The New York herald., 1922-03-03

FUSED 10 accept the ADVERSE Opinions
of critics regarding 1t. Mr.. Fordney
announced this afternoon that Gov
ernor Harding OF the Federal Reserve
Board and Actuary Mccoy assisted the
committee in working out the new
plan for a bonus"
What Mr.. Harding actually did was
to reserve his opinion as to the feast
bility and value of it.
Inquiry to-day developed that the
Treasury will oppose the issuance or
use of adjusted service certificates in
the most forceful manner possible.
Treasury attaches are convinced the
scheme would be more disastrous in
its effect upon the Treasury and the
country than the cash bonus. Its evils
they hold to be manifold. 1t would
tend to currency imitation, would ne
cessitate a tremendous administrative
organization, would seriously affect the
Government securities market during
a period when much refinancing will
he necessary and would cost more
than a cash bonus.
Experts who examined the scope of
the new certificate plan did not hesi-
tate to assert that 1t merely postponed
the payment Of 80 per cent. OF the
cash called for by the certificates at
the end of three years.
The inspiration of this plan was the
belief among its sponsors that the
Treasury would then be able to stand
the strain that may run to $4,000. .0o0,-
600 after the Victory bonds. maturing
in the next three years, have been
lIr.l 49,. InI Ttx dc
the certificates would legalize cash
payments which the Treasury would
have to make on demand at the end
of three years.
If 1t were possible for the Treasury
TO take care of the entire amount rep
resented by the certificates at the end
of three years the Government would
make profit OF $500. 1000, 900 and the
ex-service men would be defrauded
out of it, because the dollar to which
they would be entitled in fact would
be worth only 90 cents. Critics of the
new plan did not hesitate to declare
that "the proposal would be highly
dishonorable for the Government to
sanction because it is intended to de-
ceive the ex-service men by paying
them in deprecated money"
Individual holders of certificates who
are to be authorized to borrow money
from banks under the new plan pro-
posed by the Fordney committee also
would lose money. it is declared.
through default of their promissory
notes given to banks. because the
banks would receive 30 per cent. of
the face value of the certificates held
az rd VOL
profit.
No Protection Planned.
Although the sponsors for the bill
contend that holders Of certificates will
be protected by law from falling into
the hands of loan sharks. pawnbrokers
and usurers, no definite ideas as to
how this is to be accomplished have
yet been advanced except by limiting
authority for handling the certificates
to national and State banks.
A member of the committee ad-
mitted that he did not know any way
to prevent certificate holder from
selling his own property to any man
that wanted to purchase it except by
making the certificate n-transfer-
able and non-negotiable. This scheme
does not appeal to ex-service men who
want the cash as soon as they can
get it.
The majority of Senators and Repre-
sentatives decline to express any opin-
ion regarding the latest scheme pro-
posed by the bonus raiders until it has
been reduced to concrete terms. 1t was
quite apparent, however, that most OF
the statesmen who are clamoring for
the production of bill that will en-
able them to hold the favor of the
soldier voters are not particularly en-
thusiastic about it. because of the con-
fusion OF IDEAS that prevailed to-day
regarding it's specific terms.
The most comprehensive analysis of
tho features developed was furnished
by Representative Longworth, who is
credited with having compelled Ford
ney and his supporters to drop the
fantastic financial schemes repeatedly
urged and instantly rejected. He
thinks there is chance for putting
through the certificate insurance plan.
He frankly admitted that sit is the
best we have to offer and that II 1t
fails postponement of bonus legisla-
ton appears to provide the only solu-
tion OF the problem"
LonGworth Outlines Plan.
In defending the certificate plan Mr..
Longworth said: I'VE plan to put the
scheme into effect by October 1 of this
wear. The face value of the certificates
will be based on the length of service
Of the soldier AS heretofore explained
he will be allowed 81 day for each
day of home service and $l.25 a day
for each day OF service abroad.
When a man gets certificate, IL
he is in need OF cash. he can go to any
hank in the United States and receive
30 per cent. of it's cash value, the rate
Of interest not to exceed 5h per cent.
The rate of interest named in the cer-
iificate will be An per cent, so that
if the soldier holds the certificate until
maturity the compound interest will
make IL worth about three times its
face value.
"If at the end of three years the
soldier has defaulted in his payments
the Treasury Department, through the
Federal Reserve system. will be
authorized to redeem the certificates,
paying back the interest at the rate
nf an per cent. The soldier can re-
- a.. Ia