The GI Bill, Veterans Administration Mortgages, and Discrimination
by Julia Hammond
The GI Bill, passed in 1944, was designed to support veterans coming home from World War II. The original bill granted protections and benefits that helped veterans access higher education, unemployment insurance, job training, and low-interest mortgages, among others. But this comprehensive veterans’ assistance plan was, both in design and implementation, intended for White veterans only.
Lawmakers worried that federal assistance for Black veterans would empower them to advocate against Jim Crow laws, and designed the program such that it would be run by individual states rather than the federal government. GI Bill benefits were reserved only for veterans who were honorably discharged. Black men, who were far more likely to receive dishonorable or “blue” discharges (neither honorable or dishonorable) than White men, were often excluded from all benefits.
Even those who managed to enter the service and secure an honorable discharge faced difficulties in securing the benefits owed to them because there were no robust legal remedies to enforce the equal distribution of benefits. Some job training facilities and educational institutions would not allow Black veterans to use their equipment.
Further, the low-interest home loans guaranteed by the Veterans Administration were actually administered through private lenders, meaning that financial institutions could refuse mortgages to Black veterans and effectively deny them their benefits. As White veterans flowed into new suburbs and began amassing wealth in skilled positions, Black veterans were effectively excluded from skilled jobs, suburban living, and higher education by discriminatory hiring practices, discriminatory lending practices, and racist restrictive covenants. Historian Ira Katznelson writes that these injustices were not just limited to the South: “in New York and the northern New Jersey suburbs, fewer than 100 of the 67,000 mortgages insured by the GI bill supported home purchases by non-Whites.” According to Katznelson, there was “no greater instrument for widening an already huge racial gap in postwar America than the GI Bill.”
Questions for Newtown:
How many houses in Newtown were financed through the GI Bill? Did this spur the homebuilding market?
How many people bought a house in Newtown through the GI Bill? How many people bought a house in Newtown after the house they bought elsewhere with the GI Bill appreciated in value?
How many people have inherited wealth based on the appreciation of their parents’ or grandparents’ houses? Were any of those houses financed through the GI Bill?
Lawmakers worried that federal assistance for Black veterans would empower them to advocate against Jim Crow laws, and designed the program such that it would be run by individual states rather than the federal government. GI Bill benefits were reserved only for veterans who were honorably discharged. Black men, who were far more likely to receive dishonorable or “blue” discharges (neither honorable or dishonorable) than White men, were often excluded from all benefits.
Even those who managed to enter the service and secure an honorable discharge faced difficulties in securing the benefits owed to them because there were no robust legal remedies to enforce the equal distribution of benefits. Some job training facilities and educational institutions would not allow Black veterans to use their equipment.
Further, the low-interest home loans guaranteed by the Veterans Administration were actually administered through private lenders, meaning that financial institutions could refuse mortgages to Black veterans and effectively deny them their benefits. As White veterans flowed into new suburbs and began amassing wealth in skilled positions, Black veterans were effectively excluded from skilled jobs, suburban living, and higher education by discriminatory hiring practices, discriminatory lending practices, and racist restrictive covenants. Historian Ira Katznelson writes that these injustices were not just limited to the South: “in New York and the northern New Jersey suburbs, fewer than 100 of the 67,000 mortgages insured by the GI bill supported home purchases by non-Whites.” According to Katznelson, there was “no greater instrument for widening an already huge racial gap in postwar America than the GI Bill.”
Questions for Newtown:
How many houses in Newtown were financed through the GI Bill? Did this spur the homebuilding market?
How many people bought a house in Newtown through the GI Bill? How many people bought a house in Newtown after the house they bought elsewhere with the GI Bill appreciated in value?
How many people have inherited wealth based on the appreciation of their parents’ or grandparents’ houses? Were any of those houses financed through the GI Bill?
Sources Used:
Blakemore, Erin, How the GI Bill's Promise Was Denied to a Million Black WWII Veterans, www.history.com/news/gi-bill-black-wwii-veterans-benefits, 2019.
Black and White Veterans and the GI Bill, U.S. History through Census Data, https://journeys.dartmouth.edu/censushistory/2016/10/31/black-and-white-veterans-and-the-gi-bill/, 2016.
Katznelson, Ira, When Affirmative Action was White; An Untold History of Racial Inequality in Twentieth-Century America. W. W. Norton & Company, 2005.
Rothstein, Richard, Color of Law: A Forgotten History of How Our Government Segregated America, The, Liveright, 2018.
Blakemore, Erin, How the GI Bill's Promise Was Denied to a Million Black WWII Veterans, www.history.com/news/gi-bill-black-wwii-veterans-benefits, 2019.
Black and White Veterans and the GI Bill, U.S. History through Census Data, https://journeys.dartmouth.edu/censushistory/2016/10/31/black-and-white-veterans-and-the-gi-bill/, 2016.
Katznelson, Ira, When Affirmative Action was White; An Untold History of Racial Inequality in Twentieth-Century America. W. W. Norton & Company, 2005.
Rothstein, Richard, Color of Law: A Forgotten History of How Our Government Segregated America, The, Liveright, 2018.