Great Falls tribune., 1922-03-13

duQlClOndl taxes on the PUBIC.
Cost About $1,000. 100000
The secretary estimated the cost of
the bonus under the bill. considering
each of the possible choices offered to
veterans. at more than 81 100000, 900
by January 1. 1926. Whatever form
the bonus measure might take, he as
serted. would mean a cost to the gov
ernment of from $500, 600. 600 to $780,
900. 900 for the next three or four years
and possible continuing liabilities there
after of more than S2OO.0O0,0 900 a year
until 1943.
Accompanying his letter. Mr. Mellon
transmitted statistical tables prepared
by the treasury experts, showing the
varying cost of a bonus according to
what percentages of veterans might
choose the different plans Of payment
offered.
Mellon Urges Sinking Fund
Mr. Mellon called attention to the
fact that the bill makes no provision
for raising additional revenues to meet
the cost of the bonus, and recalled to
ter of February is, in which it was
suggested that a general sales tax be
enacted to provide the necessary funds
or the bonus legislation be postponed.
Secretary Melons letter, in part, fol-
lows:
The bill makes no provision what
ever for sinking fund. amortization or
other reserves against either the lia-
bility that would be thrown upon the
government in 1925. or against the LA
bility on the certificates at the end
of 20 years, nor does it make any pro-
vision for the payment for the inter
est that would accrue in ordinary
course from year to year on account
of the death of veteans.
Estimated Cost Analysed
''The direct cost to the government
of bill Carrying these provisions for
about 100000 ex-service men is al
most impossible to estimate. because of
the uncertainty as to which of the
plans will be chosen. and in what pro-
portions. But the government actually
has prepared tables of estimated cost
on the assumption that 20 per cent will
choose the certificate plan. % per cent
the farm and home plan. per cent
the vocational training plan and : per
cent the land settlement plan. In the
calculations as to the cost of the GER
tificate plan it is assumed that the
certificate holders will borrow on their
certificates from the banks and de-
fault on their loans. in view of the at
tractive provisions for cash redemp-
ton in case of default. 1t ap-
pears from these tables that on the
basis assumed by the actuary. the total
direct cost to the government IN the
fiscal year 1928 would be S2S9,a54.-
900; in the fiscal year 1924, Solb,44o,-
900: in the fiscal year 1879. Si2S,ola,-
coo, and in the fiscal year 1875. for the
most part by October Is. 1928. when
the adjusted certificates issued rs Sc
curity for bank loans would have to be
redeemed. S615. $4,000. This would
mean total payments within about
three and one half years of over ST.
100000 These estimates take N" ac-
count Of amortization or other reserves
against certificates TO remain outStand-
ing after the fiscal year 1926. which
would add at least $4O,M0,OOo year
to the current charges. or OF possible
additional costs under the land settle
ment plan if the reclamation projects
therein authorized should be carried
through. 1t is estimated that about
S1OO, 100000 per annum would be re-
auired after 1928 if these reclamation
projects should be pressed.
$4,000, 100000 Involved
'.If all the veterans should choose
the certificate plan, the total face
amount Of the certificates would
amount to over $4.5OO, ,OO0. 600, distrib-
uted over 20 years, and if all the vet
erans should choose the farm and
home aid plan the total cost would
amount to $2,o93. 100000 witain tho
next two or three years.
apart from the direct cost Of the
bill, d most serious feature is the pro-
vision for bank loans upon adjusted
service certificates during the period
(CpntlrucA ON Page seven.)