The Civil War pension system was the most comprehensive social policy in the late nineteenth-century United States. Between 1880 and 1910, approximately a quarter of the federal government’s expenditure was devoted to this enormous system of military benefits. Scholars have typically charted the development of the pension system through a series of legislative watersheds, detailing its gradual expansion and liberalization. Yet, as this article shows, this was not the only path that the pension system could have followed. By investigating Commissioner of Pensions John Bentley’s five-year administration of the Pension Bureau during the late 1870s, this article explores a story of suppressed – rather than successful – state-building. While Bentley attempted to administer the pension system according to the shibboleths of the contemporary civil service reform movement, the nation’s veterans and their allies pursued a pension system predicated upon an incipient theory of veterans’ entitlements and rights. The Civil War pension system, this article thus reminds us, was not simply the sign of a precocious nineteenth-century state, but the product of a specific type of state, one that reflected a preference for distributive policies and decentralized administration rather than administrative centralization and broad grants of bureaucratic discretion.