Military payday loans then and now
Payday, Then and Now
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It's payday.
While you were sleeping, an electronic exchange deposited money in your bank account. Perhaps later today you'll stop by a 24-hour teller machine to get some ready cash.
Tonight, instead of writing checks, you can spend time with the kids or go to a movie, because many of your bills will be paid automatically through government allotment or through direct payments from your bank account.
Brig. Gen. Roger Scearce, the Defense Finance and Accounting Service's deputy director and the agency's senior officer, remembers when payday was a very different experience.
Twenty-four years ago, he was a young lieutenant and a disbursing officer in Frankfurt, Germany. "I was assigned to the 503rd Finance Company, with no training, at a time when commanders paid their soldiers through their class 'A' agents. As a disbursing officer, I ran the payroll through the Consolidated Army Pay System."
Scearce remembers making a change list -- determining what denominations of cash were needed to pay each soldier in his unit, then counting and recounting the money before sealing it in a brown bag and putting it in a vault.
"I handled millions of dollars in cash, and terrorism was not uncommon then," Scearce said. "The one thing I remember is what a logistical burden paydays were."
He also remembers how other officers hated to be designated class "A" agents and how, when any payroll bundle was "short" on cash when it returned, the lieutenants were "requested" to make up the difference or undergo an extensive investigation.
Then came the days of automation and JUMPS, the Joint Uniformed Military Pay System. As Scearce remembers, it was a major event to move into key-punch computing and begin the initial attempt to merge pay and personnel items. Soldiers were paid by Treasury checks, but that still required finance offices to maintain U.S. and foreign currency so soldiers could cash their checks. Millions of dollars were recycled every payday.
But even JUMPS was cumbersome by today's standards. It required key punch, review, key punch, adding headers and trailers to punch cards, making trial runs and, finally, the run to print and distribute checks.
Payday also meant "payday activities" -- a day off for soldiers, since they had to have time to cash checks and pay bills.
Today's technology has ended this inefficiency and made life easier for soldiers and the finance offices that support them. And it has led to remarkable savings through personnel reductions.
"In the former finance-support structure, finance units were staffed with 100-plus soldiers to support about 16,000 troops. Now we have 2,700 officers and enlisted personnel in the Finance Corps supporting half a million active-duty soldiers. No branch of the Army provides a bigger bang for the Army's buck," Scearce said.
Today the Finance Corps has taken its expertise into battlefield planning and operations.
"In Operation Desert Storm, finance soldiers were on the second plane that landed in Dhahran, sent in to set up an infrastructure before other soldiers arrived," Scearce said. "Otherwise, who would take care of feeding and housing the troops? Or how would transportation be arranged, or gas be purchased? Someone had to acquire and pay for these necessities locally. That's the initial sustainment we bring to the fight."
DFAS was activated in January 1991 and, while learning as it went, played a major role in Desert Storm's success. The agency was created to improve the overall quality of Department of Defense financial management through consolidation, standardization and integration of all the armed services' finance and accounting procedures, operations and systems.
Still, most service members are only aware of DFAS when they see the name at the top of their monthly leave-and-earnings statements. And that's all right, Scearce says, because he thinks of DFAS as DOD's paymaster.
"We pay people and we pay for items and services to keep soldiers, sailors, airmen and marines ready to defend the nation. With those responsibilities come a lot of challenges -- integrating the varied ways services have done things in the past into one way of doing business; using technology to its greatest potential; reducing systems and changing business processes."
Scearce said that by 1999 DFAS will have restructured to only nine systems, replacing the more than 110 finance systems it inherited. There will be only one basic system for the numerous payments made to DFAS customers: military and civilian pay, debt and claims management, vendor pay, contract pay, transportation pay, travel pay, and retiree and annuitant pay. As these systems become standard, he foresees a "purple" DFAS emerging, where all services do things one way.
"We've developed a vision, and we're driving toward that vision -- now we need to change our business practices and make technology a part of the way we do business," Scearce explains.
Soldiers in Scearce's former unit probably would have laughed at the thought of electronic fund transfers, ATM cards and LESs via e-mail. Perhaps in another 20 years, the way we do business today will be seen by future generations as archaic -- or it may be seen as paving the way to that future.
For more about military or civilian pay, retirement or annuitant benefits, or other topics related to military finance and accounting, visit the DFAS home page at www.dfas.mil.
Paying soldiers correctly and on time has always been a priority, but it hasn't always been easy.
From the Revolutionary War until just before World War I, paymasters delivered coin payment by horse and wagon to soldiers on the battlefield. Paymasters, typically highly educated young men possessing good penmanship skills, kept meticulous records that reflected each soldier's name, grade and monthly pay. Despite Army escorts, many paymasters were robbed and murdered.
Soldiers were paid varying amounts, based on whether they were assigned to infantry or cavalry units, whether they were formally educated and whether they chose to enlist rather than be drafted.
This variance in pay was the first real entitlement to U.S. military pay. -- Lisa J. Anderson
Revolutionary Era (1775-1783)
Army privates earned $4 per month. Soldiers often waited six to 12 months to get paid.
War of 1812 (1812-1815)
As Francis Scott Key was inspired to write the "Star Spangled Banner" after seeing a tattered flag waving in the breeze at Fort McHenry, the average private earned $8 a month, with the same pay lag experienced during the revolution.
The Civil War (1861-1865)
Thousands of men left homes and families to fight for the Union Army, earning a mere $13 a month for their sacrifices.
World War I (1917-1918)
U.S. soldiers lived in trenches and endured chemical warfare while fighting in Europe. A private earned about $33 a month. This was the first war in which soldiers were paid according to their time in service.
World War II (1941-1945)
Additional entitlements for hostile-fire pay and foreign-service pay added about $50 per month to a soldier's base pay. Families could receive dependency benefits if service members requested to have money deducted from their pay and sent directly home. The 1943 allotment drive generated 8 million allotment checks per month.
Homecoming (1946-1947)
The U.S. National Defense Act of 1947 established the U.S. Air Force as a separate military branch. Qualified members of all branches of service could receive additional entitlements such as jump pay and flight pay.
The Korean War (1950-1952)
Recruits earned $83.20 per month. Service members fighting in Korea were paid in Military Pay Certificates, a substitute for U.S. currency used to curb black market activities.
Vietnam (1964-1974)
Monthly pay for new soldiers, sailors, airmen and marines increased from $83.20 to $344.10 in a 10-year period.
Today
When U.S. forces conducted Operations Desert Shield and Desert Storm, the average private earned $724.20 per month. Since then, service members have deployed in Operation Joint Endeavor and smaller operations such as Just Cause and Restore Hope. When service members were sent to Bosnia in 1996, Army privates and their peers in the other services earned $809.10 per month.