Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-02-08
BONUS BILL ADDS
TO VET INSURANCE
100000 PoIicyhoIders Seen
as Beneficiaries Under
Act Passed by House.
BY the Associated Press.

A half million former service men
who hold Government life insurance
policies stand to benefit by final pass
age of the Green bonus loan bill,
although its primary purpose is to
facilitate borrowing on adjusted com
pensation certificates. The bill passed
the House yesterday and now goes 70
the Senate.
Under the bill, interest profits made
on the compensation certificate loans
would go to a fund set up to retire
the Governments life insurance poll
cies, which, it is intended. will be re-
fiected with lower insurance premiums
through divided declarations.
The Green bill authorizes the Vet
Grams Bureau to make loans on bonus
certificates at per cent interest I'm
excess of the current Federal Reserve
discount rate, which means that the
normal rate to loan seekers would be
approximately per cent.
Would Advance $25,O00,00O.
In order to make these loans. the
Treasury would advance $25, 900, 900
to the Veterans Bureau, the bureau
giving as security an equal amount
of bonds it holds to redeem insurance
converted from war risk policies. The
Treasury would be authorized to
charge the Veterans Bureau 4 per
cent interest.
Inasmuch as the bureau would re-
ceive 6 per cent on loans and pay only
per cent to the Treasury. a 2 per
cent profit would accrue, which would
be turned into the Government life
| insurance fund.
The securities held in the fund are
to retire policies at death or at
term expiration. Whatever profit IS
made by them tat present it is 4.6 per
cent? reflects in lower premiums to
policy holders by virtue of dividend
DECLARATIONS.
The greatest benefits would result
to policy holders IN the event certi-
ficate loans were not repaid. John
Thomas Taylor of the American Lee
gion, estimates that 100000 service
men will not repay their loans, per
hitting them to remain as compound
interest-bearing charges against their
certificates, the face value of the loan
plus Is years compound interest to
be deducted at maturity Of the certif.
icates.
Gives Views to Committee
Taylor gave his views in a state.
ment to the ways and means com
mittee made public yesterday. He
said:
SHOULD 10000 men fail to repay
their certificate loans and the com
pound interest rate be set at per
cent, it would mean en- increased earn
| ing to the government of SIS 900 900,
which would be paid out of the
pockets of the men least able to
afford it-that is, the men whose pov.
erty or necessity has caused them to
borrow on their adjusted service
certificates.
1.-The 100000 world war veterans
who have government life insurance
policies are perhaps the most pros
| porous class out of the 4,200,0 900 vet.
Grams entitled to adjusted compensa-
ton.
1T would be manifestly unfair to
charge an extra per cent on the
loans of the more unfortunate class
and donate this sum to the more pros
| perOus-the holders of United States
| Government life insurance policies !"
Although it desired il lower interest
| rate, the legion is not opposed to the
Green bill and is expected to support
| 1t when it comes up in the Senate
| shortly.