Evening star., 1924-01-09
M'ADOO BITTERLY
ASSA|[S MELLON
Former Secretary Charges
Present One ''WholIy Dis
tOrtS" Bonus Issue.
BY FREDERIC WILLIAM VILE.

Bitter recriminations have broken
out between Secretary Mellon and
William G. McAdoo, former Secretary
of the Treasury and prominent con-
tender for the democratic presidential
nomination. An authorized statement
of Mr.. McAdoos attitude toward the
bonus. which has come into the
writer's possession, declares that
Mr. Mellon wholly distorts and mi.-
represents" the formers position.
The statement attacks republicans in
general, charges them with "fiagrant-
ly and wantonly misrepresenting this
situation" and urges democrats to
pound the truth into the people"
The McAdoo broadside, which is be-
lieved to be only the opening gun of
a bonus barrage against Secretary
Mellon and the Coolidge administra-
tion, was called forth by the Secre-
tarys recent discussion of the taxa
ton question in a published inter
view. Having been asked by his in
terrogator whether he thought the
McAdoo plan of a fifty-year bond
issue issue would work" Mr.. Mellon re-
Joined with an argument which as
sumed the total cost of the bonus to
be about $4,000. 100000 That is the
statement which has lashed Mr.. Nc
Adoo into the retort furious. The
manifesto which accurately depicts
his point of view reads as follows:
Text of McAdoo's Statement.
MELONS statement wholly distorts
and misrepresents McAdoo's position.
The Secretary of the Treasury as
sumes that the bonus. if paid in cash,
viii cost S4,000.000.00O, when the
truth is that if paid in cash it will
cost approximately $I,54S, ,OOO, 900, as
shown by the report of the Senate
finance committee in 1921.
Mellon own statement in his let
ter OF July, 1921, to Senator Freling-
.huysen, estimates the cash payment
at $l.500,000, 900. Mellon estimates
the interest on the bonds at per
cent, or s200,000,000, and the sinking
fund at 112 per cent, or $4,000. 600
per annum, on the false assumption
of cash cost of $4,000, 100000 The
total of 6 u per. cent for interest and
SINKING fund of government bonds is
rldiculous. The truth is as given in
McAdoo'S statement of November %
1928, namely, that the cash cost of
a bonus, based on the report of the
senate committee, is approximately
S1,54S.000,000.
Per Cent Sufficient.
Rive per cent per annum will be
Sufhcient to cover interest and sink
ing fund of f1fty-year bond issue
rms imposes an annual charge of
$77, 100000 and leaves. on Melons
own showing, a possible tax redac-
tion of 100000 per annum
THE cash bonus could be paid in
three annual installments. involving
the issue each year of $500, 900, 900 of
government bonds. This will not in
terfere with the refunding of liberty
bonds maturing during the next five
years.
IF, ss Mr. Mellon figures, per
cent interest and 12 per cent sink
ing fund are necessary to float new
is claiming that the eight billions of
Liberty bonds to be refunded in the
next five years will cost 61a per cent
for interest and sinking fund
This on it's face is ridiculous and
preposterous. The republicans are
hagrant1y and wantonly misrepre-
senting the situation and the demo-
Gratis should pound the truth into
the people. Many other statements
in the Mellon article are wholly in
accurate, if not deliberately untrue"
Mellon Center of Fight.
The taxation controversy already
the storm center of one of the bitter
est discussions in cotemporary Amer
lean politics, now assumes a new
phase-an acrimonious personal duel
between the present and a former
Secretary of the Treasury. Mr. Mel
Ion finds himself under fire not only
from President Coolidge's rivals for
the republican presidential nomina-
tion-Johnson and Pinchot-but from
the man who ranks as the present
hour leader in the democratic presi-
Dental contest. To the host of foes
Secretary Mellon thus has rallied