Sunday, May 18, 2008

The Bonus Army of 1932

Striking America

By Richard E. Noble

In 1932 nearly one out of every four workers were unemployed, approximately twelve million individuals. Of those that were employed half were working part time or on temporary status, and almost all were receiving wages on a subsistence level or lower. A million and a half to two million "hoboes" were estimated to be riding the rods and living beside the railroad tracks in hobo jungles. Hoovervilles were springing up next to luxury flats, food and grain were abundant in storage elevators while people went hungry, lined up at soup kitchens or starved in the streets. The U.S. had emerged victorious from World War I. It was now the richest country in the world. It had gleaned nearly all of the world of its gold and had most of Europe sending it payments. So what was going on?
John Maynard Kaynes tells us of the mystery of the disappearing "saving". Most every historian tells of inflated stocks and over speculation. We hear stories of sagging business spirals and the re-occurring peeks and valleys of the investment "cycles". Some talk of a banking conspiracy and the collapse of paper currency or the Federal Reserve System. Only the Communists tell us of a class war between the rich and the poor, between the profiteers and the profitless. Being, of course, stanch anti-Communists we deny any possibility of linking the truth to anything that these Communists propose.
It was not so in 1932. Many Americans were Socialists and Communists and a belief of a conspiracy of the rich against the poor was prevalent and wide spread in the U.S. This notion was still being denied in the 1950's by even the liberal economist, John Kenneth Galbraith.
"No one was responsible for the great Wall Street Crash. No one engineered the speculation that preceded it. Both were the product of the free choice and decision of hundreds of thousands of individuals. The latter were not led to the slaughter ... True, as the liberal misanthropes have insisted, the rich were getting richer much faster than the poor were getting less poor..."
Galbraith and Kaynes are both very convincing and extremely knowledgeable and intelligent, but they are both members of the class being accused of the crime or conspiracy. I am impressed both by what they say and how they say it. But I am more impressed by what they both seem to leave out of their analyses. My common sense tells me that a rich man is not going to move quickly and easily toward condemning the rich and wealthy. But in reading my history it becomes quite obvious that the rich have traditionally been very willing to challenge the poor to the right to what little they possess. To overlook or dismiss the notion that the wealthy and super wealthy may have played an active part in undermining the middle and upper middle and, of course, the lower classes via underhandedness and conspiratory behavior, would be extremely naive and certainly a disservice to history and the exploration of truth.
The post Civil War period, extending up to the inauguration of Franklin Roosevelt was a time of great exploitation of the poor and the working classes. The Robber Barons of the later part of the 19th century, the investigations into the financial holdings of the trusts and conglomerates of the time under the Theodore Roosevelt and Woodrow Wilson administrations; the financial scandals under the Grant and Harding administrations; the exploitation and profiteering exposed in investigations after Word War I; the nefarious history of industry in general and the armament industry in particular; the exploits of businessmen bankers and financiers throughout the American Industrial Revolution would make anyone who cavalierly dismissed the possible unscrupulous role of the "rich and famous" in the 1929 disaster, naive to say the least.
I would be more inclined to take Kaynes and Galbraith with a grain of salt, knowing that they were both well aware of what happened to the rich and wealthy in Russia in 1917 and to the rich and wealthy of France in 1793. For them to start accusing the rich and wealthy of dirty deeds might very well be a candle that neither of them was inclined to ignite. I don't blame them. But for myself, I want to know the truth. I have no ax to grind and no one type or class of people who I wish to see eliminated. I have no doubt that when the poor or the middle become the upper and the super, there would be those among this new crowd, despite their background and their roots, who would act in no less an unscrupulous, immoral manner. We have only to look at the collapse of today's Mother Russia to find the truth in this proposition. But only in knowing and understanding what really happened can anything in the future ever be corrected. Money and markets don't collapse by themselves. Markets are manipulated by investors and money comes from the pockets and bank accounts of individuals. People caused the stock market crash of 1929 and people caused the depression.
