New Britain herald., 1922-03-02
Adjusted Service Ger tificate Plan'' Consid- cred as "Lesser of Two Evils"
New Provision Would Per- nit Veterans to Borrow 50 Per Cent. of Total Re- muneration to Which They Are Entitled.

Washington. March 2.-Unanimous agreement to eliminate the cash fea- ture of the soldiers bonus except in the case of men whose adjusted serv- ice pay would not exceed $50 was re- ported today by the special sub-com mittee of the republican members Of the house ways and means committee to which the whole bonus question was referred on yesterday.
 Certificate Best Plan
 The adjusted service certificate plan was described today at the treasury as "The lesser of two evils" officials . there indicating that Secretary Mel lon still remained firm in his opposi- tion to enactment of any bonus legis- lation at this time, which would in any way act as drain on the treas- ury.
 Secretary Mellon was represented as having formed no definite opinion as to the new suggestion but was said to view with less disfavor the pros- peet of providing funds 20 years hence under the service certificate plan than the necessity for raising an estimated two and half million dol- ldTS III lllc ICdl iulhiSs ! 20 Years Hence
 Treasury officials, however, pointed out that in 20 years, there would he more than three billion dollars in government securities maturing which must be met but said even with this prospect in view it would be less un- desirable to finance for payments over a score of years than to attack the problem at the present.
 !. The treasury was said to believe that the certificates would be eligible as security for rediscounts by federal reserve banks which would enable member banks to handle what busi- ness might develop from the loaning features of such q program.
 It was thought at the treasury that while numbers of service men might obtain loans upon their bonus certi- ficates comparatively few of them would allow their securities to be de- faulted for non-p payment of the loans obtained.
 Can Borrow Money In lieu of cash for the other service men. it was agreed to add new pro- vision to the bonus bill under which the men accepting adjusted service certificates could borrow immediately on those certificates from banks sum equal to fifty per cent. of the total adjusted service pay, computed at the rate of $1 q day for domestic and SIPS a day for foreign service.
 This official statement, given out by the sub committee, was issued hy Chairman Fordney and Messrs. Green, Iongworth HawIey, Treadway and Copley. is as follows:
 Official Statement
 The elimination of the cash fea. ture of the bonus bill where the vet e,ans are entitled to more than $50 adjusted service pay, but adding a new loan provision to the adjusted service certificate tite which will en- able holders of such certificates to borrow from any National bank or bank and trust company. incorporated under the laws of under state. fifty per cent. of the sum of the adjusted service pay prior to Sept. 30. 1925. This date was fixed because, after that time the bill as originally draft ed by the committee for larger per centage of loan by the government and has not been changed by the sub committee"
 Chairman Fordney said this plan was expected to meet with general ap- proval since it enabled the soldiers who may be in need to obtain cash immediately after the issuance of the certificates: would relieve the treas ury of any large cash payment dur ing the enormous refunding opera tions, which must be carried out in the next two years, and would place no additional tax burdens upon the public.
 Details Incomplete.
 Many details Of the proposed amendment to the bonus bill remain to be worked out and Mir, Fordney said it probably would be q week be- fore the plan was ready fo, suhmis- sion to the entire republican member ship of the committee. He declared that there would be provisions safe guarding the rights of the holders of the certificates and limiting the amount of interest which the banks could charge for the loans,
 Governor Harding of the Federal Reserve board, was in conference with the sub committee today in the dis cussions
 Can't Sell Titles.
 Under tentative provision being considered the title to the certificates could not he disposed Of by the serv- ice men. The loans could be made by National or State banks and trust companies, the idea being, MT. Ford ney explained. to prevent the certifi- cates falling into the hand of loan sharks.
 If the loans advanced by the banks were not paid by the service men on
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