The New York herald., 1922-03-15
Continued from First Page.

Sitiduo Ol questions InaI lne meIuptTs
hurled at each other.
Apparently Mr.. Mellon had not been
advised by Actuary Mccoy that there
had been a mistake in transcribing his
estimated cost of the land settlement
provision, as was brought out later,
and that the correct figures should
have been $1S,500. 100000. The Secre-
tary tried to justify the figures by
saying the whole estimate was prob
lematic, as ii is impossible for any one
to predict with accuracy the cost OF
such a gigantic land development
project as is contemplated in the bill
Cheaper to Buy Farm Land.
Representative Hawley argued that
it would be much cheaper for Congress
to go out and buy farm land already
developed and give 1t to the soldiers
II the Treasury Departments figures
were correct.
Secretary Mellon intimated that was
so and said: "The reclamation feature
In the bill is very indefinite and un-
certain proposition and to carry out
Its provisions it win 1mdoubtedly cost
q vast sum. am gorrv4t is In the bill
at all"
Representative Crissing (Ga.) next
asked Secretary Mellon: What effect
would the insurance certificates, with
their loan provisions, proposed to be
given to the ex-service men. have
upon business and the banks OF the
country?"
That question has been answered
f.sl lztk
mittee few days ago" was the re-
ply.
To a question by Representative
Frear (Wis.) Secretary Mellon can
didly admitted that the Treasury De-
partment had found serious fault with
any and all plans to raise the bonus
so far proposed, and added Taxes
are now as burdensome as the coun-
try should be asked to bear"
Most Equitable Method.
To another direct question Mr.. Mel
lon declared some sort of general
tax. distributed over a large number OF
items so that no class or particular in
dustries would suffer to the exclusion
Of others would be the most equitable
way to, raise the needed funds for a
bonus. To some extent it would re-
semble the Canadian sales tax scheme,
Secretary Mellon replied to another
question. Then Mr.. Mellon added other
possible sources OF revenue, such as
additional cost Of postage stamps. an
extra tax on tobacco, and the like.
Representative Frear replied: I'VE
believe that the President would veto
any bill carrying provisions for tax
which you enumerate."
I'VE understand you oppose the
present plan of having the national
banks, State banks and trust COM
panies make loans on the proposed
insurance certificates to be issued to
tie ex-sehvice men. VIII you give us
your reason?" asked Representative
Longworth.
Mr.. Mellon replied that the plan pro-
posed is little different from direct
loan from the Treasury III that the
loans are to be made on Government
security and are to be redeemed by the
Federal Reserve system at the end OF
three years
Replying to a question from Repre-
sentative Garner, Mr.. Mellon said it
would be preferable to have the Treas
ury Department make the direct loan
IN that II would cost much less than
the plan proposed.
Facing Huge Deficit.
The Secretary at this point ex-
planned tLat the Treasury Depart
ment is facing a huge deficit for the
fiscal year. and is in no shape to carry
such a bunden as proposed. The fact
that no burden is to be placed upon
the Treasury for three years does not
relieve this apprehension. he pointed
out. At the end OF that period, he
argued, there is no certainty that the
Treasury will be in any better fnan-
cial condition than at present.
He told of the huge sum needed to
refund the Victory notes and other
obligations of the Government coming
due at that time and of the uncer-
tainty as to TIE time when the inter-
est and principal from the moneys
loaned European countries will be
available.
Representative Copley said the
money which will be advanced in all
probability by banks on the insurance
certificates the first three years will
not be more than eight-tenths OF !
per cent of the total assets OF the
banks.
"In view of tkat fact" he asked
Secretary Mellon, "do you think the
proposed loans will be a serious men,
ace 10 the banks or to business?'
"They probaly will not be a serious
menace replied Mr.. Mellon. without
further explanation.
warning Not Necessary.
Mr.. Mellon said the Treasury De-
partment would not consider 1t neces-
sary to send out a warning to banks
advising them not TO lend their funds
on the proposed certificates. Reply
ing to question by Representative
Longworth, the Secretary gave II as
His opinion that banks would hesitate
in making loans on such SLOW paper"
He added that banks undoubtedly will
be influenced in making loans by the
condition OF the other collateral held,
but that no banks ordinarily make
such long term loans upon CONNER
cial paper.
Answering a question by Represen-
tative Garner, Mr. Mellon declared the
passage of the proposed bonus bill