Evening journal., 1922-03-04
Paucnshop Bonus AsSaiIed
As Worst Of Raiders Bill

anu INAANNN IT 90 AAANT W'tAN tNtNAAns
Most OF the day was spent by
Mr.. Bowers and other members OF
the subcommittee TO which the pro
iect was referred for completion
and drafting in trying TO meet crlti-
cism leveled at it from all quarters
yesterday one OF the first changes
made was to decrease the loan value
at the Treasury Department OF the
certificates from go to So per cent
The effect OF this. according to
financial experts would be to re-
duce the probable outlay OF Govern
ment money from $4,000. 100000 10
around S4.25O.OO0.O00. In other
words. instead OF getting S5.0oO.O00.-
600 In actual money from tho Cow
ernment finances. the soldiers en-
titled to the bonus would get t4,-
$50, 900 900 when they presented
end OF three years.
Another change made In the bill
was that the highest rate OF interest
that can be charged by banks shall
not exceed per cent. above the ~
per cent. which the certificates will
bear. and which will be compound
ed annually
Not Bothered by Final Cost.
Just how much money the new
bonus enterprise would cost the gov
ernment al the end of twenty years.
the date OF maturity proposed. non-
OF the members OF the committee
has tried 10 figure out. They are
not interested IN that phase OF the
problem. Another feature which is
not really re sardsl as important
was the framing OF a provision 20
prevent the certificates from falling
into the hands OF pawnbrokers. loan
sharks and usurers. That Is going
TO be done, according to the mem
bers Of the committee. but just how
is something else"
Another criticism which will have
10 be met will be TO devise some
method for compelling banks TO
lend mony on the certificates when
their resources will not permit g..
Then the only way open 20 a soldier
demanding immediate cash would
be that he will have TO look for "a
market elsewhere until he can pre-
sent his certificate to the Treasury
Department at the end OF three
years and get loan OF SIS per cent.
OF IT,
Analysed from various points.
financial experts expressed grave
doubt as 10 the ability Of the com
mittee TO frame a safeguard that
would prevent a soldier holding a
certificate from selling his own prop
erty 10 the vest available purchaser.
Il Is quite probable that the certih-
Gates may be made non-transfer-
rable and non-negotiable.
II this is done and a soldier can
mot negotiate a loan with a bank he
will be confronted with one OF two
other methods One will be 10 keen
his certificate for three years. when
he can take 20 20 the Treasury. The
other is 10 make a private deal with
a pawnbroker. usurer or loan shark
and pay a bonus out OF his Govern
ment bonus for the "accommoda.
ton" he Is not able TO obtain at q
bank.
Loose Ends Admitted.
Members OF the committee admit
ted this afternoon that the new
, bonus venture is far from perfect
They concede the existence OF man
loose ends" and the development o
. unexpected problems that were n .
revealed until the scheme was sub
p 5ected 10 expert analysis.
The only information forthcomin'
from Mr.. Fordney left much 10 b
desired in the way OF explanation &C
cording TO Treasury officials and l.,
dependent financial experts. 'Wha
Mr. Fordney said was this:
In a full meeting OF the majorit.
, OF the members OF the Ways an
p Means Committee unanimou
4 agreement was reached on the bon
p us bin.
! Substitute for the cash provision
K of the bin as introduced the follow
ing provisions: That the certificate
- of insurance shall have a loan valu
o. of so per cent. of its compensation
q value from the date OF issue n pre-
o sented 10 any national bank or trus
q company or bank organized unde
70 state laws. The highest rate of in
Il terest that can be charged by tn
banks under the provisions of tn
IS bin shall not exceed per cent. abov
II the rate charged by the Federal Re
a serve Bank in ninety-day loans
e the district where such loans ar
8 made. This safeguards the soldier
e rights and prevents usury.
= These loans will not extend hs
m yond a period of three years. or IN
.e maximum date Of September 81
is 1925. on and after which time IN
j. holder Of the certificate may borro
e- not 20 exceed So per cent Of 81
l. value from the Federal Government
The certificates are TO run tweni
years from their dates and bear
w rate Of interest OF AZ per cent. con
-. pounded annually.
an I'm case of the death Of the so
~ dicr the full amount of the value
the policy at the end OF twenty yea
~ shall be due TO the benehciaries ar
~. payable on the date of the soldier
-. death II Is especially provided
az the bill that these certificates sha
not be honored II IN the possessi,
90 of any one other than the origin
o- owner. his beneficiary or the ban
o. above described.
H. cash will be paid TO the soldi
of who is TO receive less than $50.
- "Au other provisions IN the bill
bo originally introduced remain u
NJ changed except a few minor part
,is ulars which are beneficial to the 81
or diers.
Three Benefits Emphasized.
TO I'm this change in the bill a
NJ found three especially beneficial pr
4. trf-fo-as Il ttsfff rrftra tho eo1nfQr ho