess of Federal activity-creating expenditures over activity-decreasing receipts.” 63
Explicitly mentioning the Bonus as a measure standing opposed to activity-decreasing
receipts like taxation, and significantly helping to establish excess in federal expenditures,
Currie promotes deficit spending as a measure on its own.
61
Brinkley, The end of reform, 47.
Dwight L. Israelsen, “Marriner S. Eccles, Chairman of the Federal Reserve Board,” (The American Economic
Review 75-2, 1985), 357-362.
63
Lauchlin B. Currie, “Causes of the recession,” (History of Political Economy 12-3, 1980), 317, 321-322.
62
23 According to Brinkley, earlier spending programs under the New Deal were generally
justified as ways to deal specifically with certain social problems: “helping the unemployed,
subsidizing farmers or homeowners or troubled industries, building the national
infrastructure.” 64 On the contrary, the set of spending recommendations that Roosevelt
announced to the public on April 14, 1938, with his first Fireside Chat in five months, he
justified as vehicles for stimulating the economy as a whole:
The Government contribution of land that we once made to business was the land of all the people.
And the Government contribution of money which we now make to business ultimately comes out
of the labor of all the people. It is, therefore, only sound morality, as well as a sound distribution
of buying power, that the benefits of the prosperity coming from this use of the money of all the
people should be distributed among all the people- at the bottom as well as at the top.65
After this pledge for stimulation of purchasing power, Roosvelt continued to argue that “an
addition to the net debt of the United States need not give concern to any citizen.” Deficit
spending, according to Roosevelt, “will return to the people of the United States many times
over in increased buying power.”66 While the combined expenditures totalled $3 billion
dollar, or a 25 percent increase of the federal budget, critiques questioning the thoroughness
of the measure soon came up. The critique did not only come from political opponents, but
was also articulated by promoters of Keynesian-economics. For instance, Eccles and Currie
emphasized that if every spending request had to undergo the slow process of being approved
by Congress, and if such spending was only justified in case of a recession like 1937, a true
Keynesian approach for America’s political economy was not yet feasible.67
In accordance with the critique, after some early successes, soon it would be clear that
Roosevelt’s ‘compensatory fiscal program’ would not steer to real recovery. Moreover, before
America would enter the war in 1941, Roosevelt and his Democratic party would lose
exceptionally many seats in Congress as a result of the mid-term elections of 1938.
Democratic liberals would effectively lose their majority in Congress because Southern
Democrats would often vote with Republicans on New Deal legislation.68 Liberals facing a
new political reality after 1938, would soon find out that major developments on the global
level were about to strike in and change America’s political field far more thoroughly.
64
Brinkley, The end of reform, 104.
Franklin D. Roosevelt, “Fireside Chat,” (April 14, 1938, via: www.presidency.ucsb.edu).
66
Roosevelt, “Fireside Chat,” (April 14, 1938, via: www.presidency.ucsb.edu).
67
Brinkley, The end of reform, 100, 104-105.
68
For more on 1938’s mid-term elections see: Jamie L. Carson, “Electoral and Partisan Forces in the Roosevelt
Era: The U.S. Congressional Elections of 1938,” (Congress & the Presidency 28-2, 2001).
65
24 However, not easily circumvented during the war would be: an established infrastructure for
veteran politics able to push for a Bonus-act that fitted into the Roman model for militaryduty in relation to citizenship; and, a well articulated belief by both citizens and politicians in
the broader social (‘citizen consumer’) and economic (‘purchaser consumer’) significance of
‘the consumer.’
25 Chapter 2: War- and Postwar Planning
On January 14, 1944, the national commander of the American Legion, Warren H. Atherton
spoke in front of Congress’ Senate subcommittee on Veteran Affair’s and said the following
about what would come to be the GI Bill:
We are appreciative of the grave importance of this legislation pending before you and which will
doubtless be presented to you, not only because it affects some ten to twelve million of our
children, but it affects the generation which for the next 50 years is going to have most to do with
what happens in the United States, and of course they are interested in the proper solution of the
financial aspects of these questions as well as the reception of benefits.69
Aware of the importance of the veterans’ readjustment program, Atherton emphasized both
the benefits in itself, and the related financial aspects as relevant “for the next 50 years.” As a
sponsor of the bill, Atherton off course believed that the concept GI Bill handled both the
financial aspects and the distribution of benefits ‘properly’.
This chapter will discuss the same two issues and will ask what this ‘proper’ way
meant. With no final answer to the Depression, and little more than the Bonus legislation for
the able bodied World War I veteran, a ‘proper’ answer in the form of a comprehensive
veteran benefits program like the GI Bill still seemed far away before World War II had
started. Therefore on the one hand this chapter is concerned with the broader political
economical changes in America during World War II, namely the last step towards the
Consumers’ Republic. On the other hand this chapter will discuss the developments in the
field of veteran-politics, beginning in the early 1940s and ending with the signing of the GI
Bill on June 22, 1944.
Discussing the wartime changes in America’s political economy the main argument
will be that the position of the consumer matured. Whereas previous attention for both the
citizen- and the purchaser-consumer perspective more often than not served a symbolical
function, in wartime the consumer would stand at the center of America’s political economy.
More important, in the end both perspectives came to form a single new perspective, referred
to by Cohen as, “the purchaser as citizen” perspective. As the essence of the Consumers’
Republic, it will be argued that this perspective created a social- and political milieu in favour
69
United States, Cong. Senate, Committee on Finance, Veterans' Omnibus Bill, Hearing, 14 Jan, 1944, 78th
Cong., 2nd sess, (Washington: Government Printing Office, 1944, via: LexisNexis Congressional Hearings
Digital Collection), 2.
26 of legislation like the GI Bill. Accordingly it was believed that the GI Bill would reward the
veteran and stabilize the economy all together by stimulating the demand side of the
economy.
Due to the broad political acceptation of this economical perspective, postwar
planning would fairly easy come to display consensus over the content of benefits allowed to
future veterans. Consequently, the uncontroversial bipartisan endorsement of an extensive
package of benefits for veterans marks a large transition in comparison with the situation after
World War I. In terms used in the previous chapter this indicates the continued transition from
a sober Athenian to an extensive Roman-model of veteran-politics.
Still, this transition is not solely the product of a new political economy. Accordingly,
the matters of implementation and deciding whether or not benefits should be extended to
civilians were a lot more politically controversial. As established during the interbellum
period, several actors within veteran politics, especially the American Legion, Veterans of
Foreign Wars, Veterans Administration, and the House Committee of Veteran Affairs, played
an important role in deciding over these troublesome issues of the GI Bill. It will be argued
that the political differences with respect to implementation and administration represents the
traditional political differences related to America’s state-citizen relation between
progressivism and the conservatism.
Turning to the structure of this chapter, the main two developments will be discussed
in two parts. The first part is concerned with (pre)war-planning while the second will focus on
postwar-planning. As (pre)war-planning by definition excludes veteran-politics this part will
focus on the changes in America’s political economy. Hereafter, the second part of this
chapter on postwar planning will discuss both the veteran- and economic politics in an effort
to explain the ideas and intentions behind the actual GI Bill.
2.1 War Planning
A few years after both opponents and proponents had criticized Roosevelt for his half-hearted
way of implementing Keynesian economic thinking with his 1938 compensatory fiscal
program, the defence, and thereafter war preparation would bring the Keynesian economic
stimulus that would pull America out of the depression. One could argue that starting in 1940,
two separate but connected economies stood at the basis of this recovery. The first one, the
war economy, came to be characterized by strong connections between the federal
government and big business. Effectively working as one big consumer, the federal
27 government stimulated industrial expansion and near to full employment by filling out
expansive orders to large commercial enterprises. This war economy model presented the
positive economic effects of the purchaser consumer perspective.
Furthermore, the war economy affected the civilian economy, because the combined
purchasing power of civilian consumers grew due to the increase in employment. Still, what
Cohen refers to as the Consumers’ Republic could not yet be realized because the war
economy was the first priority. The result of this prioritization was that the civilian use of
many goods came to be rationed. Moreover, mandatory price controls protected the consumer
against inflation. Overall, the American economy during World War II was characterized by
intensive federal control. The consumer-orientated legislation enforced during war,
represented a next step for the citizen consumer perspective. Not simply aggregated
purchasing power but thoughtful consuming was deemed to be an important factor to achieve
victory abroad.
Taken together, apart from the differences, both wartime economies supported a
common development. Concerned with America’s state-citizen relation, historian Allan
Winkler argues that war-economics “changed [the] configuration of political power.” For
Winkler this meant that due to the experience of wartime federal expansion “Americans now
looked to the federal government to deal with problems which were previously handled in
private, or before at the state or local level.”70 The main argument of the first part of this
chapter will be that the changes in America’s political economy that started late 1920s
accelerated during wartime. As said before, leading up to the Consumers’ Republic these
changes are essential for understanding the making of the GI Bill.
2.1.1 The Office of Price Administration
A good starting point to discuss the continued importance of the citizen consumer perspective
during World War II would be New Deal consumer activist Caroline Ware. As a supporter of
what she herself called “economic citizenship,” Ware counted as a prominent consumer
activist during the 1930s. Describing Ware’s vision, historian Eleanor Capper states that she
envisaged an American society with:
[A]n ambitious kind of regulatory, statist consumer politics, one that stressed the importance of
rigorous government regulation, nationwide economic planning, vigilant and wise consumption
70
Allan M. Winkler, “The homefront experience during World War II,” (OAH Magazine of History 16-3, 2002),
4.
28 and the importance of education in the context of the emergence of a new, industrialized, massproduction and mass-consumption economy.71
Closely involved in New Deal politics Ware started out with the ideal of economic planning
in order to reform the capitalistic market but would later turn to a vision of society in which
the federal government functioned to “smooth[en] the sharper edges of the capitalist system.”
Due to government regulation, a more egalitarian American society could then be
accomplished not despite of, but thanks to the market system. This ideal consisted of a market
system which was not only overseen by the government but was also consisting of educated,
well informed and responsible consumers who were aware of the effects of their consuming
behaviour. More broadly speaking, Ware tried to make clear that issues like democracy and
citizenship were not strictly bound to the political realm but could be acted on in economic
spheres as well.72
As described in the previous chapter, the New Deal period showed increased political
attention, but little concrete legislative measures for the consumers’ interest. During the
following war period the necessity for federal-controlled consumer-side regulation became
granted and “forged a close link between consumption and citizenship.” With the set-up of the
Office of Price Administration (OPA) in 1942, an agency capable and inclined to work in the
interest of consumers became reality. Not surprisingly, Ware was selected to be part of the
agency by filling in the function of Vice-Chair in the Consumer Advisory Committee. She
and other liberals like her, hoped that success for the OPA during the war would increase the
possibility that a postwar equivalent of the agency could be maintained. This equivalent
agency would then ideally be part of a mixed economy in which “unbridled economic
prosperity and social welfare measures” came together. While the agency certainly left a
postwar legacy, events would not exactly turn out the way Ware had hoped.73 However,
before addressing the issue of OPA’s postwar legacy it is useful to go into its war efforts first.
In May 1940 Roosevelt established two new departments under the National Defense
Advisory Commission, one imposed with the responsibility for price stabilization and one for
consumer protection. According to Cohen, the fact that the Consumer Office did not have a
precursor during World War I shows “how central the ‘concept of consumer’ had become
over the last twenty years.” Respectively led by Leon Henderson and Harriet Elliott, both
71
Eleanor Capper, “Caroline Ware, consumer activism and American democracy during the New Deal, 1933–
45,” (Cultural and Social History 9-1, 2012), 85.
72
Capper, “Caroline Ware,” 85-86.
73
Ibid., 90-94.
29 departments did not have the power to regulate but rather played an advising role.
Accordingly, Elliott tried to convince “consumers, manufacturers, wholesalers and retailers”
to voluntarily act in accordance with a vision similar to Ware’s ‘economic citizenship’. Not
able to make it work, Elliott decided to quit a year and a half later.
Shortly thereafter, as a response to Pearl Harbor, the Emergency Price Control Act of
January 1942 would place both departments under the newly established Office of Price
Administration headed by Henderson. No longer restricted to mere advising, the OPA could
set mandatory price controls.74 In order of their installation the following goods were rationed
in 1942: “tires, automobiles, typewriters, sugar, bicycles, gasoline, protective rubber
footwear, fuel oil, coffee, shoes, stoves, processed foods, and meats.”75 With 90 percent of all
sold goods under price control by the end of the war, American consumers got used to buying
and selling with “the government looking over their shoulders as it never had before.”
Moreover, under voluntary price controls the inflation rate during World War I rose as high as
62 percent compared to 8 percent between 1941 and 1945. In this case, forceful government
intervention was seen as a success.76
Still, broad popular support for OPA’s measures did not come until Chester Bowles
became the administrator late in 1943. Historian Andrew Bartels argued that when Bowles
entered the OPA, “he stressed the importance of public participation and a committed public
constituency for supporting the program politically.”77 To achieve this goal, Bowles took
three important steps. Firstly, he created the Consumer Advisory Committee in which next to
Caroline Ware twenty-five other consumer leaders took place.78 Secondly, in order to increase
support for price controls Bowles wanted to incorporate the voice of businessmen to the
agency. However, the appointments of businessmen to OPA positions were restricted to
operational functions and did not involve the agency’s economic policies. Thirdly, and most
important, under Bowles the OPA started to invest in grassroots activities. Via the more than
5.500 local War Price and Rationing Boards (also referred to as ‘little OPA’s’) the OPA was
able to attract many more unpaid citizen members “to administer local rationing.”
