Should Hoover have just paid the Bonus Army? (Washington, economy, tanks)

[YuMart]

I know they were supposed to get it in '45 but given the dire circumstances why not just go ahead and show some good will by giving in? Certainly better than having tanks and soldiers march down pennsylvania avenue beating/shooting them.

[maf763]

Politically speaking, he should have tried it. The optics you describe certainly didn't help his re-election chances. Even a down payment of sorts would have helped. But he may have been too far gone politically anyway.

Interestingly, payments weren't authorized until 1936, a re-election year for Roosevelt, but it was passed over Roosevelt's veto. So Hoover wasn't alone in his position.

[MinivanDriver]

Originally Posted by YuMart

I know they were supposed to get it in '45 but given the dire circumstances why not just go ahead and show some good will by giving in? Certainly better than having tanks and soldiers march down pennsylvania avenue beating/shooting them.

At that point, nothing was going to help Hoover. When it came to the economy, the man took a medium-sized brush fire and, through his policies and legislation, essentially dumped twenty gallons of gasoline on it.

[mensaguy]

With the country in the midst of the Great Depression, where do you think the money would have come from to pay the bonuses?

[markg91359]

America could have greatly benefited during the early years of the Depression from virtually any and all deficit spending. Paying veterans their bonus early would have been very sensible for a start.

[Hulsker 1856]

Originally Posted by mensaguy

With the country in the midst of the Great Depression, where do you think the money would have come from to pay the bonuses?

The bonuses being sought were established by law in 1924, with the vast majority coming due in 1945.

However, in 1936 Congress passed the Bonus Act, which replaced the award certificates from the 1924 law with treasury bonds which were immediately redeemable - and the vast majority of veterans who received the bonds promptly redeemed them. The depression was still ongoing in 1936.

While it is true that federal receipts were much higher in 1936 than they had been in 1932 (the year of the Bonus Army), it is also true that the 1936 deficit was larger as a percentage of GDP than in 1932. So it certainly could have been paid in 1932 - and should have, as it was a ready-made stimulus opportunity.

[djmilf]

Originally Posted by Hulsker 1856

The bonuses being sought were established by law in 1924, with the vast majority coming due in 1945.

However, in 1936 Congress passed the Bonus Act, which replaced the award certificates from the 1924 law with treasury bonds which were immediately redeemable - and the vast majority of veterans who received the bonds promptly redeemed them. The depression was still ongoing in 1936.

Note what Hulsker's post illustrates - President Hoover couldn't have just paid the Bonus Army because only Congress can decide where to spend federal money. Buying off the former soldiers occupying city spaces in DC wasn't possible for any President.

The Bonus Army "re-occupied" Washington when Franklin Roosevelt was president. Roosevelt's response to the protesters was to accommodate them with a campsite in Virginia, to provide them with three free meals per day, and to sent officials, including his own wife, to converse with the members of the Bonus Army. While Roosevelt's people commiserated with the protesters, the most the Bonus Army got from him were campsites, food, sympathetic ears, speeches from Eleanor Roosevelt and promises of positions in the newly created Civilian Conservation Corps. FDR issued an executive order that waived age and single-marriage status requirements for the CCC so that the WW1 veterans could immediately sign up with the federal program.

I love this quote from a Bonus Army protester (shamelessly lifted from the Wikipedia article): "Hoover sent the army, Roosevelt sent his wife".

It's also interesting to note that Congress in 1936 passed a law over FDR's veto to immediately pay the bonus to the veterans, overriding the original legislation that would have paid out the bonus in 1945.