The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1922-01-25

WASHINGTON, Jan 25.-Treasur,
opposition to a soldie~ bonus remain
unchanged, but if there is to be a bonu.
it must be provided through taxation il
addition to taxes imposed by existing
law. Secretary Mellon declared last
night in a letter to Chairman Fordney
Of the house ways and means commit
tee.
ANY attempt to provide for the bonus
through the use of the principal and in
tcrest of the foreign debt to this coun-
fry, he continued, would be futile. a
we'll as unwise.
Replies to Fordney's Request.
Mr. Melons letter was in response to
Il request from Mr.. Fordney for an eX-
preston CT the views of the secretary
and the treasury department on the gov
ornamental financial outlook for the com
ing year and a half and for suggestions
as to legislation.
Sumitting detailed estimates of gov
eminent receipts and expenditures for
the fiscal years 1922 and 1923. and the
treasury plan for rcfunding the short
dated debt. Mr.. Mellon declared no al
lGwance has been made for any eXtraOd-
mary expenditures for a soldiers bonus,
which would cost on the most cOnserya-
tive estimate, he said. probably not less
than $500 600 in the first two years.
The figures" he said, show that
there viii be 10 available surplus, but
more probably Il deficit, and that with
the enormous refunding operations
which the treasury has to conduct. ii
would be dangerous in the extreme TO
attempt to finance the expenditures in
Hulvcd in the bonus through new Dor
r.wiuE~ The position of the treasury
remains unchanged, but if there Is TO
Ic "a soldier bonus. il IS clear that it
must be provided for through taxation
and through taxation in addition TO the
taxes impo=cI bv existing law.
On the other hand, no indirect means
If financing the bonus would make ii
any less an expense TO be borne in the
long run by the taxpayer, Mr.. Mellon
declared. taking up the proposal to use
the foreign debt as a basis for bonus
payments.
Il is impossible. be maintained. i'm adj
vance of funding arrangements to eS-
innate what may be collected on the
foreign debt in the near future by way
of principal or interest The Obliga-
tions. WHICH are in the form of demand
Obligations, are not, he asserted. in
Shape to sell to the public, while to
offer them with the guaranty of this
government would interfere with the
treasury refunding operations and
Tr"ve more expensive than the sale of
direct obligations of the government.
Camplicate Foreign Relations.
AT the same time" he added. lit
would enormously complicatc the inter
national situation and certainly embar-
raS~ the funding negotiations"
1t would accomplish nothing. Mr..
Mellon argued. to set aside the foreign
6nbt for the payment of the bonus. even
If enough could be realized in time
AS the law now stands he said,
and i'm Justice To the millions of Lib
crty bond holders, the government is
bound to apply any principal payments
hy foreign governments, as we'll as any
proceeds of sale. 10 the retirement of
outstanding Liberty bonds. about So
N01O0O Of which were issued in the first
instance to provide for advances to for
Clgn governments.
Interest collected. he declared, should
also 60 to provide interest on Liberty
bonds 50 that if the proceeds of the for
cign debts were applied TO the bonus
the government would, to that extent.
lave to provide for the principal and
interest of Liberty bonds from other
sources. This means, he asserted, taxes
otherwise unnecessary.
The plan to use the foreign obliga-
tons to pay soldiers bonus, there
fore" Mr.. Mellon continued, would
still leave the burden ON the shoulders
# the American taxpayer"
Financial Outlook Squally.
Discussing the financial outlook of
the government, DIR. Mellon presented
detailed figures covering budget est
mates which. he said. indicated a deficit
of over S24000.000 for 1922 and a de-
ftit OF over S1S7. 100000 for 1928. not
allowing for $jO0O0.000 requested by
the shipping board for the payment OF
claims, $7,000000 to be spent for Rus
sian relief by the United States Grain
corporation. and S5,000,000 to be paid
aS the 1923 instruments under the treaty
Of Colombia . total Of 12,000,000.
To overcome these deficits, he eX
p7ained. expenditures must be reduced
in the aggregate by about $500. OOOO0t
in the next two years, while at the same
time the government faces heavy
Shrinkage of receipts. In view of tho
depression in business, he added, there
j. grave doubt whether the estimates OIL
receipts which appear in the budget car
BE realized.
The ovcrshadowing problem of the
treasury. Mr.. Mellon declared, was il
the handling of the public debt, amount
ing at the end of the past year to SOB.
ABS, 9S4,3J1, of which S6,500,000.00(
falls due within the next 16 months
The refunding OF this vast maturity. h'
asserted, would require the treasury:
constant attention from now on.
How much additional taxation would
Re necessary to pay soldier bonus. h,
declared, would be difficult to estimate
but on the basis of the McCumbcr bill
it would appear that the total cost woulC
be about So. 10000 900. OF which a
least Se50.000,000 would fall due in tn,
first two years of operation and, pos
aibly. as high as 81 100000. if Al
unexncctedly large number of veterans
should choose cash. The minimum cos
he placed at about 81, 60,G00, 900, baseC
on cash payments. ard the maximum
cost at about S5.250000.000. if all thu
veterans should take certificates in liel
q cash.
To discover new taxes, that coul,
properly be levied to yield as much a
SG50O00G COO within two years. Mr.
Mellon coutended would be difficult, a
the field Of taxation has been 50 thor
oughly covered
I'm these circumstances. he said
sahould congress determine to adopt TIN