World War Adjusted Compensation Act
The World War Adjusted Compensation Act, or Bonus Act,[1] was a United States federal law passed on May 19, 1924, that granted a benefit to veterans of American military service in World War I.
Provisions[edit]
The act awarded veterans additional pay in various forms, with only limited payments available in the short term. The value of each veteran's "credit" was based on each recipient's service in the United States Armed Forces between April 5, 1917, and July 1, 1919, with $1.00 awarded for each day served in the United States and $1.25 for each day served abroad. It set maximum payments at $500 (approximately $8,000 in 2021 dollars) for a veteran who served stateside and $625 for a veteran who served overseas.[1] Most officers and anyone whose service began after November 11, 1918, were excluded.[2]
It authorized immediate payments to anyone due less than $50.[3] The estate of a deceased veteran could be paid his award immediately if the amount was less than $500.[4] All others were awarded an "Adjusted Service Certificate," which functioned like an insurance policy. Based on standard actuarial calculations, the value of a veteran's certificate was set as the value of a 20-year insurance policy equal to 125 percent of the value of his service credit. Certificates were to be awarded on the veteran's birthday no earlier than January 1, 1925, and redeemable in full on his birthday in 1945, with payments to his estate if he died before then.[5] Certificate holders were allowed to use them as collateral for loans under certain restrictions.[6]
Later history[edit]
Veterans were able to take out loans against their certificates beginning in 1927. By June 30, 1932, more than 2.5 million veterans had borrowed $1.369 billion.[15]
In 1936, the Adjusted Compensation Payment Act (January 27, 1936, ch. 32, 49 Stat. 1099) replaced the 1924 Act's service certificates with bonds issued by the Treasury Department that could be redeemed at any time.