In the summer of 1932, a group of over 40,000 people, including 20,000 World War I veterans - self dubbed the Bonus Expeditionary Force or Bonus Army - marched to Washington D.C. to demand payment of their service certificates. Service certificates were given out a few years after World War I by Congress. The problem was, the payment wasn't due until 1945, but the veterans, desperate and in the midst of The Great Depression, were drowning financially. (Learn more about the Great Depression in What Caused The Great Depression?)

Under the bonus payment plan, veterans who received bonuses of less than $50 were paid in cash, while those who received bonuses of greater than $50 received a service certificate that matured after 20 years, or 1945. In 1932, there were approximately 3.66 million of these certificates outstanding, with a combined face value of about $3.6 billion. To meet the obligation, Congress had planned to deposit $112 million installments each year into a trust for 20 years, for a total of $2.24 billion, and expected compounded interest to increase the total to make up for the difference. So at the time when the Bonus Army marched to Washington, the trust had just under $1 billion in it.

Because immediate payment of the service certificates would have required the government to come up with over $2.0 billion dollars, Congress felt it would have put the federal budget into a crisis at a time when they were trying to get the country out of the Great Depression. Thus, the proposed bill to move up the maturity date was blocked and the government ordered the forced evacuation of all the Bonus Army veterans.

On July 29, military troops and tanks, under the command of General Douglas MacArthur moved in on the Bonus Army camps are forcibly removed the veterans from the city. The troops set fire to tents and camps, killed one veteran and injured nearly 50 others.

Related Articles
  1. Stock Analysis

    How Rollins Inc. Transformed from Radio to Pest Control

    Discover how Rollins, Inc. grew and expanded, making numerous acquisitions, transitioning from the radio industry to the pest control industry.
  2. Professionals

    Holding Out for Capital Gains Could Be a Mistake

    Holding stocks for the sole purpose of avoiding short-term capital gains taxes may be a mistake, especially if all the signs say get out.
  3. Entrepreneurship

    Mark Cuban Success Story: Net Worth, Education & Top Quotes

    Learn more about America's favorite billionaire: Mark Cuban, outspoken owner of the Dallas Mavericks and star of the hit show "Shark Tank."
  4. Savings

    All About Income

    Income is the money you or a business earns by providing goods or services, or through investments.
  5. Investing News

    Acquisition of Zulily Inc

    On August 17, 2015, Zulily Inc (ZU), an e-commerce company that caters mothers and children, announced that it will be strategically acquired by QVC, a part of Liberty Media Corporation (LMCA), ...
  6. Taxes

    Top Tips for Minimizing Taxes on Severance Pay

    A look at the top ways to lessen the tax burden on severance pay.
  7. Professionals

    8 Justifications For Sky-high CEO Salaries

    Why are CEO salaries so astronomically high? There may be more to the story than you think.
  8. Economics

    Is The EU Holding Germany Back?

    As Germany agrees to initiate bailout talks with Greece once again, could all of the EU's economic turmoil result in Germany being better off alone?
  9. Investing Basics

    3 Companies You Never Thought Would Go Bankrupt

    Understand more about company bankruptcy and why a company would file for bankruptcy. Learn about three companies that went from industry leaders to bankruptcy.
  10. Stock Analysis

    Drugmaker Extraordinaire: How Eli Lilly Grows

    Drugs mean big profits in America. Here's how the country's oldest pharmaceutical firm keeps its toehold in the market.
  1. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the ...
  2. Regional Asset Liquidation Agreement ...

    An agreement between an asset manager and the Federal Deposit ...
  3. The New Deal

    A series of domestic programs designed to help the United States ...
  4. Accelerated Resolution Program ...

    A program designed to reduce the time and cost of resolving failed ...
  5. Back Pay

    The amount of salary and other benefits that an employee claims ...
  6. Contingent Commission

    A commission with a value dependent on an event occurring, and ...
  1. Does my employer's matching contribution count towards the maximum I can contribute ...

    Contributions to 401(k) plans come from employee salary deferral and employer match dollars. According to the IRS, employees ... Read Full Answer >>
  2. Do negative externalities affect financial markets?

    In economics, a negative externality happens when a decision maker does not pay all the costs for his actions. Economists ... Read Full Answer >>
  3. What is the difference between disposable and discretionary income?

    According to the Bureau of Economic Analysis, or BEA, disposable income is the amount of money an individual takes home after ... Read Full Answer >>
  4. What are the major laws (acts) regulating financial institutions that were created ...

    Presidents George W. Bush and Barack Obama, in conjunction with Congress, signed into law several major legislative responses ... Read Full Answer >>
  5. What are the similarities and differences between the savings and loan (S&L) crisis ...

    The savings and loan crisis and the subprime mortgage crisis both began with banks creating new profit centers following ... Read Full Answer >>
  6. What measures could the U.S. Government take to prevent another crisis similar to ...

    Some of the measures that the U.S. government can take to prevent another crisis similar to the savings and loan (S&L) ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!