The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1927-01-04
BANKSHES|TANT
ABOUT L0AN|NG.
ON BONUS

u e Three million veterans in the
II United States today find themselves
II boxing up tree, figuratively
speaking, for the. benefits Of their
4 adjusted service certificates, other
i wise known as "the soldiers bonus"
i Officials of the Veteran Bureau
/, admitted that reports received from
various sections of the country
show a marked indisposition on the
4 part of banks to make any loans
whatsoever on the certificates.
There is no provision in the law for
the bureau, itself. to help the GER
tificate holder by making the loan.
Officials of the Federal Reserve
Board said that while they have is.
sued regulations authorizing mem
Der banks to make loans on the Ger.
i tificates, they recognize the manv
reasons why banks hesitate about
handling the business! and are
powerlesS to force any bank to ad
vance money.
i Can't Force Loans.
4 Edmund Platt, vice-governor of
the Federal Reserve Board. said:
Il There is no way the Federal
Reserve Board can compel any bank
or trust company to accept the
veterans certificate as collateral for
10 loan.
n 1.-THE law merely provides that If
lany bank does make loan on one
.lof these certificates, that bank may
present the veterans note to a
Federal Reserve Bank for discount.
But the law does not compel the
banks to make loans"
i A. D. Hitler. assistant to Gen.
Frank T. Hines, director Of the Vet.
Grams Bureau. said today that un.
pess the banks do receive the certifl.
Gates as collateral for loans, the
practical benefits of the bonus will
be indefinitely postponed. He point.
ed out that the Government will not
redeem the certificates until twenty
years after they were issued, or
about eighteen years frow now
Howard Moran. president of the
District Bankers Association, said
Today that the question of making
these loans had been informally dis.
eussed by his association. 1t was
decided, however, to make no recon.
mendations, but to leave the ques.
pon OF loans to the individual banks.
From scattered points it was
learned that few loans are b.
ing made by Washington banks.
At the American Legion National
Service Division, in the Bond
Building, it was stated that a few
veterans have been able to pro.
pure loans from banks where they
have accounts.
Improbable Business
A smaller number. it was said
pave been able to procure loans
Yltnout having an account at a
q pank, but in these instances the
Panks have insisted upon an
\ elaborate Identification of the
nan applying for the loan.
Inc reluctance to make loans, it
Tas explained by Washington
banker today, springs from a
plumber OF causes. While the
present loan value of the adjust
ed certificates is approximately
B215,O0O,OOO, the maximum loan
value of any one certificate is less
than $500. '0'''
~ This means that all loans made
by banks must he confined to
what was described as small and
Improbable business" fanv OF
the certificates have a loan value
of around $40 or $50 only.
1t was explained further on be.
ha1 OF the banks that the law
authorizing the certificates to be
fused as collateral for loans is very
intricate, and that an affidavit,
kg1ust accompany every claim mad,
My bank in case the veteran does
I not pay back the loan.
The law stipulates that loans
shall be made for a period of
NINETY days, and if the loan is not
Jpaid at that time. the bank must
lwait ninety days longer before the
Veterans Bureau may make the
loan good.
q Vice-Governor Plat. of the Fed
leral Board, stated that his opinion
dis that bankers generally will not
AAgree to make loans unless thew ale
assured the veterans will repay
hem at the end of ninety DAYS, lie
,egards 1t as unsound banking TO
make loans with a view TO having
the veteran forfeit the collatera,
thereby making it necessary for The
banks to apply to the Veterans
Il Bureau for payment.
!, Plat has talked with Representa-
we Hamilton; Fish of New York a
teran leader in Congress. with a
tw toward starting campaign
Ough veteran organizations TO
eek the application for loans.
It was pointed out that while a
\ 1880 certificate now has a loan
value of less than 5000, II will he
worth its full value If saved or upon
Inc death OF the veteran. At legion
he'""n""ters here ~ was agreed thnt
r. move NAV he started to restrain
hthe move On the mart of veterans 10
|cash IN their 90 rtifi"a'es n"w for the
NDittanpR that thu, - .......t "