Home » “Once I built a railroad” – The Bonus Army and the On-to Ottawa Trek

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“Once I built a railroad” – The Bonus Army and the On-to Ottawa Trek — 31 Comments

  1. One thing leaders have learned is if you throw enough money at the citizens you can pacify enough of them to keep the protests in check and that is what we have seen the last two years.

  2. No matter how justified the grievance, power sees mass protest as a threat and knows only one response; force.

    Only when convinced that force will bring about its demise will power seek appeasement, while planning to betray their agreement. Just as FDR tried to veto paying the vets what was lawfully owed them. Rhetorical question; when Congress overrode FDR’s veto did the compensation paid to the vets include the interest that had accrued over the past 18 years?

    PS MacArthur and Patton’s actions speak ill of them. But… they were just following orders, right?

  3. Geoffrey Britain:

    No, that’s not the way the bill originally granting the bonuses worked. The original bill included a delay in payment till 1945. The vets wanted a hardship advance, and FDR vetoed a new bill granting them the advance. So no interest was necessary.

  4. This verse is particularly apt given our current class warfare of the laptop class against the working class:

    Once I built a railroad
    I made it run
    Made it race against time
    Once I built a railroad
    Now it’s done
    Hey, buddy, can you spare a dime.

  5. We will have to wait to see what the final outcome is. I don’t think the interval will be very pretty.

  6. Also, about this time, The Businessmen’s Coup was afoot.
    General Smedley Butler (War is a Racket) was being courted to lead the veterans in a coup against Roosevelt.
    Except he smelled a rat and exposed them.
    One of the interesting things about this was one of the businessmen telling Butler that he’d spend half his millions to protect the other half.
    I think there is some of that going on today.

  7. neo,

    “The original bill included a delay in payment till 1945.”

    I stand corrected on that point. Though a bonus with a delay of 27 years is an insult to men who put their lives on the line for their country. Many might well fail to live to see 1945…

  8. We can learn a couple things from our current political class:

    The first is the brittle, arrogant and defensive response of our ruling class to any kind of political opposition nowadays. What kind of mind turns parents complaining at a school-board meeting into some sort of “domestic terrorism” threat? (The same kind that turns peacefully protesting truckers into “insurrectionists,” I suppose.)

    In what previous age of Canadian and American history would secret targeting and federal investigations of people engaging in a bedrock institution of participatory democracy have been seen as appropriate? Who calls people racist for wanting their kids to learn?

    In this age, alas, those things happen, and the people doing them — the people who are supposed to be our society’s leaders, the best and the brightest, the level-headed non-extremists of the establishment — are frankly more than a little bit crazy.

    No sane person would respond this way, and yet respond this way they do, over and over again. (And every time they do, they label their opponents racist, sexist, homophobic, transphobic, Islamophobic, etc., wielding those adjectives like magic curse words.

  9. Geoffrey Britain:

    The long delay in payment for the original bonus bill was one of the things the Bonus Marchers were upset about, especially once the Depression intervened (the bill had been passed in 1924, I believe). I think the delay had something to do with not wanting to raise taxes to pay for it. There’s a lot of info about that at the Wiki link.

  10. neo, Ann in LA:

    Thanks for the references to “Buddy, Can You Spare a Dime.” It’s been covered by a ton of people from Al Jolson to Bing Crosby to Judy Collins to Tiny Tim and justly so.

    Here’s Bing’s version:

    –Bing Crosby, “Brother, Can You Spare A Dime?” (1932)
    https://www.youtube.com/watch?v=HbcZmnhaEYM

  11. neo:

    Interesting.

    Made me think immediately of Irving Berlin’s “Russian Lullaby.” There’s a boatload of covers for that too. Sounds not the same, but close. Wouldn’t surprise me of a relationship.

    Here’s Ella Fitzgerald’s soulful version:
    __________________________

    Every night you’ll hear her croon
    A Russian lullaby
    Just a little plaintive tune
    When baby starts to cry
    Rock-a-bye my baby
    Somewhere there may be
    A land that’s free for you and me
    And a Russian lullaby

    –“Ella Fitzgerald – Russian Lullaby”
    https://www.youtube.com/watch?v=ao0ICrT4OtY

  12. Thomas Edison’s father and mother were refugees from Canada after the 1837 Mackenzie rebellion. We might be seeing more.

  13. @ Chuck > “Thomas Edison’s father and mother were refugees from Canada after the 1837 Mackenzie rebellion. We might be seeing more.”

