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World War Adjusted Compensation Act

Many veterans who returned to the United States at the end of World War I were disappointed to find that their old jobs had been taken by domestic workers at wage levels unknown in prewar times. Bitterness was reduced little by the fact that the federal government had granted a small parting bonus at the time of discharge and some of the states had done likewise. As early as 1919, the American Legion and the Veterans of Foreign Wars began to agitate for what they chose to call “adjusted compensation.” Critics of financial aid to ex-servicemen preferred to use the somewhat derogatory term “bonus” in their discussions. The veterans’ advocates argued that their members deserved a cash award to balance out the difference between their modest military pay and the high wages enjoyed by civilian war workers. A compensation measure worked its way through Congress by the fall of 1922, but President Warren Harding vetoed it, an action in keeping with Treasury Secretary Mellon's drive to avoid all unnecessary government expenditures. Undeterred, the veterans’ groups kept up the pressure and succeeded in gaining passage of what was popularly known as the Soldiers' Bonus Act in the spring of 1924. Calvin Coolidge’s veto of the measure was overridden. Provisions of this law applied to veterans who had held the rank of captain or below and provided:

  • Adjusted compensation was to be paid at the rate of $1.25 per day for time spent in foreign service and at the rate of $1 per day for domestic service.
  • The sum earned by veterans was not to be paid in cash, but was to be used to create a 20-year endowment; in the short term, participants were entitled to borrow up to 22.5 percent of the value of the fund.
Veterans and their advocates were not satisfied with this measure and pressed immediately for cash settlements. The Republican presidents and legislators of the later 1920s resisted those appeals and the issue would continue into the next decade.
See other domestic activities during the Coolidge administration.