The New York herald., 1921-06-07
TUESDAY, JUNE z. 1921.
Soldiers Bonus Pitfalls.

SOA0kCfo DOhl0o =
Primary duty to itself and to its
war veterans makes it an imperative
obligation of the nation to consider
carefully from all sides the SOL
diers' bonus legislation now in the
hands of the Ways and Means Com
mittee of the House of Representa-
tives and in the special committee
Of the Senate. The wisdom OF put
ting a money value on patriotism or
even on actual war service Is dis
tasteful incident of this legislation,
because the money value thus fixed
is bound to be low.
The amount Of actual cash that
can be assembled for the purposes
OF soldiers bonus is only a small
proportion of the national wealth.
BY increasing taxes and by hypoth-
ecating the national credit 1t would
be possible at the very outside to
raise over a period OF years not
more than three billions OF perhaps
four billions of dollars. II this were
distributed among the four million
men who were engaged in the war
the individual payments would be
from $3.50 to $1,000 each.
Yet IL It could be shown that this
sum could be given clean and clear
TO the soldiers and that 1t would
represent to them a gift out of the
wealth OF those who did not serve
in the war and who were therefore
obligated to make some sacrifice
40 doubt the award would he freely
granted by Congress.
No such thing as clean and clear
gift of four billions, three billions
or even one billion, however, can be
made to the soldiers. This can be
shown in plain figures which can
not be juggled to show anything else,
no matter how anxious the nation
may be to show its gratitude for the
devotion of its fighting men.
The expenses OF the national Gov
ernment are now running at the rate
of $4,000, 100000 year. For the next
year the running expenses will be at
the very least $4,000 100000. For
several years after that they viii be
not penny less than $4,000, 100000.
Perhaps they will be much more.
This year the revenue from taxes
will be about $4,000. 100000. Next
wear It will be about $4,000. 10000
II no new taxes are imposed. Az
ter that II may continue as high
as $4,000, 600, 900. but II II drops lower
II will not be out OF line with the
Treasury's calculations. This is on
the basis OF present taxes.
II the soldiers bonus bill were TO
authorize aggregate payments OF
$4,000, ,000, 900, only one method would
be open to raise the money. This
would be by issuing more bonds. In
1929 a total Of $500. 900, 900 Of short
term Government obligations will
fall due. This will have to be re-
funded. The Treasury is not receiv-
ing enough IN taxes now TO pay cur
rent expenses. There will be no mar
gin for debt retirement. The float
ing OF $4,000, ,000, 900 Of bonds, In con-
junction with funding operation in
the s7.500, 100000 existing debt, would
necessitate an excursion into the
money market for s9,5O0, 100000.
No person can contemplate such an
enormous issue without realizing
that very high interest rates would
have to be paid to get the money. n
the Government were fortunate
enough to refund it's present 70 6
per cent. notes at per cent and to
sell the bonus bonds at ia per cent,
which, In view OF the world shortage
OF capital. would be doubtful, the
added interest charge on the nation
would amount to at least 800, 10000
a year and the total interest charae
on this part OF the national debt
alone would be $3.50. 100000.
The national debt would be raised
10 nearly $4,000. 100000, and on this
colossal sum the annual interest
charge. without allowing for sinking
fund or debt retirement Of any kind
would be at least s1,3OO,OOO, 900, OF
nearly half the revenue which 1t would
be possible to raise by taxation.
To provide this additional interest
money II would be necessary 20 in
crease taxes, raise postal rates and
initiate the currency. The soldier
who received his $3.50 to 81 900 bonu:
would find that the imitation OF thu
currency resulting from the discount
ing OF bonds at the Reserve bank
would rob him of probably q quarte
of the buying power Of the money
on top Of that he would be taxe'