Palisadian. [volume] (Cliffside Park, N.J.) 1906-current, 1920-05-22
HOUSE MAJORITY
FOR BONUS ACTION
Come Out for Legion Soldier Re-
lief Plan at Republican
Caucus.
IGNORE HOUSTON LETTER.
Treasury Head Strongly Protests Aid
to Ex-Soldiers, "However Financed"
Increased Revenues Instead of
Big Expenditure Vital Need.

Washington. - House Republicans.
In party caucus, came out squarely for
enactment of soldier relief legislation,
as advocated by the American Legion.
Before deciding in favor of the legis-
lation, the Republicans refused 141 to
40, to postpone indefinitely all action
on relief legislation. Several Republi-
can leaders, including a majority of
members Of the Steering Committee,
were said to have supported the mo-
ton, but there was no record vote.
Secretary Houston's letter, which re-
suited from an inquiry by Chairman
Fordney as to the treasury's view on
the "insurgent" Republican-Democ
tic proposal for retroactive so per
cent war profits tax, declared that Con-
gress, instead of devising new means
of spending money, should concen-
trate it's efforts on raising funds for
current government expenses.
81 beg to submit to your committee
for its serious consideration" the
treasury secretary wrote, 1.-The ques-
ton, whether, all things considered,
it would not now be advisable to seek
out additional sources of revenue to
meet the current requirements of the
government, in order to obviate the
necessity of continuing in considerable
measure to meet them by borrowing"
Mr.. Houston said 1t was a matter of
serious concern to have the govern
ment appear in the market every few
months for lOans as this course would
result in additional credit expansion
with higher prices and a more difficult
financial situation.
Discussing the alternative Of bond
issue - increased taxes - Secretary
Houston said:
1.-THE very heavy burdens which will
rest upon the treasury by reason of
laws already enacted, including par
ticularly the recent railroad laws
which, it is estimated, will entail an
expenditure of approximately $1,000
O0O,O00-and also by reason Of the
delay in making provision to realize
upon the governments investment in
railroads and ships, taken in conjunc-
ton with the existing credit situation,
suggests the need Of grave considera-
ton Of the question whether, quite
aside from and in addition to any taxa
ton which it might be necessary to
impose in order to pay bonus to the
soldiers, it may not be necessary to
provide for meeting the necessities
of the government in a larger meas
ure from taxation.
1.-THE total Indebtedness of the gov
represented by treasury certificates,
war savings certificates and victory
notes, is in the neighbOrhood of ST.
GOO. 100000" Secretary Houston wrote.
ut is no longer possible to finance
the current needs Of the government
In part by the issue of treasury certif-
icates, except on onerous terms which
reflect upon the value Of the govern
ment's bonds and depreciate them in
the market. Furthermore, it would
appear to be bad economy and bad
finance for the government to borrow
money on short-term certificates of in
debtedness (maturing within from
three to six months) to be invested for
term of years in railroads and ships
"It is matter of serious concern"
continued the letter, ito have the gov
eminent appearing in the market
every few weeks for loans. Certainly
nothing ought to be done to add to
existing credit expansion that can pos
sibly be avoided. The result would
he to increase priceS and to make A
difficult situation less satisfactory.
additional taxes are also undesir-
able, but they may be Tess undesirable
than borrowing. They would at least
have the effect in part of enforcing
economics.
1.-THE first thing to do, I am sure, you
will agree, Is to keep Federal expendi-
lures down to the minimum, and it is
obvious also that other governmental
jurisdictions and private individuals
should do likewise"