Pueblo chieftain., 1922-01-25
TREASURY Still
OPPOSED TO THE
SOLDIERS BONUS
Mellon Says Other Taxations
Must Be Imposed If
Warriors Are Paid

WASHINGTON, d. c.. Jan. "a
Treasury opposition to soldier bonus
remains unchanged but IL there is to
be a bonus it must be provided thru
taxation in addition to taxes imposed
BY existing law Secretary Mellon de-
clared tonight in IL letter to Chairman
Fordney OF the house ways and means
committee. Any attempt to provide for
the bonus thru use OF the principal
and interest of the foreign debt, he con-
tended would be futile as well as un-
wise" The letter was in response 10
Il request from Mr.. Fordney for an
expression of the views of the secre-
tary and the treasury department on
the governmental financial outlook ana
io- suggestions as to legislation.
Submitting estimates of government
receipts and expenditures for the fis-
cal years 1922 and 1923 ard the treas
ury plan FOR refunding the short dated
debt. Mr.. Mellon declared no allow
auCe has been made for any e1traor-
dinary expenditures for soldiers
bonus which would cost on the most
conservative estimates he said prob
ably not less than ss5oooo.0oo In the
first two years.
The Figures" he said. SHOW that
there VIII be no available surplus but
more probably a deficit and that
With the enormous refunhing opera
tons the treasury has to conduct, II
would be dangerous TO attempt to IL
nance the expenditures involved IN the
bonus thru new borrowings. The posi-
lion of the treasury remains unchanged.
but II there Is 10 DO bonus. 1t Is
clear that II must lie provided for thru
taxation"
on the other hand. no indirect means
of financing the bonus would make 1t
any less expense TO be borne in the
loug run by the tax payer, he declared.
taking up the proposal to uso the for
e.gn debt as a basis for bonus pay
mente.
/, IS Impossible he maintained IN ad-
vance OF funding arrangements to cs-
timatc what may 10 collected on the
foreign debt by way OF principal or in
,ercst. The obligations which are In
the form OF demand obligations are
no. he asserted In shape 10 sell 10
the public. II would accomplish moth
Ing he argued. to set aside tho foreign
debt for the payment for the bonus.
even II enough could &c realized in
time.
''As tho law stands he said. and
In Justice TO the millions OF Liberty
hondholders, the government is bound
TO apply any principal payments by
foreign governments AS well as any
proceeds OF sale to the retirement OF
Outstanding Liberty bonds"
Interest collected, he declared. should
also go to provide interest on Liberty
bonds, 30 that II tho proceeds Of the
foreign debt were applied to the bonus
the government would to that extent
have to provide for the principal and
interes, OF Liberty bonds from other
sources. This means. he asserted,
taxes unnecessary.
The plan TO use the foreign oblsa-
tlons to pay a soldiers bonus there
fore" Mr.. Mellon continued. would
still leave tie burden on tho shoul-
dors OF the taxpayer
Discussing the financial outlook OF
the government Mr.. Mellon presented
figures covering budget estimates
which hc said indicated deficit OF
more than 900 for 1922 and Il de-
flclt OF over SlsT .0o0. 900 for 1923 not al
lowing for $50. .ooo. GOO requested by the
shipping board for the payment of
claims. 5000 900 to DO spent for Rus
sian relief by the United States Grain
corporation aud 5000, 600 to be paid as
the 1898 installmcnts under tho treaty
with Columbia, together with other
items making a total OF sll2. COO,
chiefly for 1928.
To overcome thcAc deficits. he oS-
planned. expenditures must be reduced
by about $500 100000 in the next two
years while the government faces 4
heavy shrinkagc az rates.
Lord Fairfax OF Cameron has th'