Evening journal., 1922-03-13
Mellon ShOlUs Menace
In NelU Bonus Measure

amount or caSn tnat Wouu nave
been payable on a cash bonus, in
creased by 40 per cent.
The plan for land settlement aid
provides for the development Of
reclamation projects and for al
iowances to veterans who elect it.
These two plans offer so many
attractive possibilities to veterans
as well as to persons interested in
the development OF home building
reclamation and other projects,
that their cost during the first
few years OF the operation OF the
bill is sure to be substantial. 1t is
impossible. Of course. to estimate
the proportion OF the veterans
who win choose these plang as
distinguished from the certificate
plan ana the vocationa. training
plan and per cent. the land set
tlement plan.
Attractive Redemption Provision.
In the calculations as to the
cost Of the certificate plan, IL Is
assumed that half OF the veterans
will borrow on their certificates
from the banks and default on
their loans. in view OF the attrac-
tive provisions for cash redemn-
tion In case Of default. Thc table
showing the estimated direct cost
OF the bill on this basis for the
twenty-year period from 1928 TO
194S is attached as Exhibit 1.
A further table showing in de-
tail the cost OF the certificate
plan on the same basis. as 10 the
20 per cent. of the veterans taking
certificates, is also attached as EX
hibit 2.
It appears from the tables that
on the basis assumed by the actu-
ary the total direct cost to the
Government In the fiscal year 1928
would be S2S9.954. 900: In the fiscal
year 1924. S216.44O.O0O; in the fis-
cal year 1925, S12S,O19.OO0. and in
the fiscal year. 1925. for the most
part by October ] 8. 1925. when the
adjusted service certificates used
as security for bank loans would
have to be redeemed. S615,S22,-
900. This would mean total pay
ments within about three and a
half years Of over s1,200,O0O,0OO.
These estimates take no account
OF amortization or other reserves
against certificates to remain OUT
standing after the fiscal year 1926.
which would add at least S40.-
100000 a year TO the current
charges, or OF possible additional
costs under the land settlement
plan II the reclamation projects
q therein authorized should be car
ried through. IL Is estimated that
about S1OO.O0O,00O per annum
would be required after. 1929 II
these reclamation projects should
be pressed.
Possible Cost OF BnI
In order that the committee
may have full information as to
the possible cost OF the bill to the
Government there is also inclosed
table. designated Exhibit g..
which indicates the total cost Of
each OF the plans. in case all Of
the veterans should choose one
plan, but makes no attempt to
estimate what plans the veterans
would choose.
II appears from this table that
n all TIE veterans should choose
the certificate plan, the total face
value OF the certificates would
amount 10 over S4.5OO. 200, 600
distributed over twenty years, and
that II all the veterans should
choose the farm and home aid
plan, the total cost would amount
10 S2.093.O00.OO within the next
two or three years.
There is attached further
table. desigrSted Exhibit FIR.
which gives in further detail the
estimates as to the maximum cost
each year TO the Government. un-
der each OF the optional plans.
with no allowance, however, for
direct borrowing from the Gov
ernment under the certificate
plan.
These tables show one thing
clearly. namely. that no one can
even approximately estimate tho
direct cash cost OF the proposed
bill to the Government for the
next few years. and that by jan
uary /, 1926. II will probably cost
over Sl,20O.000, 900, and may cost
very much more. II enough vet
Grams should elect to take farm
and home aid.
Most Serious Feature
Apart from the direct cost OF
the bill. a most serious feature IS
the provision for bank loans upon
adjusted service certificates dur
ing the period between its pas
sage and September 80. 1925. TIE
effect OF this provision Is to trans
fer the cost OF policy loans from
the Government TO the banks and
70 place In the banks. TO the ex-
tent that the ex-service men are
able TO obtain loans from them. a
mass OF unliquid. non-negotiable
paper, upon which the banks will
be unable to realize until 1925
The result would be frozen banl
loans and imitation OF currenc,
and credit.
To the extent that the bank
are obliged to make loans on ad
justed service certificates. tkei
ability 70 taEa caro 90 tbo L..