, 1921-07-28
SOLDIERS ADJUSTED
COMPENSATION BILL,

At the behest of President Hard
ing the Soldiers Adjusted Compensa-
ton Bill. which had already passed
the House n was practically as
sured of passage in the Senate, was
recommitteed to the Finance COM
mittee of the Senate.
This means that the will
be held up for some time as it will
not be returned from the Finance
committee before the December SEES
sion at the earliest.
In order that our readers may
realize better the reasons for Presi-
dent Harding taking the action We
did The Republican Is publishing
extracts from a letter written by Sec
rotary OF the Treasury Mellon to
Senator Frelinghuysen. outlining the
effect upon the country of the pas
sage of this measure :
THE bill which has been reported
to the Senate provides, a. you know
for five optional plans: % Adjusted
service pay, (2) adjusted service GER
~tificates, (3) vocational training aid,
90 farm or home aid, and co land
settlement aid. The financial obi
CATION which its passage would i'm
pose on the Treasury depends in
large measure upon the choice of
plan which may be made by veter-
IN entitled to the benefits Of the
bill. 1t is therefore impossible to
make accurate estimates at this time
either as to the total cost to the
Treasury or as to the time when the
payments would have to be made.
The features Of the plan which
would entail the greatest expense
are (1) the cash payments to be
made as adjusted service pay, ca
the payments and loans to be made
on adjusted service certificates. and
go the payments involved in the So
called farm or home aid.
1.-The most conservative estimates
show that the bill would cost from
about 81, 500, 200, OO0-if the bulk of
the payments were on account of ad-
justed service pay, the greater part
Of which would fall in the near
future-to about $5.25O.0 OO. 00O-if
most veterans elected to take ad-
justed service certificates, the pay
ments on which would be distributed
over a period Of 20 years. The ac-
tual cost of the bill should fall be-
tween these two extremes, according
to the choice of plan made by the
veterans.
III, as seems probable, at least one
half should elect the cash payment
plan and about one-half the c~ertifi-
cate plan, with one-third of the latter
borrowing on their certificates, the
ultimate cost of the bill. 1t is esti-
mated would be Y e $3.50. 600, 900.
These estimates take no account of
expenses of administration or pos
sible cost of affording vocational
training aid, farm or home aid, or
land-settlement aid to veterans who
elect such benefits. These will in
volve substantial additional expense.
"Under Title v Of the bill, for ex-
ample, IN veteran who elects farm
or home aid may obtain in one pay
ment or in installments an amount
equal to his adjusted service pay in
creased by 40 per cent for the pur-
pose Of enabling him on or after
January l, 1922, to purchase or
make improvements on a city or SUI
burban home or farm. II n con-
siderable proportion of the veterans
should choose this form of aid the
effect would be to throw a heavier
expense into the first two or three
years and perhaps greatly increase
the aggregate cost Of the plan.
"These estimates, incomplete as
they are, show the heavy obliga-
tions to which the pending bill would
commit the country. To impose these
vast additional liabilities upon the
Treasury, particularly under present
conditions in industry and commerce.
would. in my judgment, create a seri-
GUS situation.
mot the least disturbing feature
Of the bill is the plan to postpone
actual distribution of the principal
benefits conferred by the bill to the
fiscal year 1928. This means that,
without comforting immediate bene-
fits on ex-service men, the country
would be committing itself to
~stupendous indeterminate liability
which, once assumed, it would have
to carry through no matter how en-
barrassing it might prove to the
finances of the government and the
business of the country when the
time m for fulfillment.
incidentally this feature OF the
bill tends to mislead the people into
the belief that in some way the pro-
posed program can be accomplished
without imposing a serious burden on
the Treasury or the country. The
result is to secure for the bill more
favorable consideration than 1t could
receive were the situation presented
in its true light.
GAS a matter OF fact, a plan to dis
burse yer over a period Of years up
to four or five billions Of dollars as
adjusted compensation must in
evitably increase by that much the
war burden which the American
people have to bear. 1t would great
~ swell the cost of government and
virtually the administrations pro-
gram Of economy and retrenchment.
1t could be financed only by adding
to the burden OF debt and taxes
under which the country is now
staggering. However financed. no
such sum could be taken out Of the
public treasury without throwing a
corresponding load upon the whole
..,-1 T. a.. FNr~& ~ trnrnncn1F In.