The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1922-09-20

must be generous and without apol-
ogy. Clearly the bill returned here
with takes cognizance of the inability
of the government wisely to bestow
and says, in substance, We do not
have the coach, we do not believe In
tax levy. to meet the situation, but
kere is our note-you may have our
credit for half its WORTH This Is
not compensation, but rather a
pledge by the Congress, while the ex-
ecutive branch of the government Is
due in ever increasing amounts.
Sales Tax Avoided
when the bill was under consider
alton in the house, l expressed the
conviction that any grant OF bonus
ought to provide the means of pay
ing 1t and / was unable to suggest
any plan other than that of gem
eral sales tax. Such a plan was I'M
acceptable to the Congress, and the
bill has been enacted without even
a suggested means of meeting the cost.
Indeed the cost Is not definitely
known, either for the immediate flu
ture or in the ultimate settlement.
The treasury estimates, based on
what seems the moA likely exercise
OF the option. figures the direct cost
at approximately s145,o0o.o0o for
1928; $225.o00.000 for 1924. S114.000,-
| 600 for 1925, $312,o00.000 for 1926,
making a total of s795,o00,000 for the
| first four years of its operation. and
! a total cost in excess of 100000, 600.
No estimate of the large indirect cost
| ever had been made. The certificate
| plan sets up no reserve against the
! ultimate liability.
! THE plan avoids any considerable
| direct outlay by the government dur
! ing the earlier years OF the bills
| proposed operations, but the loans on
| the certificates would be floated or
| the credit of the nation. This is bor-
rowing on the nations credit just as
| truly as though the loans were made
by direct government borrowing and
| invokes a dangerous abuse of public
| credit Moreover, the certificate
| plan of payment is little less than
| certified inability of the government
| to pay and invites practice of sac
rificial barter which l cannot sane
| ton.
ut is worth remembering that the
public credit is founded on the popu-
| lar belief Of defensibility of public
expenditure as well as the govern
| ment's ability to pay. Loans come
| from every rank of life and our
| heavy tax burdens reach, directly or
indirectly, every element in our citi-
| zenship. To add one-sixth of the
total sum of our public debt for a
distribution among less than five
millions out of 100000, whether
| inspired by grateful sentiment or po-
| litical expediency. would undermine
| the confidence on which our credit is
builded and establish the precedent
| of distributing public funds wherever
| the proposals and the numbers affect
ed make it seem political appealing
1 to do so.
| Congress clearly appraised the
danger of borrowing directly to fl
nance bestowa1 which is without
oobligation and manifestly recognize
| ed the financial problem with which
the nation is confronted. Within the
next six years more than $10.000,0o0,-
900 will mature and will have to be
| financed. These obligations are diff
| ficult enough to meet without the
complication Of added borrowings,
every one Of which threatens higher
interest, and delays the ad1ustmen.
| to stable government financing and
the diminution OF federal taxes to de-
| fensible cost Of government.
1T 10 sometimes thoughlessly
| urged that 1t Is q simple thing for