Every evening, Wilmington daily commercial., 1922-07-01
THE PROBLEM OF THE BONUS
BY Frederic J. Haskin

Washington. July with tho re-
| porting Of a bonus bill b. b Senate,
| tho faro Of argument for and against
tho has hriso O The
colder and his supporters sro come
times al n loss 20 understand why the
payment of q soldier bonus is opposed
when 10 Is considered that tho United
States IL tho richest country in the
world and why nnanciers are slow 10
approve Of the plan.
Nowhere can anyone ba found who
opposes tho idea 81 rewarding the sol
diers for the part they toolJ in winning
the war and bringing 10 an end the
German aggression which threatened
democratic Institutions. Tho objections
from tho financial world are based on
the present ~expediency 81 the move
and the mLaner In which It IL pro
posed to pay the men the adjusted
compensation.
Finance is a science Of endless In
~tricacles and great movements II
large sums have an I~nter-acting ef-
feet on the entire business OF the
country. Tho opposition 10 tho bonus
arises from reluctance OF business
men and nnnnciers to disturb the
money market. Proponents Of the
bonus either ignore tho disturbance or
say that 81 IL OF less national import
ance than tho adjustment Of the col
dler'a monetary reward for their ger
? vices.
An examination Of the effects Of the
! payment 0f n soldier bonus. wholly
aside from tho merits u tho caro- IN
its human aspect. Is II speciSl inter
est at n time when nearly all Ameri-
can citizens arc gaining an increas-
, ing realization of how great hnan-
- ella affairs affect every DAY life.
Primarily. n nation has certain limit
: TO Ito wealth and income. These limits
. can be enlarged by speclal exertion
: rs they were during tho war. but
: there arc limits beyond which ~
amount Of imitation or squeezing car
push tho national income. During tn
war, no United states borrowed iron
the American people come $4,000,
10000. Tho people did not have an
q such great sum to lend 20 the Govern
ment out Of current income within IN
period the funds we're required. Tina
/. the money was raised seems a paradox
The fact is. the 500. 900, 900. 900 lent IN
Government vas not advanced out Q
current earnings but was borrowe'
d from future earning power. What N
Treasury borrowed from the Deopl
d was not only all they could spare from
h current earnings, but What they coul
n spare for some years TO cone.
II Why Bonds Deprecated.
" This Ia one Of the reasons why Lb
erty Loan bonds fell below par an
u why some still are slightly below pal
, The people and the Government mort
- gagged tho future. The nation steahii
10 ia catching up. Every rise in the mar
y ket price OF Liberty bonds on IN
~ stock Exchange represents an ar
proach toward the point where IN
national income will have caught Il
he with the money advanced 20 IN
~ Treasury during the war. The tas
% will be accomplished within a yea
In or W IN all probability, provide
ID things remain substantially the same
The fundamental objection OF lnar
u ciers to payment Of the bonus now
that TO AXE from S4.000.0 900 900 20 s.
y 900, oO0, 900 Of h national COFFEE
an for "a bonus this year Will mean tn;
in the whole people will be plunged baS
into debt by just that much and tn
the time when we shall eaten up Wi
the war obligations Will be Just III
much longer postponed.
President Harding has urged n
the bonus be paid by increased tax
he ton. IN this way, the bonus wOu
at be paid. in large part, out Of Gu
rent earnings. But It would not
all paid wholly out OF such earnings. I
,st an increase in taxes would force ma
ny taxpayers TO borrow money with viii
KIT 10 meet the imposts. This would me
as the mortgaging OF the future. but
Der the opinion Of the President AMI I
lIl. Treasury Department would be Of
Ter ferable 70 = Government loan. ina
as much as the borrowing would be wild
TX " scattered and privately conduct
and therefore would not cause q So
es, den and concentrated strain on :
money market.
The President and the Treasu
stand firmly against 4 national 30
7 issue 20 pay the bonus because 81
a move would At one stroke set :
Mt country back several years in It's
fort 70 catch W on the var debt.
issue bonds 10 be bought by the pub
would mean that the whole count
,h- would understand the Treasury's po
ton had been weakened BY The amou
the of the bond issue and the mari
uf- prices Of Liberty bonds Of all the "
the issues would drop TO lower levels. ST.
/. pose the list Of bonds on an ayers
dropped five. points. This would me
the people who now own these Dor
would sustain a paper loss OF $500
600. 900 or more. This loss would
ar become actual unless the holders +
to sell their bonds but many wo'
encounter emergencies which nee
STATED their sale.
A further effect ~ a bonus bond
sue would DO that the general lie