The New York herald., 1922-01-25

expenses Oh dQIIllfislidliOn Vt Tic E>Ob
sible cost Of vocational training aid
farm or home aid or land settlement
aid to veterans who elect such benefit.
which would involve substantial addi
tional cost.
"The expenditures involved moreover
would be In addition TO already sub
stantial expenditures on account of vet
Grams OF the world war, chiefly for re-
lief TO disabled veterans which amount
to about 10000 year. according
to estimates for 1929 and 1923. The
Governments obligation to the disabled
veterans is continuing and paramount
AID heavy expenditures for their relief
will be necessary for many years tc
come.
Predicts Big Levies.
"On the Most conservative estimates
therefore the cost of q soldiers bonus
in the first two years would probably
be not less than SS50,000,000. This
would necessitate additional tax levies
TO corresponding amount during the
same period The taxes already in force
are too onerous for the country's good
and are having an unfortunate effect on
business and industry. The neld OF tax
alton moreover has already been so
IhOrOuRlIy CONctcts OWING w thS S~Nsio
ordinary revenue neds growing out of
the war. that it is exceedingly difficult
TO discover new taxes that could prop
erly be levied to yield as much as
$3.50, 100000 within two years.
I'm these circumstances, should Con-
grass determine to adopt the policy or
paving a soldiers bonus 1t would be-
come necessary to ippose general taxes
on broad classes of articles or transac-
tions in order to pay it. For such taxes
in their nature of wide application much
might be said as substitutes for cxxist-
ing taNas, but the Treasury would hesi-
tate to recommend them as additional
taxes except to meet some exrraordi-
nary purpose.
Cites Budget System.
'What ever additional taxes might be
levied, provision for them would have
10 be made in the same bill with the
bonus. The budget system is now
firmly established and the budget al
ready submitted has pointed out the
reltaion between receipts and expendi-
lures for this year and next year. If
the Congress decides to authorize large
expenditures outside of the budget 1t is
fundamental that it should make simul-
taneous provision for the adequate
taxes necessary to meet them.
"It is also well to keep in mind that
no indirsct means of financing the
bonus could make 1t any less an ex-
pense than will have to be borne in the
Ions run by the taxpayers. Thus it
would be futile as well as unwise to at
tempt to provide for the bonus through
the use of the principal or interest of
the foreign obligations held by the
United States or through the sale of
any srch obligations to the public.
For the most part the foreign obliga-
tions are still In the form of demand
obligations, and it is impossible in the
present state of international finance
and in advance o funding arrange
ments to estimate what may be col
lected on them in the near future by
way of principal or interest. The obli-
cations are not in shape moreover to
sell to the public, and to offer them to
investor with the guaranty of this Gov
ernment woul dseriously interfere with
our own refunding operations, upset the
security markets and in the long run
prove mere expensive TO this Govern
ment than would the sale OF it's own
direct obligations. At the same time it
would enormously complicate the inter-
national situation and certainly embar-
rass the funding negotiations.
Puts BOndholders First.
Even If enough could be realized on
the foreign debt in time to pay the
bonus 1t would accomplish nothing to
set 1t aside for that purpose. As the law
now stands and in justice to the mill
lions of Liberty bondholders the Gov
ary,p nf,t t-