Broad based local implementation meant that the measures carried through by the
OPA felt “less insensitive [and] distant.” According to Bartels, the strategy conducted by
74
Cohen, A consumers’ republic, 1196.
Paul M. O’Leary, “Wartime rationing and governmental organization.” (The American Political Science
Review 39-6, 1945), 1090.
76
Cohen, A consumers’ republic, 1208, 1221.
77
Andrew H. Bartels, “The Office of Price Administration and the legacy of the New Deal, 1939-1946,” (The
Public Historian 5-3, 1983), 19-20.
78
Cohen, A consumers’ republic, 1235.
75
30 Bowles was successful because the same Congress “that had mauled the agency in 1943,
renewed the price control acts in 1944 with few changes and considerable praise for Bowles
and his program.” Still, while successful in winning over Congress’ support, Bartels argued
that Bowles did so by “adjusting to rather than changing the political climate.”79 The fear that
New Deal politicians would try to reform the postwar economy with the aid of an OPA-like
strong federal agency was still present. This became clear when efforts in favour of prolonged
consumer protective regulation ultimately failed to counter conservative and business
orientated proposals for lifting regulations as soon as possible after war.
Reflecting on the experience of the OPA in relation to America’s state-citizen
relationship, historian Meg Jacobs argues that “the very way OPA legitimated and constituted
its authority contributed to its eventual post-war defeat.” More precisely, according to Jacobs,
the problem lays with the fact that the previously underrepresented consumer “once
empowered, could not be controlled.” The war granted the consumer representation with an
extra motive, that of just-consuming in order to unburden the war-industry. Once that motive
was taken away, OPA’s pursuit to protect the consumer became “once too wide and too
shallow.”80 For Jacobs these characteristics caused the OPA’s defeat in their effort to expand
the responsibility of the state towards the interests of the consumer. Notwithstanding broad
based popular support for the OPA during war, consumer representatives could not simply
impose their demands to the state.
Explaining the workings behind the process of state expansion Jacobs argues:
Neo-institutional social scientists such as Stephen Skowronek and Theda Skocpol have pointed out
that the American state is not a static entity upon which special interests graft their separate
agendas. Rather, state expansion has occurred as the result of a dynamic, long-term process in
which various groups of state actors with different visions of political economy have competed to
set the government's agenda. […] Exploring both cultural assumptions and institutional
configurations reveals the dialectical relationship between state and society, in which public
policies and administrative government shape groups who then reshape the state.81
Supporting one of the basic premises of this paper, Jacobs argues that state expansion is not
simply the product of either technocratic planners or bottom-up social pressure but rather of
both. Referring to it as “the dialectical relationship between state and society,” Jacobs
approached the OPA as a product of this relationship. Within the long-term dynamic process
79
Bartlels, “The Office of Price Administration,” 20-23.
Meg Jacobs, “‘How about some meat?’: The Office of Price Administration, consumption politics, and state
building form the bottom up, 1941-1946,” (The Journal of American History December, 1997), 913.
81
Jacobs, “How about some meat?,” 912.
80
31 between state and society, consumer representation had carefully developed during the New
Deal. It was not until the war that consumer interests were adopted into expansive political
legislation.
Still, as Bowles’ strategy has shown, the OPA as a federally organized “consumer
agency par excellence” won Congress’ approval by involving local communities and
businesses. For people like Caroline Ware who hoped that the postwar federal government
would act on consumer interests in a similar fashion, mixed results would be realized. On the
one side, a positive experience of government-intervention reaching as far as “the kitchen and
closets of every home” would make future federal intervention in the field of consumption
less extraordinary. 82 On the other side, deciding over the postwar civilian economy,
established political interests like that of big business would grow stronger when the
consumer initiative could no longer be presented as a war-effort. Moreover, where the OPA
successfully controlled prices in the civilian-economy, strong connections between the
government and big businesses was thought to be essential for the war-economy.
2.1.2 War Production Board
The eventual ties between the government and big business that effectively made the first “a
major consumer of goods” for the second, did not come uncontested.83 Liberal initiatives for
economic planning may have lost in strength but were not immediately forgotten. With the
expansion of the nation’s industrial war capacity being the number one priority after the start
of Germany’s “blitzkrieg” in May 1940, the questions of how to finance and administer the
expansion became two of Roosevelt’s main concerns. Historian Alan Brinkley argues that
after years of economic depression, in general, private industry was reluctant to invest capital
in the extension of their plants for the war effort. Furthermore, when it came to administering
the whole process, “Roosevelt faced a dilemma of his own making.” 84 Explaining this
dilemma Brinkley states:
On the one hand, he was determined not to cede control of the economy to private or quasi-private
authorities, not to create an independent “super-manager” who would usurp what he considered his
own legitimate powers. On the other hand, there existed no administrative mechanisms within the
government capable of handling the enormous new tasks the war had imposed on it.85
82
Jacobs, “How about some meat?,” 912, 918.
Frydl, The GI Bill, 75.
84
Brinkley, The end of reform, 177, 182.
85
Ibid., 177.
83
32 Several attempts to create an agency responsible for setting up and administrating war
production within or aligned to the administration resulted in creation and the abolishment of:
the National Defense Advisory Commission, Office of Production Management, and the
Supply Priorities and Allocations Board. All of these agencies were more or less inclined to a
liberal economic planning perspective, and, perhaps more important, all lacked “a strong
central leader capable of bringing order out of the chaos of conversion.”86
Shortly after Pearl Harbor, on January 13, 1942, Donald Nelson was made head of the
newly formed War Production Board (WPB). With Nelson’s appointment, the war industry
would get its strong central leader. While his powers over “procurement and production” were
thought to be absolute, Nelson had to deal with two strong political entities, the military and
big business. With their aim to “bend virtually the entire American economy to their needs,”
military representatives like Robert Patterson tried to reduce the civilian influence on the
economy as much as possible. In order to illustrate the thoroughness which he proceeded,
Brinkley refers to a case when Patterson tried to ban “comic strips from newspapers” as he
considered it “inappropriate levity into the grim business of war.” Not able to counter the
political pressure of the military departments, Nelson and his WPB were placed in an “almost
untenable position.” In effect, the agency became the “the arbitrator of conflicts between the
military and civilian sectors of the economy,” instead of the actor “that controlled basic
economic decisions.” However, as a “defender of the civilian economy,” liberals feared
another political power to influence the WPB perhaps more than they feared the military
power, namely big business.87
According to Brinkley two reasons stand out explaining why Roosevelt and Nelson
decided to line up with big business and incorporate many “conservative corporate figures”
within different war agencies. Firstly, as noted earlier, government lacked the capacity and
experience to handle all the bureaucratic responsibilities that came with war mobilization.
Secondly, the affiliation with business was a deliberate political choice. Explaining this
choice, Brinkley argues: “Roosevelt feared that entrusting the war economy to existing
agencies would create damaging partisan divisions; and he believed that businessmen would
respond more readily to directions from other businessmen than to orders from what they
considered a hostile federal government.” The choice to avoid political problems meant that
the initially cherished hope for economic reform along New Deal lines vanished.
86
87
Brinkley, The end of reform, 180-182. Ibid., 186-188.
33 Instead, the “dollar-a-year-men” came to symbolize wartime industrial mobilization.
Under this construction, businessmen were appointed to war bureaucracy functions but
continued to receive their corporate salaries. The government symbolically paid these
businessmen a dollar a year.88 Initially many liberals expressed concerns about the conflict of
interest the “dollar-a-year-men” would have to deal with. However, while perhaps born out of
necessity, historian Barton Bernstein argues that during the war a growing consensus was
formed over a “frame of reference which identified the objective interests of large-scale
enterprise with the economy and the nation.” Still, this growing consensus would not reach as
far as the OPA. Proving that, like business, the executive branch “is not a monolith” leaders
of the WPB and the OPA would follow different approaches until the end of the war.89
In terms of Cohen’s notion of the Consumers’ Republic, the WPB and the OPA were
respectively the war-equivalents of the purchaser consumer- and the citizen consumer
perspective. Both using the war as the prime justification for their approach, the WPB was
aligned to the businesses community who, on their turn, profited from a federal government
who acted as ‘a major consumer of goods.’ Eager to profit from the accumulated wealth of
potential consumers, the WPB favoured the “speedy relaxations of controls.” By channelling
“scarce material into low-priced items and restricting them from higher-priced commodities,”
the WPB had assisted the OPA countering possible inflation. However, efforts from Chester
Bowles to convince the new head of the WPB, Julius Krug, to continue performing the antiinflation measures after the war would fail.90
Hoping that President Truman would support his effort to extend and gradually reduce
government’s commitment to the consumer for a period of twelve to fifteen months after the
Victory over Japan (V-J), Truman’s announcement four days after V-J would mean a
disappointment for Bowles.91 In his speech, Truman asked the war agencies “to move as
rapidly as possible without endangering the economy toward the removal of price, wage,
production and other controls.” Shortly hereafter, on August 20, Krug choose to revoke “210
WPB orders which had restricted or prohibited the production of consumer goods.”92 With
leadership in favour of extended controls, the OPA would manage to execute regulation till
the end of June 1946. Moreover, according to Cohen, the public continued to support the OPA
and favoured the proposed extension till June 30, 1947, with rates reaching as high as 82
88
Brinkley, The end of reform, 190.
Barton J. Bernstein, “The Removal of War Production Board Controls on Business, 1944-1946,” (The
Business History Review 39-2, 1965), 243-244.
90
Bernstein, “The removal of War Production Board,” 244-246, 253.
91
Bartlels, “The Office of Price Administration,” 24.
92
Bernstein, “The removal of War Production Board,” 252.
89
34 percent. With the end of the OPA, “a major prop supporting the ideal of consumer citizenship
that had started during the 1930s,” was removed.93
Taken together the stories of both the WPB and the OPA signal a political climate not
in favour of using the war as a stepping-stone for economic reform along New Deal lines.
Instead, the experience of federal spending as the prime stimulator for economic recovery
proved the critics of Roosevelt’s 1938 compensatory fiscal program right. In line with their
suggestions, according to historian Kathleen Frydl, wartime spending “persuaded key
government officials of the [Keynesian] wisdom of feeding this frenzy on a more permanent
basis by creating the consumer market to sustain it.”94 Perfectly adapted to this Keynesian
economic way of thinking and able to satisfy a moderate citizen consumer perspective, during
the end of the war, America saw the emergence of the “purchaser as citizen”. According to
Cohen, this perspective was a combination of the citizen consumer and purchaser consumer
perspectives. The development towards this new perspective can be illustrated by means of
wartime commercials.
Writing on advertising and domestic propaganda during World War II, historian
Dannagal Young finds the themes of “sacrifice” and “consumption” to be mutual
companions. Originally posted in the Saturday Evening Post in 1942, Young gives several
examples to illustrate her argument, two of which are:
Every penny you spend on nutritious food for the family is a worthwhile investment. Every ounce
of food you save from being wasted can help make America strong.
All of us are using our cars less, doubling up, making a special event of what used to be a
commonplace trip. Makes you appreciate your car, doesn’t it? Give your car an extra lease on life
by replacing old, worn-out or inferior quality spark plugs with new Champions.95
These advertisements describe how one can fulfil his or her civic obligation to the war by
consuming the right commodities. As illustrated by the following example, Young argued that
advertising and propaganda not only emphasized wartime sacrifice and consumption, but also
sketched an image of America’s postwar society.
Right now Cessna is devoting its vast facilities and 31 year background in air craftsmanship to a
24 hour a day war effort ... the same sort of aviation “know how” that produced Cessna’s famous
93
Cohen, A consumers’ republic, 1891, 1935.
Frydl, The GI Bill, 75.
95
Dannagal G. Young, “Sacrifice, consumption, and the American way of life: Advertising and domestic
propaganda during World War II,” (The Communication Review 8-1, 2005), 37-38.
94
35 Airmaster, three times judged the “World’s most efficient airplane”. But when peace comes to
America, Cessna will turn those facilities into an even richer experience toward building the
family car of the air that everyone can buy and fly.96
This example shows how a promise of postwar consumer prosperity is combined with a
company’s wartime obligation. Taken together, Young concludes that the messages of
wartime advertising and propaganda indicate “an ongoing negotiation between serving the
good of the country and serving the good of industry.”97
Fitting Cohen’s description of the purchaser as citizen, Young’s findings show the
early adaptation of this perspective. It shows a shift away from the New Deal, away from of
an economy strongly controlled by the government. Instead, the successful Keynesian-style
government intervention related to the war would leave its marks on postwar society. Coming
to discuss postwar planning in the second part of this chapter, the familiarity with government
intervention and the preference for Keynesian economics would be translated into
unprecedented bipartisan support for extensive government support in the form of the
veterans’ benefits that formed the basis of the GI Bill. However, a political shift to the right,
and a strongly established veteran political apparatus would oppose Roosevelt on the
important questions of implementation and administration. More specific, as the OPA needed
its status of a war-effort, consumer-orientated postwar legislation was also in need of an extra
political stimulant, that of the veteran.
