In 1924 WW I veterans had been granted Service Certificates. Each Service Certificate, issued to a qualified veteran soldier, bore a face value equal to the soldier's promised payment, plus compound interest. The problem was that the certificates, matured twenty years from the date of original issuance, thus the Service Certificates were un-redeemable until 1945.

However, the Crash of 1929 wiped out many veterans' savings and jobs, forcing them out into the streets. Groups of veterans began to organize and petition the government to pay them their cash bonus immediately. The self-named Bonus Expeditionary Force was an assemblage of some 43,000 marchers, 17,000 World War I veterans, their families, and affiliated groups, who protested in Washington, D.C., in spring and summer of 1932.

In Washington and other cities they set up camps, called 'Hoovervilles'. A bill to accomadate the demands of the veterans was debated in Congress but met stiff resistance from Republicans loyal to President Hoover, who was adamant about maintaining a balanced budget. When the protests grew Hoover called his Army Chief of Staff, General Douglas MacArthur, to clear the camps, which led to a clash with army troops who prevailed. This episode contributed to the defeat of the Hoover administration in the following election.