Money "disappeared" says John Maynard Kaynes. Money does not disappear. It goes someplace. It is also not water flowing in an uncontrollable rush. It is controlled and manipulated by individuals. Very few people controlled a huge portion of American capital in those days. A congressional investigation under Teddy Roosevelt showed that as few as a dozen men were in control of nearly eighty percent of the U.S. economy. None of these men lost in the 1929 collapse. Good fortune, I suppose.
We know, or should know, from reading our own history that our Government has from its very beginning been in the hands of the rich and the powerful. We also know that all of these governments have favored the advancement of their class. They have invariably been on the side of business and big business. We also know from reading "Striking America" that the working man and his Labor Unions have not been overly successful in convincing the "haves" of their obligation to share what they have accumulated with the "have-nots" up to this period.
Herbert Hoover when asked in 1932 why so many people were now selling apples on street corners told his inquirer that selling apples on a street corner must clearly be more lucrative than what these people were previously engaged in. In 1932 Herbert Hoover had machine guns on the roof of the White House. He lived as a virtual prisoner in the Nation's Capital. He expected, as did many others, an armed revolution. Legislators were giving speeches on the House and Senate floor about how America needed a man like Mussolini in Italy, or Adolf Hitler in Germany. Men who were not afraid to put down the peasant rabble, bust the unions, and imprison their leaders. Of course we had Woodrow Wilson who performed all of these tasks, and joined in a World War to suppress similar activities abroad to boot. But even these measures had not stemmed the tide of discontent. Years of persecution and war had certainly weakened the man in the street.
Abroad, the common man had been pitted against foreign armies in battle for his life. At home they were pitted against one another in their struggle for decent wages, better working conditions and life with hope for themselves and their children. By 1932 most of the common heard were tired of fighting. They were confused by the patriotic propaganda and turned against the violent and reactionary behavior of their own kind. They had been drafted and sent off to war; they had their heads battered in by hired bullies, Pinkertons, strike breakers, Militia, police, state and federal troops. But, yet, here they were once again unemployed by the millions, their families without food or homes, and they were living in the wealthiest country in the world. What was going on? Where had all the money gone?
Hoover was getting rid of the federal government's share of wealth as fast as he possibly could. The cry in the streets was that Hoover had billions for the wealthy and nothing for the poor. This seemed to be fairly accurate. Hoover was not only giving tax cuts to the wealthy and the super wealthy, he was giving out billions to the rich industrialist. They were all supposed to be using this money to invest in America. Their investment would then "trickle down" to the unemployed and the less fortunate. But the moneyed people had a different plan for their dollars. They were converting them into gold and shipping them out of the country as fast as they could. Gold was leaving the U.S. to the tune of one hundred million a week. So much for the "trickle down" theory.
The rich were bailing off the sinking, socialist, American ship and seeking greener pasture in "safe" countries like Germany, Italy, Switzerland, Holland, Denmark etc. America was no longer a safe place for capital, and maybe capitalists. The Fascists had the right idea. Bring out the troops; bust some heads; better a dead, than a red. The rich and the wealthy were not even paying their taxes where they could get away with it. And they were getting away with it big time. Not only that, Hoover and this administration were helping them with abatements and refunds wherever possible.
Plenty of individuals had profited from the stock market crash in 1929. Joseph Kennedy, Bernard Barauch, John D. Rockefeller, Andrew Carnegie, J. P. Morgan and others. The Federal Reserve, under J. P. Morgan, cashed in vast holding shortly before black Friday. The Rothchilds, Montagu Normand of the Bank of England, and the Bank of France all seemed to benefit somehow. Lots of wealthy people suddenly became super-dupper wealthy people. I suppose this all could just be coincidence.
In any case, in May of 1932 in Portland, Oregon, some unemployed World War I veterans got together. Probably inspired by Coxey's army of unemployed who marched out in the name of Christian brotherhood and charity during the depression of 1893, they too headed for Washington D.C. They chose as their leader, Walter W. Waters an ex-sergeant and unemployed cannery superintendent. Waters had been unemployed for eighteen months. They decided that the only money that any of them had coming was in the form of a "bonus" promised to them by the U.S. Government as an "Adjusted Compensation" for doing their part in World War I. This bonus was not due, according to Congress, until the year 1945 but it was being considered form immediate payment under a bill submitted by Wright Patman. On June 15, the House had passed the Patman Bill. The bonus, if they could get it, amounted to five hundred dollars. Not a lot of money but substantial for their circumstances in 1932. They called themselves, sarcastically, the Bonus Expeditionary Force, B.E.F.
