The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1922-06-28


With the reporting of a bonus bill
to the senate, the fare OF argument
for and against the measure mas
arisen anew. The soldier and his
! supporters are sometimes at loss
to understand why the payment OF
soldier bonus is opposed when
it is considered that the United
Statesfis the richest country IN the
world and why financfers are SLOW
to approve of the plan.
Nowhere can anyone be found
who opposes the idea of reward
ing the soldiers for the part they
took in winning the war and bring
ing to an end the German aggres-
sion which threatened democratic
institutions. The objections from
the financial world are based on
the present expediency of the move
and the manner in which 1t is pro-
posed to pay the men the adjusted
compensation.
Finance is a science OF endless
intricacies and great movements of
large sums have an inter-acting ef-
feet on the entire business Of the
country. The opposition to the
bonus arises from reluctance of
business men and financiers TO dis
turb the money market Propon-
ents of the bonus either ignore the
disturbance or say that it is of less
national importance than the ad-
justment of the soldiers monetary
reward for their services.
An examination of the effects of
80
wholly aside from the merits of the
case in its human aspect, is of spe-
cial interest at time when nearly
all American citizens are gaining
an increasing realization of how
great. financial affairs affect every
day life.
Primarily. a nation has certain
limits to it's wealth and income.
These limits can be enlarged by
special exertion. as they were dur
ing the war, bnt there are limits
beyond which no amount of infia-
ton or squeezing can push the MAJ
tional income During the war, the
United States borrowed from the
American people $4,000, 900, 900.
The people did not have any such
great sum to lend to the govern
ment out of current Income with
in the period the funds were re-
quired. That the money was raised
seems a paradox. The fact is, the
$26, 600, 900 900 lent the government
was not advanced out of current
earnings but was borrowed from
future earning power. What the
treasury borrowed from the people
was not only all they could spare
from current earnings, but what
they could spare for some years to
come.
Why Bonds Deprecated.
This is one of the reasons why
Liberty bonds fell below par and
why some still are slightly below
par. The people and the govern
nation steadily is catching up. Ev-
cry rise in the market price of
Liberty bonds on the stock ex-
change represents an approach
toward the point where the nation
al income will have caught up with
the money advanced to the treas
ury during the war. The task will
be accomplished within a year or
two in all probability, provided
things remain substantially the
same.
The fundamental objection of
fnanciers to payment of the bonus
now is that to take from $4,000
100000 to $4,000, 000, 900 cut of the
national Golfers for a bonus this
year will mean that the whole peo-
pie will be plunged back into debt
by just that much and that the time
when we shall catch up with the
war obligations will be Just that
much longer postponed
President Harding has urged
that the bonus be paid by increased
taxation. In this way, the bonus
would be paid, in large part, out of
current earnings. But it would not
be paid wholly out Of such earn
ings, for an increase in taxes
would force many taxpayers to
borrow money with which to meet
the imposts. This would mean the
of the future, but in the
opinion of the president and the
treasury department would be pref
cradle to government loan, mas
much as the borrowing would be
widely scattered and privately con-
Quoted and therefore would not
cause a sudden and concentrated
strain on the money market.
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