Evening star., 1926-10-31
VETERANS MAY GET
$G262,54Q,O1O LOANS
Banks, However. Sound Note
of Caution About Borrowing
Privilege in 1927.

Approximately 2.SS3 900 adjusted
service certificates in the possession
of World War veterans. with a face
value of S2.975. 900 900, will be avail
able in 1927 for deposit with banks
as collateral security, on which the
Veterans Bureau estimates $262 $40
000 may be borrowed.
The drain under this policy on
Washington banks assumes formi-
dable proportions when it is realized
that they may be called upon to lend
approximately S2.100000 after Jan
uary l to some $4,000 holders of bonus
certificates residing in the District.
These 5000 certificates. increasing
gradually in borrowing power from
year to year, have a face value of
S24 $4,000 underwritten by the Gov
ernment.
Bankers, generally. in Washington
face the issue with considerable ap-
prehension. As an investment prop
osition, many of them fear that they
will be left with lot of frozen funds
on their hands. to be collected from
the Government through a tedious
process of unravelling red tape
Sound Note of Caution.
a sounding of sentiment among
them serves as a warning to the vet
eran that he cannot expect to walk
into the first bank at hand, plank
down a service certificate, and walk
Immediately out again with a short
time loan of $50 or SIS in his pocket
What seems to be the sentiment
among bankers here reasonably may
be claimed to be the sentiment else
where.
Loans may be made to veterans on
these certificates only by banks and
trust companies, Brig. Gen. Frank T.
Hines, director of the Veterans Bu
reau said Under no conditions, he
let it be known, can loans on bonus
certificates be extended by the Vet
Grams Bureau or any other agency
of the Government.
In other words. voicing the opinion
expressed by Charles j. Bell. presi-
dent of the American Security and
Trust Co. and echoed by others. Con-
gress simply passed the buck to the
banks when it wrote the loan pro-
visions into the soldiers bonus act.
Banks Free to Decide.
The banks may or may not lend on
bonus certificates, the discretion being
theirs under the law to turn down
any applicant they see fit, as in the
case with individual borrowers. Nor
can the veteran. in the event he is
refused a loan by his or any bank.
turn to the Government in the hope of
obtaining funds. The Veterans
Bureau can lend money only on
war risk insurance policies, on which
1,o -
involving $4,000 900. which is less
than 10 per cent of its assets.
Charles E. HIVE, treasurer of the
American Security and Trust Co.,
pointed out that Congress had thrust
the veterans wholly upon the mercy
of the banks, a fact which the banks
recognize, and undoubtedly they would
do what they could to meet the situa-
tion in strict adherence to banking
principles. But what is to happen
to the man who can't borrow from
any bank-and there probably will be
many" Mr.. Howe asked
IF he IS turned down at the banks
he cannot borrow from the Govern
ment. If Congress had wanted to
make it certain that a former soldier
should obtain a loan. it should have
put the responsibility on the Govern
ment. so that each man could go to
his post office and obtain loans merely
upon identification.
Realizing the injustice that may be
done to many worthy veterans ur-
able to obtain loans except on their
bonus certificates. local bankers are
inclined to cooperate with the Gov
ernnent in SO far as they feel able,
provided their interests are fully pro
tected. Perhaps Gen. Hines realized
| the situation confronting the banks
of the country when he coupled with
the statement issued by the bureau
an appeal 10 veterans to go slow in
seeking loans.
Hopes for Minimum Loans.
The director sincerely hopes the
veteran will not exercise the loan
privilege to any appreciable extent"
said the statment, since 1t will be
much more advantageous to the vet
eran or his beneficiary to hold the Ger
tificate unincumbered to the date Of
| its maturity"
Due to the uncertainty that sur
rounds the situation, many of the
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