2.2 Postwar Planning
From 1939 till 1944 the accumulated salary-figure in America rose from $52.6 billion to
$112.8 billion without matching inflation.98 The war economy then, increased the overall
purchasing power of consumers while curtailing civilian consumption. In line with this
observation Cohen argues that the wartime civilian economy was marked by a courtesy of
people saving their money while picturing themselves consuming after the war. The fantasies
Americans persevered related to consumer goods like cars, washers, and most important, a
private home, were not so much part of a “lofty political ideal” but rather stood for an
“American Way of Life.”99
96
Young, “Sacrifice, consumption,” 38.
Ibid., 47.
98
Ibid., 27.
99
Cohen, A consumers’ republic, 1318.
97
36 The question nonetheless would be, what kind of federal government would come to
accompany this postwar consumer prospect. For Roosevelt postwar planning in general and
veteran rehabilitation specifically meant a chance to push for the extension of the federal
government’s responsibilities towards the basic economic care of its citizens. Like the later GI
Bill, Roosevelt spoke of ‘rights’ that should be assigned to citizens. The right to have “good
education”, a “decent home” and a “useful and remunerative job.”100 Interestingly enough, his
political opponents would not dispute Roosevelt on his claim that these rights should stand at
the basis of a veteran’s individual and a nation’s general rehabilitation after the war. Applied
to veterans these ‘rights’ would come to mean a large transition replacing WWI’s Athenian
model for a Roman model.
However, as said, Roosevelt ultimately wanted to extend this Roman model of federal
care taking to all citizens. Meanwhile, the promoters of the GI Bill tried to prevent such
extension believing that the federal government owed veterans, not civilians. Next to the
broadly accepted shift in political economy, the GI Bill then represents a conservative
perspective on the responsibilities of the state. The important legislative aspects of
implementation and administration reflected this perspective. Though before turning to these
aspects, first Roosevelt’s postwar ideas and initiatives will be addressed.
2.2.1 Roosevelt
After his re-election in 1936, Roosevelt came to face increasing political opposition. The
administration’s shift from a policy of economic reforming (that was not able to counteract
the Depression), to a compensatory fiscal program based on Keynesian economic thinking,
seems to be a logic choice. Not necessarily in need of a big government, consumer-oriented
fiscal policy could count on much more political support than large-scale reforming measures.
While this compromise enabled the President to deal with the rising political
resistance, Roosevelt still wanted to enlarge to role of the federal government. Where
economic regulation and the federal military have long been basic obligations of the
government, the President was still driven by a desire to add “the basic care of citizens” to
these obligations. In order to do so, Roosevelt set up the President's Committee on
Administrative Management (Brownlow Committee) in 1937. Though the actual
achievements of the Brownlow Committee can be said to be meager because Congress
100
Franklin D. Roosevelt, “State of the Union Message to Congress,” (January 11, 1944, via:
www.presidency.ucsb.edu). 37 blocked most of its initiatives,101 it does signal the administration’s commitment to what
would come to be referred to as long term postwar planning. One of the major features
initiated by the Brownlow Committee that did manage to pass Congress was the executive
planning body called the National Resources Planning Board (NRPB). Roosevelt ordered the
NRPB, headed by his uncle Frederic A. Delano, as early as November 1940 to prepare a
comprehensive postwar plan for America. Writing in 1944 about “the underlying philosophy”
behind the board’s programs, Charles Merriam, a former member of the board, stated the
following:
The practical program of the Board was based upon the idea of a dynamic expanding economy on
the order of 100 to 125 billions of national income. The Board recognized that we stand on the
threshold of an economy of abundance, attainable if the will and the skills are made available. If
we can buy what we make, industry and labor can be stabilized and the standards of living raised
notably, perhaps in the ratio of one-third to one-half.102
Merriam thus claims that in general the board’s planning advice was based on the recognition
that the principles behind America’s economy were fundamentally changing. More practically
this meant that the NRPB commanded “early analyses of the structure of the American
Economy,” and “elaborate studies of consumer income and budgets.” While most legislation
that came out of the NRPB would not be enacted, according to Merriam, the board’s activities
had “far-reaching importance and influence.” As an example hereof he argues that the
NRPB’s 1943 demobilization report “was generally accepted and became the basis of” the GI
Bill. As Merriam argued that the NRPB recognized America standing “on the threshold of an
economy of abundance,” the proposed benefits, also incorporated in the GI Bill, were set up
to act on that notion.103
During the same year on July 28, Roosevelt broadcasted a fireside chat in which he
stated that: “the members of the armed forces have been compelled to make greater economic
sacrifice and every other kind of sacrifice than the rest of us, and they are entitled to definite
action to help take care of their special problems.” This definite action, Roosevelt suggested,
could contain off a mustering-out pay, education or training assistance and unemployment
compensation.104 Half a year later, on January 11, 1944, Roosevelt would express his final
101
See: James W. Fesler, “The Brownlow Committee fifty years later,” (Public Administration Review 47-4,
1987), 291-296.
102
Charles E. Merriam, “The National Resources Planning Board: A chapter in American planning experience,”
(The American Political Science Review 38-6, 1944), 1080.
103
Merriam, “The National Resources Planning Board,” 1083.
104
Franklin D. Roosevelt, “Fireside Chat,” (July 28, 1943, via: www.presidency.ucsb.edu).
38 thought on postwar America which he referred to as “a second Bill of Rights.” Discussing the
vision behind this bill, historian Meg Jacobs argues that Roosevelt acknowledged the
changing needs of citizens in a society thriving towards consumerism. Often referred to as an
economic bill of rights the naming leaves no doubt that Roosevelt deemed these new
economic-orientated rights to be fundamental, and thus of great importance.105 A few of the
rights Roosevelt specifically mentioned are:
-The right to a useful and remunerative job in the industries or shops or farms or mines of the
Nation;
-The right of every family to a decent home;
-The right to adequate medical care and the opportunity to achieve and enjoy good health;
-The right to adequate protection from the economic fears of old age, sickness, accident, and
unemployment;
-The right to a good education.106
Roosevelt’s citizen consumer perspective clearly envisioned a postwar American society in
which the federal government extended its responsibility for the basic (economic) care of its
citizens.
For the GI Bill historians Altschuler and Blumin, Roosevelt’s Second Bill of Rights
speech meant that the President “established himself as the conceptual father of the GI
Bill.”107 While to call Roosevelt the “conceptual father” is a highly debatable assumption, it
does signal an important issue. Interestingly enough, differences between liberals and
conservatives would not come from determining how benefits would rightly stimulate the
economy. Both parties believed in a Keynesian economic model for the veteran, and
indirectly for the nation as a whole, to readjust to a war free society. But Roosevelt had
always wanted more. He fought for the extension of the federal government’s obligation
towards civilians and their social-economic well-being, the GI Bill merely applied to veterans.
Turning to the creators and promoters of the GI Bill the question remains, what were their
ideas and visions behind this veterans-only bill.
105
Jacobs, “How about some meat?,” 920.
Franklin D. Roosevelt, “State of the Union Message to Congress,” (January 11, 1944, via:
www.presidency.ucsb.edu).
107
Altschuler, The GI Bill, 48.
106
39 2.2.2 Public Law 16
Prior to the political discussion concerned with all returning veterans, a solution had to be set
up for the veterans returning home disabled. Resulting in the enactment of Public Law 16 on
March 24, 1943, the discussion over the just treatment of disabled veterans would clearly
expose the differences between liberals and conservatives concerned with veteran politics.
Discussing the establishment of Public Law 16, two things immediately become clear.
Firstly, when it came to rehabilitating returning veterans the majority in Congress and
Roosevelt’s administration did not share the same perspective. Secondly, the established
veteran political apparatus was aligned with Congress and would mean strong competition for
Roosevelt. Within Congress, the Senate subcommittee and the House committee on Veterans’
Affairs dealt with all veteran related legislation. The records of the hearings of these
committees show the ideas and expectations behind both Public Law 16 and the GI Bill. On
January 21, 1942, the national commander of the American Legion Lynn Stambaugh
addressed the House committee urging for legislation that would take care of the veterans that
were already send home wounded. Trying to make sure that World War II veterans would be
“more fortunate than the veterans of 1917-1918,” Stambaugh explicitly mentioned the
Economy Act of 1933 as a “vicious” example of how the government then acted towards
disabled veterans.108
The most important argument against a possible new Economy Act that is often
mentioned in the hearings of both committees depends on the veteran’s ‘special’ situation. As
for instance Senator Bennett C. Clark (chairman of the senate subcommittee on Veterans’
Affairs) stated: “since these men are treated specially when they are taken from civil life and
put into the armed services they should be treated specially when they come out of the armed
services and back to civil life.”109 While nobody would deny government’s obligation to
wounded soldiers, the crux of the ‘special’ status for veterans lays with their acclaimed
priority over civilians. Explaining the difference between a disabled civilian and a disabled
veteran chairman of the House committee on Veterans’ Affairs John Rankin stated:
108
United States, Cong. House, Committee on World War Veterans’ Legislation, World War Veterans'
Legislation: Statements of National Commanders of Veterans Organizations, Hearing, 21 Jan. 1942.
77th Cong., 2nd sess., (Washington: Government Printing Office, 1942, via: LexisNexis
Congressional Hearings Digital Collection), 2.
109
United States, Cong. Senate, Committee on Finance, World War Veterans' Legislation, Hearing, 25
Feb. 1943, 78th Cong., 1st sess., (Washington: Government Printing Office, 1943, via: LexisNexis
Congressional Hearings Digital Collection), 17.
40 Whereas the civilian had all of his life to establish himself, he was not taken away from his home
for foreign service and did not suffer any physical handicap as the result of anything he did for the
Government; and therefore he is in an entirely different category, as I see the matter, from the
veteran.110
While this ‘special’ status point was often presented as an ideologically charged argument, it
served a real and practical purpose. Rankin best expressed this purpose when he said:
Besides, I do not want to make the World War veterans the common carriers for the enormous
appropriations that I can see in the distance for all the social uplifting that we will have and all the
social and physical rehabilitation that may be undertaken.111
Where Roosevelt tried to reorganize the executive branch in order to add the basic care of
citizens to the obligations of the federal government, Rankin feared the idea that veterans
came to be used as “common carriers” for broader, civilian orientated, disability care.
Accordingly, while there was next to no dispute over the provisions that Public Law 16 would
host, the means of implementation would divide the involved. Unmistakably on the side of
Rankin, Clark and the American Legion, the national commander of the Veterans of Foreign
Wars (VFW), Omar Ketchum, when talking about implementing Public Law 16, referred to
the “old-saying” of “the camel [who] gets his nose under the tent.”112 For Ketchum, as for the
others, the only right agency to administer the rehabilitation program for disabled veterans
was the Veterans’ Administration (VA). They feared that any other option would mean other
interests would take over and threaten the ‘special’ treatment that they thought veterans
deserved.
Justifying this fear, Frydl argues that Roosevelt, “almost immediately” after Pearl
Harbor, “recognized an opportunity to use the war to build upon and expand the mission of
his newly formed FSA [Federal Security Agency].” Next to the NRPB, this agency was the
result of a second proposal initiated by the Brownlow committee in 1939 that passed
Congress. The main goal of this agency was to centrally administer all legislation concerned
with “health, welfare, and related activities affecting the national defense.” Shortly after his
appointment the first administrator of the FSA, Paul McNutt, tried to bring together several
agencies under his heading, one of them was the VA.
110
US. Cong. House. Com. on World War Veterans Legislation, 7 Oct. 1942, 18.
Ibid., 18.
112
Ibid., 20.
111
41 McNutt’s plan dictated a regional setup with direct federal control. However, the VA
had already established its own state centered approach with only little federal interference.
Rejecting McNutt’s proposal to be placed under the FSA then had two purposes. Firstly, this
way the VA could “maintain organizational independence.” Secondly, the VA would stay
aligned with Congress instead of the administration. Ultimately, this and other attempts to
annex the Veterans Administration under a civilian-orientated agency would fail. With one
such attempt McNutt tried to add, those who were disabled from accidents that took place in
the war industry, as deserving of veteran benefits. Unfortunately for McNutt, also this effort
to enlarge the federal obligation by including civilians to the to be formed vocational training
and rehabilitation program could not count on support from an increasingly conservative
Congress. In other words, McNutt and Roosevelt failed to “anchor” the then still venerable
FSA by adding to its responsibilities the established care for disabled veterans.113
As opposed to the extensive social legislation Roosevelt and McNutt had in mind, the
bill proposed by Rankin and Clark had a simple goal. Explained by the administrator of the
Veterans Administration, General Edward Hines, the main objective of the bill that would
become Public Law 16 was to place the veteran “in the shortest practicable time, an
employment that will afford a suitable living wage in a vocation in which he has a good
chance to make good.” On March 24, 1943 Public Law 16 was passed and would do just that.
Placed under the Veterans Administration, according to Frydl foremost two principles would
characterize the treatment disabled veterans enjoyed: decentralization and difference.
