The World War Adjusted Compensation Act, or Bonus Act,Red Cross, 363 was a

United States federal law The law of the United States comprises many levels of codified and uncodified forms of law, of which the most important is the nation's Constitution, which prescribes the foundation of the federal government of the United States, as well as ...

passed on May 19, 1924, that granted a benefit to

veteran A veteran () is a person who has significant experience (and is usually adept and esteemed) and expertise in a particular occupation or field. A military veteran is a person who is no longer serving in a military. A military veteran that h ...

s of American military service in

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...

Provisions

The act awarded veterans additional pay in various forms, with only limited payments available in the short term. The value of each veteran's "credit" was based on each recipient's service in the

United States Armed Forces The United States Armed Forces are the military forces of the United States. The armed forces consists of six service branches: the Army, Marine Corps, Navy, Air Force, Space Force, and Coast Guard. The president of the United States is ...

between April 5, 1917, and July 1, 1919, with $1.00 awarded for each day served in the United States and $1.25 for each day served abroad. It set maximum payments at $500 (approximately $8,000 in 2021 dollars) for a veteran who served stateside and $625 for a veteran who served overseas. Most officers and anyone whose service began after November 11, 1918, were excluded. It authorized immediate payments to anyone due less than $50. The estate of a deceased veteran could be paid his award immediately if the amount was less than $500. All others were awarded an "Adjusted Service Certificate," which functioned like an insurance policy. Based on standard actuarial calculations, the value of a veteran's certificate was set as the value of a 20-year insurance policy equal to 125 percent of the value of his service credit. Certificates were to be awarded on the veteran's birthday no earlier than January 1, 1925, and redeemable in full on his birthday in 1945, with payments to his estate if he died before then. Certificate holders were allowed to use them as collateral for loans under certain restrictions.

Enactment

The American Legion was a principal proponent of the legislation on behalf of World War I veterans, and it objected to the term ''bonus'', because "bonus has come to mean 'full payment plus,' and there has not yet been full payment, or anywhere near full payment, so there cannot be any plus." The Legion said that the government needed to "restore the faith of men sorely tried by what they feel to be National ingratitude and injustice." The Legion pointed out that the

Wilson administration Woodrow Wilson's tenure as the 28th president of the United States lasted from 4 March 1913 until 4 March 1921. He was largely incapacitated the last year and a half. He became president after winning the 1912 election. Wilson was a Democrat ...

had made additional payments to government workers in 1917–18 to help offset the effects of inflation, without making any comparable provision for members of the military. The Legion fought President

Warren G. Harding Warren Gamaliel Harding (November 2, 1865 – August 2, 1923) was the 29th president of the United States, serving from 1921 until his death in 1923. A member of the Republican Party, he was one of the most popular sitting U.S. presidents. A ...

as his position changed from supporting payments if paired with a revenue measure, to supporting a future pension system. Harding felt so strongly about the issue that he visited the Senate to make his case against one version of the bill in 1921, and the Senate voted it down 47–29. Harding vetoed another version of the Adjusted Compensation Act on September 19, 1922, and the House overrode his veto 258–54 but the Senate failed to override by four votes on a vote that split both Democrats and Republicans.Palmer, 62 Harding's veto of the popular measure particularly alienated the Senate Republicans, who thought the President's defense of fiscal integrity endangered the party's electoral prospects. Harding died before the issue was taken up again by Congress. In preliminary negotiations between Congress and President Calvin Coolidge, it became clear that the President would veto any law that proposed immediate cash payments to veterans and that the Senate would sustain that veto. The legislation, popularly called the Insurance Bill, provided the veteran instead with a variety of future payment scenarios rather than cash in the short term. On May 15, 1924, Coolidge vetoed a bill granting bonuses to veterans of World War I saying: "patriotism... bought and paid for is not patriotism." Congress overrode his veto a few days later. The act was amended with respect to minor details on July 3, 1926.

Later history

Veterans were able to take out loans against their certificates beginning in 1927. By June 30, 1932, more than 2.5 million veterans had borrowed $1.369 billion.Willard Waller, ''The Veteran Comes Back'' (NY: Dryden Press, 1944), 241 In 1936, the

Adjusted Compensation Payment Act The Adjusted Compensation Payment Act (January 27, 1936, , ) was a piece of United States legislation that provided for the issuance of US Treasury Bonds to veterans who had served in World War I as a form of economic stimulus and relief. The act ...

(January 27, 1936, ch. 32, 49 Stat. 1099) replaced the 1924 Act's service certificates with bonds issued by the Treasury Department that could be redeemed at any time.

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