During the spring and summer of 1932, approximately 17,000 World War I veterans gathered in Washington, DC, together with their families and supportive groups, to redeem their service certificates for cash payment from the United States Government. The assemblage was led by former Army Sergeant Walter W. Waters, and the group became popularly referred to as the Bonus Army. The media referred to the assemblage as the Bonus March, although participants named themselves the Bonus Expeditionary Force.
The "bonus" referred to payment to soldiers of the difference between what they were paid for service and what they could have earned had they not enlisted, a tradition that began in 1776. President Calvin Coolidge vetoed a Bonus bill for World War I veterans (who received $60), but was overridden by a Congressional veto, which brought into force the World War Adjusted Compensation Act. Amounts greater than $50 were issued as Certificates of Service, which would mature in 20 years. Approximately 3.7 million certificates were then issued, totaling more than $3.6 billion 1924 US dollars. A trust fund was established to finance the expected 1945 disbursement, and in the meantime, veterans were allowed to borrow a portion from the fund.
The District of Columbia had been exempted from Posse Comitatus Act restrictions (forbidding US military from acting as police domestically) when an unpaid group of Continental Army members who'd not been paid surrounded the State House, forcing the Congress to flee, and were eventually cleared out by the Army.
By 1932, however, many of these veterans had been unemployed due to the Great Depression, and assembled in Washington to demand cash payment in full immediately. Cox's Army, a group of 25,000 unemployed citizens from Pennsylvania, had marched on Washington DC in January of 1932, the largest march of its kind in history, setting a precedent for the Bonus Army to follow.
The Bonus Expeditionary Force set up a Hooverville camp, carefully built from scrap materials and secured by the veterans, across from the federal core of DC, complete with sanitation facilities and streets, and held a daily parade. At one point Retired Marine Corps Major General Smedley Butler, who authored the well-known pamphlet "War is a Racket," visited the camp to encourage the Bonus Army members and supporters.
On June 17 the Bonus Army gathered at the Capitol and when the Bonus Bill was defeated in the Senate the veterans returned to their campsite. On July 28, 1932, US Attorney General William D. Mitchell ordered Washington police to clear the camp and remove the veterans from all government property. When the police attempted to carry out this order two policemen became trapped in a building. When cornered, they shot two veterans who later died.
In response, President Herbert Hoover issued an order for the Army to empty the campsite. That order was carried out by the infantry and cavalry with Major George S. Patton commanding six tanks, led by Army Chief of Staff General Douglas MacArthur. The Army cleared the campsite of the Bonus Army, with their wives and families, and then burned their belongings. With thousands of civil service employees lining the streets to watch, the Bonus Army initially cheered the troops, thinking they were marching in honor of their action. But when the cavalry charged, the spectators began to yell, "Shame! Shame!" The infantry forced the Bonus Army to flee their camp, armed with bayonets fixed and adamsite gas. Hoover order an end to the assault but General MacArthur ordered another attack. In the end, 135 veterans were arrested, 55 wounded, one veteran died, and one wife suffered a miscarriage.
In a blatant example of the "directed history" authored by various United States agencies, Major Dwight D. Eisenhower wrote an official Army incident report endorsing MacArthur's actions. Nonetheless, at the time of the assault Eisenhower had been an aide to MacArthur and recommended MacArthur not lead the action against fellow veterans. Eisenhower is quoted as having stated, "I told that dumb son-of-a-bitch not to go down there. I told him it was no place for the Chief of Staff."
President Hoover lost his re-election bid to Franklin D. Roosevelt, who had opposed the veterans' demands during his campaign. But in May of 1933 the new president arranged for them to have a campsite and three meals a day. Trying to bring the protest to an end, he sent his wife, Eleanor, to the campsite where she listened to the men and promised them positions in the Civilian Conservation Corps. Eventually, Roosevelt issued an executive order to waive certain requirements and make possible the enrollment of 25,000 vets in the CCC. Bonus payments of $2 billion were authorized were finally made in 1936, after a Democratically led Congress passed the Adjusted Compensation Act of 1936.