Norwich bulletin., 1922-03-25

S6 eos ,0o0,000 of indebtedness within tils ! next 15 months This is the greatest piece of financing done by the govern nent in peace times in its entire history, and it calls for the most delicate han ding lest the fnaHcial activities of the country be disturbed in the progress to- ward economic rehabilitation. The pay ment Of a cash bonus through the pro- posed certificate issue would add a bur den which would be felt by every person 1 in the country.
 If 9 cash bonus is to be paid it ought ! to be paid by the government. and out i Of direct taxation. whatever the burdens 1 that method will e Ea Though the les i ser Of evils 1t may result in the infiction of conseouenoes Of which the country has surely had enough experience, including 1 es suffer. The storm of protest how
 ever. coming from over tise country Fvscn 1 direct levies were proposed gave power l fui evidence of the fact that what the 1 people want is lower taxes. not increased
 or continuing high taxes.
 The present certificate plan was then proposed The danger to the government having been recognized. it was deemed
 expedient to ask the banks of the country
 instead of the national treasury to sd-
 vance the money required. The banks
 have been working for nearly two years
 10 get capital into a fluid condition, but
 under the present proposal the banks are 1 expected to take hundreds of millions of
 dollars in loans of a kind commercial banks are not organized 10 handle.
 So unusual is the proposal. and SC fraught with danger. that high govern
 ment financial authority has declared
 this proposal to be the worst one vel
 made No such proposal as that implied
 in the bill could be approved or advised I In 1925 the government will he called
 upon under the new bonus proposal t' :, take over the certificate indebtedness ear 3 ried by the banks. It is to be noted tha tho banks are expected not only to car 7 rv all the Indebtedness created thronsl y the loans on certificates, but there is n' T way provided whereby even the interes
 on these loans may be collected unti = May. 1925 unless the interest is at ono s deducted from the loan.
 e The government of course agrees C = pay in 1925 the amount of the gote piu = the unpaid interest accrued at the rat f fixed in the note. but not until that tim if can the banks enforce payment Of prir n cfpai or interest If the veteran. makin ,s the note defaults.
 Even though he does default. the gov .t ernmeut after paying his note at th q bank will nay to the veteran the dide1 Q ence between 80 per cent. Of the lca Y basis Of the certificate at the time or ' ,r receipt by the secretary of the treasur ,- and the amount paid to the bank le So the vicious circle is completed An s the longer the day Of settlement Is pi o+ off the more appalling becomes the bl " because of interest accumuiat.ons- 10 If we should struggle through the ec ,9 homie crisis and regain fnanci 's strength and prosperity. there Is lit assurance that this happy position cou be maintained if the creation Of b -ti -ti nus debt handled by the certificate pl; .l | will saddle the, government with hu ea dreds of millions of dollars worth of nc II obiigations If no loans by vetera Sh were made and the certificates were c' no ried until 1922 there would then be q nd at least 5OO.OO0.G00 and this you It. mature at time when the governme ao would be called upon to redeem over S ne o00 .GO1. .000 worth Of other obligation .f- Tventy-three years after the war. thei
 fore. the present plan would causs [
 government to redeem n ts42 over
 500, ,0o0.0 worth Of securities. It ls Us be recalled that the Fourth Libert" los -cs amounting to ss30O ,00o.0oe. natures he 1888 and the First Liberty loan, amour tss ;ne to s2.DnO .O00 900. natures in 1e oI- Despite thsse obligations of over VI ,n- 0oO .O0O .0OO. it is proposed to add throu
 the bonus bill al least $4.50o, ,Ooo.eoo ota ditionaI but the bill carries no provlsi
 for arnortizing the loan. or creatins ot sinking fund or reserves.