The daily times., 1922-02-14
tBy David Lawrencs.l
(Copyright 1922 by The Daily

(COpyriSnt lSzI ny Ing Od1ly
Times.)
Washington, Feb. 13.-The politi-
cal paradox of the moment-whether
to put out a new issue of bonds to
the amount OF one and one half bill
Hons or to impose $3.50, 0,000,eeO of
eaxes per year for the next three
ysara-is causing saeepless nlshts for
the chieftains OF !, the Rsanblican
party.
The leaders reaaize that THE situa-
2d>n is bad either way: new bond
tissue is unsound finance but fairly
good poastics wbile direct taxation IL
sound Anamce and very had politics.
Mensbsrs Uf Congress are seeking
[xhe advice sof she President and Sec
Eretary OF the Treasury- They will set
|from Mdr. Ms19on the judgment which
he has always given-what the
ytrsasury considers to be sound I'm
lance but whether the party lenders
WILL accalt sthe plan anr make their
kOwn alternative remains to be seen.
In ANY event here ;aEe the rsasnns
Ewahv a ihand tissue rs opposed and
bwhy the TAseasMry bA1iewes direct tax
bation lis essential If the bonus Is abb
E. E.nAgt6ly sfneNitable. And after ezam-
dining thnae reasons members sea Con
tgress win be :aale st0 tell the White
tHIouse why they badeEe direct taxa
Et;tiwn shearsla he avoided if the Repnb-
lhiean party is to retain control OF
lCsomgress. @ssa
The Tueas,rry insists that even
though only $500, ,0sO ,:es6 may be
meeded to Pay the soldier bonus-and
this is a mzaamum guess for every
ihsay agrees that it might run as high
las $59e, 100000 or approximately
$Sse, ,esO,e ,ees in the first two years
the total amount that may be re-
iaaired must be taken into considera-
ItiOn in any new bond issue. In other
words if the government must bor-
row billion and half dollars more
fmpney from the American people, the
Total sum that will have to be obtain
led will be nearly eight billion dollars
in the next two or three years be-
lcause six and a half billions must be
borrowed to pay Victory Bonds which
lco.ne due. The Victory Bonds were
lonly of five years duration and when
they were issued the government
knew the Allies wouldn't be ready
ro pay any of the principal so the
IAmerican people are in effect asked
to wait by accepting new treasury
certificates instead. The Treasury is
in process now of exchanging Victory
bonds for new Treasury certificates.
THE total amount of the war debt is
Twenty three and half billions and
with the soldier bonus bond issue the
amount would be approximately
Twenty five billion dollars.
The financiers at the Treasury fear
that to add billion and half to
Americas total debt by borrowing
Through bonds would be to depre-
|ciate the value of all Liberty Bonds
and to make the American dollar
worth Just SO much less because OF
1.-THE added burden of debt imposed on
lAmerica's resources. To the argument
THAT the bond market can readily abb
]sorb the new issue, officials say
there's no doubt of it but that if new
tgoyernment bonds are issued, just
SO much money which would have
been available to private business as
a stimulus to industrial revival will
be cut of and normalcy delayed. The
business Interests of the country
lshare this view in the main and are
4 .topposing the bonus tooth and nail
land particularly bond issue.
Il Ever since direct taxes have been
mentioned. on the other hand, the
avalanche of protests has been grow
ling in volume. Senators and members
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