Decentralization meant that every state would handle and control “most pragmatic
operations.” VA’s central office in Washington would only remain in charge of planning the
program as a whole. Secondly, because the VA had no commitment to civilian affairs what so
ever, the ‘special’ treatment or ‘deference’ status for veterans was secured there. Furthermore,
with decentralization and difference set as the standard for the treatment of disabled veterans,
future discussions concerned with the implementation of benefits for non-disabled veterans
would not start with a plain record.114
At least two reasons help explain why the final decisions over implementation and
administration did not follow from a presidential proposal but rather from Congressmen
Rankin and Clark. Firstly, support for the Roosevelt administration in Congress strongly
declined after the 1942 mid-term elections. Secondly, while Roosevelt did not neglect
domestic policy, it was not his first priority in times of international warfare. As Frydl
113
114
Frydl, The GI Bill, 75-79, 87.
Ibid., 95-97.
42 remarks, while the President made key “decisions in Tehran with Churchill and Stalin,”
Congress members “on the other end of Pennsylvania Avenue busied themselves with shaping
postwar domestic power.”115
After Public Law 16 was signed another important political step in the direction of an
omnibus veterans-only bill was taken when “discharge petition #8” was passed. Lobbied for
by the American Legion, this petition ordered that all veterans’ legislation would be heard by
the House Committee on World War Veterans Legislation, chaired by John Rankin. This way,
Rankin’s committee could keep sight on the all the facets of the GI Bill.116 With Rankin’s
committee appointed to hear all veterans’ legislation and the Veterans Administration (VA)
running Public Law 16, the American Legion, now working together with the Veterans of
Foreign Wars (the two largest veteran representative organizations), had two strong partners
in the political field of veteran legislation.
2.2.3 The GI Bill
From December 1943 till early January the American Legion, and more precisely Harry
Colmery, drafted the first version of the omnibus veterans-only bill that would thereafter be
pending in Congress. As the national commander of the American Legion Warren Atherton
would later recall that the different titles of the GI Bill were “largely taken from the best
rehabilitation ideas and procedure developed between 1918 and 1943.”117 In the end returning
veterans could benefit from one or more out of five ‘titles’: (title I) hospitalization. (title II)
education; (title III) loans for the purchase or construction of homes, farms, and business
property; (title IV) assistance with searching for employment; (title V) readjustment
allowance for the unemployed. Before discussing the ideas behind the individual titles, first,
the vision behind the bill as a whole will be discussed. A good starting point then is a first
description of the bill by Atherton in front of Senate’s subcommittee on Veterans’ Affairs:
This bill was intended to deal with the bread-and-butter things as to which a veteran should have
assistance the first week or the first month or the first 90 days after his discharge. This is not
intended to reach out into the long-range solution of unemployment. It stays entirely out of the
field of adjusted compensation.118
115
Frydl, The GI Bill, 101.
Ibid., 104.
117
Ibid., 114.
118
US. Cong. Senate. Com. on Finance, 14 Jan. 1944, 8.
116
43 The GI Bill was originally intended to deal with the ‘bread-and-butter things’; it was created
to assist the returning veteran with the first essential benefits for rehabilitation. Or, as Rankin
has put it: “we are not trying to revolutionize this country,” but rather we try to “preserve
what the veterans left.”119 While the GI Bill is often referred to as a catalyst for revolutionary
social-economic changes within American society, its creators did not intend it to be one.
This does not mean however that they were focused only on the veteran. Explicitly
mentioned by the author of the bill’s first draft, Harry Colmery, but clearly felt by other actors
as well, there was “a twofold duty” to preform. First there was the “interest of the veteran,”
but next to that the “interest of the public and the Nation” had to be taken into account at all
times. Thus, revolutionizing America was not believed to be in the interest of the public.
Instead, preventing the veterans from laying to heavy a burden on the economy was.120
Moreover, referring to the bad reputation of the World War I veterans who joined up in the
Bonus March, VA Administrator General Hines stated: “I hope they will never change their
attitude toward the veterans serving in this war or in all our wars, but we will be faced with a
definite program of economy, not because we will like it, but because we will have to have
it.”121 Taken together this means that the GI Bill was intended to set up a short run program of
benefits only for veterans while trying to prevent the economy from slipping back into a
depression. It is important to note at this point that the actors behind the bill, for the most part
conservative minded, believed with Roosevelt that a bill empowering veterans with an
education, unemployment allowance and loan program was thought to be the best way to
achieve this twofold duty.
One other important central vision behind the bill as a whole relates to the VA as the
only agency administrating the GI Bill. According to Senator Clark this way veterans would
have “one place to go and find out all about all of their rights and take advantage of all the
benefits that the Government sees fit to extend to them.” Furthermore Clark argues, “the
whole purpose of the bill and everything in it is to expedite that aim.”122 So one argument
explaining the preference for the VA that often returns in both Veteran Committees hearings
records is the convenience for the veteran.
Another returning argument applied to the VA’s decentralized structure. The local
accessibility of the VA was argued to be convenient for the veteran, however, it also served a
broader political goal. According to Frydl during the end of the war “offices and advisors
119
US. Cong. House. Com. on World War Veterans Legislation, 29 Mar. 1944, 309.
US. Cong. Senate. Com. on Finance, 10 Mar. 1944, 247.
121
US. Cong. House. Com. on World War Veterans Legislation, 27 Mar. 1944, 226.
122
US. Cong. Senate. Com. on Finance, 8 Mar. 1944, 173
120
44 grouped around the presidency provoked fears of a powerful state.” The postwar model of
state power that Roosevelt envisioned, Frydl continues, “ran antithetical to American political
tradition.”123 Implementation of the GI Bill through the VA would not threaten this political
tradition because the VA had established itself along the lines of individual states. Following
this rationale, John Stelle (chair of the American Legion Committee charged with formulating
the GI Bill) explained his preference for the VA as the administrative agency by remarking:
“as a good old southern Illinois Democrat I am against centralization of powers in
Washington.”124 Turning to the individual titles of the bill, this particular stand will be of
great importance.
2.2.3.1 Title II: Education
Discussing the individual titles mostly on the basis of the records of the Congressional
hearings means discussing some titles at length and others almost not at all. Accordingly, by
far the most expansive and controversial parts of the bill are the titles II and V dealing
respectively with veterans’ education and unemployment allowance.
However, for the sake of completeness, Title I had the purpose of upgrading the status
of the VA by declaring it “an essential war agency.” Most important for the VA, because of
this priority status, they could reduce their shortage in personnel and hospitals. Also without
much discussion the actors involved endorsed Title III of the bill setting up veterans with
loans to buy a house, or, start a business or farm. According to Rankin, Title III delivers
“what these boys think they are fighting for,” their own home.125 Furthermore Rankin argued
that he could “think of nothing that would be of greater value for the stability of this country
in the future than to see every man own his own home.”126 Probably serving the same dual
cause, Title IV was created to supply the veterans with job counselling and employment
placement through local employment offices.
As opposed to these three titles, Title II dealing with the education of the veteran has
yielded much discussion. The most progressive perspective on the education program for
veterans came from the American Legion (AL). Presenting their version on Title II, the
national commander of the AL, Atherton, argued that the more people went to college, the
more the employment market would be relieved. Moreover, Atherton continued, the nation
123
Frydl, The GI Bill, 130.
US. Cong. House. Com. on World War Veterans Legislation, 29 Mar. 1944, 323.
125
Ibid., 329.
126
Ibid., 30 Mar. 1944, 439.
124
45 will benefit because it would “make more educated and trained men and women available 3,
4, or 5 years after discharge from the Army.”127 In line with this argument, Harry Colmery of
the AL claimed Title II to have a “broader significance and compelling obligation.”
According to Colmery the man and woman who were developed to be “the largest body of
killers” should, for the good of the nation, be given the “opportunity to become disciplined
forces for progress, through educational and training opportunities in every available aspect
that can be provided for them.”128 So one perspective that was involved in constructing the
educational program of the bill took into account the broader national significance by arguing
that investing in educated and trained veterans would pay the nation back more then it had
cost.
Another perspective involved though, can be referred to as more conservative. This
perspective is concerned first with federal government’s obligation to rehabilitate the veteran
by supplying him with ‘the bread-and-butter things.’ Believing that “the world does not owe
every man a college,” Rankin further expressed this view when he stated:
Now, there is all the difference in the world in rehabilitating a man who has lost an arm who was,
say, a stenographer, or a man who has lost a leg, who was a farmer, reeducating him and
rehabilitating him to follow some other occupation in which he can make a living, than in
educating some other man who has never had an occupation and who has not been injured, has not
been physically incapacitated, and sending him to certain colleges – with some of the professors I
know – and teaching how to select the right spoon, or drive ducks, and these things like that.129
For Rankin and the many likeminded, the GI Bill then was not intended to be revolutionary.
Indeed, it was designed to give veterans back their previous lives. The result of this
perspective can for instance be found in the compromise that under Title II, educational and
training benefits were only granted to those veterans that were likely to be cut of from it by
their service. That meant that when a veteran was older then twenty-five, he had to prove to
the VA that the war had interrupted his education.
As with the rest of the bill, perhaps more than the content, the right implementation of
Title II yielded discussion. The VFW national commander, Omar Ketchum, and Rankin
conducted one such discussion. Starting out by referring to the American Council on
Education who just spoke before him, Ketchum expressed his fear that there are “some groups
who want to make this a Federal responsibility, with Federal money to be expended but with
127
US. Cong. House. Com. on World War Veterans Legislation, 11 Jan. 1944, 15.
Ibid., 30 Mar. 1944, 399.
129
Ibid., 24 Feb. 1944, 162-163.
128
46 no Federal control or supervision any place along the line.” Without claiming that the VA’s
central office in Washington should interfere with the delicate right of states to manage their
own educational system anymore than absolutely necessary, Ketchum argued that some
federal supervision is needed in order to “prevent any injustice or abuse developing out of the
program.” Practically, Ketchum proposed that the VA’s central office would have veto-power
over the list of approved educational institutions setup by the individual states.
For Rankin and his fellow committee members this was a problem. Basically Rankin’s
House committee argued that once veto-power was granted to a federal department, standards
would be set for states to subject to. Instead, Rankin proposed that the servicemen himself
would get the right to select his school. Explaining the benefits of leaving out any federal
control on this point Rankin states: “We have separate schools in every State in the South; and
there is a certain element in and out of Congress that is always nagging and trying to stir up
trouble for us down there. They have already cost the lives of many innocent white people
and more innocent Negroes.”130
Furthermore, according to Rankin federal standards would not only stir up the
established educational separation of ‘white people’ and ‘innocent Negroes’ but also
“discriminate against those men that were taken out of the field.” To be more precise, Rankin
believed that farmers would be subordinated because the small-scale “agricultural high
schools” of the South were to be excluded from the list of approved institutions. The
sentiment behind this thought is best expressed when Rankin stated the following: “I am tired
of a few crack-brained professors of the country looking down their noses at the masses of the
people who are furnishing the sweat and toil to support the Nation in times of peace and
whose sons fight for us in time of war.”131 Notwithstanding the committee’s efforts, in the
end, the GI Bill granted the VA’s central office with veto-power over the approval lists set up
by the individual states. When similar points were discussed with reference to Title V though,
more or less the same sentiments would come in to play.
2.2.3.2 Title V: Unemployment Allowance
The unemployment allowance program proposed by the American Legion in their first draft
of the GI Bill encountered the most steadfast resistance of all titles. Referring to Title V as
130
131
US. Cong. House. Com. on World War Veterans Legislation, 29 Mar. 1944, 341, 348-349, 351.
Ibid., 30 Mar. 1944, 431-432.
47 “the dynamite” in the bill, Rankin strongly opposed the design that was co-sponsored by the
Veterans of Foreign Wars.
First and foremost, as with the education title, it was thought to be a “violent
discrimination against the man who tills the soil.” Moreover, Rankin argued Title V to be
“designed to assist the industrial worker.” The thought behind this presumption was that the
farmer, with his own responsibilities, would return back to work immediately while the
industrial worker, as an employee, would rather prefer unemployment allowance. In this case
the Southern industrious farmer paid for the Northern industrial worker sitting at home. To
prevent this, Rankin’s committee proposed that every veteran would receive a certain amount
of money for a certain amount of time. 132 Defending the title’s design, VFW national
commander Ketchum argued that “the principle of this act is the American way.” For
Ketchum ‘the American way’ refers to a system in which one can choose whether or not to
make use of particular advantages and benefits.133 In line with this argument Colmery of the
AL added that because “there are indolent and lazy people” one should not want to “burn
down the house in order to get the rats.”134
Where Rankin’s committee and the representatives of the two largest veterans
organizations had followed each other with most legislation, this point showed a difference in
approach. With the Senate version of the act already passed, Rankin choose to filibuster the
act preventing it from passing through the House. In the end, Rankin agreed with an
amendment that, according to Frydl, meant “a tremendous transfer of administrative
sovereignty from federal to state government.” In this case apparently, the decentralized
structure of the nonetheless federal VA could not satisfy Rankin. The amendment ruled that
each state would designate one’s own agency to administer Title V.135
The influence of the anxiousness for government intervention shown by Rankin with
respect to Title V reflected a political tie turning towards conservatism after a good ten years
of progressive New Deal liberalism. Still, the answer to the question how the government
should act with regard to returning veterans changed over the whole political spectrum.
Firstly, a strong political veteran lobby established during the interbellum period showed it
was able to push legislation in the interest of the veteran after World War I and continued
doing so with the GI Bill. Secondly, content wise, both conservatives and progressives came
to argue that the best way to rehabilitate both the veteran individually, and the nation as a
132
US. Cong. House. Com. on World War Veterans Legislation, 30 Mar. 1944, 374, 377.
