In 1932, three years after the stock market crashed and when the U.S. was in the throes of the worst depression in history, WWI veterans occupied a parcel of land not far from the White House to demand payment on the bonuses that were owed them. They were supposed to get paid for the difference between their military pay and their civilian wages according to legislation passed in 1924 but would have to wait until 1945. Since many were unemployed and destitute they demanded immediate payment.

Like today’s OWS, this occupation captured the country’s imagination and led to a political polarization. With Herbert Hoover still in the White House, there was little to expect in the way of justice but probably few of the veterans expected what eventually took place, a full-scale military assault led by General Douglas MacArthur that included six tanks. Under MacArthur’s command were Dwight Eisenhower and George Patton. This was obviously a major offensive.

After an initial foray with fixed bayonets and adamsite, a vomit-inducing gas, Hoover called for a halt to the assault that MacArthur ignored, stating that he was trying to put down a Communist insurgency. At this point in his career, MacArthur showed the kind of defiance of civilian authority that would lead to his firing by Harry Truman years later.

In the video clip below, pay close attention to the orator in white shirt with rolled-up sleeves and suspenders. That is none other than General Smedley Butler!

The Bonus Army movement raised some of the same themes now being heard at OWS rallies. On June tenth, just a month before the men were attacked, their leader Walter W. Waters wrote an article in the NY Times (the paper was reasonably favorable toward the movement) using language that might sound familiar to you. He wrote:

We realize that the hue and cry is being raised by our opponents that payment of the bonus would be “class” legislation. But is not Federal assistance to broken-down railroads and defunct banks “class” legislation of a sort? Of course, the point is raised that assistance to industry is assistance to the working man.

Then, as now, there were certain problems that the occupiers had with the “Marxist-Leninist” left. Today that left is generally sympathetic to the movement but has no clue how to engage with it, a function unfortunately of seeing every mass movement as something to “intervene” in rather than become integrated with organically.

Back in 1932, the left was pretty much synonymous with the Communist Party which was deep into its “left turn”. A June 18 NYT article titled “Reds Urge Mutiny in the Bonus Army” that was not far from the truth. The CP urged the men to go back home and join with the working class in a fight for unemployment insurance. While the party’s call was cloaked in ultraleft rhetoric, it was clearly missing the point of the action, which was to implicitly put the rulers in Washington and their Wall Street funders on the defensive.

A week after the Bonus Army had been driven from its encampment, the CP held a press conference where its leaders demonstrated unbelievable stupidity. The lead paragraph of a July 31 1932 NYT article states: “The Communist Party, at its headquarters here accepted responsibility yesterday for the demonstration that resulted in the Bonus Army riots in Washington.” Speaking for the party leadership, William Z. Foster said:

Under the banner of the world Communist party, fight imperialist war, defend the Soviet Union, make Aug. 1 the beginning of a gigantic struggle for the defense of the right of workers.

Rally behind the election fight of the Communist Party. Oust the Hoover-Wall Street government. Forward to the workers’ and farmers’ government.

Can you imagine that this was the largest party on the left? Using rhetoric that evoked the “social fascism” mindset of the German CP, the CP labeled Walter Waters as a “stoolpigeon” who was following Mussolini and Hitler.

In the same way that Obama’s election in 2008 brought hope that social justice would be served, so did FDR’s election in 1932 raise the country’s spirits. Surely, someone who would become famous for his New Deal achievements—at least in the hagiography of American liberalism—would see a way to meet the request of the Bonus Army. As it turns out, FDR was as opposed to granting the veterans’ demand as Hoover. The only difference between the two was in the rhetoric they used. Hoover opposed it for obvious plutocratic motives while FDR opposed it because it would divert resources from the New Deal. In other words, the two presidents were playing the same game that Bush and Obama would play 76 years later in tweedle-dee and tweedle-dum fashion.

As part of “the Hundred Days” that marks the onset of the New Deal shortly after taking office, Roosevelt pushed through the Bill to Maintain the Credit of the United States Government. Better known as the Economy Act, the bill drastically cut federal expenditures through a 400-million-dollar reduction in veteran pensions and benefits. If Obama had taken the advice of the Nation Magazine and Salon.com to create a new New Deal, this is a piece of legislation he surely would have embraced.

In an odd role reversal, the Veterans of Foreign Wars—nowadays a bastion of reaction—took FDR to task from the left. The Economy Act in their eyes demonstrated the continuing influence of “Big Business” and “Wall Street”.

With its ranks dominated by men who were suffering from the impact of the Depression, the VFW’s magazine Foreign Service did not mince words. In an April 1933 editorial titled “Blood Money”, they wrote:

It is apparent that the veteran has been forced to bear the burden of a depression that was caused by his enemies—the predatory interests that have their hands in the public till. The money that will be withheld from the disabled veteran…can only be regarded as blood money.











This is the same mood that can be seen among the veterans participating in OWS today even if in this instance the anger is directed more at Sean Hannity than the president.

By April 1933, the VFW had FDR pegged in pretty much the same terms as Paul Street had Obama pegged early on. While some pundits viewed FDR has having been duped into supporting the Economy Act, the VFW saw him siding openly with big business and nothing but a continuation of Hoover. Since the Economy Act had removed 501,777 veterans and their dependents from the pension rolls, the pain must have been excruciating. In the VFW magazine, the reference was from that point on to “the new deal” rather than the New Deal.

While the VFW has gone through an evolution obviously, the American Legion was not much different in 1933 than it is today. It supported the Economy Act and its leader Louis A. Johnson spent as much time at the White House as some labor fakers do today.

The VFW published Smedley Butler’s speech to the Bonus Army seen in the Youtube clip above under the title “You Got to Get Mad”. Butler agreed to go on a speaking tour to promote the veterans’ demands that year. A Roosevelt supporter in 1932, Butler was now angry at the administration’s cozy alliance with “Big Business”.

Under the impact of such activism, FDR was forced to back down but not without resistance. Congress, where Democrats held majorities in both houses, passed the Adjusted Compensation Payment Act in 1936 authorizing the immediate payment of the $2 billion in WWI bonuses over the President’s veto.

If there’s any lesson to be learned from the original occupiers, it is that you have to rely on your own power in the spirit of Frederick Douglass’s words: “Power concedes nothing without a demand. It never did and it never will.” Even if such demands are still pending!

Source:

Stephen R. Ortiz, The “New Deal” for Veterans: The Economy Act, the Veterans of Foreign Wars, and the origins of New Deal Dissent, The Journal of Military History, April 2006, Vol. 70, no. 2