The New York herald., 1922-03-06
fact to-day that Treasury officials were
not asked for advice as TO some of its
most important features.
where Fordney. Solicited Ala.

Where Fordney. Solicited Ala.
Mr.. Fordney and his associates So
licited the aid of Chairman Harding
OF the Federal Reserve Board and
Actuary Mccoy in making the new
scheme bullet proof against pawnbrok-
ing, usury and note shaving. Sugges-
sions for restricting loans 10 national
and State banks and trust companies
We're freely offered and adopted.
The bill is conceded now by experts
10 contain provisions that will keep
the bonus certificates out Of the hands
OF pawnbrokers usurers and loan
SHARKS. The same experts add, how
over, that "the Federal Reserve act
Will keep them out of the banks" a
situation that the trainers of the bill
presumably did not take into consid-
Grafton.
There is nothing in the national
banking act to prohibit the banks from
accepting the certificates as collateral.
An analysis of the banking laws makes
that certain beyond cavil. But neither
is there anything in the national bank
ing law that will enable the banks to
certificates and at the same time sup
ply available money to lend to farmers
and to finance local commercial and
industrial undertakings.
There is no way, in other words, by
which the banks can use the bonus
certificates in financing the needs OF
their customers, because the certifi-
Gates are non-negotiable and nom
transferable and cannot be used as
the basis for borrowing money from
other banks.
The effect of this situation. accord
ing to the experts, will be that il the
$4,000, 000,0 900 of certificates (repre-
sented by dollars having a value only
OF So cents as the basis for a loan
at the end of three years. will be that
there will be no money to lend to reg
ular customers.
Emba rrassed by Tansles.
These are some of the tangles that
the Ways and Means Committee will
have to straighten out to remove OBJ
jections raised by the small bankers
Of the country upon which local in
dustries are compelled to depend for
working credltS.
The committee may undertake to
correct the defects pointed out by the
experts and bankers or send it's bill
along in the hope that way may be
found through amendment on the floor
OF the House to overcome it's short
comings. The thing is to get this bill
or any other bonus bill before the
House and give the members of II an
opportunity to prove to the ex-service
men that they are worthy of support
in the Congressional elections next
autumn.
The implied opposition of the farm
bloc to the bill which Mr.. Fordney and
his Republican associates will order
reported on Tuesday may kick over
the whole thing 1t was the farm
bIoc that headed off the adoption OF
the suggestion made by President
Harding for a sales tax, even though
the agriculturists expressed complete
sympathy for the bonus project.
The members cooperating in the
farm group demanded that the ex-
cess war profits taxes be restored or
that the foreign loan be used to
finance the bonus bill. They expressed
n preference for anything but the sales
tax. which the President declared was,
in his judgment. the most feasible
method for providing the money.
More than a majority of the members
OF the House held the opposite view
and made it known in so vigorous a
fashion that it was instantly dropped.
That Is how the insurance service cer-
tificate scheme was brought about.
There was nothing else that appeared
10 stand even the ghost of chance
OF providing the money.
Longworth's Declaration.
The farm bloc is opposed to all taxes
except the restoration of the wartime
burdens. Representative Longworth
,Ohio). who favored the sales tax. re-
Ieatedly declared that there was no
ether way OF getting the money for the
bonus raid. He. and it is understood a
majority of the members OF the Ways
and Means Committee, finally assented
10 the "pawnbrokers' bill"-as critics
of the loan certificate idea insist on
calling it--because 1T is the only thing
left"
No attempt was made by Mr.. Ford
ney and his associates to sound out
sentiment among the members of the
House. They proceeded on the assump-
tion that tho members of tina body will
pass any bill that the Ways and Means
Committee reports, and their conf
dence in this respect is probably justi-
fed. .
The attitude of the Democratic mem