Evening star. [volume] (Washington, D.C.) 1854-1972, 1922-03-09
HOUSE B0NUSB|||lL
sEENASQ||A|N|G;ER
"Freezin9" of $780, GOO, 600
in Banks and Curb on
Business Predicted. -
BY, DAyID LAWRENCE.


Five hundred million dollars, will be
frozen" in the banks ,of the United
States if the soldier bonus bill being
considered by the House. of Repre-
sentatives should become law. Also
it may mean a net cost to the govern
ment in three Years of about a bill
lion dollars.
nartment. which continues unabatetl
its opposition to. The method pre-
scribed by the House ways and means
committee to provide funds for /,
soldier bonus. The Treasur view is
that If the bonus must be paid the
funds would better be-obtained by di
rect borrowing On the part of the
United States, though that form j.
hardly as good as sales TAX or any
of the other forms of taxation sug-
gested 49,.
Indeed, the Treasury looks upon the
scheme to compel the banks of the
United States to loan money on the So
called service certificates as the worst
possible way that could have been de-
nised to handle the situation.
believe President Informed.
The position of the Treasury will
unques'ionabiy be made known to
the House ways and means commit
tee, though, to be sure, there is rea-
son to believe Secretary Mellon COM
municated his views to the President
and that Mr. Harding as conse-
uuence issued his statement OF Tues
day reiterating his proposal that the
whole bonus issue be postponed or a
sales tax imposed.
Officials at the Treasury explain
their opposition to the House plan
tAis way: They say that the so.
cplled loan certificates will embarass
the banks of the country. for it com.
pels them to lend money to- the sol
diers and yet the certificates are not
transferable Nr negotiable. The mo.
sums they borrow the certificates
must remain in the banks for three
years. Upward of five hundred mil
lions of capital which might other.
wise go into business Investment OF
be used to finanee the couptry's nor
nal needs would be withdrawn. And
ii at the end of three years. the SOL
dierS who have borrowed. the money
should default the government must
not only MAKE good the banks loss
but it must pay the soldiers the re-
manning half of tho morey they were
privileged to borrow under the SOL
der certificates.
Transfers Drain to Banks.
As viewed 1T the executive end
transfer of the drain for the moment
from the Treasury to the banks of
the country As between the two. II is
contended that the Treasury is bet
ter able to stand such borrowings
than are the hanks. In the end. the
Treasury considers the government
will have to reimburse the banks. so
1t amounts to the same thing. though
for three years the capital of Amer
lean banks would be tied up OF
"frozeh"
Controller Of the Currency Girls
singer. who nv Law is Entrusted with
the SUPERVISION of national banks
and who halls from Marion. Ohio
where for years he has been President
Harding's intimate friend. insists
that tn" scheme is SO unsound that
he would not advise banks to lend
money on the certidcs ties which
Congress is talking about.
The consensus Of opinion in exec
uiive quarters is that the latest
plan is filled with more dangers to
the ccuutry's finances than any yet
proposed. and that the soldiers them
selves will insist upon sales tax
when they find out that. painful as