I have given thought to your request that I should express to you and the Senate Finance Committee my views upon the bill passed by the House of Representatives, increasing the loans to World War veterans upon the so-called bonus certificates. In view of the short time remaining in this session for its consideration I shall comply with your request.

The proposal is to authorize loans upon these certificates up to 50% of their face value. And to avoid confusion it must be understood that the “face value” is the sum payable at the end of the 20 years period (1945) being based on the additional compensation to veterans of about $1,300,000,000 granted about six years ago, plus 25% for deferment, plus 4% compound interest for the 20 year period. As the “face value” is about $3,423,000,000, loans at 50% thus create a potential liability for the Government of about $1,172,000,000, and, less the loans made under the original Act, the total cash which might be required to be raised by the Treasury is about $1,280,000,000 if all should apply. The Administrator of Veterans' Affairs informs me by the attached letter that he estimates that if present conditions continue, then 75% of the veterans may be expected to claim the loans, or a sum of approximately $1,000,000,000 will need to be raised by the Treasury.

I will not undertake to enumerate all of the grounds for objection to this proposal. There are a number of most serious objections, some of which are matters of method and some of which are matters of fundamental principle affecting the future of our country and the service men themselves.

I have supported, and the nation should maintain, the important principle that when men have been called into jeopardy of their very lives in protection of the Nation, then the Nation as a whole incurs a special obligation beyond that to any other groups of its citizens. These obligations cannot be wholly met with dollars and cents. But good faith and gratitude require that protection be given to them when in ill health, distress and in need. Over 700,000 World War Veterans or their dependents are today receiving monthly allowances for these reasons. The country should not be called upon, however, either directly or indirectly, to support or make loans to those who can by their own efforts support themselves.

By far the largest part of the huge sum proposed in this bill is to be available to those who are not in distress.

The acute depression and unemployment create a situation of unusual economic sensitiveness, much more easily disturbed at this time than in normal times by the consequences of this legislation, and such action may quite well result in a prolongation of this period of unemployment and suffering in which veterans will themselves suffer with others.

By our expansion of public construction for assistance to unemployment and other relief measures, we have imposed upon ourselves a deficit in this fiscal year of upwards of $500,000,000 which must be obtained by issue of securities to the investing public. This bill may possibly require the securing of a further billion of money likewise from the public. Beyond this, the Government is faced with a billion dollars of early maturities of outstanding debts which must be refunded aside from constant renewals of a very large amount of temporary Treasury obligations. The additional burdens of this project cannot but have damaging effect at a time when all effort should be for the rehabilitation of employment through resumption of commerce and industry.

There seems to be a misunderstanding in the proposal that the Government securities already lodged with the Treasury to the amount of over $700,000,000 as reserve against these certificates constitute available cash to meet this potential liability. The cash required by the veterans can only be secured by the sale of these securities to the public. The legislation is defective in that this $700,000,000 of Government securities is wholly inadequate to mend either a potential liability of $1,280,000,000 or approximately $1,000,000,000 estimated as possible by the Administrator of Veterans' Affairs, and provision would need to be made at once for this deficiency.

The one appealing argument for this legislation is for veterans in distress. The welfare of the veterans as a class is inseparable from that of the country. Placing a strain on the savings needed for rehabilitation of employment by a measure which calls upon the Government for a vast sum beyond the call of distress, and so adversely affecting our general situation, will in my view not only nullify the benefits to the veteran but inflict injury to the country as a whole.

For some days police authorities and Treasury officials have been endeavoring to persuade the so-called bonus marchers to evacuate certain buildings which they were occupying without permission. These buildings are on sites where Government construction is in progress and their demolition was necessary in order to extend employment in the District to carry forward the Government's construction program.

This morning the occupants of these buildings were notified to evacuate and at the request of the police did evacuate the buildings concerned. Thereafter, however, several thousand men from different camps marched in and attacked the police with brickbats and otherwise injured several policemen, one probably fatally.

I have received the attached letter from the Commissioners of the District of Columbia stating that they can no longer preserve law and order in the District.

