Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1922-02-07
SALES TAX AS MODE
Of FINANCING BONUS
ABANDONED BY COP.
Opposition From West So
Strong as to Threaten De-
feat of Such a Pro-
gram

WASHINGTON, Feb. 6.-By the
Associated Press.) Republican
house leaders are understood vir-
tually to have abandoned the idea
of financing the soldiers bonus by
means of a general sales tax, a pro-
gram which has been freely dis
cussed with more or less favor at
the two ends of the capitol.
Opposition among the majority
members, mostly from the middle
and far west, to a sales tax, is said
to be so strong as to threaten defeat
of such a program. The alignment
against it is understood to be prac-
tically that which forced acceptance
of the so per cent income surtaX
voted into the revenue bill by the
senate.
Developments at further hearings
today before the house ways and
means committee disclosed that in
spite of Secretary Melons opposi-
ton to the plan, a number of the
majority members favor the use of
part of the proceeds from the re-
funded British debt in helping to fl
nance the adjusted compensation.
They believe that this would meet
with a greater measure of public
approval than would a program in
VOlving the raising of the entire
amount by means of special taxes.
Arguments Heard
Arguments on both sides of the
question were heard by the commit
tee. Representative Ramseyer, Re
publican, Iowa, opposed the pro-
posal arguing that such use of the
money would be a breach of contract
with the holders of Liberty bonds,
who, he said, had been told in the
law adopted by congress that the
proceeds from the foreign debt
would be used to retire the Liberty
bonds issued to raise the money adj
Vanced to the debtor nations.
Chairman McFadden, of the bank
ing and currency committee, favor
ed the financing of the bonus
through the sale in this country Of
the refunded British bonds, with the
principal and interest guaranteed by
the American government as we'll as
the British COVE. ment. He con-
tended that with this double guar
antee the bonds would bring a high
er price than would American gov
eminent securities sold for the sa.-
purpose.
Other Plans Offered
Increased inheritance taxes as an
other means OF financing the bonus,
were advocated by Mr. Ramseyer,
who said such taxes could not be
passed on and would not be a pen
atty on initiative and enterprise. He
thought the present return of $154,-
100000 from this source could be in
creased by $200,000,00G a year with
out imposing any hardship. Chair
man FOrdney and some other mem
bers of the committee apparently
received this suggestion without ap-
prevail, but other members indicated
sympathy with it.
Now that the arms conference has
has approved e naval limitation
treaty, some committeeman are con-
sidering the subject of naval and
army reduction as one means of
providing revenue for the bonus. Be
cause of the cost of scrapping ships
on the ways they are not at all GER
tain that the building appropriation
can be greatly reduced in the next
fiscal year, but it is their belief that
with many ships now afloat consign-
ed to the scrap heap, the personnel
can be cut down, sharply effecting a
considerable saving.
This phase of the situation is en-
pected to be among those to come
up at the forthcoming bonus con-
terence between President Harding
and house and senate leaders.