    Why would anyone want to come to America from Canada for more freedom?
    From Venezuela and most of Africa, sure, at least for a while longer, but Brandon and Brandeau are using the same playbook as the leftists that ruined those places.

  14. @ Geoffrey > “a bonus with a delay of 27 years is an insult to men who put their lives on the line for their country. Many might well fail to live to see 1945…”

    @ Neo > “I think the delay had something to do with not wanting to raise taxes to pay for it.”

    Wikipedia:

    Congress established a trust fund to receive 20 annual payments of $112 million that, with interest, would finance the 1945 disbursement of the $3.638 billion for the veterans. Meanwhile, veterans could borrow up to 22.5% of the certificate’s face value from the fund; but in 1931, because of the Great Depression, Congress increased the maximum value of such loans to 50% of the certificate’s face value.[9] Although there was congressional support for the immediate redemption of the military service certificates, Hoover and Republican congressmen opposed such action and reasoned that the government would have to increase taxes to cover the costs of the payout and so any potential economic recovery would be slowed.

    As Geoffrey notes, a payout is no good if you died in the meantime, unless it was inheritable (Wiki doesn’t say). Why didn’t the marchers take out the loans for immediate use (who knows?) and why is raising taxes to disburse loans okay but raising taxes to make lump sum payouts is not?

    I suspect there is more to the story that isn’t being included in the established narrative.

    Note that the trust fund swindle was also replicated with Social Security, where the age for drawing the pension exceeded the normal life expectancy at that time.
    Wikipedia does not mention any of the following that I could see.

    https://www.ssa.gov/pressoffice/IncRetAge.html

    The original Social Security Act of 1935 set the minimum age for receiving full retirement benefits at 65.
    Congress cited improvements in the health of older people and increases in average life expectancy as primary reasons for increasing the normal retirement age.

    https://www.cdc.gov/nchs/data/hus/2019/004-508.pdf

    Life expectancy at birth in 1900 was 47.3; in 1950 was 68.2 years.

    (from the table)

    Do the math.
    They weren’t expecting to have to pay too many people; however, they did end up making the claims heritable by widows and children, before then making the whole Ponzi scheme into flat-out welfare.
    Because Congress decided to use the collected funds for current spending and stick IOUs into the “trust fund.”

    Who really knows what was happening with the Bonus Trust Fund?
    Most likely something similar: maybe they couldn’t pay the bonuses (or even make loans?) because there wasn’t really any money there after the Depression began, having been “invested” in some of the failing enterprises.

    * * *
    https://en.wikipedia.org/wiki/Social_Security_(United_States)

    Current year expenses are paid from current Social Security tax revenues. When revenues exceed expenditures, as they did between 1983 and 2009,[10] the excess is invested in special series, non-marketable U.S. government bonds. Thus, the Social Security Trust Fund indirectly finances the federal government’s general purpose deficit spending. In 2007, the cumulative excess of Social Security taxes and interest received over benefits paid out stood at $2.2 trillion.[81] Some regard the Trust Fund as an accounting construct with no economic significance. Others argue that it has specific legal significance because the Treasury securities it holds are backed by the “full faith and credit” of the U.S. government, which has an obligation to repay its debt.[82]

  15. “MacArthur chose to ignore the president and ordered a new attack.”

    LOL – that statement jumped out at me. Not that what happen is funny; but, the fact that MacArthur seems to have had a habit of ignoring orders and going for another attack. Something which eventually led to his being relieved of command.

  16. I took a US History since 1877 in college in the 80s. The only references to Patton and MacArthur where their actions with the bonus army. They did not receive one mention in the WW II chapters. This is the kind of history that has only become more pronounced in the intervening decades.

  17. huxley: It’s the Bing version I had in my head when I posted.

    Ann in L.A.:

    It’s all part of the neo synchro-mesh!

    I didn’t realize Bing could have such dreamy eyes until I saw the accompanying photo.

  18. Thanks for the piece on the bonus marchers Neo. I had heard of the federal promissory certificates and that there was dissatisfaction, but not much else.

    I found this from Neo’s Wiki link interesting:

    Before World War I, the soldiers’ military service bonus (adjusted for rank) was land and money; a Continental Army private received 100 acres (40 ha) and $80.00 (2017: $1,968.51) at war’s end, while a major general received 1,100 acres (450 ha). In 1855, Congress increased the land-grant minimum to 160 acres (65 ha), and reduced the eligibility requirements to fourteen days of military service or one battle; moreover, the bonus also applied to veterans of any Indian war. The provision of land eventually became a major political issue, particularly in Tennessee where almost 40% of arable land had been given to veterans as part of their bonus. By 1860, 73,500,000 acres (29,700,000 ha) had been issued and lack of available arable land led to the program’s abandonment and replacement with a cash-only system.

