Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1922-03-04
Ne VI BONUS BILL
GIVES CASH IF
ADJUSTED WAGE
IS UNDER $50
Adjusted Service Certifi-
Gates With an Added
Loan Provision Yielding
90 Per Cent of Bonus,
BANKS COULD CHARGE
FAIR INTEREST RATE
If Loans Are Not Paid By
September 80, 1925,
Banks Can Make Demand
From Government,

Washington, March 3.-Unani-
NOUS agreement on a compromise
soldiers bonus bill along the gen.
eral lines outlined officially yes
terday was reached today by
house ways and means committee
republicans, who believed they had
found a solution of the problem
which has been giving administra-
ton and congressional leaders con-
cern for several weeks. The re-
vised measure, however. still has
long road to travel before 1t reach
es the statute books,
AS now drawn the bill provides
for cash payments only to those
men whose adjusted service pay
would not exceed $50, and these
four optional features:
Adjusted certificates with an td-
ded loan provision which would
enable the men to obtain maGi-
ately from banks sum equal to
so per cent OF the adjusted scrv-
ice pay; vocational training, home
and farm aid and land settlement.
In working out details OF the
certificate loan provision, which
was suggested originally by Rep
resentative Bowers, republican OF
West Virginia. the majority COM
mitteemen reduced the face value
of the certificate, which would be
the amount Of the adjusted service
pay plus 25 per cent. plus interest
at 4 1-2 per cent. compounded an
nually. instead Of the service pay
plus 40 per cent, plus the interest
as originally proposed.
It was thought this would re-
suit in a saving of the government
up to a possible maximum of half
a billion dollars.
Banks in making loans on the
certificates could not charge an
interest rate in excess OF per cent
above the redlscount rate charged
by the regional federal reserve
bank on 80 day paper in the dis
trict where the loan was made.
and they could not make the loans
for a period in excess of three
years from the date of the certift-
cate, which wonld not be redis-
countable by federal reserve
banks.
If the loans had not been repaid
on September 80, 1925, the banks
could make demand on the gov
ernment for the money due. The I
it was stated, then
would cash the certificates, pay
the bank and turn the remainder
over to the service man. The cash
value of the certificate |
on that date would he S5 per cent !
of the adjusted service pay, plus
interest at 1-2 per cent COM
pounded annually from the date F!
of the certificate. This also would |
be the loan value for federal ad-
vanccs as of that date.
Committeeman said IL was not |
possible to estimate how much |
money the government would have |
to advance on and after Septem- !
ber 80, 1925. as this would depend |
first upon the number Of men |
electing to take certificates and |
second upon the number borrow
ing from the banks and defaultinc |
In payment or borrowing directly !
from the government.
at Is hoped and believed" said |
Fordney in a formal |
statement, "that when these insur- |
lnce certificates become due and |
payable. the money may be secured |
bv the sale of property and securi- |
ties owned by the federal govern |
ment and without any special |
charge on the treasury This plan |
seems to me to meet the general |
approval of the members OF the |
house of representatives as well as |
The public generally"
Some members Of the commit |
tee estimated that If all the men |
took certificates and held them
For the full twenty year period, the |
ultimate cost of the bonus would |
be approximately four billions of !
iollars. They thought, however, |
hat this sum would be reduced by
Derhans billion dollars or more |
through borrowings and forfeit |
1res
A few details of the revised plan |
5till remain to be worked out by |
the majority committeeman, 1t was
'aid today. but the expectation ia |
hat the new bill will be ready for |
by the entire ways
md means committee next Tues
day.
If favorable report on the
measure is ordered, and that prac-
.ically is assured. week NAV
alapse before the bill Is presented
10 the house. 1t was explained
that It was desired to give repre-
septo tiyna nnnnIa tirna to ft1ify
study the details before house con-
begins.