The Birmingham age-herald., 1922-03-02
CASH FROM BANKS FOR K SOLDIERS
 NEW BONUS PLAN
Method Would Make Heavy Draft on Treasury UnneC- essary and Remove Cause
 of Friction
By Associased Prcss

Washington, March 1.-Elimina- ton of the cash feature of the sol diers' bonus bill, under plan which would enable former service men to obtain funds from banks on adjusted service certificates immediately after they were issued, is under con- sideration by majority members of the House ways and means commit tee as a possible solution of the bonus problem.
 This would make unnecessary any heavy draft on the federal treasury during the next two years while the refunding of the 36,500. 100000 short dated debt is in progress and, it was said, would remove the fundamental cause of the differences in Congress and between the administration and Congress over the bonus question.
 The task of working out the plan was assigned today to special sub committee which was appointed by what was described as "un1nimous consent" after the majority mem bers had failed to agree on any method of financing the cash pay ments. IL had been planned that they should be spread over period of two and one-half years from next October 1. The subcommittee had it's first meeting late today and ex- poets to call in Secretary Mellon and possibly members of the federal TO- serve board for discussion of the whole proposal.
 Months Delay Likely
 Emphasizing that the suggested stage, Representative Longworth. of Ohio, said it probably would be a week or more before the subcommit- tee completed it's work. Whatever program is agreed upon must be sub mitted to the other majority mem bers for decision and it appeared probable that it would be at least a month before whatever bill was agreed upon would be ready for the house.
 Committee members said it was not proposed to change the vocational training, farm and home aid and land settlement features of the Fordney bill Some of them thought however. that the certificate feature would he so attractive that great majority of the men would elect tha option.
 Under he plan now contemplated, the face vaRie of the sdtueted sers- iee certificate would DC equal to tHe sum of the adjusted service pay of the veteran ($1 day for domestic service and sl.25 a day for foreIgn service less the s60 bonus paid at the time Of discharge) increased by 40 per cent, plus interest thereon for twenty years at the rate of 4J1 per cent a year. compounded annually. The total face value thus would be approximately 3.38 times the amount of cash that a veteran would have received under the cash feature.
 Fifty Per Cent Cash
 Immediately after the certificate was received the service man could ob tain from a bank an amount equal to 50 per cent of the adjusted ser vice pay. If at the expiration of three years the sum thus otbaiend plus interest, had not been paid by the service man the bank could make demand on the federal treasury for the amount due. The government [ thus would take over and carry the loan.
 Provisions respecting loans to be made by the government on the cer- tificates after three years from their issue would be retaoined in the bill, it was said. Under these provisions, if the loan were made within from three to five years after issue the amount could not exceed 90 per cent
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