Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1922-02-09
A BONUS is IMPOSSIBLE
WITHOUT MONEY TO PAY 1T
tory Way to Raise the Nee.
essary Funds

DRESIDENT IIARDING'S insistencc
L that any bonus plan adopted by Con
gross must carry with IL provision for
raising the money is statesmanlkc. 1t
would be better to reject the bonus plan
altogether than TO hold out to the soldiers
the hope OF extra compensation without
doing anything TO satisfy their cxpeCta-
tions.
The summary rejection BY the President
of he suggestion that The bonus charges
be met ont Of the interest payments on the
foreign loan is businesslke. The money
lent to the foreign Governments was bor-
rowcd from the people OF the United States.
and its payment was secured by the issue
of bonds on which our own Government Is
now paying interest. Every dollar Of in
tcrest paid by the foreign Governments
should be used TO meet the interest on the
domestic bonds, and If any Of the principal
is paid that money should BE- used to reduce
tn" amount of the domestic debt.
There ought TO be business sense enough
IN Congress 10 sustain the Presidents OBJ
lection 10 such an improvilcnt course ms is
involved in divcrting TO the payment Of
bonuses money consccrated by every prin-
cip'c oi sound iinanr" to tho paymcu, Of
obligations already incurred.
lhc objection to lcvying special taxes TO
raise money for bonus payments has led
several Congressman to favor borrowing the
money on twenty or thirty ycnr bonds II
is estimated that S2.500. .00O.0 600 would be
needed. The interest and sinking fund
charges would be at least $780, 900 n
year which would have TO bc raised by
taxation.
There rises at once the question whether
50 large Il loan could be hoated. No one
thinks it could bc hoatcd by ordinary proc
csscs. When the country was nt war and
patriotism was at fever heat it. was neces-
Sary 10 resort TO extraordinary methods TO
raise money to maintain the armies. The
people were cXhortrd to lend till it hurt.
and many Of them did. The bonds are not
yet digPsted. Hundreds Of millions Of dol
lars advanced by banks TO business men
who bought the bonds are still owed BY the
borrowers because the business men have
not accumulated enough out of their profits
to pay for what they bought.
The soldiers. it is true. might become
bond statesmen and canvass the country for
Il direct interest in the success of their
campaign. for if it failed they would not
get the bonus.
The attempt TO float Il 5000 100 600
loan this year, however. would rmbarrass
the other financial operations of the Gov
ernment. Within the next sixteen months
$4,000. .O00,0 Of Government obligations
fall due. They cannot all be paid and the
grenter part of the amount must be refunded
in another lonn.
There Is 81. 500. 900. 600 in Victory Notes
maturing on May 90, 1923. As that
amount OF money is not in sight and can
not be found, it will he necessary TO refund
the greater part of the debt by the Issue
of long term bonds. II the holders of the
notes will not exchange them for the new
bonds. then the bonds will have to be sold
in the open market in order 10 raise the
money to pay the notes.
Then there is ST. 200 900, 600 in Treasury
certificates which fall due at various dates
during the current year These certificates
represent temporary floating debt which
will have to be changed into Il long term
obligation in some way. because tho money
TO redeem them is not in sight And finally
S.oO,OOO.Ooo in ar-savngs certificates fall
due January I. 1923. These certificates are
held in small amounts BY hundreds of thou
sands of citizens to whom the promise was
made that the money would be paid when
It was due.
Congress must face these facts They
cannot be lodged, and it must be admitted
that they present an obstacle in the wav
"f satisfactory bonus legislation that will be
difficult TO overcome. II will rcnrirc all the
financial genius of which Secretary Mellon
is possessed to carry the Government safely
through the next sixteen months even if no
heavier obligations are placed upon him.
III the advocates of the bonus would de-
vote their energies TO finding a satisfactory
and unburdensOme way to raise the money
to pay it they would advance their cause so
rapidly that the proposition would 90
through Congress by an almost unanimous,
vote