Evening star., 1925-01-22
IN TODAY'S SPOTLIGHT
BY PAUL Y. COLLINS.

Billions OF dollars worth Of life in
surance certificates are now in process
Of mailing from the Veterans Bureau
! to the soldiers of the World War. They
will not mature for 20 years and can
not legally be used as collateral Sc
curity for any loan to the holder until
two years from the date Of the GER
tifcate Hence they are Of no assist
ance to the needy veteran now out Of
employment and homeless. After two
years a bank may lend him $S7,
provided he will secure his note with
a policy certificate having a face value
Of $1,000
Taking a tangible case for illustra-
ton, a soldier enlisted February 16, 1918,
and served 1876 days in America and 339
days overseas. When he was discharged
he was given a bonus Of $50, which
amount must be deducted from his
present adjusted compensation, leaving
his adjusted service credit" $499.75.
The amount of insurance that sum will
cover for him depends on his age at
present.
If now he be 80 years OF age his
insurance. maturing when he reaches
so years of age, will be Sl,26l.39. II,
however, he is today 65 years or age,
though he served the maximum length
of time. or is entitled to the maximum
adjusted service credit" OF $62o, MS
insurance will be only s1,18O.2o-Ior
he is likely to die earlier than the
30-vear-old veteran who served only
Iittia more than half the service of the
older man. BY the time the 65-year-
old veteran reaches the age OF 6S ne
can go to bank with his certificate OF
s11S025 az collateral and borrow
s1O3.S5. The younger man, VINO mad
served about half as long, can oorrow
S11Oe1 on his certificate OF S1,26139.
These are maximum illustrations OF he
peculiarities of the law.
In case the loan from the DanK tto
be made in 1927 or later) be not PAID
hv the veteran when due the Gov
ernment, will pay the bank and hold
the veterans certificate as security
No further loan can be obtained on
that certificate, because 1t Will no
longer be in the veterans possession.
When the veteran dies the insurance
will be paid to his beneficiary OF rec
ord. less the loan with its accrued
interest at 6 per cent
hundreds of thousands Of the cer-
tffcates have reached veterans since
January 1, and already reports are
coming back to the Veterans Bureau
that there are some soldiers who seem
too impatient to wait until the 2o-
wear certificates mature or until death
brings the insurance to immediate
availability for their heirs and as
signs. These veterans are charged
with borrowing money from other
lenders than banks, in spite of the
prohibition in the law which makes
suoh transactions void. They ne ed
the money, and certain lenders are
willing to take O. chance" upon the
law; so where a loan value two years
hence would amount to. say, 800.
they advance $25 cash at once and
take the certificate as security, with
the agreement of the veteran that he
will make the lender his beneficiary
under the certificate. The assumption
IS that two years from now the SOL
der can go to bank, accompanied by
the lender, there borrow the maxi
mum and pay either the full amount
to the lender or such part as usurious
practices will demand.
The lender may or may not be
aware that the veteran can change
his beneficiary at will as often as he
cares to do so. The lender, therefore,
must take great chances on his Sc
curity in the good faith of the bor-
rover, since his collateral is void.
Taking such risks. it is an axiom of
business that the rate of interest, or
the premium demanded. must be in
proportion, but the veteran cares less
for that than he does for immediate
possession Of cash to meet present
emergencies. So when the Govern
ment rewards the service of the SOL
der the chances are said to be that
the soldier gets about s25 and the
usurer $75.
In n notice through the press last