New-York tribune., 1922-03-15
Bill Amended 10 Let Banks
Not in Reserve System Re-
discount Veteran Loans /:
Sales Tax Effort Fails
Mellon Sees PeriIto
Treasury Funding e
Leaders Hope 10 Suspend
Rules to Block Changes
NEUTRALITY-SUSPICIOUS.


WASHINGTON. March 1a.-Thc so
called service certificate soldiers bonus
bill was formally presented tonight to
tno House Of Representatives. by the
Ways and Means Committee. Onlv five
votes were cast against reporting the
measure favorab'y when the committee
finished it's work late this afternoon.
following session with Secretary Of
the Treasury Mellon, Governor Har-
ding of the Federal Reserve Board,
Comptroller Of the Currency Crcssnger
and Government Actuary Mccoy. The
fvo opposing the report were Repre-
scntatives Tilson, Of Connecticut. and
Ireadway. Of Massachusetts,, Repubi-
cans, and kitchin, of North Carolina.
Garner. Of Texas, and Collier, of Mis-
sissippi, Democrats. Nineteen members
voted for the bill
No action has been taken to deter
mine what form of procedure will gov
ern cons deration of the bonus meas
urc when it is called up in the House.
Should the committee have its way. it
Will be taken up next Monday under a
suspension Of the rules preventing
amendment. The failure last night to
reach an agreement with the steering
committee on this plan means, it was
SAID, that this angle of the question
probably will not be settled until
Speaker Gillctt returns from Florida at
the end Of the week.
Sales Tax Again Reatcn
The committee defeated by another
vote of l9 to 5 last-minute attempt
TO put IN the bill proy'sion for a sales
tax as the revenue NJ Aes. Representa-
tive Bacharach, Republican. of New
Jersey. offered the amendment calling
Tor ! per cent wholesalers tax for
three years. Those voting for the tax
were Representatives Bacharach, Mott
Of New York; I.ongworth, of Ohio;
Illson, of Connecticut, and Watson. OF
Pennsylvania.
An amendment accepted BY the ma.
Jorlty, however, permits banks accept.
ing the adjusted service certificates as
security for loans to redscount them
through regular banking channels with
the exception of the Federal Reserve
banks. Prior to the insertion of this
provision the bill made the certificates
ron-transferable and they would have
remained with the lending banks. in
case of defaults, until the government
was prepared to make restitution. The
change, it is contended, does away with
| the complaint of Comptroller Girls
singer and others that the certificates
would become frozen credits and posi-
ply embarrass some of the institutions
The formal report, recommending
passage of the bill and explaining its
provisions hoc r,ot hoo,, IA
will probably be made public to.
| morrow.
Secretary Mellon and his aids were
called before the Ways and Means Com.
mlttee to clear up conflicting state
ments concerning the financial aspect:
of the bill and its effects upon the
country. The hearing took the form of
series of ross-examinations by all
the members.
Mellon Rencws Criticism
Mr.. Mellon reiterated his previous
statements of the possible evils which
it might bring upon the general eco
nomic condition of the country ane
opposed the general plan of the bill
He declared that the plan for financing
the certificate option would have prac
tically the same effect as would bt
brought should the Treasury resort t,
| ulIcCl UoI WING tIOll tHe people u
meet payments to the veterans. There
would be little differancc between The
two, he said, in the extent to which
they may interfere with the govern
ment's funding operations in retiring
its tremendous obligations.
During the questioning Representa-
tive Frear, of Wisconsin, pointed ou
that the Secretary had opposed alst
the issuance Of new Treasury certif
Gates Of Indebtedness to handle th'
financing of the bonus, and then asket
him, "What method, if any, would yo,
propose to finance this legislation i
it is enacted ?"
Mr. Mellon stuck to his original stant
and said: "For the purpose of raising
this revenue there should be a ditfu
sion. a spreading out of the tax--some
thing in the nature Of a sales tax OF
a broad class of commodities, where
the percentage would be small and no
burdensome.'
Mr. Mellon was then asked if the in
creased buying power caused by thu
Continued paso sIx)