The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1922-03-13
-oans By the Banks on Ad
iusted Service Certificates.
Dangerous Abuse Of Cow.
ernment Credit Lesser.
Evil Direct Government
Borrowing, Says Secretary
of Treasury.

Washington. d. C.. March 1.-THE new
soldiers bonus bill as drawn by house
Republicans was attacked tonight by
Secretary Mellon as involving "a dan
gcrous abuse OF government credit
Replying to a request for the treas
urys comment on the new bonus bill.
Mr.. Mellon, IN a letter to Chairman
Fordney OF the house ways and means.
committee, made public tonight by the
treasury. sharply criticized the features
Of the proposed measure providing Tor
loans by banks upon adjusted service
certificates. as indirect and forced" bor-
rowing by the government. He suggested
that the direct and regular way to
provide for a paid-up endowment insur-r
ance feature. would be to authorize in
surance certificates with provision for
direct policy loans to be financed by the
government. Mr.. Mellon contended that
1t Is both dangerous and unwise" to at
tempt to avoid the cost Of the bonus for
the time being.
There is no way" he said, by which
the American taxpayer can avoid the
burden, and IL a bnus is to be imposed
It IS far better for all concerned that IL
DC placed upon direct and dennite
basis and paid for each year out OF
current revenues. To do this At this
time VII! necessarily mean the imposi-
tion Of additional taxes for the pur-
pose"
Estimating the Cost
The secretary estimated the cost or
the bonus under The bill, considering
each Of the possible choices offered TO
veterans, at moro than Sl,200, 100000 by
January /, 1926. Whatever form tho
bonus measure might take. he ASSERTED
would mean cost to the government or
from three hundred million to four hun
dred million dollars for the next three
or four years and possible continuing
liabilities thereafter Of more than TWO
hundred million dollars year unui
1913 Accompanying his letter MI. MOL
lon transmitted tables prepared oy
treasury experts showing the varying
cost OF a bonus according TO what pro-
port!on Of veterans might choose me
INHERENT plans Of payment offered.
Mr.. Mellon called attention to the fact
that the bill makes no provision for rais-
ing additional revenue TO meet the COST
Of bonus and recalled 10 Mr.. Fordney
President HardinG's letter OF February
l6, in which il WAS suggested that
general sales tax be enacted TO proVide
the necessary funds or the bonus leg1s-
lation be postponed. secretary Me!'ons
letter, in part, :"l.o"s
III. MELONS Letter
The bill makes 10 provision whateVsf
for sinking fund, amortization or re-.
serves against ether the liability tnSta
wou,d bc thrown u.".a the governments
:, 1qo5 or agaiu., The liability on the
certificates a; the end OF twenty years
nor does 1t make any provision for tnS
payments which would accrue IN ordin-
ary course from year 10 year on account
.! death Of veterans. a
THE direct cost 10 the government or
Lill carrying these provisions lot
about 4.5OO.U00 ex-service men Is almost
impossible TO estimate, because OF the
pncertainty as TO which OF the pi1ns
will be chosen and in what proportions.
But the government actuary has pre-
pared tables OF estimated cost on the
assumption that 70 per cent will choose
the certificate plan, % per cent the farm
v.optinuad ON Pare TwOlVO.)