In 1944, at the Mayflower Hotel in Washington, Harry W. Colmery of the American Legion scribbled a plan on hotel stationery and a cocktail napkin for what would happen when sixteen million troops came home. It became the Servicemen's Readjustment Act, signed by Franklin D. Roosevelt on June 22, 1944, and it was born of political terror rather than generosity. This episode traces that fear back to the Bonus Army of 1932, when World War I veterans holding uncashable tombstone bonus certificates camped in Washington and were driven out by troops under Douglas MacArthur with tear gas and bayonets.

The episode contrasts Roosevelt's restrictive, means-tested proposal with the Legion's universal benefits for anyone with 90 days of honorable service, explains why conservatives backed the bill as a way to contain the welfare state, and shows how zer ...