New-York tribune., 1921-07-07
Treasury Secretary Says
Adoption Would Defeat
Administrations Plans
to Cut National Budget
Cost Estimate Up
To $3.50, 100000
Underwood of Opinion
A. E. F. Men Do Not
Measure Services i'm Cash

WASHINGTON. July g. With a
warning that there is grave danger of
an immediate government deficit, Sec
retary of the Treasury Mellon asked
Congress to-day to defer action on the
soldiers bonus bill.
"This is not time to impose several
billion dollars of new liabilities on an
already overburdened treasury" the
Treasury Secretary said to Senator
Frelinghuysen, Republican of New Jer-
sey, in a letter which was read in the
Senate when the bonus bill was called
up. The bill has already passed the
House, and the letter was in response
to request from Senator Freling-
huysen for statement of the financial
obligations which the bill would place
upon the government.
The letter was characterized by Sem
ator Underwood, Democratic leader, as
"strong, forceful and to the point"
After the reading of the letter SEN
ator Underwood made an attack on the
bill. "Jn passing the BILL" the Ala
bama Senator said, "the Republican ma
jority would write in the country's his
tory that men no longer sacrifice, but
measure their service in dollars
Replying briefly, Senator McCumber,
of North Dakota, in charge
of the bill, denied that any attempt
was being made to measure the serv-
ices Of soldiers of the World War in
dollars.
MELONS Estimate
Secretary Mellon estimated that the
bill would cost between S1,5OO, 100000
and $780, 900, 900; that it would "swell
the cost of government and virtually
defeat the Administrations program Of
retrenchment and economy" and that
it would block "all refunding opera
tions on the national debt. and depress
further the prices of Liberty bonds"
These, he said, would be "inevitable
direct financial consequences" adding
grave danger of renewed imitation, in
creased commodity prices and unset-
tied business conditions"
All of his estimates, the Secretary
explained, were devoted merely to the
cash payment sections of the bill and
took "no account of expenses of admin
istration or possible cost of affording
vocational training, farm or home aid
or land settlement aid to veterans who
elect such benefits"
81 should be derelict in my duty to
the country and to the veterans them
selves if failed to give this warning
of the inevitable financial consequences
of the pending BILL" ne concluded "The
result would be serious injury and loss
to the whole country, and in Tie
long run the veterans themselves would
lose far more than they would gain
cannot bring myself to believe that this
would be adjusted compensation for
a service that was performed as the
highest duty of citizenship and a sacri-
flee that can never be measured in
terms of money"
LOAD Upon Whole People"
Not the least disturbing feature, he
continued, was the bills plan to post
pone actual distribution of funds until
next year, which, he said, "tends to
mislead the people into the belief that
in some way the proposed program can
be accomplished without imposing q
serious burden on the country
'lt must inevitably increase the war
he contended. at 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 cor
responding load upon the whole people
in the form of increased interest
charges, increased taxes and increased
cost of living"
Cost of refunding the early maturi-
ties of public debt, the Secretary said,
would be vastly increased and the re-
funding operations themselves seri-
ously embarrassed" Holders of Lib
erty bonds, he added, would "have to
face the threat of further depression" /"
"It seems particularly inappropri-
ate," he said, ito give present consid
erations to the measure when we still
have before us the pressing problem of
revising the internal tax laws and find
ing sufficient revenues to meet the ex-
listing requirements of government.
(CoEtnued on next paga)