Many ex-servicemen from World War I were in dire economic straits by early 1931. A proposal aimed at improving their situations was advanced by sympathetic veterans’ organizations. Congress responded by approving a measure that would have made available one-half of the adjusted compensation (the so-called “bonus certificates”) provided in the Soldiers' Bonus Act of 1924, which had authorized each veteran to have access to 22.5 per cent of the compensation due to him in the form of a loan against the total amount owing.
In February 1931, President Hoover vetoed this bill, explaining that such largess would deplete meager federal funds. In addition, the measure had been applied to all former servicemen and had not singled out those in dire need — which probably amounted to only about one-quarter of the veterans.
In short order, Congress reconsidered the matter and passed it over Hoover’s veto.
The President’s rejection of this aid program, while rooted in sound economic conservatism, did much to erode his once-popular image. Protests among veterans did not end at this point. A movement began to gather steam for the payment of all of the adjusted compensation amounts in cash. Agitation on this score led to the “Bonus March” on Washington in the summer of 1932 and the resulting final destruction of Hoover’s reputation as a humanitarian.