    Our little family farm has been in our family for 140 years now. It was awarded to a member of the Massachusetts Militia via a document signed by President Buchanan in 1855. The amount of land? 160 acres. The document maybe says he was a surgeon (old sawbones?), if I’m reading the old cursive correctly. Cool stuff.

  19. I surmise that very few today can appreciate how desperate people were in the 1930s; although we may learn for ourselves in due time.

    I was born in ’35, so the depression had ended, and WWII had started before I had any conscious awareness of the world. Still through the years, although overshadowed by the war, I heard personal accounts of life during the depression. My parents were married in ’31 and I was not born until four years later. Given the hit and miss nature of birth control in those days, I presume that considerable effort was made to delay my arrival; and I attribute that to the depression. No one ever discussed that with me.

    Two of my older cousins were in the CCC before they went into WWII service. Since they came from a hard scrabble farm, powered by mule and human sweat, in which able bodied, teen aged labor would be prized, I assume that things were really desperate. Maybe, in part, because the only cash crop was tobbacco, and the government put severe limits on how much a small farmer could produce. Why? (BTW, Roosevelt’s ballyhooed programs did reach into rural Suwanee County Florida (among other Southern locales) until some time after my last summer on the farm. There was still no electricity, telephone service, or paved roads in 1947; and no law enforcement or emergency/civic services of any kind.) Only “white privilege” he noted, snarkily.

  20. Oldflyer:

    My mother, who was a young adult during the Depression, told me many stories. Her own family never suffered much and remained comfortable although not rich; I’m not sure how they did it, but they did. However, she knew tons of people who had hardship of various kinds.

    The form many of her stories took in the 1950s and 1960s was to point to some of their friends (with whom she’d grown up and gone to school) and explain how this one and that one had been forced to drop out of high school to earn money for the family and had had to give up their dreams of becoming a [fill in the blank]. I think one, for example, had wanted to be a teacher, and ended up working his whole life in the garment district pushing those huge racks of clothes around the city streets. In my mother’s case, she was engaged to someone who was in law school, but when he graduated he could not get a job. Just could not. So he broke up with her and joined the army and became a career guy in the military. I believe he attained the rank of colonel and married many years later. This may not seem like the kind of hardship that starving people endured – and it wasn’t – but it still was very hard for her to lose her fiance because of the Depression. These stories of course occurred in an urban environment.

    I grew up thinking in terms of the Depression and human tragedy – loss of hopes and dreams – rather than starvation, although she also told me about bread lines and the like.

  21. neo:

    Good points all.

    My grandparents and their children thrived during the Depression. They owned the plant which employed half their hometown. They became the local royalty. It was a mixed blessing.

    When I was young, I didn’t understand my grandparents were rich. For all I knew everyone’s grandparents retired to a killer beachfront home in Ormond Beach, which eventually got a spread in “Better Homes and Gardens.”

    My mother showed me her childhood pictures and it was years later I understood what it meant that for Christmas, during the Depression, she and her sisters got Shetland ponies.

    I’m boasting some here, but it is a cautionary tale. All of my grandparent’s children ended up seriously screwed-up. The sisters committed suicide. The brother rejected his parents entirely and dropped out as a hippie into the Haight-Ashbury when he was in his 40s.

    I see my family as Ground Zero for the sixties culture war, which we are still living through today.

  22. FYI: My mother’s generation blew the family money.

    I got a bit of an inheritance and a bit of trust fund, which gave me the leeway to retool from being a garden-variety electronics tech to a Silicon Valley programmer where I made my own money.

  23. My mother told me that the depression didn’t make any difference for her. My maternal grandparents were share croppers, so not much to lose. My father’s family was also poor by choice, my grandfather spent his time preaching in WV, walking the hills and building a religious camp. My father gained 30 pounds after he joined the army in the summer of 1941.

    The strange thing is that about half of my mother’s siblings attended college and my father’s father learned calculus in high school and taught himself Greek in order to read the New Testament in the original.

  24. AesopFan wrote: “Because Congress decided to use the collected funds for current spending and stick IOUs into the ‘trust fund.’” (That really means “collected funds **in excess of the program’s current obligations**.”)