Ibid., 24 Feb. 1944, 160.
134
Ibid., 30 Mar. 1944, 445.
135
Frydl, The GI Bill, 139. 133
48 whole, was to support the returning men and women with benefits that provided for them in
their newly acknowledged basic economic needs. The fact that the creators of the GI Bill did
not agree with Roosevelt’s idea that the federal government should take care of the basic
economic needs of all Americans does not undermine the point that they agreed upon those
economic needs. Still, the people involved in the formulation of the GI Bill envisioned the bill
to take care of the ‘bread-and-butter’ things for only a specific amount of time. The creators
did not want the bill to be the start of a revolution in the relation between state and citizen as
Roosevelt had wanted it to be. As chapter three will show, the way the bill was amended and
used would neither be in line with the vision of its creators nor with that of Roosevelt.
49 Chapter 3: The GI Bill at Work
The most important issues for historians concerned with the effects of the GI Bill have almost
always been related to race, class and gender. Nowadays there is a consensus among these
historians that the bill did not diminish pre-war racial, class and gender practices of
discrimination. GI Bill historians however disagree on the issue to what extend the bill did or
did not actively engage in these practices. They mainly disagree on the question whether or
not the creators of the bill deliberately incorporated local implementation of federal funding
to preserve such inequalities.
While both views rest on convincing arguments, this particular dispute has little
relevance here. When one elaborates on this dispute, an obvious pitfall would be to assign too
much explanatory power to the bill. Instead, the objective of this chapter is to explain the
workings of the GI Bill as both a producer and a product of the postwar changes that can be
referred to as the Consumers’ Republic. As for a long time, postwar American society was
marked by inequalities in race, class and gender. Not surprisingly, the GI Bill wore these
characteristics. A new phenomenon in this period of time was the rise of the Consumers’
Republic. As the previous two chapters have explained, veteran political and economical
political developments have shaped the GI Bill as a key piece of this Consumers’ Republic.
Accordingly, the main question for this chapter is not how did the GI Bill work; but how did
it work in the Consumers’ Republic? Incorporating the Consumers’ Republic into this
question means incorporating the broader changing social economic reality of the postwar era.
This way, one avoids the pitfall of assigning to much explanatory power to the GI Bill, and,
one does not undermine the bill’s key role within the broader changes that did take place.
The first part of this chapter will briefly introduce the broader implementations of the
Consumers’ Republic and the political process of amending the GI Bill after the first version
was signed in 1944. The second and third part of this chapter will respectively come to
discuss the workings of the GI Bill with respect to housing and education in postwar America.
While the unemployment allowance title fuelled controversy during the design of the bill,
implementation of the benefit proceeded without causing much of a stir. The same cannot be
said for the housing and education titles of the bill. The fields these titles worked in are often
described to deliver the two most important vehicles for “moving […] Americans into the
postwar middle class.”136 Accordingly, historians have primarily focused on these two titles.
136
Cohen, A consumers’ republic, 2837.
50 Additionally, the main point of the housing and education parts of this chapter will be that the
workings of the GI Bill with respect to these particular fields followed and produced the logic
and rules of the new Consumers’ Republic.
3.1 The beginning of the Consumers’ Republic and its GI Bill
As historian Gary Cross rightly remarks, when the war ended in August 1945, “Americans
were ready and able to consume.”137 Consumerism no longer had to be curtailed in the interest
of the war effort. Instead, postwar America came to display a strong belief in the connection
between unrestrained consumerism and economic prosperity. More importantly, the belief in
consumer driven economic prosperity came to mean much more than just economic growth.
This is the point where the postwar purchaser as citizen perspective distinguishes itself from
the earlier purchaser consumer perspective. During the depression and the war, the purchaser
consumer and the citizen consumer stood opposed to each other respectively representing
economic motives and social-cultural ideals. The purchaser as citizen placed both
perspectives in one line by arguing that “the general good would be best served […] by
individuals pursuing personal wants in a flourishing mass consumption marketplace.”138
As Cross notes, in this postwar ‘flourishing mass consumption marketplace,’ the
consumer “did not become a political force capable of defending their rational and utilitarian
needs against the power of corporations and advertising.”139 In other words, the main goal of
the citizen consumer would not be fulfilled in postwar America. First, the active role of big
business during the war helped to explain this shift away from the accrued citizen consumer
perspective. With big business’ recognized tribute to the war effort, criticizing their stand
towards the American consumer could be considered unpatriotic. Secondly, the American
people were optimistic believing that the “war-proven capacities of mass production and mass
consumption” would steer America towards postwar general prosperity. Finally, a more or
less unregulated economic market (federal economic stimulus instead of political control)
worked as the perfect anti-dote for Cold War communism. With the “economic
egalitarianism” that would follow from an economy of abundance, Americans would “beat
the Soviets at their own game,” without redistributing existing wealth. All in all, without the
Depression and the war, the consumer activist and the corresponding citizen consumer
137
Gary Cross, An all-consuming century: Why commercialism won in Modern America, (New York: Columbia
University Press, 2000), 88.
138
Cohen, A consumers’ republic, 2145.
139
Cross, An all-consuming century, 135. 51 perspective would come to be increasingly marginalized as the Consumers’ Republic became
realized.140
Meanwhile, the purchaser as citizen perspective found broad political endorsement.
The idea that consumer-purchasing power stimulated by the government was not only
favourable to the national economy, but also for America’s democratic ideals, was adopted by
both “strident anti-New Deal big businessmen” and “moderate and liberal capitalists.”141 In
line with this observation Cross argues that “the key debate in American politics became
which policies brought the greatest purchasing power.”142 According to Cohen it was the GI
Bill that, as “a Keynesian bulwark of the Consumers’ Republic,” brought consumers the
greatest purchasing power after the war.
Still, as many historians have noted, the first year of its administration the GI Bill was
associated with confusion, rather than with stimulating purchasing power. This confusion
mainly resulted from administrative chaos in the Veterans Administration. Discharged GI’s
were not properly informed about their rights as veterans. Many of them either did not know
of the GI Bill or misunderstood its regulations. Speaking in front of the Senate’s
subcommittee on Veterans’ legislation over a year after the bill’s enactment, the new VA’s
administrator Omar Bradley gave an example of such confusion attached to the loan
provision: “In some way, the impression was broadcasted, even to the most far-flung battle
fronts, that all the discharged veterans had to do was to take his honorable discharge
certificate to some place and be handed out $2,000.”143 Disappointment would obviously
follow when the veteran would find out that the promised $2,000 in cash was only a loan
guarantied by the government.
Another provision that received much criticism during its first year of implementation
was the education title. Speaking in front of the same committee Bradley argued that the VA
had “been very liberal in applying this provision.” Still, due to its ‘25 years’ restriction, Title
II revoked “a great deal of dissatisfaction and charges of discrimination.” This restriction
commanded that every veteran of twenty-five years and older had to prove that his education
was interrupted by his service in the war. Moreover, this restriction signalled the GI Bill’s
broader purpose of readjustment rather than revolution. The aim was not to supply as many
veterans as possible with an education. Instead, as discussed in the previous chapter, the
creators of the bill wanted to give back to the veterans the life they had before the war, and,
140
Cohen, A consumers’ republic, 2057, 2233.
Ibid., 2060.
142
Cross, An all-consuming century, 87.
143
US. Cong. Senate. Com. on Finance, 8 Oct. 1945, 31.
141
52 perhaps more importantly, unburden the labour market in order to prevent another depression.
However, according to Bradley the older veterans misunderstood the purpose of the education
title and felt discriminated upon.144
At the urging of, among other the VA, this ‘25 years’ restriction was removed. This
amendment past over a year after the original bill’s enactment together with many other
amendments to the GI Bill following the same logic, that of liberalisation. The process of
liberalisation was intended to lessen the VA’s workload and be a handout to the veteran by
lessening the amount of red tape involved. Stretching the definition of ‘readjustment’ that
steadfast creators of the bill like Congressman Rankin had put into it, the question remains
why these amendments easily passed through Congress. The answer to this question is simple
as historians Altschuler and Blumin argue that “the overriding concern of legislators across
the ideological spectrum in 1945 was not that too many GIs were availing themselves of
government largesse but too few.” If, due to the its restrictions, only few veterans would be
rehabilitated through the GI Bill, “millions of disappointed veterans might take out their
frustrations at the next election.”145 The soldier’s vote was again deemed an important factor,
and with much less applications granted than was expected, liberalisation was welcomed by
many.
Perhaps because of the 1945 amendment, perhaps just a matter of time, but soon after
the amendment the number of granted applications would far exceed the expectations held by
the bill’s creators. According to Altschuler and Blumin, these veterans would experience a
bill that what was once intended to provide the ‘bread-and-butter things’, as “an engine of
economic opportunity and social mobility.”146 However, while the amendments made the
benefits of the GI Bill more attractive for more veterans, it is important to note that matters of
implementation were not changed. These matters of implementation it will be argued would
ultimately decide who could (and who could not) make use of this social economic ‘engine’.
As discussed in the previous chapter, the creators of the GI Bill were not in favour of a
strong central government. Believing that stimulation of the national economy and rewarding
the veteran (who was sent on duty by the federal government) was however necessary, they
created a program in which federal funds were allocated to secondary implementers, like
states and local governments, and third party institutions, like banks and schools. This meant
that federal funding was one thing, but implementation was another. As will be illustrated in
144
US. Cong. Senate. Com. on Finance, 8 Oct. 1945, 29.
Altschuler, The GI Bill, 79.
146
Ibid.
145
53 the paragraphs discussing the housing and education titles of the bill, the postwar established
focus on consumerism, referred to by Cohen as the Consumers’ Republic, is of upmost
importance when addressing how the bill came to operate via these partners.
3.2 Title III: Housing
To give a first indication of the magnitude of the GI Bill’s home loan provision, twenty-eight
percent of the veterans made use of it. As the result, one out of every five singly family
residences built between the end of World War II and 1966 were financed with the aid of the
GI Bill.147 While significant, these numbers do not indicate what former reporter Michael J.
Bennett claims to be the achievement of the bill. According to Bennett “the GI Bill brought a
total relandscaping of America with the growth of the suburbs.”148 Pointing to the GI Bill as
the unique source of postwar suburbanization assigns too much explanatory power to the
housing title of the bill. Nonetheless, contributing to what historian Robert Wood has called
“the greatest migration in the shortest time of the nation’s history,” is perhaps the bill’s most
important legacy. The GI Bill’s position with respect to the twelve million Americans who
moved to suburbs in the first ten years after the war can better be described as a key policy
signalling a broader change in the nation’s political economy.149 This change can be referred
to as the Consumers’ Republic.
The postwar migration to the suburbs must be appreciated in its own right not because
suburbanization was something new but rather because of the scale and the means that pushed
it. Forasmuch as the scale, according to historian Kathleen Frydl, homeownership together
with higher education had both previously been “declared properties of the middle class.” Not
until the post-World War II era however had so many Americans moved to own their own
home and receive higher education that the “majority of American could be called middle
class for the first time.” As said, the means that stimulated this middle class to grow like it did
were also novel. After the war housing became the “biggest domestic political item.”150
Government intervention in housing (by then still a rather new phenomenon for Americans)
did not mean building real estate, that job was reserved for the ‘free market.’ Instead
government acted on the demand side by supplying Americans with credit. Together with the
Federal Housing Agency, the Veterans Administration accounted for nearly half of all new
147
Cohen, A consumers’ republic, 2560.
Bennett, When dreams came true, 302.
149
Robert C. Wood, Suburbia: Its people and their politics, (Boston: Houghton Miffin, 1958), 4.
150
Frydl, The GI Bill, 263, 266
148
54 mortgages between 1947 and 1957.151 Equally important, the process of federally financed
and privately provided houses in the suburbs would come to be accompanied by an increase
of scale and power of local governments. Taking together, the postwar housing structure
consists of three important links: federal funding, a free (but stimulated) market, and local
government.
Without underestimating the importance of this government-business structure,
historian Kenneth Jackson justly points to the consumer in order to explain the workings of
the GI Bill’s loan provision specifically, and the postwar housing market more general.
Jackson argues that the policy adapted by the government was “in accord with the preferences
of its citizens.” 152 As discussed above, purchaser as citizen perspective became broadly
accepted after the war. In line with this perspective, historian Jeongsuk Joo argues that “the
surburban house equipped with various consumer gadgets became central to the definition of
an American way of life, it stood for national identity in the Cold War conflict.” To buy a
home and furnish it with new goods was not only seen as a personal affair but also part of a
citizen’s “patriotic duty”. Accordingly, Americans actively preformed this duty. While overall
consumer spending increased 60 percent, the amount of dollars spend on household
furnishings and appliances rose 240 percent.153 Moreover, one out of every six jobs could be
linked to the housing market.154 As suggested by these figures, the housing market would
deliver a large contribution to the postwar prosperity.
However, while the purchasers as citizens may have assumed that their individual
economic interests in the housing market coincided with the general good of all American
citizens, it would turnout otherwise. While the loan provision title in itself, like the GI Bill in
general, did not exclude anyone in advance, it did leave enough room for discrimination to
take place during the implementation phase. Some say that the creators of the bill deliberately
included this structure in order give free reign to local discriminatory practices.155 Apart from
the question of intention, almost all historians argue that the structure of the GI Bill treated
151
Cross, An all-consuming century, 87.
