DEFINITION of 'Service Certificates'
Bond-like certificates that promised payments at maturity date to World War I (WWI) veterans. Service certificates were granted to WWI veterans under the Adjusted Service Certificate Law in 1924, which promised "bonus" payments to eligible soldiers redeemable in 1945. Service certificates had a face value like a bond and the promised payment at maturity included compound interest.
BREAKING DOWN 'Service Certificates'
The long-term maturity date of these service certificates presented problems for holders and the U.S. goverment. In the 1930s, in the midst of the Great Depression, war veterans were desperate and tried to demand immediate payment of the service certificates. A group of war veterans and their families, known as the "Bonus' Army", marched to Washington D.C. to try to persuade Congress to move up the date of maturity of the certificates. The march in 1932 failed initially to get Congress to speed up the payments, only in 1936 did Congress pass a bill allowing veterans to collect the service certificate payment.