Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1924-03-18
What The Bonus Means
public Ledger

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The original aim of the Sixty
eighth Congress was to pass the
soldier bonus and do nothing about
tax reduction. This plan was up
set by Secretary Mellon and the
insistence of the taxpayer that he he
given relief. Congress then pro-
ceeded to suck as much political
juice as possible from the tax
orange. The result thus far is a
House Tax Bill that is a fraud on
its face and that will mean n def
cit of S55,000,000 or more in 1928.
Meanwhile, the House expects to
vote next week on the bonus. The
measure now offered is not the one
President Harding vetoed. It's es-
timated cost is about S2.119,000,0 600,
or a little less than half as much
as the one vetoed last year. The
veteran entitled to less than $50
would get cash. All others would
receive adjusted compensation in
the form of paid-up twcnty-year
endowment life insurance policies.
on which after two years they might
borrow 80 per cent of the paid-up
cash value.
To meet these policies it would be
necessary to set aside sinking
fund of S11O,OO0,0O0 the first year
and decreasing to S91.000,000 in the
last year. The money for tina
sinking fund is not in sight. Ger
tainly it is not in sight in the re-
vised income-taX measure drafta1
in the House.
From where. then, is the money
for the bonus to come? Certain
Democrats in the Senate Finance
Committee have that all worked out.
1t is to be very simple.
Under the present Treasury
program we will wipe out our war
debts other than the approximately
$1,000, 100000 owed us by foreign
nations in thirty-one years and five
months. If We make agreements
with sixteen of our debtors such as
that part of our debt might als> be
cleared away in about thirty-s ix
years.
We now are setting aside 2 -
rer cent of the total of our national
debt, less these foreign debts,
in sinking fund and using this
to reduce our obligations Theo-
retically, we are paying off at the
rate of S250,000,000 a year. Actu-
ally. the present rate of payment is
about 3S7,000,000 yearly, as we are
applying the principal paid by for
eign nations to this reduction.
Studying the House Tax Bill. with
it's probable deficit of $4,000. 600,
and considering the bonus measure
with it's $l00.000,00O yearly de-
mands. some of our legisia tors have
evolved the idea of slowing up debt
Payments. They argue that our ma
tional debt is being paid off far too
swiftly. Posterity, argue these
bonus opportunists, is escaping
much too easily and should be made
to carry more of the burden,
Posterity, of course, is not yet regis
tered and voting.
Therefore, to get money to meet
the deficit from a makeshift tax
law. but mainly to hand the bonus
hunters part of what they demand,
It has been proposed in the Senate
Finance Committee that the sink
ing-fund rate be cut from 81 to
4 per cent on about $4,000, 0eO.-
900. This would make available
about $125,000,000 a year.
One, OF Americas proud boasts
is thatSwe are cleaning up our war
debt. With the exception of Great
Britain, We are about the only ma
ton doing so. Russia repudiated
hers. Germany wiped hers out with
a debased currency. Others are
carrying them along. trying to
ignore them, paying as little as pos