Kenneth T. Jackson, “Federal subsidy and the suburban dream: The first quarter-century of government
intervention in the housing market,” (Records of the Columbia Historical Society 50-1, 1980), 450-451.
153
Jeongsuk Joo, “The root and development of suburbanization in America in the 1950s,” (International Area
Studies Review 12-1, 2009), 74-75.
154
Cohen, A consumers’ republic, 2202.
155
Cohen, A consumers’ republic; Frydl, The GI Bill; Ira Katznelson, When affirmative action was white, (New
York: W. W. Norton & Company, 2005); Amy Hillier, “Searching for red lines: Spatial Analysis of lending
patterns in Philadelphia, 1940-1960,” (Pennysylvania History 72-1, 2005).
152
55 “some citizens more equal than others.” 156 In other to understand the workings of this
structure the following three paragraphs will examine it link by link.
3.2.1 Federal Funding
The history of federal inference in the housing market is a short history. Historians have
pointed to the 1934 National Housing Act as the beginning of this tradition.157 The most
important aspect of this New Deal act was the establishment of the Federal Housing
Administration (FHA). Insuring loans made by banks and other private lenders, this agency
basically served the same purpose as the VA would later come to do under the GI Bill, but
without the restriction of veterans-only. While the government officially entered the housing
market with the establishment of FHA, their success would not come immediately.
Widespread use of the FHA’s provisions would not occur until after the war and would
coincide with the success of the loan provision program administrated by the VA.
As mentioned above, especially in the beginning many veterans wrongly interpreted
Title III of the bill and expected the government to hand out bonuses of $2,000 each. What
the bill actually did was “insure that amount of a loan to a veteran for a home, farm, or
business. If a veteran needed a $10,000 loan to buy a house, the VA would vouch $2,000 of
it.” With a fixed interest rate of 4 percent (lower than the commercial standard at that time)
the program was started as a means to make lending money more attractive. Like the GI Bill
in general, in the first place Title III was designed as an economical “emergency plan.” Due to
the amendments, and the larger than expected use of the bill, it turned out to be “a long-range
housing program.”158
While the new President Harry Truman wanted to use the GI Bill to achieve a higher
living standard for as many citizens as possible, the President also supported the basic
premise of the GI Bill’s loan provision. In his 1946 radio report to the American people
Truman discussed the status of the reconversion program and stated: “The Government is
determined to give private enterprise every encouragement and assistance to see that the
houses are produced - and produced fast.”159 Four years later, with the National Housing Act
of 1950, restrictions set by Title III were eased once more by lowering the monthly down
payments. Moreover, the act provided a direct loan program administered by local VA offices
156
Frydl, The GI Bill, 71.
Joo, “The root and development,” 70; Jackson, “Federal subsidy,” 426.
158
Frydl, The GI Bill, 273, 294.
159
Harry S. Truman, “Radio report to the American people on the status of the Reconversion Program,” (January
3, 1946, via: www.trumanlibrary.org)
157
56 for those veterans who were not able to receive private home financing. Finally, by injecting
more money in the Federal National Mortgage Association (Fannie Mae) the act meant to
encourage private lenders to “lend or build more generously and cheaply.”160 To lower their
risk Fannie Mae would secure mortgages closed by private lenders. It would nonetheless take
another four years for the GI Bill’s loan provision to hit its peak. Accordingly, after 1954
more veterans (3.5 million) made use of the bill then during its first ten years (3 million).161
By helping 6.5 million veterans accessing credit, it leaves little doubt that the
government was an important stimulator for the postwar economy. Moreover, Frydl states,
Title III “enhanced the legitimacy of government interventions designed as assistance to an
individual in a “free” market.”162 This legitimacy was necessary because as Cohen argues:
“prosperity [that is] built so much on consumer demand raised a challenge: how to keep
demand growing once war savings had been exhausted and the delayed purchases of wartime
satisfied.” In line with this argument Cohen notes that the Consumers’ Republic would
continue to perform a GI Bill-like Keynesian economics in the field of housing until the
1970s.163 This is important to note because while with some measures more, and with some
measures less directly, stimulation of the “free” market means responsibility over its effects.
Consequently, as will be discussed in the following paragraph, the ongoing discriminatory
practices of profit-seeking lenders were financially backed up, and thus stimulated, by the
government. Following “standard real estate industry practice,” local VA offices
implementing the direct loans to veterans would not be much better.164
3.2.2 Market Rules
Writing in 1958, historian Robert Wood argued that with “the very adversity” that “the reality
of the urban world” brought, the suburban ideal grew stronger over the last hundred years.165
With the harsh times of the Depression strongly felt in the urban centres of America, and the
pent up wealth of the industrious war years, Americans were not only ready to consume, but
many were also ready to consume themselves into their suburban ideal. Heavily subsidized by
the federal government, the “free” market of the Consumers’ Republic was more than
160
Frydl, The GI Bill, 294-297.
Ibid., 297.
162
Ibid., 297.
163
Cohen, A consumers’ republic, 2204, 2291.
164
Andrew Wiese, Places of their own: African American suburbanization in the twentieth century, (Chicago:
The University of Chicago Press, 2004), 100.
165
Wood, Suburbia, 21.
161
57 willingly to provide the houses needed to accomplish this ideal. In the process, Jackson notes,
“the American suburb was transformed from a rich man's paradise into the normal expectation
of the middle class.” 166 However, as a home in the suburbs became a mass consumer
commodity, market concerns were paramount in deciding who would and who wouldn’t be
part of this new middle class.
While many historians have argued that racial discrimination was the prime
distinguishing feature applied by GI Bill loan implementers, Cohen stresses the additional
importance of the market rules in the Consumers’ Republic. Not racial prejudice on its own,
but the combination with the market rules of mass consumerism can explain postwar
residential segregation in the suburbs.167 It is important to note that reference is made to
market rules applied to homeownership, rather than renting. Whereas renting was a rare
phenomenon in the suburbs, an increasing proportion of people living in the suburbs led to
more homeowners. The numbers related to homeownership, showing “the largest jump in
homeownership rates ever recorded,” confirm this argument. In 1940, 44 percent of the
Americans owned their own home, whereas in 1960, 62 percent of the people could call
themselves homeowners.168 With the value of their home as their basic economic security,
factors that could depress property values were anxiously avoided. Consequently, according
to historian Andre Wiese “psychological expression of racial fear” typically came to be
conflated with “more straightforward economic anxieties.” This conflation, more firmly then
before, rendered African Americans to be “forbidden neighbors.” Their presence would mean
that the neighbourhood came to be associated with “blackness,” leading to the inescapable
result of decreasing property values. Such was the established opinion of “white real estate
agents, appraisers, home builders, and lenders.”169
Accordingly, new segregating practices were established to provide the new white
middle class suburban residents with their demand for economic stability. One of the biggest
real estate entrepreneurs of the postwar era, William Levitt, did not hide his vision when he
said: “We can solve a housing problem, or we can try to solve a racial problem, but we cannot
combine the two.”170 Moreover, describing the practice of “redlining” gives a more detailed
view of the methods used for economically strengthened racial segregation. Discussing the
“redlining” policy of the FHA, Jackson argues that the standards used by the government to
166
Jackson, “Federal subsidy,” 428.
Cohen, A consumers’ republic, 3813.
168
Ibid., 2189.
169
Wiese, Places of their own, 98-99.
170
Bennett, When dreams came true, 296-297.
167
58 determine who would get his (or sometimes her) mortgage insured, were similar to the
standards of profit seeking private institutions. Based on the public papers of the FHA,
Jackson describes a practice that he refers to as “redlining.” As part of what the FHA called
their “unbiased professional estimate,” redlining was meant to grade the neighbourhood for
which a loan guarantee would, or would not, be issued. The other aspects that were rated were
the mortgagor and the property itself. In order to grade the different neighbourhoods, four
categories were established.
The First and best grade, i.e. green, areas were described as new, homogenous, and “in demand as
residential locations in good times or bad.” Homogeneous meant “Americans of the better class,”
and not Jewish, black, or immigrant sections. The Second security grade (blue) went to “still
desirable” areas that had “reached their peak,” but were expected to remain stable for many years.
The Third grade (yellow) or “C” neighborhoods were "definitely declining” because of age,
obsolescence, or change of style. “Having seen their better days,” such yellow-colored sections
were “within such a low price or rent range as to attract an undesirable element.” Finally, the
Fourth grade (red) or “hazardous” areas were those “in which the things taking place in C areas
have already happened.”171
In addition, Jackson remarks that more often than not, “the presence of one single non-white
family on any block” was enough reason to rate that neighbourhood with a “D”, making it
practically impossible to receive a mortgage for such, mostly urban, neighbourhoods.172
Not surprisingly then, postwar residential numbers show a large difference between
urban and suburban growth. Between 1947 and 1953 the general population increased 11
percent; during the same period the suburban population grew with 43 percent. During the
1950s, the cities within the twenty largest metropolitan areas would grow only .1 percent.173
Taken together, the 6.5 million Title III users were part of a broader move away from the
urban cores, and towards racially homogenous suburban communities. This development was
subsidized by federal funds, and executed according to market rules. The formation of these
suburban communities is however not the end of the story. While federal dollars encouraged
the suburban migration, afterwards, local/suburban governments would play an important
social and economic role.
171
Jackson, “Federal subsidy,” 431.
Ibid., 431-43.
173
Cohen, A consumers’ republic, 3513.
172
59 3.2.3 Local government
In his book Suburbia Wood identifies that after the war there was at least one “stubborn
holdout” against “the broad wave of mass culture, mass values, and mass society.” While
suburban living represented “modern character and behaviour,” according to Wood, “their
suburban governments [did] not.” Imitating the “isolated villages and hamlets in a rustic
countryside” when it came to political independence, these new suburbs pioneered in the field
of modern mass consumption. 174 In line with this argument, Frydl describes America’s
postwar approach to institutional power to be “unique and dialectical.” As discussed in the
first chapter of this thesis, national veteran politics shifted during the interbellum period from
an Athenian, community based approach, towards a Roman, nation based approach. This shift
towards federal caretaking of the returning veterans paradoxically also invoked the “receding
model of Athenian governance.”175 Beyond the effects of the GI Bill’s local implementation,
the revoking of this Athenian model would have continuous implications for the development
of postwar suburbs.
According to Cohen, the renewed attention for local governance came from suburban
residents determined to protect their prime financial investment, a home. As mentioned in the
previous paragraph, prewar suburbs were characterized by their upscale residents. The federal
subsidized democratization of the suburbs, however selective still, created more
“socioeconomic stratification” among them.176 To keep the different suburbs homogenous and
thus economically stable, local governments had a number of resources available to them.
Among these resources, the practice of zoning was perhaps most common and effective. This
practice can be described as a list of rules enforced by municipalities in order to govern
allowable construction and land use in a specific residential zone. The story of Eddie
Strickland, cited by Wiese, reflects and explains the workings of the postwar expansion of
municipal land-use regulations.
In august 1946 officials of Woodmere, Ohio, approached black Clevelander Eddie Stickland on
the site of a new home he was building in the suburb and arrested him for the “illegal use of used
lumber.” Strickland, who had been at work on the house since February, had completed the first
story when the village constable intervened, objecting ostensibly to Strickland’s use of secondhand
boards for subflooring material. Threatened not only with arrest but with the loss of his labor and
investment. […] After an eighteen-month court battle, Woodmere officials triumphed, blocking
174
Wood, Suburbia, 9.
Frydl, The GI Bill, 70 .
176
Cohen, A consumers’ republic, 4150.
175
60 Strickland and several other black property owners from building or completing homes on land
they owned in the suburb.177
According to Wiese, it was not until after that the war that African Americans started to move
to Woodmere, Ohio. When about fifteen African American families had established
themselves in Woodmere by 1944, a “wave of unexplained fires” which damaged only their
homes was the first clear indication that their presence was not appreciated. While racial
discriminating expressions were by no means a new phenomenon in postwar America, the
effectiveness and scale by which local governments would reinforce the purposes of such
expressions was.
To take the example of Woodmere, the municipal county passed a zoning code in
1946 aimed to restrict do-it-yourself builders, of which the outright majority were African
Americans. First, the code set a one-year maximum for the construction of new homes.
Second, it forbade the builder to secede work for any period longer than forty-eight hours.
Third, the code prohibited the use of second-hand building materials not long after the war
effort had encouraged people to use them. Finally, it required builders to “post a $1,000 bond
to ensure compliance.” Upheld by a Cleveland judge in 1948, the zoning code effectively
“cleansed” the suburb of Woodmere. As a “national trend” rather than an isolated event,
Strickland’s case indicates how zoning was used as a racist, and economic application.178
Barring the ethical objections attached to the desired homogenous product of zoning,
another important practical problem occurred with respect to a specific zoning variant called
“upzoning”. The strategy of “upzoning” was meant to repress costs of public services like
education. Explaining the workings of this strategy, Cohen states:
To keep down both the demand for local services and the property taxes needed to fund them. The
most prevalent kind of postwar zoning became “upzoning,” or “large lot zoning,” a strategy of
requiring substantial plots for home construction to preserve high property values but also to cap a
municipality's population and thereby control the demand and cost of local services. If one house
was built on a large lot instead of three or four on smaller ones, fewer children would enroll in
school, fewer residents would need police and fire protection, and fewer cars would wear down
local roads.179
177
Wiese, Places of their own, 94-95.
