Volume 17 , Issue 20

On This Day, 22 June

It was on this day in 1944, U.S. President Franklin D. Roosevelt signed the G.I. Bill, an unprecedented act of legislation designed to compensate returning members of the armed services, known as GIs, for their efforts in World War II.

It was the last of the sweeping New Deal reforms, Roosevelt's administration created the G.I. Bill, officially the Servicemen's Readjustment Act of 1944, hoping to avoid a relapse into the Great Depression after the war ended. FDR wanted to prevent a repeat of the Bonus March of 1932, when 20,000 unemployed veterans and their families flocked in protest to Washington. The American Legion, a veteran's organization, successfully fought for many of the provisions included in the bill, which gave returning servicemen access to unemployment compensation, low-interest home and business loans, and funding for education.

The GI Bill became one of the major forces that drove an economic expansion in America that lasted 30 years after World War II.

1775

It was on this day in 1775, Congress issued $2 million in bills of credit. By the spring of 1775, colonial leaders, concerned by British martial law in Boston and increasing constraints on trade, had led their forces in battle against the crown. The American revolutionaries encountered a small problem on their way to the front. They lacked the funds necessary to wage a prolonged war.

Though hardly the colonies' first dalliance with paper notes-the Massachusetts Bay colony had issued its own bills in 1690-the large-scale distribution of the revolutionary currency was fairly new ground for America. Moreover, the bills, known at the time as "Continentals," notably lacked the then de rigueur rendering of the British king. Instead, some of the notes featured likenesses of Revolutionary soldiers and the inscription "The United Colonies." But, whatever their novelty, the Continentals proved to be a poor economic instrument: backed by nothing more than the promise of "future tax revenues" and prone to rampant inflation, the notes ultimately had little fiscal value. As George Washington noted at the time, "A wagonload of currency will hardly purchase a wagonload of provisions" Thus, the Continental failed and left the young nation saddled with a hefty war debt.

A deep economic depression followed the Treaty of Paris in 1783. Unstable currency and unstable debts caused a Continental Army veteran, Daniel Shays, to lead a rebellion in western Massachusetts during the winter of 1787. Fear of economic chaos played a significant role in the decision to abandon the Articles of Confederation for the more powerful, centralized government created by the federal Constitution. During George Washington's presidency, Alexander Hamilton struggled to create financial institutions capable of stabilizing the new nation's economy.
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