The New York herald., 1922-05-08
HARDING'S DECISION
| ON BONUS SCHEMES
IS EXPECTED TO-DAY
Any Other Reply Than Firm
Rejection Would Cause
Great Surprise.
HIS LEADERSHIP TEST
SmoOt to Fight McCumbeI
Plan With Sales Tax
Amendment.
BIG BURDEN ON FARMERS
Raid Would Put Tax Obliga-
tion of 1915 on Every Farm
in United States.
BY LOUIS sEIBoLD.

BY LOUIS SEIBOLD.
Special Dispatch TO THE NEW Yonx HERALD.
New York Herald Bureau.l
Washington, ID. c., Mny :.
The promoters and opponents Of the
bonus raid on the finances OF the
country agree on at least one point in
the controversy-that In the bonus the
President Is confronted with the su-
preme test of his administrative and
party leadership.
Opponents Of the measure believe
the President will reject the latest
proposals for commercializng patri-
otic services; win ignore the supplica-
lions of log rolling politicians con-
cerned only with their individual po-
litical ambitions and thereby win pop
ular approval for broad-sauged states
manship.
Every surface indication appears to
justify the hopes of the opponents Of
the project and fears of the advocates
that the President will adhere to his
previous declarations that the country
financial drain involved in the under
taking.
Temporixips Would BE Surprise.
There would be in fact the greatest
surprise IL the reply which he is to
make to the plea that he approve the
McCumber bill submitted to him yes
terday Is other than firm declara-
ton that it does not merit executive
Endorsement on several grounds.
The failure of Mr.. McCumber and
I his associates to provide a practical
SOURCE Of revenue. the proposed drain
on the banks through the operation OF
the certificate loan plan and the erect
on the business and taxpayers are
some of the objections which the
President enumerated in his confer
ence with Senator's McCumber. Lodge,
Watson and Curtis at the White House
yesterday.
The President and Secretary Mellon
now are engaged in studying the Nc
Cumber proposal. 1t is quite possible
that the President will make known
his attitude on not only the McCumber
and Smoot suggestions but the entire
bonus project tomorrow. Before do
ing so he will confer with Senator
Smoot regarding the paid-up insur-
ance plan which the Utah Senator be-
lieves could be adopted with less in
Jury than the McCumber proposal.
smoot,s Proposal Not Drafted.
Senator Smoot said this afternoon
he had not reduced his paid-up insur-
ance certificate scheme to legislative
form. He does not think he will pre-
sent II TO the Finance Committee, but
will reserve II for submission to the
Senate as n substitute for the McCum-
Der measure when 1t comes before that
body.
Senator Shoots scheme. while sup
ported by a number of his Republican
colleagues on the Finance Committee
and in the main body is not regarded
with favor by the officials of the Amer
lean Legion and other bonus propa-
gandists because 1t does not contem-
plate the payment of money down as
provided in the McCumbcr bill.
The Utah Senator has no definite
engagement with the President. He
said he would await the Presidents
convenience and take with him TO the
White House figures prepared by
Treasury and other experts to prove
the feasibility of the paid-up insurance
method.
wanted Immediate Cash.
Mr.. McCumber and the other bonus
Senators on the Finance Committee
rejected the Smoot proposal out Of
hand tho other day because of the
positive declaration OF the American
Legion officials that they would not
sanction any bonus legislation which
did not provide for immediate cash TO
ex-service men entitled TO less than
fifty dollars.
Mr.. McCumber frankly admitted
that his bill was framed to comply
with every demand OF the American
Legion. Political leaders and MEM
bers of Congress who have their eyes
glued on the White House believe the
President will inform Senator Smoot
that, while his paid up insurance
scheme will presumably involve less
hardship to the country than the Nc
Cumber plan. 1t does not meet the OBJ
jections repeatedly made known at the
White House to all bonus suggestions
offered to date.
Declaring his unalterablc opposition
TO tho McCumbcr scheme. Senator
Smoot said to-day he would oppose
any bonus bill that did not carry a
revenue feature or that was not based
on the sales tax system. The Utah
Senator Is the father OF the sales tax
project for general revenue purposes.
The President has approved of the
sales tax as the only feasible method
Continued on Page -Four.