In order to put an end to this rioting and defiance of civil authority, I have asked the Army to assist the District authorities to restore order.

Congress made provision for the return home of the so-called bonus marchers who have for many weeks been given every opportunity of free assembly, free speech and free petition to the Congress. Some 5,000 took advantage of this arrangement and have returned to their homes. An examination of a large number of names discloses the fact that a considerable part of those remaining are not veterans; many are communists and persons with criminal records.

The veterans amongst these numbers are no doubt aware of the character of their companions and are being led into violence which no government can tolerate.

A bunch of out-of-work ex-service men in Portland, Oregon, figured they needed their bonus now; 1945 would be too late, only buy wreaths for their tombstones. They figured out, too, that the bonus paid now would tend to liven up business, particularly the retail business in small towns; might be just enough to tide them over till things picked up. So three hundred of them started east in old cars and trucks, hitchhiking, riding on freight trains.

By the time they reached Council Buffs (Iowa) they found other groups all over the country were rebelling against their veterans' organizations and getting the same idea. It was an Army. They organized it as such and nicknamed it the Bonus Expedition Force.

When war came in 1917 William Hushka, 22-year-old Lithuanian, sold his St. Louis butcher shop, gave the proceeds to his wife, joined the Army. He was sent to Camp Funston, Kansas where he was naturalized. Honorably discharged in 1919, he drifted to Chicago, worked as a butcher, seemed unable to hold a steady job. His wife divorced him, kept his small daughter.

Long jobless, in June he joined a band of veterans marching to Washington to fuse with the Bonus Expeditionary Force. "I might as well starve there as here", he told his brother. He took part in the demonstration at the Capital the day Congress adjourned without voting immediate cashing of the bonus.

Last week William Hushka's Bonus for $528 suddenly became payable in full when a police bullet drilled him dead in the worst public disorder the capital has known in years.

A few weeks later there was more talk of revolution when the Bonus Expeditionary Force descended on Washington. The BEF was a tattered army consisting of veterans from every state in the Union; most of them were old-stock Americans from smaller industrial cities where relief had broken down. All unemployed in 1932, all living on the edge of hunger, they remembered that the government had made them a promise for the future. It was embodied in a law that Congress had passed some years before, providing "adjusted compensation certificates" for those who had served in the Great War; the certificates were to be redeemed in dollars, but not until 1945. Now the veterans were hitchhiking and stealing rides on freight cars to Washington, for the sole purpose, they declared, of petitioning Congress for immediate payment of the soldiers' bonus. They arrived by hundreds or thousands every day in June. Ten thousand were camped on marshy ground across the Anacostia River, and ten thousand others occupied a number of half-demolished buildings between the Capitol and the White House. They organized themselves by states and companies and chose a commander named Walter W. Waters, an ex-sergeant from Portland. Oregon, who promptly acquired an aide-de-camp and a pair of highly polished leather puttees. Meanwhile the veterans were listening to speakers of all political complexions, as the Russian soldiers had done in 1917. Many radicals and some conservatives thought that the Bonus Army was creating a revolutionary situation of an almost classical type.

A challenge to the authority of the United States Government has been met, swiftly and firmly.

After months of patient indulgence, the Government met overt lawlessness as it always must be met if the cherished processes of self-government are to be preserved. We cannot tolerate the abuse of Constitutional rights by those who would destroy all government, no matter who they may be. Government cannot be coerced by mob rule.

The Department of Justice is pressing its investigation into the violence which forced the call for Army detachments, and it is my sincere hope that those agitators who inspired yesterday's attack upon the Federal authority may be brought speedily to trial in the civil courts. There can be no safe harbor in the United States of America for violence.

Order and civil tranquility are the first requisites in the great task of economic reconstruction to which our whole people now are devoting their heroic and noble energies. This national effort must not be retarded in even the slightest degree by organized lawlessness. The first obligation of my office is to uphold and defend the Constitution and the authority of the law. This I propose always to do.