, 1922-02-16

President Harding informed
congress today he considered
a general sales tax the only
feasible method of rN;sing
funds for a soldiers bonus.
Tho executive In a letter addressed
to Chairman Fordney OF the house
ways and means committee suggested
that unless congress saw ft TO enact a
7lcs tax. passage Of bonu legislation
should be temporarily p~otponed.
Declaring that tho government had
under consideration tho disposition OF
surplus war properties and other
transactions which should bring
great relief TO the treasury, the
president said It would be wise TO let
the Legislation 20 over II congress
did not deem II adviabio to adopt the
sale- tax.
ct believe" the president wrote.
-the American people win accept the
levy OF n general sales tax to meet
the proposed bonus payments and VIC
should contribute thereby no added
difficulties to the problems OF read
justment. II congress viii not adopt
such a plan. Il would be wiso to lot
the legislation go ovcr until there is a
situation which viii Justify the largo
outlay.
The presidents letter was regarded
generally at the capital rs leaving the
bonus situation sven more complicated
than before. The senate and house
subcommittee were to meet late in
the day to receive and consider che
White House communication
=
the subcommittee last week. II was
understood that senators were inform
ed that les than 100 Republican votes
I nihe housa could be mu9trred for a
sales tax as n method of financing
the adjusted compensation. Such q
tax had been considered by house
leaders as a possibility. but virtually
had been discarded.
The text OF tho presidents letter
which was addressed to Chairman
Fordney of the house ways and means
committee. follows:
TN accordance with tho promise
made to yourself and your associates
on the senate and house committees.
charged with tho responsibility of for
mulating proposed bonus legislation.
/ have carefully looked into the pro-
gram OF taxation which has been sug-
gested. In addition thereto. I ave
made inquiry into the feasibility Of
J issuing either short time treasury
notes or long time bonds to meet the
financial obligations which the pro-
posed legislation will impose. 1t is
not possible to commend to you either
of tho plans suggested.
TT continues to be my best tudg-
ment that any compensation legisla-
ton enacted at this time ought to
carry with it tho provisions for rails
ing the needed revenues, and I find
myself unable to suggest N com
mendabIe plan other than that OF n
general sales tax. IN a tax will
distribute the cost OF rewarding the
ex~-service men in such a manner that
it will be borne by all tho people
whom they served. and does not com
nit the government to class imposi-
ton of taxes or the resumption OF
burdens recently repealed. the main
i tenance of which can be justified only
by n great war emergency.
ut If fully realized how great is
the difficulty which confronts the con
gress IN sowing this difficult prob
lem. L am aware the strong sentI-
ment in congress in favor of this ad
justed compensation. I have spoken
, ~approvingly myself. always with the
reservation that the bestowed shall
be made when IL may be done with.
out such injury to the country as will
nullify the benefit 10 the c<,service
men themselves which this express
! sion OF gratitude is designed to be.
:. stow.
1, 1T is not an agreeable thing to
suggest that action DO postponed
again, but frankly, 1 do not find my
self favorable to the piecemeal pay.
mont plan. which Is manifestiy de
signed to void embarrassment &c
a the treasury. The long drawn out
payments will not afford an effective
: h~elpfulness to tile servicemen.
w have no serious problem In be
ginning the ailotments OF public
: lands and the immediate issue OF paid
y Continued on Page SKI