New-York tribune., 1922-03-13
Tells Trainers He Will Not
Carry Out Its Provi-
siOns Unless Funds Are
Specifically Provide d
Government Credit
Would Be Injured
Secretary Asserts Neither
Treasury nor Banks
Should Bear the Strain

'o"' "o ff'ounc Washington Bureuu
WASHINGTON, March Neither
inc treasury nor the banking system
S"ouId be made TO bear the cost Of the
new certificate plan soldiers bonus bill
and there is no wav hv which tho
american taxpayer can avoid the bur
dcn' Secretary of the Treasury Mellon
to-day Informed Chairman Fordncy of
the House Ways and Means Committee.
The Sccretary's letter is an exhaustive
analysis of the new bill and its cf-
fects upon the country. 1t declares the
bonus plan involves dangerous abuse
OF government credit.
The letter places big hurdle, it is
generally admitted. in front of the ap-
parently determined plans of House
leaders TO force the bonus measure
through that body under suspension
of the rules. 1t discloses that tic com
mittee solicited the Secrctary's com
Ment only few days ago, indicating a
new attitude Of tolerance that has not
been evident with the bonus advocates
of the House.
representative Fordncy's comment
TO night on the letter bears out the be-
oi'i. th'Ic is NOT as muCh certainty
about the smoothncss Of the road be
fore tho measure in the House as has
been generally indicated. He said:
- don't know whether the letter will
affect the plans for pushing the bill
through or not. 1t will not affect me
any. The committee will meet to-mor-
row TO act on the favorable report Of
the bill have no comment to make
about my opinion of the letter"
Total Cost s4,s95,74o,OoU
Secretary Melons communication.
which will he read to the committed
tomorrow, fatty informs them that
even though their bill ls enacted the
Treasury will not carry out its pro
visions until further legislation making
actual appropriations for meeting the
payments is provided.
The direct cost of the bill to the
government is impossible to estimate.
he declared, principally tecause of the
uncertainty as to what options will be
chosen by the veterans
s The cost of the entire prw bonus
plan, figured by the government actu.
ary on the assumption that 70 per cent
Will choose the certificate plan, 23 rer
cent the farm and home aid, 5 per cent
vocational training and per cent land
settlement, is estimated in Secretary
Melons letter at a minimum of So
995, 100000. If the scheme is carried
through there should be added to this,
1t is stated, about 100000. 900 annually
or another $4,000 100000, making a to-
tai of $4,995, 900.
Inc total payments required on this
basis within three and one-half years,
beginning with the fiscal year 1928 is
more than 81 200 600, 900.
Suggests Pay-as- You-Go Bonus
"lt is impossible to avoid the cost, if
bonus is to be adopted, and it is both
dangerous and unwise to attempt to
avoid it for the time being by throwing
the burden upon the banks of the coun-
try and piling up for the Treasury an
accumulated liability which, in 1925,
may amount to over S600,000,00O," says
the letter.
lean taxpayer can avoid the burden.
and if bonus is to be imposed it is
far better for all concerned that it be
placed upon a direct and definite basis
and paid for each year out of current
revenue. To do this at the present
time will necessarily mean the imposi-
tion of additional taxes for the pur-
pose.
"Thc bill makes no provision what
ever for sinking fund, amortization or
other reserves against either the liza
bility that would be thrown upon the
government in 1925 or against the
liability on the certificates at the end
Of twenty years, nor does it make any
provision for the payments which
would accrue in ordinary course from
year to year on account of the death
of veterans"
The Secretary bears out the state
ment several days ago of the Comp
Continual ON pauo four)