Ibid., 96-97; For more on zoning as a racist and economic application see also: Matthew D. Lassiter, The
silent majority: Suburban politics in the sunbelt south, (Princeton: Princeton University Press, 2006).
179
Cohen, A consumers’ republic, 4150. 178
61 According to Cohen the practice of “upzoning” contributed to a situation in which the
homogenously wealthier and less densely settled suburbs paid less taxes to support better
public services than in poorer suburbs. Contributing to the same pattern, the regional
shopping centres that arose after the war, favoured affluent rather than poor regions to settle.
The taxes that they paid to the municipalities were sometimes as high as 43 percent of a
municipal’s total revenue.180
All in all, together with the increase of federal dollars spend on veteran caretaking
(mostly for the purpose of stabilizing the national economy), a parallel development sought to
enhance the influence of the Athenian community based model of governance. Pushed by
established discriminatory racial beliefs and a new economic reality, municipal governments
increasingly used what was in their power to accomplish/preserve racial homogeneity and
thereto deemed related economic stability, in their suburbs.
3.3 Title II: Education
This paragraph will start with some numbers which indicate the scale of the GI Bill’s
education provision. First, from the more than 15 million eligible veterans, 7.8 million made
use of Title II. This number can be divided into 2.2 million veterans attending college and 5.6
million participating in vocational training programs and on-the-job training. 181 Second,
assuring the Committee on World War Veterans legislation that the total amount of
applications would not exceed 2 million, VA administrator Hines, and with him many others,
greatly underestimated the eventual popularity of the provision.182 Finally, and perhaps most
importantly, the total number of enrolments at higher education institutions grew from less
than 1.5 million in 1940 to a little over 8 million in 1970. During this period, the GI Bill’s
peak year was 1947, with a little over 1 million veterans enrolling in colleges and universities,
or 48 percent the total enrolment. By 1950 this number had already dropped to a little less
than six hundred thousand, which equals a quarter of all students at institutions of higher
education.183
This last set of numbers clearly indicates that the upsurge in higher education
enrolments that started after World War II would outlive the contribution of the GI Bill’s
education title. To explain these numbers, historians have pointed to the GI Bill as the
180
Cohen, A consumers’ republic, 4157, 4766.
Mettler, Soldiers to citizens, 351.
182
Frydl, The GI Bill, 189.
183
Dongbin, Kim, and John L. Rury, “The changing profile of college access: The Truman Commission and
enrollment patterns in the postwar era,” (History of Education Quarterly 47-3, 2007), 304-306.
181
62 principal factor that changed the reputation of colleges and universities as elite institutions.184
The main question for these historians is: did the GI Bill introduce “new” students to
America’s colleges and universities? The consensus among GI Bill historians is that about 20
percent of the Title II users would not have gone to college or university if it were not for the
federal government to support them.185 While significant, a 10 percent increase of new
students made possible by the GI Bill during the peak year of 1947 is not likely to have meant
al the difference. Instead of focusing on the question of how many “new” students Title II has
supplied, this paragraph will rather focus on the broader changes in federal funding, market
rules and local governance which together can be described as the rise of the Consumers’
Republic. The GI Bill’s position with respect to these broader changes should nonetheless be
described as both product and key producer.
The architects of the GI Bill had incorporated the education title primarily as a means
to unburden the employment market after the war. However, success demanded that what
started out as a question of transition would soon turn into a debate about the future of higher
education. Next to Title II of the GI Bill historians concerned with the postwar development
of America’s system for higher education have pointed out the President’s Commission on
Higher Education as an important factor for explaining what they refer to as, “the third phase
in the history of the American academy.”186 Established in 1946, this commission, popularly
known as the Truman Commission, represented one of two competing visions in the debate
over what role higher education should play in American society. In short the
recommendations of this commission were aimed to reform the higher education system at the
expense of the federal government to be expansive and inclusive. Represented by the
Rockefeller group, the other end of the spectrum argued that this way of reform would lead
higher education too much away from its liberal art character. Supporter of the Rockefeller
group’s vision and President of the University of Chicago, Maynard Hutchins believed that an
education program should come “from the careful contemplation of university mission” and
not “at the behest of government and commercial interests.”187
As the Truman Commission had hoped the figures presented at the beginning of this
paragraph indicate that the system of higher education would turn to be more expansive and,
so it was thought, necessarily more inclusive during the postwar era. In an effort to examine
184
Bennett, When dreams came true, 238; Altschuler, The GI Bill, 87.
William G. Bowen, Martin A. Kurzweil, and Eugene M. Tobin. Equity and excellence: In American higher
education, (Charlottesville: University of Virginia Press, 2005), 31; Frydl, The GI Bill, 306.
186
Stephen C. Wilhite, and Paula T. Silver, “A false dichotomy for higher education: Educating citizens vs.
educating technicians,” (National Civic Review 92-2, 2005), 47.
187
Frydl, The GI Bill, 346.
185
63 the workings of this system and the position of the GI Bill within it, the following three
paragraphs will discuss its different parts.
3.3.1 Federal Funding
At first Title II was a federal answer formulated to the question of how to assimilate the
veteran into a stable economic society. However, reaching many more veterans than was
expected the education title became more than just a means for economic stabilization. As
noted above, the success of this education title would force new questions to be relevant. In
terms of government, the most important question would be: what role should the federal
government play in the future of America’s higher education? Perhaps not surprisingly, the
answer to this question would have great resemblance with the way the GI Bill was
constructed to enforce economic stabilization. Accordingly, the largely adopted vision of the
Truman Commission can be called Keynesian because it favoured “working on problems of
consumption,” rather than, “confronting problems of production.”188 What should count as the
real added value of the GI Bill then is not the amount of veterans that enrolled into higher
education, but the exemplar function of how a Keynesian approach to education could
succeed in attracting many more new students than was expected, making colleges and
universities, at least apparently, more inclusive and democratic.
The six-volume report published by the Truman Commission at the end of 1947 and the
beginning of 1948 is called Higher Education for American Democracy and carries all the
commission’s advices. One of the basic assumptions made in this report dealt with the role of
the federal government.
There is but one source capable of providing the funds needed to avoid a deficit and to balance the
operating budget for higher education: the Federal Government. Only if the Federal Government
becomes a strong, permanent partner in the system of financing higher education can the needs of
a greatly expanded enrolment be provided.189
Together with their emphasis on “strong” and “permanent” federal financial support, the
Truman Commission is clear about their belief in keeping federal power from interfering with
state power over educational programs. Accordingly, the chairman of the commission,
188
Frydl, The GI Bill, 341.
United States, President's Commission on Higher Education, Higher education for American democracy
(1947-1948), vol. 5, 43, (cited in) John D. Russell, “Basic conclusions and recommendations of the President's
Commission on Higher Education.” Journal of Educational Sociology 22-8, 1949: 506.
189
64 educator George Zook, believed that federal money “should come with no strings, [that
means] not even earmarks to support certain kinds of education.” Still, federal funding was
needed in order to redistribute the educational costs among states, because poorer states were
carrying the heaviest education load.190
Moreover, the Truman Commission did not stop by arguing that federal funds were
needed to redistribute the education load among states. Most of the program’s funds would
not be allocated to schools, but rather to students by means of federal scholarships. The
commission presented the $672 million that was needed to realize their program not as a cost,
but rather as an investment.
It is an investment in free men. It is an investment in social welfare, better living standards, better
health, and less crime. It is an investment in higher production, increased income, and greater
efficiency in agriculture, industry, and government. […] It is an investment in human talent, better
human relation-ships, democracy, and peace.191
The rhetoric used here fits into the purchaser as citizen perspective. It is argued that investing
in the demand side of education, leads to “higher production, increased income,” and
ultimately, “better human relationships, democracy, and peace.”
Previously adopted by the GI Bill, the Truman Commission came to share the same
perspective. Next to the fact that the GI Bill had sent 2.2 million veterans to higher education,
and the broadly supported argument that Title II had helped to democratize the idea of higher
education, it did more. The educational title of the GI Bill applied a consumer-orientated
perspective to the relation between government and higher education. A perspective that
would then be taken over by the influential Truman Commission, to detach it from its veteran
aspect, and establish it for many more years to come. While the above-mentioned figures
indicate that from the inception of this perspective and on, higher education enrolments have
greatly increased, two complicating issues still have to be addressed.
First of all, as Frydl remarks in respect to both the housing and education titles of the GI
Bill, “the market frame obscures the mighty hand of the government in the supply of these
goods.” The argument was that government intervention via the GI Bill was mostly restricted
to financially stimulating the consumer side of the market. The “free” market, however, could
not respond quickly enough to the overwhelming success of both the housing and education
titles. In order to compensate for this lack, “tremendous supplementary appropriations bills”
190
Frydl, The GI Bill, 338-339.
US, Higher education for American democracy, vol. 5, 26-27, (cited in) Russell, “Basic conclusions and
recommendations,” 507-508. 191
65 were allocated to the supply side of the economy in order to make sure that these new “rights”
were realizable.192 Second, as will be discussed below, the assumption that the proposed
combination of federal funds with local implementation would lead to a more equal and
inclusive system of higher education, is at best partly true.
3.3.2 Market Rules
Due to the benefits provided by the education title of the bill, the GI, who was considered to
be an average American, received much public attention when he entered the perceived to be
elite institutions of higher education. Although most of these ex-servicemen would have gone
to college anyway, the image of the “veteran-every-man” worked to “democratize the image
of higher education to a certain degree.” To backup this claim, historian Daniel Clark
analysed the use of colleges and universities images for marketing purposes, before and after
World War II. Considering the products that were advertised, the media that carried these
advertisements, and the messages that were transmitted, Clark concludes that the postwar
cultural image of higher education “invited a broader segment of the population to identify
themselves circulating within elite, sophisticated, collegiate surroundings.”193
This paradoxical development of retaining the elite notion of higher education while
broadening the assumption “of who could benefit from a college education,” was tenable
because something was holding the two together. After the war higher education increasingly
became a means of “defining oneself in a corporate world and a consumer culture.”194 Or, as
Frydl puts it, college and university education came “to represent ‘ends’ in and of
themselves.”195 Accordingly, to a great extent the expansion of the cultural image of higher
education proceeded along market rules, favouring some potential consumers over other.
Accompanying this image shift of higher education towards commerce and a matching
perception of equality, is a more practical shift producing a change in the educational
programs of colleges and universities.
As many historians have noted, the postwar era was a defining moment for America’s
higher education. Together with growing enrolment numbers, colleges and especially
universities came to rethink the approach of their educational programs. This rethinking
basically occurred along two opposing ideals. On the one side the Rockefeller group took a
192
Frydl, The GI Bill, 265.
Daniel A. Clark, “The two Joes meet. Joe College, Joe Veteran: The G.I. Bill, college education, and postwar
American culture,” (History of Education Quarterly 38-2, 1998), 174, 177, 180.
194
Clark, “The two Joes meet,” 167-168, 175.
195
Frydl, The GI Bill, 264.
193
66 conservative approach. This group consisted of what historian Richard Freeland refers to as
“the academic establishment.” Two of its prominent members were the President of the
University of Chicago, Robert M. Hutchins, and President of Harvard University, James B.
Conant. Both coming from a liberal arts background, Hutchins and Conant were champions of
what was presented as the concept of “general education.”196 The report of the Havard
Committee on General Education gives a good indication of what this concept came to mean.
Published in 1945 and often referred to as the “Redbook” because of the cover’s colour,
Freeland summarizes its main argument:
[G]eneral education should “look first of all to [the student’s] life as a responsible human being
and citizen.” Education must be concerned not only with imparting knowledge and skills but also
with producing the “good man” and the “good citizen” by developing values, wisdom, a sense of
cultural tradition, and the capacity for emotional and gregarious life.197
The emphasis of educators like Hutchins and Conant on the civic mission of higher education
was an effort to come up with a solution for the problem they saw developing, due to the GI
Bill. According to Frydl, Hutchins famously denounced the GI Bill “as only an acceleration of
the already deplorable debasing of the liberal arts education” by referring to the colleges of
the near future as “educational hobo jungles.”198 If the federal government was one driving
force behind this educational decline, commercialism was believed to be the other.
Accordingly, writing for The Journal of Higher Education in 1953, educator Martin Shockley
argued that “aggressive forces of commercialism” worked as “factory smokestacks” on a
student “who needs breathe clean air.” In other words, commercialism worked to “distract and
debase” the traditional values of higher education. Consequently, campuses would evolve into
“supply depots for industry and business,” instead of places for the development of students
as responsible human beings.199
On the other side, the Truman Commission, headed by George Zook, lacked
representatives from “the arts and sciences of the elite professions.” Instead, the commission
consisted of representatives of what can be called the progressive education movement. Most
of the commissioners were active in the occupational and technical fields of higher education.
According to Freeland, one recommendation of the commission in particular caused most of
196
Richard M. Freeland, “The world transformed: A golden age for American Universities, 1945-1970,”
(Published in) The history of higher education, (eds.) Lester F. Goodchild, Harold S. Wechsler, (Old Tappan:
Pearson Custom Publishing, 1997), 590.
