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Statement on the Veterans' Bonus.

September 14, 1932

THE PRESIDENT said:

"It is due to the country and to the veterans that there should be no misunderstanding of my position upon payment of the face value of the adjusted service certificates prior to maturity, as recommended in the resolution pending before the convention at Portland. I have consistently opposed it. In public interest I must continue to oppose it.

"I have the duty not alone to see that justice and a sympathetic attitude is taken by this Nation toward the 4 million veterans and their families, but also to exert myself for justice to the other 21 million families to whom consummation of this proposal at this time would be a calamity. Cash payment of face value of certificates today would require an appropriation from the Treasury of about $2,300 million. No matter how or in what form the payment to the veterans is imposed it will come out of all these families but of more importance it will indefinitely set back any hope of recovery for employment, agriculture, or business and will impose infinite distress upon the whole country. We owe justice and generosity to the men who have served under our flag. Our people have tried to discharge that obligation. Regular expenditures on account of the veterans already constitute nearly a billion a year or almost one-fourth of our whole Federal budget.

"Every right-thinking man has the deepest sympathy for the veteran suffering from disability, for those out of work, or for veterans on farms struggling with the adversities of the depression. No one, who began life in the humble circumstances that I did and who at the earliest and most impressionable age learned the meaning of poverty from actual experience, can be lacking in feeling and understanding of the problems and sufferings of these men and their families. I have seen war at first hand. I know the courage, the sacrifice of our soldiers.

"But there are many million others in the same circumstances. They too must be entitled to consideration. Their employment and their farm recovery, as well as that of the veterans, can be secured only by the restoration of the normal economic life of the Nation. To that end we have been and are devoting our best efforts. Anything that stands in the way must be opposed. The welfare of the Nation as a whole must take Precedence over the demands of any particular group.

"I do not believe that the veterans generally really understand the Adjusted Service Certificate Law (so-called bonus law) which was Proposed by themselves. In its simplest terms that law provides that an annual sum of about $112 million is to be paid into a fund which, with compound interest, is calculated to amount to a total of $3,500 million, the face value of certificates to be distributed in 1945. Approximately $1,300 million has been paid into this fund. Under the law of last year authorizing loans up to 50 percent of the face amount of the certificates, if we take into consideration loans made through the veterans' life insurance fund which will have to be repaid, all this accumulated sum and more has already been distributed. If the Government distributed to the veterans the $112 million annually from now on, it would represent the Government's obligation. If these sums be kept in the fund the Government adds compound interest on each installment and gives a life insurance right. By paying the adjusted service certificates at their 1945 face value now the Government would not only be paying all remaining 13 annual installments in advance but would be paying the compound interest upon them in advance.

"This would, I am advised, add about $2,250 million to the amount which the people of the United States, acting through Congress, undertook to pay when they gave the certificates.

"No such sum is available. It cannot be raised by adding to the crushing burden of taxes which drain every family budget in our country today and weigh heavily on business struggling in the midst of depression. It cannot be borrowed without impairment of the credit of the National Government and thus destroy that confidence upon which our whole system depends. It is unthinkable that the Government of the United States should resort to the printing press and the issuance of fiat currency as provided in the bill which passed the House at the last session of Congress under the leadership of the Democratic Vice-Presidential candidate. Such an act of moral bankruptcy would depreciate and might ultimately destroy the value of every dollar in the United States. It would cause the collapse of all confidence in our Government and would bring widespread ruin to the entire country and to every one of our citizens. Daniel Webster 100 years ago stated: 'He who tampers with the currency robs labor of its bread. He panders, indeed, to greedy capital, which is keen-sighted, and may shift for itself; but he beggars labor, which is honest, unsuspecting, and too busy with the present to calculate for the future. The prosperity of the working classes lives, moves, and has its being in established credit, and a steady medium of payment.' And the experience of every government in the world since that day has confirmed Webster's statement.

"Let us not forget that while we have lost much in this depression, we still have much more to lose. And our whole future may be said to depend upon early recovery.

"For many months the right-thinking men of both parties have been engaged in organizing and mobilizing the resources of the Nation to promote the economic recovery which is the one sure and effective means of restoring the standard of living of all of our people and rescuing millions of them from suffering and misery. The proposal to levy over $2 billion and to pay it to a particular group constitutes a fatal threat to the entire program of recovery, to the success of which all must look for their well-being, security, and happiness. In my judgment the enactment of any such proposal into legislation would be a deadly blow at the welfare of the Nation. I was elected to protect and promote the interests of all of the people. As long as I am President I shall continue to do so and to oppose with all of the strength and influence at my command any demand that runs counter to the common welfare."

Note: The White House issued the statement on September 14, 1932, for publication on September 15.

On September 14, at the American Legion convention in Portland, Oreg., the legislative committee approved a resolution for the immediate payment of the veterans' bonus. The resolution was passed at the closing session on September 15.

Herbert Hoover, Statement on the Veterans' Bonus. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/207530

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