The New York herald., 1921-07-07
MELLON Sees RUIN
TO ECONOMY PLANS
IF BONUS Is PASSED
Secretary Warns That Bill
Would Disrupt Treasury,
Raising Taxes and Liv-
ing Costs.
L. s. NOW STAGGERING
Writes Senator Freling-
huysen That Payments
Would Prove Boone
rang to Soldiers.
COST RUNS IN BILLIONS
Appeals to Congress to Get
Country Back on Sound
Basis Before Taking
Final Action.
COST RUNS IN BILLIONS
Special Despatch 10 THE NEW YoRK HEhAih
New York Herald Bureau,
Washington, ID. C., July 8.

New York Hernld Bureau,
Washington. ID. C.. July 8.
Passage of a soldier bonus bill at
this time would be most unfortunate
for the Treasury and for the country;
would disrupt Treasury refundment
proposals, increase taxes and the cost
OF living, and in general give finan.
cial and economic setback. This is
the opinion of Secretary of the Treas
ury Mellon.
In letter to Senator Frelinghuy.
sen, made public to-day, the Secretary
freely expressed his views on the
bonus. saying the situation created
under any Of the optional plans pro-
posed would be serious one and
would fairly wreck the Administra
tion plans and efforts for Govern
ment economy. In this connection
the Secretary expressed fears that
Government disbursements might In
any event run ahead of receipts, and
the matter was one Of grave concern
to the Treasury.
Notwithstanding the frank analysis
and declarations OF Secretary Mellon
the presentation Of the Secretary's
letter in the Senate brought rever-
sion of sentiment in that body
strongly in favor Of the bonus. Many
Senators indicated willingness to
sacrifice considerations for some
form of bonus legislation. Senator
McCumber. sponsor of the bill. spoke
in favor OF the budget, and sought to
discount Mr.. MELONS forceful out.
line with the declaration that it was
of course up to the Secretary to look
after the Treasury interests and con-
serve funds.
Underwood Opposes Bill.
Minority leader Underwood (Ala-)
opposed the bill He said: The vote
here yesterday in favor OF taking UP
for consideration the socalled bonus
bill indicates on it's face. at least. that
there Is strong sentiment in favor
of its passage.
"Tt is not a pleasant task to speak
against this bill, but / do not feel that
would do my full duty II did not
express. so that it may appear in tho
record, some OF the reasons why be-
lieve this bill should not become law.
IT did not expect this letter from
the Secretary of the Treasury. con-
10
forceful and to the point. In my judg-
ment. II the party in power desires to
serve the soldiers. serve the farmer
and serve the people generally in this
country. the action that party should
take is 20 endeavor TO bring the cour-
try back TO a stable condition OF
finance. stable conditions OF business.
so that toi!ers on the farms and in the
workshops may have employment and
reasonable remuneration for their toH.
ITO attempt TO paliate the present
condition by paying men bonus does
not relieve the situation. and is not
for the benefit of the country. am
opposed to the bill for many reasons"
Gives RensOn Tor Attack.
He attacked the bill. reading from
the McCumber report which explained
worthy OF .he committee to report Il
out.
Referring 70 the fact that IL was pay
ing for patriotic services--paying a !,
dollar day. mo man in the Senate.
he said. would take the chances that
these soldiers took for a dollar day
Secretary Melons letter was in re- /
sponse 70 a communication from Senator \
Frelinghuysen. in part as follows: In
my study Of the bill have tried to de-
termine what financial obligation its
enactment would place upon the Treas
ury. Such obligation your department.
am sure. Is equipped to ascertain. I
have no desire 10 place any undue bur-
den upon you. but would be grateful
II YOU could seq your way clear TO In
dicate what the enactment OF the bill
would mean 10 the Treasury OF the
United States"
Secretary Mellon replied: The bill
which has been reported to the Senate
provides. as you know. for five optional
plans: ca Adjusted service pay; t2)
adjusted service certificates; t5) voca-
tional training aid ca farm or homo
aid and (5) land settlement aid. The
financial obligation which its passage
would impose on the Treasury depends
In large measure upon the choice OF
plan which may be made BY veterans
entitled 60 the benefits Of the bill IL
Is therefore impossible TO make ac~I-
rate 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. a The cash payrnents IN ne ma 4,