197
Freeland, “The world transformed,” 593.
198
Frydl, The GI Bill, 344.
199
Martin S. Shockley, “The extra-curriculum,” (The Journal of Higher Education 24-9, 1953), 453-454.
67 the controversy. The Truman Commission advised that the capacity of higher education
should be enlarged so that, “by 1960, 49 percent of the country’s eighteen- to twenty-oneyear-olds would receive at least two years of college, and 32 percent would attend for a full
four years.” While less then 16 percent received higher education in 1940, the commission
justified this high percentage by arguing that it followed recent trends and responded to needs
exposed by the GI Bill’s educational program.200
Historians have pointed to the needs of veterans in higher education as more practically
orientated then their non-veteran student peers. With their education intermittent exservicemen were older by average. Moreover, the war had a maturing affect on these men and
women. Back in America, a good part of the veterans sought to establish a family, and related
thereto a home of their own. With their intention to realize their American Dream soon after
the war, the civic mission offered by traditional institutions of higher education did not have
the highest priority. Instead, having proofed its usefulness almost every day during the war,
the most popular studies among veterans were related to engineering. Accordingly, Frydl
concludes that perhaps the most important “campus legacy” of the GI Bill is that “veterans as
mature and vocationally directed worked a kind of force on the content of education.”201
Due to the presence of the veterans under the GI Bill, backed up with political
initiatives to include non-veterans by the Truman Commission, the meritocratic liberal arts
segment of higher education became less influential. The inclusivity of the more vocationaland commercial-orientated perspective that came to replace this vision would nonetheless not
be as democratic as some people hoped/claimed it to be.
3.3.3 Local Government
Starting with the comment that “[t]he U.S. Constitution does not mention education,” political
scientist Patrick McGuinn implies that traditionally education has not been part of the
responsibilities of the federal government. According to McGuinn, this tradition was not
challenged until the 1950s. However, while federal intervention towards education
policymaking developed during and after the 1950s, it would continue to be primarily a
responsibility of state- and local governments.202 Moreover, one might argue that more than a
responsibility it was the state- and local municipal’s right to govern over the important
200
Freeland, “The world transformed,” 590, 591.
Frydl, The GI Bill, 307, 331.
202
Patrick J. McGuinn, No child left behind and the transformation of federal education policy 1965-2005,
(Kansas: University Press of Kansas, 2006), 25.
201
68 educational public services. Between the two levels of government, Cohen argues, states
traditionally granted local governments the authority to provide and pay for their own
schools.203 Following this tradition Title II described the role of the federal government only
as a supplier of financial resources and not as a policymaker. The political economy of
America’s system of higher education itself would not change then, because the government
only offered to pay for the student’s tuition fee. Still, as described above, the role of the
federal government as finance supplier, stimulated the commercial expansion of higher
education in America raising its total enrolment figure from 1.5 million in 1940, to more then
8 million in 1970. These numbers however, do not tell the whole story. While the federally
paid tuition fees, together with the commercialization of the idea and practice of higher
education, broadened America’s middle class, local implementation meant that others were
excluded perhaps more forcefully then before.
The importance of local authority over education, for implementing local sentiments in
favour of segregation, has been discussed in the previous chapter. According to Congressman
Rankin separate schools were needed in order to maintain peace and order. In his eyes,
intervention by the federal government almost always meant an attempt to upset this order.
For the same, or less politically correct reasons, after World War II, America as a whole was
still characterized by segregationist principles. The institutions of higher education were no
exception to these principles so that, for a good part, the local implementation of Title II
worked along racially divided lines. The result was that many African Americans could not
take full or even any advantage of the opportunities Title II brought. This combination of the
tradition of local educational authority and established segregationist sympathies is probably
the most important factor for explaining the (limited democratizing) effects of Title II.
Moreover, this combination has probably received the most attention from scholars concerned
with educational benefits of the bill. Referring to these scholars for further substantiation of
this argument, one last complementary, and less often recognized argument deserves attention
from scholars interested in the GI Bill and/or America’s postwar educational system.204
While directly connected to the housing title of the GI Bill, this argument only
indirectly relates to education. Still, Cohen’s contribution to the role of local governments’ in
postwar higher education is important when she states that the quality of education in
particular, was determined by local circumstances. The traditional educational authority of
Cohen, A consumers’ republic, 4338. See: Altschuler, The GI Bill, 117-148; Frydl, The GI Bill, 303-352; Hilary Herbold, “Never a Level Playing
Field: Blacks and the GI Bill,” (The Journal of Blacks in Higher Education 3-6, 1995).
203
204
69 local governments resulted in more than the preservation of segregated schools when it
became part of the postwar mass suburban culture. While also credited as an important
postwar social-economic mobilizer, higher education, like other public services, was financed
through a structure that depended on local tax revenues. In an America that was increasingly
characterized by homogeneous suburbs each with its own race and/or class, this meant that
funding for higher education in wealthier (white) communities often far exceeded the funds
allocated to institutions for higher education in poorer (non-white) communities.205
In its most extreme form, this system of local education funding reigned during the
period that most veterans took advantage of Title II. The educational reformers who
challenged it had to wait until the 1954 Brown v. Board of Education decision to receive
official recognition for their efforts. This legal decision stated that segregated schools were
inherently unequal. Reviewing this decision Professor of Law Molly S. McUsic stated it was
important “as an articulation of principle,” but far less significant “as a tool of integration.”
Writing as recently as 2004 she noted: “American children today attend increasingly
segregated schools.” 206 During the fifty years between the Brown decision and McUsic
comments, the responsibility for school funding have increasingly been transferred to the
state- and the federal government. Still, according to Cohen the contribution of localities is
not insignificant. More importantly, Cohen argues growing suburban segregation to have
rendered the principal behind the Brown decision “increasingly meaningless.” The need to
separate students applying at a particular school becomes less relevant when the racial
homogenous suburbs of the Consumers’ Republic effectively worked as pre-selectors.207
205
Cohen, A consumers’ republic, 4338.
Molly S. McUsic, “The future of Brown v. Board of Education: Economic integration of the public schools,”
(Harvard Law Review 117, 2004), 1334.
207
Cohen, A consumers’ republic, 4464, 4502. 206
70 Conclusion
Speaking about his Post-9/11 GI Bill in Fairfax, Virginia on August 3, 2009, President Obama
argued that the new version was “driven by the same simple logic that drove the first GI Bill.”
Accordingly, with respect to education, Obama summarized this logic with the catchphrase:
“You pick the school; we'll help pick up the bill.” As simple as the approach was, according
to Obama, “it produced […] the backbone of the largest middle class in history.”208 While
indicative of how popular perception reflects on the GI Bill, scholars nonetheless
demonstrated that both the intentions and the operations of the bill did not fit the simplicity of
these assumptions. Most prominently, historians concerned with the GI Bill have argued that
established discriminating beliefs with respect to class, gender and race drew heavily on the
bill’s history from start to finish. Another parallel history, referred to by Cohen as the
Consumers’ Republic, has perhaps similar significance, but did not find its way into the GI
Bill debate yet. This thesis consists of an effort to correct this lack, without losing sight of the
consumers’ history’s explanatory boundaries.
Looking at the history of veterans’ affairs, an important first remark is to conclude that
before the GI Bill’s installation, extensive attention for veteran’s issues by the federal
government was not obvious. The World War I veterans experienced the treatment of
successive governments that held on to a traditional belief in the citizen’s duty to participate
in the army. This traditional belief stood opposed to the idea that the federal government
owed the men and women who fought under its name. Two separated, but at times mixed
developments competed together to change the attitude of the federal government in this area.
First, World War I veterans and their representative organizations morally challenged what
they thought was a lack of recognition. With the 1932 Bonus March as its peak, the former
doughboys ultimately conducted a successful campaign claiming that ex-servicemen ought to
be treated ‘specially’ by the federal government since that same government had treated them
specially when they were sent to war.
Second, moral reasoning was not the only, and it is argued probably not even the
primary reason why expansive veteran benefits were rejected. It is clear that Presidents as
Coolidge and Hoover did not believe that federally funded stimulation of the consumer
(veteran) side of the market would help America out of its economic depression. Moreover,
they rejected Bonus legislation as economically irresponsible. Meanwhile, proponents argued
208
Barack Obama, “Remarks on the Post-9/11 GI Bill in Fairfax, Virginia,” (August 3, 2009, via:
presidency.ucsb.edu).
71 that the veterans’ Bonus would work as a positive economic stimulus against the Depression.
While the important political shift in favour of such an approach seemed imminent later
during Roosevelt’s second New Deal period, historians have nonetheless argued that a truly
Keynesian economical approach was not implemented before World War II.
The consumer politics that had developed over the previous decades came to stand at
the centre of political and public attention for the first time, during the war. On the one side,
the federal government effectively worked as one big consumer filling out expansive orders to
the commercial (war) industry. The deliberate choice to outsource the war production to
commercial enterprises worked as a Keynesian stimulant to the depression-ridden economy,
pulling the nation out of the Depression. The effectiveness of the war economy was made
possible by the sacrifices that were made in the civilian economy. Next to the fact that the
federal government rationed consumer products, a growing consciousness developed among
American citizens connecting their ability to consume consciously with the ideology of the
war. For many, consuming became to mean more than fulfilling one’s own needs. Sparing
recourses for the war-economy was to take into account the nation’s war effort against
Fascism and Nazism.
It is argued that the war experience ushered the continued importance of a consumerorientated political economy. When the war was nearing its end, the heretofore related but
separate Keynesian and civic perspectives on consumer politics generally fused. Indicative of
this development is the postwar American Dream. To act on the broad-based desire for a
suburban home stuffed with new consumer products for instance, was believed to stimulate
the economy and increase overall prosperity and equality. Following this reasoning, it is
argued that those who were politically responsible for the sixteen million veterans returning to
society could now count on enough support when they planned to invest in the purchasing
power of the World War II veterans.
Still, it is important to acknowledge that the specific ideas and intentions of
individuals concerned with the creation of the GI Bill matters as well. The decisions that
initially followed from the co-operation between the veteran representative organizations and
Congress’ veterans committees over what benefits had to be included, received
uncontroversial bipartisan endorsement. However, the decisions over matters of
implementation did not. In a political discussion where liberals and conservatives stood
opposed to each other, the ex- or inclusion of civilians, and a decentralized or federalized
structure for allocating the different benefits became the two most important issues. Finally,
the GI Bill that excluded non-veterans and empowered local and state institutions with the
72 responsibility of implementation gained so much political momentum that liberal alternatives
were left with no chance.
With the GI Bill in place after June 22, 1944, it took a few more years before many
veterans started using the bill. Eventually the housing and education titles of the bill would
turn out to be the bill’s most influential features. The workings of both titles have been
described on the basis of three different levels, that is to say: federal funding, market rules and
local government. First, federal funding under the GI Bill for both housing and education has
provided for millions of veterans the access to the required financial means. Some historians
have pointed to the significance of these absolute numbers. Others have established an
argument that claims that the GI Bill democratized the idea of higher education and
homeownership. Here, the emphasis is on the GI Bill as a positive example of how
government intervention could reach economic and arguably democratic success in the areas
of housing and education. The significance of the GI Bill is then more broadly the revival of
older government programs (FHA), and the establishment of new federal initiatives (The
Truman Commission) that worked according to the same consumer-orientated political
economy.
Second, stimulated by federal funding, after the war (suburban) homeownership and
higher education became to represent a truly middle class ideal. Access was no longer defined
as a matter of elitism. Instead the middle class could obtain a sense of elitism via
homeownership and higher education like any other commodity. This meant that consumers
were bound to market rules more than they were to the rules of elitism. The GI Bill’s
decentralized structure of implementation made these market rules an important part of its
workings. With respect to housing, practices of red lining have indicated how racial prejudice
was strengthened by a new sense of commercial interest. Moreover, for higher education, the
introduction of veterans meant that market rules got a hold on the educational programs of
colleges and universities. Accordingly, a postwar debate concerned with the ratio of liberal
arts and vocational orientated education let many educators to act on the belief that a more
practical, or one might say commercial, approach was desirable.
Third, the execution of market rules by public and private institutions under the GI
Bill was not only federally financed, but also locally governed. With the increased popularity
of suburbs, the popularity and effectiveness of a community based model of governance grew
accordingly. With economic prosperity as their aim, local governments increasingly applied
what fell within their means to accomplish/preserve homogeneity of inhabitants. This cause
was served for instance, by the practice of ‘upzoning’. By adding restrictions to the
73 residencies that were allowed in a certain district, local government influenced the
composition of inhabitants in the respective communities. One critical result that was
achieved this way had to do with the quality and costs of locally provided public services.
Ultimately, inhabitants of wealthier and less densely settled suburbs were able to use betterfinanced publics services while paying less taxes for them. When it is observed that higher
education, as a means of upward mobility, is also part of this local public service structure,
the full significance of local government becomes clear.
The effects of particular zoning practices preformed by local governments stand
perhaps the farthest away from the ‘magic’ of government legislation with which this thesis
started. At the same time, the purpose of this thesis was to bring the GI Bill debate a step
closer to the bill’s ‘real’ history. Or, in any case, to a more balanced perspective on both the
GI Bill’s creation, and its workings, by adding to the debate, the history of how veterans
became consumers.
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