The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-02-16
Only Feasible Method Execu'
tive Tells Congress.
Poll Shows Less Than 100
Votes for Plan in House.
LEAVES COMPENSATION IN AIR
Leaders Had Practically De-
cided to Abandon Tax.
No Way Seen to Raise the
Money Needed.

Washington, Feb. 16.-President
Harding Informed congress today he
considered a general sales tax the
only feasible method of raising funds
for soldiers bonus.
The executive in a letter addressed
to Chairman F'ordney of the house
ways and means committee and Chair
man McCumber of the senate financial
committee suggested that unless con-
! gress saw fit to enact a sales tax
passage of bonus legislation should be
temporarily postponed.
Believes Tax Is Popular.
'I believe the president wrote, the
American people will accept the levy
of a general sales tax to meet the pro-
posed bonus payments and we should
, contribute thereby no added difficult
ties to the problems of readjustment.
If congress will not adopt such plan,
it will be wise to let the legislation go
over until there is a situation which
will justify the large outlay"
Declaring that the government had
under sconsid Grafton the disposition of
surplus war properties and other
transactions which should bring
"great relief" to the treasury, the
president said it would be wise to let
the legislation go over if congress did
not deem it advisable to adopt the
sales tax.
Leaves Problem in Air.
The presidents letter was regarded
generally at the capitol as leaving the
bonus situation even more complicated
than before. Senate and house sub
day to receive and consider the White
House communication
When the sales tax was discussed
in the subcommittee last week it was
understood that senators were in
formed that less than 100 Republican
votes in the house could be mustered
for a sales tax, as a method of fl
nancing the adjusted compensation.
Such a tax had been considered by
house leaders as a possibility but Vlr-
tually had been discarded.
A plan of levying an excise tax upon
the privilege of use and enjoyment
of large land holdings based upon their
unimproved value with increased in
heritance tax was advocated in letters
to President Harding and Chairman
Fordney of the house ways and means
committee by Representative Oscar f.
Keller, Republican, of Minnesota.
Each of these plans has been rejected
by the ways and means committee
Representative watson, Republican,
of Pennsylvania, brought forward the
bold course of abandoning all ponus
plans except the paid up insurance.
He estimated the insurance would cost
for the first year about $21 100000, IN
creasing annually until the total cost
at the end of twenty years would pc IN
the neighbo. ~ood of S6,OOO,OOO'ooO'
His suggestion received little suppole L
Text of the Letter.
The text of the presidents letter
which was addressed to Chairman
Fordney of the house ways ana means
committee follows:
I'm accordance with the promise
made to yourself and your assistants
on the senate and house committees
charged with the responsibility or tor-
mulating proposed bonus legislation,
have carefully looked into the pro-
gram of taxation which has been sug-
| gested, In addition thereto, l have
made inquiry into the feasibility OF
| issuing either short time treasury
notes or long time bonds to meet the
financial obligation which the Pro-
posed Legislation will impose. 1t is
not possible to commend to you either
! of the plans suggested.
at continues to be my best judg-
ment that any compensation legisla-
ton enacted at this time ought to
! carry with it the provisions for rails
! ing the needed revenues, and I find
myself unable to suggest any COM
mendable plan other than that of a
| general sales tax. Such a tax will dis
| tribute the cost of rewarding the ex-
service men in such manner that Ii
will be borne by all the people whom
! they served, and does not commit the
government to class imposition OF
taxes or the resumption of the bur-
dens recently repealed, the mainte-
| nance of which can be justified only
| by a great war emergency.
! 'It is fully realized how great Is the
difficulty which confronts the con-
gress in solving this difficult problem
am aware of the strong sentiment in
congress in favor of this adjusted COM
pensation.
{ Il have spoken approvingly myself
| always with the reservation that the
| bestowal shall be made when it may
be done without such injury to the
/ country as will nullify the benefits tc
| the ex-service men themselves which
! (Cortinued on Page ThreeI