When Herbert Hoover became President in 1929, the care of America’s veterans was one of the nation’s most pressing issues. Three agencies had overlapping jurisdiction over veterans affairs: the Veterans Bureau, the National Home for Disabled Volunteer Soldiers, and the Bureau of Pensions. By the end of the 1920’s, the total expenditures on veterans’ affairs approached 25% of the entire Federal budget.
When Hoover entered the White House, he promised to make the government more responsive and efficient, to improve services and to reduce costs. The three veterans’ agencies, with their enormous budgets, were a logical place to start.
On April 20, 1929, less than two months after the inauguration, Hoover received a memo from Gen. Frank T. Hines, the director of the Veterans Bureau, suggesting the consolidation of all veterans activities into one agency. It is not clear whether Hoover requested this memo, or Hines volunteered it. Hoover assigned his military aide, Lt. Col. Campbell Hodges, to organize a committee to investigate the consolidation of veterans’ affairs. Over the summer, the committee analyzed the activities of the three existing agencies and the advantages and disadvantages of consolidation. The committee submitted a report on October 1, recommending that the President ask Congress for the authority to consolidate veterans affairs into one agency.
In his State of the Union message, December 3, 1929, Hoover informed Congress, “The administration of all laws concerning the veterans and their dependents has been upon the basis of dealing generously, humanely, and justly… I am convinced that we will gain in efficiency, economy, and more uniform administration and better definition of national policies if the Pension Bureau, the National Home for Volunteer Soldiers, and the Veterans’ Bureau are brought together under a single agency.” A bill authorizing the President’s proposal made its way through Congress and was signed into law by President Hoover on July 3, 1930. Hoover announced the impending consolidation at a press conference on July 8.
On July 21, 1930, President Hoover signed Executive Order 5398 “Consolidation and Coordination of Governmental Activities Affecting Veterans,” which officially created the Veterans’ Administration. “The consolidated budget of these services for the present fiscal year amounts to approximately $800 million,” said the President, “so that the new establishment becomes one of the most important functions in the Government.”