The Great Depression, which started in October of 1929, was arguably the worst time to be an American. Nearly 25% of the population was unemployed and a great number of the remaining populous was under employed. So it is very comparable to our current state of economy.
In 1924, American veterans had been promised by the U.S. government that they would be paid a "bonus" for their service during World War 1. They were to receive $1 for every day they'd served during the war, or $1.50 for each day they served in combat. This "bonus" was supposed to be paid in 1945. When the stock market crashed and the depression hit, U.S. WWI veterans began a movement demanding that they should not have to wait another 15 years for their bonus.
As the grassroots movement took off, veterans made their way to Washington D.C. traveling by any means they could find, many were hopping train cars heading east, other were in overloaded jalopy’s, and still other hitched rides on any east bound vehicle that would pick them up.
There were over 17,000 WWI vets and their families when they arrived in Washington and soon became known as the ‘Bonus Army’. They set up a shanty town within the Anacostia flats part of the city and held daily peaceful protests. Some of the more radical veterans occupied abandoned buildings in the city.
Their arrival in Washington in spring 1932 was an embarrassment to President Herbert Hoover and his administration, and he still refused to give them the chance to lobby with himself in person, but Congress was more receptive.
On June 15th, the House of Representatives passed a bill that would pay the veterans there bonuses immediately, 2 days later the vote went to the Senate, as approximately 10,000 WWI vets gathered around the Capital building, Walter Waters, a former Army sergeant from Oregon and the leader of the Bonus Army, announced to a stunned, silent crowd that the Senate had defeated the bill by a vote of 62 to 18. “Sing America,” Waters said, “and go back to your billets.” And that is what they did.
Retired USMC Major General Smedley Butler, who at the time was America’s most colorful military figure, visited with the dejected Bonus Army and gave speeches to help them lift the morale and not give up the fight.
“You’ve got to get mad. You’ve got to hate. You’ve got to turn on these fellows who call you names such as “treasury raiders.” General Butler told them, “The only trouble with you veterans is that you still believe in Santa Claus. It’s time you woke up—it’s time you realized there’s another war on. It’s your war this time. Now get in there and fight.”
Army Chief of Staff Major General Douglas MacArthur was convinced that the Bonus Army was a communist conspiracy to undermine the government, and that the movement was actually more dangerous than veterans trying to secure funds from a nearly depleted federal treasury, this, even after MacArthur's own General Staff intelligence division reported in June that that most of the men seemed to be vehemently anti-Communist.
As the sweltering summer heat dragged on and the Bonus Army showed no signs of leaving, Hoover decided to act. He ordered General MacArthur to clear out Bonus City, the ramshackle camp of huts and tents where the veterans and their families had been living.
The sight of the federal government turning on its own citizens -- veterans, no less -- raised doubts about the fate of the republic. It still has the power to shock decades later.
The veterans were driven out by force, as rising military figures General Douglas MacArthur, Major Dwight Eisenhower and Major George Patton cleared out the "Bonus Army" and burned their camps.
MacArthur watched a brigade of steel-helmeted soldiers precisely align themselves in a straight four-column phalanx, bayonets affixed to rifles. He nodded his head in satisfaction. Discipline was wonderful. Up ahead, Major George Patton kicked his heels against his mount, and the big horse reared forward to signal a line of cavalry. The riders drew their sabers.
The most controversial moment in the whole affair - that directly involved General MacArthur. Secretary of War Hurley twice sent orders with Major Dwight Eisenhower to MacArthur indicating that the President, worried that the government reaction might look overly harsh, and did not wish the Army to pursue the Bonus Marchers across the bridge into their main encampment on the other side of the Anacostia River. But MacArthur, according to Eisenhower, "said he was too busy," did not want to be "bothered by people coming down and pretending to bring orders," and sent his men across the bridge anyway.
Major Eisenhower, believing it wrong for the Army's highest-ranking officer to lead an action against fellow American war veterans, strongly advised MacArthur against taking any public role: "I told that dumb son-of-a-bitch not to go down there," he said later. "I told him it was no place for the Chief of Staff."
At the end of the day, the toll was three dead, 54 injured and 135 arrests. The New York Times Headlines read: "Flames rose high over the desolate Anacostia flats at midnight tonight," The 1st sentence was, "and a pitiful stream of refugee veterans of the World War walked out of their home of the past two months, going they knew not where."