Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-01-04
HOPE OF VETERANS
IN LOANS REVIVED
Bureau Officials Encouraged
by Secretary MeIIon's View
of Bonus Outlook.

Secretary Melons expressed opin-
ION that the banks of the country
would accept adjusted service certifi-
Gates for loans as soon as they under
stand more about the law served to-
day to boost the hopes Of Veterans
Bureau officials that the problem
would solve itself before long.
Officials already sense a slight re
action favorable to the extension Of
loans and cited the fact in Wash
tngton the directors of two banks
since yesterday morning met and de-
Cided to make loans on certificates
regardless of whether the applicant
for a loan was a customer or not.
Harold w. Breining. assistant di-
rector of the Veterans Bureau in
charge Of financing the bonus act,
said today that the bureau believed
Mr.. Melons statement would have
such weight with banks that few, ex-
cept the largest ones, would even
tually refuse loans on certificates.
Merely Expresses Opinion.
Although Secretary Mellon did not
commit himself beyond saying that
when the banks understand all about
it (the loan provision by the bonus acO
they will make loans" his statement
an Endorsement of the proposition to
banks, if not a recommendation.
While widespread refusal of banks
10 make loans on soldiers bonus GER
fificateS, which acquired a loan value
for the first time Monday, has stirred
UP small sized rebellion in veterans
ranks, officials here believe the situa-
ton is far from hopeless. Numerous
kilograms were received from various
points of the country from veterans
complaining that they had been re-
fused loans. At the same time, Mr..
Breining said, the Federal Reserve
Bank at Philadelphia had sent in a
request for 10000 additional forms,
indicating a desire of many banks to
cooperate with the law.
In Baltimore it was said that sew
eral of the smaller banks We're MAX
ing loans to veterans, the bureau al
ready having been in receipt of affi-
davits and papers from one or two
banks there.
Treasury Shows Confidence.
Meanwhile the Treasury, with $780,
coo, 900 in its adjusted service certif-
tcate fund as a pledge to certificates
having q loan value of approximately
$500, 900 600, is confident that bank
ing institutions will make such loans
&vhen they realize there is no chance
for them to lose in these transactions.
The Treasury yesterday added to
this fund S123 900. 900 which is made
available to the director of the Vet
Grams Bureau in meeting obligations
which come to the bureau from the
banks, this sum added to the fund
already in the Treasury for the
soldiers bonus making "A total of
emphasized, has nothing whatever to
do under the law with the veterans
themselves and cannot advance loans
direct to individuals.
THE Veterans Bureau is prepared
and able to make prompt repayment
to all banks in case the legal holder
of the certificate defaults" said Mr..
Breining today. There will be no
unnecessary delay"
Mr.. Braining stated that he did not
know why the banks apparently fail
TO understand the law, since it has
been in effect two years, and any
hank desiring to get the information
could easily have done so. AS early
as December instructions We're is
sued by the Federal Reserve Board to
all member banks. along with the
necessary forms and affidavits, so
that the banks would be in a posi-
ton to understand the procedure.
Fails to Understand Delay.
Mr.. Breining said he had read with
some amaZement that it took one
bank official here half an hour to
make out the necessary forms in con-
nection with q loan. ut ought not
to take anybody more than five min
utes," he said.
Reports received here from many
Eastern and some Western cities, he
said, indicate that many banks are
refusing loans, but that at least some
are making them.
The reluctance of many banks to
advance loans already has received
brief attention in the House, Repre-
sentative Fish. Republican, New York,
charging that the banks were attempt
ing TO "discredit Congress- by refus-
ing to make loans, and Representative
Wingo, Democrat Arkansas, assert
Ing that it was unfair to assume that
all banks were in league to withhold
recognition to the former service men
;n this manner.
Chairman Green of the ways and
means committee agreed with Secre-
tary Mellon that the banks eventual
ly would give greater recognition to
the certificate.
w. j. Bailey, governor OF the Fed
eral Reserve Bank at Kansas City,
expressed the opinion that some adj
ditional legislation may be necessary
TO set up machinery TO handle the
loans. This is a matter which is be-
ing looked into by Chairman Johnson
of the House veterans committee
and Representative La Guardia of
New York. The proposition involves
direct loans by the Veterans Blu
teau.
Commenting on this proposed legis-
iation, Mr.. Breining declared today
Athat the Veterans Bureau would
gladly welcome any responsibility
placed upon it by Congress.