New-York tribune., 1922-03-04
Bonus Bill to
Carry 25 P.
Pay Premium
lcen.lnued from pace ens,

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under which tho reserve banks OF the
country held large amounts Of loans
secured by government war obl;eations
was predicted by the Chamber Of Com
merce should the certificate bonus Bill
be enacted. The progress that has boon
made IN the great problem Of readjust-
ment would be completely undone and
imitation and other evis would be in
evitable. 10 ia declared.
Objectionable, Chamber Declares
Joseph H. DeFrees. president Of the
chamber, declared, with reference to
the proposed certificate plan:
"A general bonus paid through certif-
Gates is just az Objectionable, from
the point Of view Of the Chamber Of
Commerce Of the United States, as
such bonus paid in cash The or
ganizations participating in thu ma
tional chambers referendum which
closed on February 81 were as unmis-
taxable ir their opposition to eertifi-
cate plan az 10 a cash plan. They
cast 1921 votes against general bonus
in either form, and only ACT votes in
favor.
"The chambers opposition is to a
general bonus, however paid The
chamber has not opposed a bonus
merely on account Of the amount Of
money that is involved.
"Attention has been called to the
money requirements because Of their
importance and the financial problems
and consequences they entail. Similar
reasons demand public attention to the
plan now being considered by com
mittee Of Congress. This plan calls
FOR certificates payable in twenty
years or at death. in an amount equal
to cash bonus increased by 40 per
cent (25 per cent under the plan pro
posed today and by compound IN
terest, these additions being on &C
count Of postponement. Consequently,
the face value Of certificates payable in
twenty years will be about three and
one-thrd times cash bonus il paid
now.
"Under this plan the government
will have to provide $4,000, 900 900 over
period Of twenty years. with some
where around $1,000, 900, 900 for use in
1925 and the greater part Of the rest in
19a3. These obligations are in effect
proposed in substitution for cash
bonus. estimated if every ex-servce
man took cash, at $1,000 900, coo. paid
OYER the years 1922 and 1928. IN the
two years before 1928, when the gov
ernment would have to hnd about ST.
900, 100000, there Is upward OF $4,000
100000 Of debt to be paid or refunded.
That requirement Of $1,000 600. 900
more will have serious consequences is
obvious.
"Sore features Of the certificate plan
now under consideration by the House
Committee on Ways and Means are
even more Objectionable than the
original bonus bill 1t is proposed
that certificate tes should be used as COL
lateral for loans at banks, and such
leans should be rediscounted at the
pose means return to war conditions
under which the reserve banks held
large amounts Of loans secured by
government war obligations. One Of
the problems of reedjustment has been
to get this paper out OF the reserve
banks and other paper Of similar kind
out Of other banks. Great progress
has been MADE, but this progress will
be urdone by the new proposal
Loans Of this character have no
place in the commercial banking sys-
tom. They found their entry only in
q war emergency No loans should
go into the Federal reserve system
except such as are speedily and surely
self f-liquidating. Violation Of this
principle means inevitable imitation
and other evils which are sure to fol-
low violation Of sound banking prin-
ciples.
1T may be expected that evil re
suits Of such a plan as has been pro-
posed will be increased as details are
Announced--such details as the terms
0! the loans and the rate Of redis-
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