The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1922-02-05
Believed tt Would Meet With
Greater Measure of Public
Approval Than Special
Tax Levy.
WITH DOUBLE GUARANTEE
BONDS WOULD SELL HIGH
Increased Inheritance Taxes Ad-
vOcated as Another Means
Of Raising Necessary
Bonus Money.

WASHINGTON, Feb. 4-Republi-
can house leaders are understood yir-
tually to have abandoned the idea of
financing the soldiers bonus by means
OF a general sales tax, a program
which has been freely discussed with
more or less favor at both ends OF the
capitol.
Opposition among the majority
members, mostly from the middle and
far west, to a sales tax is said to be
so strong as to threaten defeat of
such program. The alignment
against 1t is understood to be prac-
tically that which forced acceptance Of
the so per cent income surtax voted
into the revenue bill by the senate.
Developments at further hearings
today by the house ways and means
committee disclosed that in spite of
Secretary Melons opposition to the
plan, a number OF the majority mem
bers favor the use OF part of the pro-
ceeds from the refunded British debt
i'm helping to finance the adjusted
= compensation. They believe that this
would meet with greater measure
OF public approval than would a pro-
gram involving the raising OF the en-
tire amount by means OF special taxes.
Arguments on both sides of the
question were heard by the commit
tee. Representative Ramseyer, repuib-
lican, Iowa, opposed the proposal ar
guing that such use of the money
would be a breach of contract with
the holders OF liberty bonds, who, he
said, had been told in the law adopted
by congress that the proceeds from
the foreign debt would be used to re-
tire the liberty bonds issued to raise
the money advanced to the debtor ma
tons.
Chairman McFadden of the banking
and currency committee, favored tho
financing of the bonds through the
sale in this country of the refunded
British bonds, with the principal and
interest guaranteed by the American
government as well as by the British
government. He contended that with
this double guarantee the bonds would
bring a higher price than would gov
eminent securities sold for the same
purpose.
Increased inheritance taxes as an
other means of financing the bonus
was advocated by Mr.. Ramseyer who
said such taxes could mot" be passed
on and would not be a penalty on
initiative and enterprise. He thought
the present return of s154ooO,0oo from
this source could be increased by
$500, 100000 a year without imposing
any hardship. Chairman Fordney and
some other members OF the commit
tee apparently received this SUCCESS
tion without approval, but other MEM
bers indicated sympathy with it.
Now that the arms conference has
approved the naval limitation treaty,
same committeeman are studying the
subject of naval and army reduction
as one means of providing revenue
for the bonus. Because of the cost of
scrapping ships on the ways they are
not at all certain that the building
appropriation can be greatly reduced
on the next fiscal year, but it is their
thought that with many ships now
afioat consigned to the scrap head the
personnel can be cut down sharply,
srfecting a considerable saving.
This phase OF the situation Is ex-
pected TO be among those TO come UP
at the forthcoming bonus conference
between President Harding and house
and senate leaders.