Bonuses, Military, gratuities or benefits, usually paid in a lump sum, to veterans of military service. They should be distinguished from pensions, which are a continuing compensation paid to disabled veterans or their dependents. Until World War II, bonuses paid to veterans in the United States took the form of both cash payments and land grants. The practice began in 1776, when the Continental Congress voted to reward men of the Continental army with grants of land that ranged in size from 100 acres for noncommissioned officers and privates to 1,100 acres for a major general. Public lands in Ohio (U.S. Military District) were reserved for location of the bounties, and warrants totaling more than 2 million acres were eventually issued. In 1778, acting on a suggestion by George Washington, the Congress voted to give, at the end of the war, an additional five years' pay to commissioned officers and a sum of about eighty dollars to all others as a bonus.
During the first half of the nineteenth century, bonuses took the exclusive form of land grants. An act of 1811 extended to veteran noncommissioned officers and privates, with five years of service, a grant of 160 acres of the public domain. In 1846 Congress awarded 160 acres of land to noncommissioned officers and privates who had served in the War with Mexico. In 1850 an act granted eighty acres to any veteran of the War of 1812 excluded under the act of 1811, to commissioned officers of the Mexican War, and to any person who had served in an Indian war since 1790. Finally, in 1855, Congress raised the minimum land grant for all previous laws to 160 acres and lowered all previous eligibility requirements to fourteen days service or participation in one battle. Although warrants for more than 65 million acres were issued under these various laws, very little of the land was actually taken up by veterans, since the warrants could be sold to other persons or exchanged for interest-bearing or Treasury scrip. A large market for the warrants developed, and most of the bonus lands fell into the hands of speculators.
Civil War veterans of the Union Army received bonuses adjusted to the length of service, a maximum of $100 being paid to those who had served three years. In 1875 President Ulysses S. Grant vetoed a congressional measure that would have equalized the bonus payments of all Union soldiers. The veterans of the Spanish-American War were not given a bonus, and the issue was not raised again until after World War I.
Although servicemen received a mustering-out bonus of sixty dollars at the end of World War I, the American Legion led a movement for an additional bonus. At its fall convention in 1919 the legion took the position that former servicemen were entitled to "adjusted compensation"—that is, the difference between the money they actually received while in the service and the larger amount they could have earned had they remained at home. A bill to grant such a bonus was passed over President Calvin Coolidge's veto in 1924. More than 3.5 million interest-bearing adjusted compensation certificates were issued, with a total value of $3.5 billion, actual payment being in the form of paid-up twenty-year endowment insurance policies, deferred until 1945. With the coming of the Great Depression and massive unemployment, the American Legion demanded immediate cash payment of the certificates. In 1931 Congress passed over President Herbert Hoover's veto a compromise bill under which veterans could borrow 50 percent of the cash value of their certificates at 4.5 percent interest. That measure did not quiet the veterans, however, and subsequent demands for full and immediate payment were highlighted by the Bonus Army incident in the summer of 1932, when between 12,000 and 15,000 veterans assembled in Washington to demand cash payment of their certificates. The issue was finally resolved in January 1936, when Congress, over President Franklin Roosevelt's veto, passed a bill authorizing immediate payment of the certificates.
While the United States was still involved in World War II, Congress passed the Servicemen's Readjustment Act of 1944, popularly called the GI Bill of Rights. The act provided a comprehensive program of veterans' benefits, including unemployment compensation, education, and job training, and guaranteed housing and business loans. Through the date of its termination in July 1949, the unemployment compensation program paid almost $4 billion in "readjustment allowances" to nearly 9 million veterans. The education and job-training program, which terminated in July 1956, provided educational benefits at the secondary and college level and on-the-job training to almost 10 million veterans at a cost exceeding $13 billion. The insured-loan program came to an end for most veterans in July 1962, and by that date more than 5 million applicants had obtained loans totaling more than $50 billion.
In July 1952 Congress passed the Veterans Readjustment Act, which extended the benefits of the earlier measure to veterans of the Korean conflict. Congress passed still another GI bill, the Veterans Readjustment Benefits Act of 1966. In addition to extending benefits of the previous measures to veterans of the military conflict in Vietnam, it also applied retroactively to those who had served for more than 180 days after 31 January 1955, the date after which veterans became ineligible under the 1952 act. Thus the act of 1966 seemed to commit the nation for the first time to the idea that peacetime veterans were entitled to receive the same benefits as wartime veterans. In December 1974 Congress passed, over President Gerald Ford's veto, the Vietnam Era Veterans Readjustment Act. The main provisions of the act extended the period of educational benefits from thirty-six to forty-five months and increased the monthly payments to veterans enrolled in college by 23 percent. In 1976 Congress passed the Post-Vietnam Era Veterans' Educational Assistance Program. It was the first program that required a contribution from the enlisted individual for participation. The program allowed for the voluntary contribution of between $25 and $100 a month, which the government would match two-to-one. In 1984 Congress passed the Montgomery GI Bill. This bill also required a voluntary contribution for participation in the amount of $100 a month for the first twelve months of service. The government paid up to $400 a month for thirty-six months for tuition and educational expenses for those who elected to participate in the program.
Bibliography
Asch, Beth J., and James N. Dertouzas. Educational Benefits versus Enlistment Bonuses: A Comparison of Recruiting Options. Santa Monica, Calif.: Rand, 1994.
Gates, Paul W. History of Public Land Law Development. Washington, D.C.: William W. Gaunt, 1987.
Lewis, Elmer E., ed. Laws Relating to Veterans, 1914–1941. Washington, D.C.: U.S. Government Printing Office, 1945.
Ross, Davis R. B. Preparing for Ulysses. New York: Columbia University Press, 1969.
—Seddie Cogswell
