Evening star., 1931-02-27
BANKS TO REFUSE
LOANS ON BONUS
Many Institutions Declare
Interest Rate Too Low
for Lending.

The Veterans Bureau and some
banks were preparing today to issue
loans under the new soldiers bonus
expected to be passed over the PreSi-
dents veto by the Senate before night
fall, but the possibility arose that
many banks would refuse to make the
loans on account of the low interest
rate of Az per cent
Officials of the Veterans Bureau eX-
planned that the bonus bill authorized
banks to make loans to veterans, and
that already some banks had slgni-
fled their willingness to advance money
to veterans under the new law.
Other Banks Protest.
Some institutions, however, it was
learned, had already signified their in
tention of not loaning to veterans be-
cause they could not afford" to do it
at the low rate of interest fixed in the
bill.
The Veterans Bureau was ready at
its local regional Office to take care of
a flood of applications beginning the
minute the bill passed the Senate and
became law. AS matter of fact,
few applications have already been filed
and placed on record, although the
Government had not encouraged the
filing of such applications prior to ac-
tual passage of the act
With enactment of the law over the
Presidents veto, however, virtually a
foregone conclusion, many veterans
called at the regional office, at 154O 1
street, today to make their formal ap-
plications.
The work of the regional Office here,
according to Maj. E. 7. Hitch, regional
manager, today was absolutely current,
so that it is ready to take up the big
load Immediately On account of the
~ aS-fOoptpH however
Mai. Hitch could not estimate accu-
rately how long it would be before the
first veterans to apply receive their
checks All checks will be mailed out
to veterans at the address to which they
desire the checks sent.
Money Is Available.
1t was evident at the Veterans Bu-
reau that plenty of money is available
in the United States Treasury to the
account of the Veterans Bureau to take
care of the present loans. Some $30,-
100000 is said to be on hand to start
making payments. This will be enough,
officials believe, to last until further
funds were available.
Oficials are expecting a rush for at
least two weeks. not only at the local
regional Office of the Veterans Bureau,
but at the other 81 regional Offices
throughout the country.
Exactly how long it will take for vet
erans to get their money after making
application depends on several factors;
including the efficiency of the local
regional offices The one here is said
to be in excellent condition, and able
to push through the loans.
In the case of original loans the time
necessary in Office work will be shorter
than in cases where veterans have pre-
viously borrowed on their certificates.
In cases where the veteran have not
borrowed before on their bonuses, they
may borrow up to so per cent OF face
values.
Where however, a veteran has pre-
viously borrowed on his adjusted serv-
ice certificate, it viii be necessary for
much accounting to be done before 1t
can be figured what he will have coming
to him. The amount Of the first loan,
PLUS accrued interest will be deducted,
and then the veteran will be allowed to
borrow the difference between that and
so per cent of the face value. In other
words no veteran may borrow more
than so per cent, including what ne has
already borrowed before.
Another thing of importance for vet
Grams to know, it was explained, IS that
under the present Interpretation CT the
law, loans can be made only on certifl-
Gates which are two years old or over.
greSs for an increased cash loan to SOL
diers, it was learned there has been an
increased number of applications for
bonus.
Law to Be Enforced.
These adjusted certificates have been
issued in due course to veterans where
they have proved claims to the certifl-
Gates. But many Of these veterans will
find that they will be unable to borrow
anything on these new certificates un-
der the law. The provision which de-
clares that the certificates must be two
years old before the first loan can be
made on 1t is TO be enforced by the
Veterans Bureau, it was said.
Another thing Of importance, which
many veterans have overlooked. it was
stated, is that the so per cent which
veterans now are allowed to borrow will
put an end to borrowing on their SOL
diers' bonus for the next 10 years. Some
veterans have been in the habit of bor-
rowing frequently on their bonuses,
some taking out small amounts several
times year. II the full so per cent IS
now borrowed 1t will absorb the loan
value of the certificate until l943. In
the meantime no further loans can be
made on the bonus.