he 1932 march of the Bonus Army has largely been forgotten by the public. The reason for this collective amnesia is perhaps easy to understand. Details about why it started and how it ended do not fit in well with how we Americans think of themselves and our country. Moreover, a few of the people of we think of as heroes today played less than heroic roles in the affair.
The origins of the march began much earlier than 1932. They can be traced back to the days after the Armistice of the First World War. Returning veterans came home and were dismayed to learn of the differences between their wages compared to those in the civilian branch of the selective service. State-side draftees made quite a bit more than those that had actually fought and risked their lives. The war veterans demanded that some kind of compensations be paid for their lost income. During those boom years, Congress tended to agree.
After heated debate, Congress passed a bonus, but President Warren Harding vetoed it. In May 1924, Congress again passed a bonus, and this time overrode the veto of President Calvin Coolidge. The payment — which provided veterans $1.25 per day for service overseas and $1 per day for domestic service — was deferred by the law until 1945.
The eligible veterans were issued "adjusted certificates," payment equal to the promised rate including compound interest. The only problem is that these certificates would be worthless until they reached maturity in 1945. Then the Depression struck and veterans and their families realized that, without the bonus now, many families would not survive until 1945.
Between 1929 and 1932, the national GDP had shrunk by 38%. The average rate of unemployment went for 3.2% in 1929 to a staggering 24.1% in 1932. (All through Roosevelt's first term, the unemployment rate never went below 20%.) Prosperity followed by ruin and despair caused a spike in suicide rates. By any measure, this was a national emergency and help was needed now, not thirteen years in the future.
To Hoover, the answer seemed clear. This was not the time for increased government spending. Austerity- not deficit spending- must be the way forward, he believed. A balanced budget was an idea that he felt sure would guarantee his re-election in November of 1932. As Martin Fasusold writes in his book The Hoover Presidency: A Reappraisal:
Hoover never relented in his quest for a balanced budget. It had become a potent weapon in his political arsenal. With it he could courageously veto any public-works bill not to his liking and expect to benefit politically by standing for an economic princple against Congress' political expedience.
In some ways Hoover became trapped by his own rigid principals.
He considered pleas for legislative remedial action as ideological or political hostility, rather than acknowledging their merit.
The very idea of adding the "unnecessary expense" of a war bonus went against the austerity that Hoover had been preaching. His Treasury Secretary Mellon, the chief advisor on the economy, advised him that nothing be done. Hoover's confidence that the markets could take care of themselves without government interference was proving to be a disaster for the country.
If Hoover had not helped his public image by advocating austerity as the solution, he further damaged his credibility by initiating the Reconstruction Finance Corporation which attempted to ressurect the economy by extending loans to large corporations. At the same time, he was resisting direct assistance to unemployed and distressed.
This brings us to the early summer of 1932, with Hoover at odds with Congress about the best way to fix the nation's problems and people were growing restless by inaction. Under this backdrop, the march of the Bonus Army was formed.
I found an interesting this three-part video series about the Bonus March and thought you might find it interesting.
Yesterday marked the eightieth anniversary of these events and yet hardly a word was mentioned in the mainstream media, despite the fact that Bonus Army's march-and its aftermath- played a major part in Hoover's failed bid for re-election.
History often replays itself, or at least elements are replayed. Comparisons, whether legitimate or not, have been drawn between the Bonus Army marches and the Occupy movement in our times. Certainly how authorities handled both demonstrations were similar. The end result of the Bonus March - the GI Bill- ultimately contributed to an unprecedented expansion of the American middle class and an era of post-war prosperity.
The end result of the Occupy movement has yet to be written.
Please feel free to link this post on other comment sections and on Facebook.