    Beyond that, if one thinks carefully about how an entire society saves for its future, one will realize that such surpluses **have to be used**. In physical terms, you can’t just throw dollar bills into a vault and then come back when they’re needed and expect that they’ve also earned interest in the meantime.

    The money has to be used in some fashion. If it’s invested in productive enterprise, then there may be additional real wealth generated that can serve to pay off the obligation when it’s needed

    From _The Cost and Financing of Social Security_, by Lewis Meriam and Karl Schlotterbeck (Brookings Institution, 1950), p. 155:

    “The establishment of the Trust Fund has given an aura of soundness and solvency to the OASI [Old-Age and Survivors Insurance] system. Many believe that this reserve fund ‘earns’ income in the same sense as do private insurance reserves; that, if need be, all claims could be met by liquidation of the reserves; and that an individual, with his final payment of OASI taxes, will have paid in full for his retirement benefits.

    “The operation of the OASI Trust Fund is NOT [emphasis in original] similar in character to that of a private insurance company. Private insurance reserves (…) are usually invested in projects that directly participate in or promote the production of goods and services. These investments are procreative in character and thus ‘earn’ income. Furthermore, they are assets of the insurance company reserve, but they are liabilities of OTHER [emphasis in original] enterprises. The OASI Trust Fund is invested in federal government securities. Since the money is used by the government in meeting its regular expenditure requirements, no real reserve is created. The obligations of the government (liabilities) deposited in a trust account do not represent assets; they merely record future obligations which can be fulfilled only through the levy of future taxes upon the economy in general. The Trust Fund is thus a fiction — serving only to confuse.

    “The explanation of the failure to establish trust fund assets analogous to those provided by private insurance companies is presumably that the sums ultimately involved are so stupendous that available investment securities of productive enterprises would not be adequate for the purpose. The deposit of its own liabilities in a so-called reserve fund thus appeared as a happy solution to the problem.”

  25. Neo, I’m not sure that the Wikipedia entry on the Bonus Army is at all accurate. According to one source I read (a biography of MacArthur, but one I can’t locate offhand), he never received Hoover’s order not to cross the Anacostia.

    And the Eisenhower quotes appear to stem from an interview he gave in 1954, when MacArthur was a political rival. His diaries and papers at the time seem to have supported MacArthur unreservedly.

    The whole event was truly stupid, but the accounts have been heavily politicized.

  26. AesopFan asked “why is raising taxes to disburse loans okay but raising taxes to make lump sum payouts is not?”

    This question is a category error. The proper question is “why might a long series of tax payments during prosperity have different effects than a sudden large tax increase during a depression?” For a hint at an answer, ask why falling into an airbag from ten stories up might different effects than falling into a concrete sidewalk.

    AesopFan also made the old “life-expectancy at birth” error. Yes, the figure given for 1900 is absolutely accurate. That is because (by modern standards) infant mortality and child mortality were sky-high in 1900. The relevant question here is “What was life expectancy at the beginning of working life (around age 14-22 in 1935) when Social Security was established?” The number of children who never worked and never had a SS account is irrelevant, and the number of children who died before SS was established is doubly irrelevant.

  27. huxley,
    Quite the family story. Many moons ago Neo spoke of someone who accumulated a great deal of wealth and then made an off-hand comment about how that would sustain the family for many generations.

    I pointed out that on average such wealth lasts about three generations. At first I didn’t remember whether the number 3 included the wealth builder’s generation or not. It did. It’s kind of amazing, but understandable.

  28. TommyJay:

    Thanks.

    For years I wondered what terrible family secret laid waste to the subsequent generations. I never found a classic traumatic answer. I finally concluded it was the curse of nouveau riche.

    My grandparents came from hard-working Scots-Irish settlers in the Oklahoma Territory. They were decent, intelligent, hard-working folks, who believed in God and the good ole USA. They were Republicans even. However, they didn’t manage to pass that ethic to their children.

    Instead they gave their kids what the kids wanted all too easily — an understandable parental response. So, my mother, aunt and uncle hit adulthood without developing important strengths from youthful struggle and disappointment.

    There was also the envy response from the townspeople, which made relationships treacherous.

    So in spite of their advantages, they had weirdly hard lives.

    I once tried to explain my mother to a college friend. I mentioned that my mother never had to work. My friend surprised me by saying, “How awful!” When I thought about it, I realized my friend was right.

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