The New York herald., 1922-03-13
Secretary Declares Di-
rect Loan Would Be
Far Preferable in
Interest Of
Country.
REPLIES TO F0RDNEY
Certificates Would Freeze
Bank Resources and In
tlate Currency.
COST OF RAID INDICA1
Might Compel Government
Raise at Least S1.200,0(4
900 by January /, 1926.
by LOUIS sEIBOLD.


/ Special Dispotcr 70 THE NEw YonK Hrpus
New York Herald Bureau.
Washington. ID. C., March 12.
Confusion worse confounded is ex-
pected when the House Ways and
Means Committee meets tomorrow
to report the certificate loan bonus
raid on the public Treasury and bust.
ness Of the country.
Confronting those committeeman
who still assert that they will lam"
the Objectionable measure through
the House of Representatives will be
this statement from Secretary of the
Treasury Mellon:
There is no way by which the
American taxpayer can avoid the
burden, and IL the bonus is to be
imposed it is far better for all con.
cerned that it be placed upon a di.
rect and definite basis and paid for
each year out of current revenue.
To do this at the present time will
necessarily mean the imposition OF
4 additional taxes for the purpose.
! The conclusions of the Treasure
4 Secretary which bonus members OF
Congress say will fail to prevent the
raid staged for political purposes. ara
contained in letter addressed by
him TO Chairman Fordney OF the
Ways and Means Committee 1t is in
reply to Ways and Means Commit
tee request for the comment OF the
! Treasury Department on the pending
bill to provide for soldiers bonus.
This is the insurance certificate loan
measure framed by the Republican
members OF the Ways and Means
| Committee introduced in the lower
house and referred back to the com.
mittec for report.
4 stormy Fight Predicted.
Attacked on every side by the expert
analysis ard the conclusions Of Sc.
retary Mellon. which will be before
the committee tomorrow. member
of the House predict stormy battle
over the effort Chairman Fordney
will make TO impose the most stu
pendous raid on the finances OF the
country ever staged in Congress.
Opponents Of the raid undoubtedly
will support the position OF the Sas
retary. They predict that the volume
OF objections to the whole bonus
scheme. already assuming startllng
and surprising proportions. will com.
pei abandonment OF the insurance
certificate loan plan. the substitution
OF the sales tax or postponement OF
all legislation relating to the bonus
The declaration OF Senator's ana
Representatives who have needed a0
avalanche OF protests from all
tions OF the country against as
bonus that the certificate scheme y
"the worst ever devised" is subs IS
tiated by the letter of Secre =
Mellon.
In logical and incisive terms ~
Secretary points out with CONVINCING
clarity tho defects Of il. lie declines
~ 'SRi4ho1S tue ulIt1l Cost 10 the
Government or the bonus scheme che.
cause Of the uncertainty as to whi,r
of the plans will be chosen and ii
what proportion"
Defects Arc Enumerated.
Tho Secretary calls attention 10 ,ha
fact that the Insurance clause OF tae
bill carries no appropriations and that
no moneys could be paid under i bv
the Treasury unless further Iesisla
tion should make an actual appropf.
alton for the further reason tl,a
"thc bin makes no provision whatever
Tor raising additional revenue TO NICE.
the cost Of tine bonus 10 tho Govern
tnent" and "for sinking fund amor
tization or other reserves against ina
liabality that would be thrown upon
the Government"
Another objection pointed out IL
him Is that the bill fails 10 make pro
vision for the payments which would
accrue in ordinary course from year
20 year on account OF tho death Of
veterans. lie says e is impossible 10
estimate what proportion Of the vet-
erans VIII choose any OF the features
IN the 1--we way" plan.
The Secretary accepts for the pur-
pose of calculation the estimate ofline
committee that 70 pc. cent. OF the