They met their first resistance in St. Louis where they were greeted by officials of the B&O railroad. The National Guard was called out and the B.E.F. was loaded onto trucks and deported out of the state. But the B.E.F. was not deterred and by the time they had arrived in Washington, they had an Army of a thousand or more. Other veterans had heard about the Bonus Expeditionary Force from the press about the "Battle of the B&O" and very shortly thereafter there were 20,000 veterans or more stationed in Washington D.C. Many of their families would soon arrive. The administration wanted to bring out the machine guns that they had used on the Communists hunger marchers the year before. But the chief of Police, Pelham D. Glassford, the youngest brigadier-general in the AEF in France, was sympathetic to their cause. He helped them set up camp and even brought them supplies.
The Senate defeated the bill. Hoover would not even go out and speak to the men. He said that they were nothing but red-rabble troublemakers. The ex-soldiers, who had marched up to the Capital in anticipation of the vote, formed into ranks and marched in order and defeat back to their makeshift quarters. With nothing else to do, and no jobs in their future a good many of them decided to stay right there camped along side the Anacosta River, "Stay till 1945" was the cry. Glassford contributed a thousand dollars worth of food and supplies out of his own savings. But by the end of two months, things were getting pretty rank in the rank and file. The B.E.F. was not a bunch of happy campers.
Hoover was talking to boy scouts, housewives and collage sororities but he had not a word for the B.E.F. On July 26, Secretary of War Hurley complained of the law-abiding nature of the group. If there were and incident of violent behavior, they could then declare martial law.
On July 28, the District Police would create just such an incident. They went in to roust out some veterans who were holding up in a number of abandoned buildings on Pennsylvania Avenue. Some of the veterans lost their tempers and resisted. A jittery policeman drew his gun and began shooting into the crowd of disgruntled vets. Then other policemen began firing. Glassford ordered the men to stop shooting at the unarmed veterans, but not before two vets were killed and several others wounded. Hoover then called out the federal troops.
It was General Douglas MacArthur, Major Dwight D. Eisenhower and Officer George S. Patton Jr. who came to put down the B.E.F. with tear gas, tanks, machine guns and bayonets. Eugene King, a seven year old, was stabbed in the leg trying to return to his tent to rescue his pet rabbit, and Joe Angelo watched as a young officer whose life he had saved in Europe burnt his tent and all his possessions to the ground. Joe Angelo had received the Distinguished Cross for saving, now regretfully, the sorry butt of George S. Patton. Patton didn't and couldn't deny that it was Angelo who had saved his life, but stated that Angelo may have exaggerated his deed. I suppose if we listen to Patton's version of the story, he should have been the one to get the medal. Or maybe Patton didn't feel that saving his life was really worth awarding a Distinguished Cross to anyone.
MacArthur said that the ex-soldiers were about to seize the U.S. government. MacArthur had bravely and fearlessly saved his commander and chief and his senate cohorts from a horrible death in the hands of an unarmed group of World War I veterans, assisted by their terrifying screaming wives and children. A group that had been camped peacefully for over two months, living in poverty and squalor at the base of our Capital, and within walking distance of our National monuments, petitioning for what they had been promised for their brave overseas heroism. This sad, pathetic group of ex-soldiers was separated from their wives and children, cut off at every possible exit, until they were totally defeated in spirit and everything they had was burnt to the ground.
Old soldiers never die, they are simply routed, burnt out, cheated and scattered by younger soldiers on horseback, brandishing swords and bayonets. I wonder if MacArthur, Eisenhower, and Patton got a "bonus" themselves for that day's activities? I certainly hope so.
The American people were told by Hoover and his administration that the B.E.F was mainly composed of criminals and Communists. Later historical investigations show this to be false. Almost all those assembled at Anacosta were World War I veterans. In any case America's reaction to the incident was one of universal apathy. In the year 1932 it appears that the American people were not only down and out, but on their knees.

1) The Crisis of the Old Order 1919-1933, Arthur M. Schlesinger, JR.
2) the Crisis of the Old Order, A. Schlesinger, JR., page 252.
3) Books used in this essay: "The Crisis of the Old Order", 1919-1933, Arthur M. Schlesinger, JR.; "The Great Crash" 1929, John Kenneth Galbraith; "The Rise of Industrial America, Page Smith; "The Glory and the Dream", William Manchester; The Annals of America vol 15, 1929-1939.