Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-28
u. S. FINANCE UPSET
BY BONUS PAYMENT
FEARED BY MELLON
CONTINUED From First Page.l


and Improvement in their condition
from the universal and destructive con-
seouences which these measures would
entail Is beyond comprehension"
Before Mellon started, Under Secre-
tary Mills read correspondence between
the Treasury Secretary and Senator
Vandenberg, Republican, Michigan, IN
which Mellon questioned the WISDOM
of cash conversion from the veterans
standpoint as well as for the country
as q whole,
Treasury Judgment Favored.
Senator Couzens, Republican. Michi-
gan. asked whether the Treasury or the
veterans were best able to judge OF
what was best for them.
Each individual veteran Is probably
better able to Judge for himself. but the
Treasury is probably in q better posi-.
ton to Judge for the group as WHOLE
Mills replied.
''In other words" Couzens said, "the
Treasury Department is better able to
pass on what Is best for the veterans
than the veterans themselves. I think
there is some question of good taste for
the Treasury to assume to argue how 1t
would affect the veterans"
Committeeman began questioning
Mellon before he had read his state
ment, with Couzens, long one OF his
critics, leading the examination.
Referring to Melons assertion IL
would kill" the bond market for the
Government to float q large loan at this
time, Senator Walsh, Democrat, Massa-
chusettS, asked If 1t was not very diff
cult to float any private security at the
present time.
mo" Mellon replied. But a large
- {e botranr 1falG vfyNfil
there Is q more favorable market"
Then there has been q great 81
probation in the issuance OF pri9a3s
securities?" Walsh asked.
There was, but it has been i'm
proving"
There has been marked revival In
the market since the first Of the year"
Mills interjected.
Responding to Senator Barley. Dem
ocrat. Kentucky, Mr.. Mills estimated
that the public debt had been retired by
$3,459 900 600 more in the last 10 years
than required by law. Mills added that
half of the sum of Treasury SURPRISES
which had been applied to the debt
came from liquidation of war assets.
I'VE cut the debt by more than ST.
000, 900, 900 required" INTERCEPTED Sena-
tor Harrison. Democrat, Mississippi, "by
overtaxing the people"
Fears Benefit Destruction.
Senator Couzens remarked cit is a
strange coincidence that we have retired
the public debt by an amount in ex-
cess Of what was necessary which is
just equal to what we now want to give
to our soldiers"
YES" put in Mr.. Mellon, "but the
country was in a better condition to pay
that amount then than it Is now. It
was entirely different from going out
now for fresh capital"
ITO put 1t another way" added Mills,
I'VE now propose to wipe out the bene-
fits of sound financing by the Treasury
over the last 10 years"
Senator Watson, Republican, Indiana.
asked Mills what interest the Govern
ment would have to pay to float q
3,400, 000, 900 bond issue now.
Its an enormously difficult question
to answer" Mills said, but I would
estimate somewhere between IA and
Az per cent"
Mellon denied the Harrison conten-
ton that the people had been over
taxed
These rates were not reduced
enough" insisted Harrison, because of
the untrue estimates of the Treasury"
'They were the best estimates that
humans could make" said the Secre-
tary.
Mills, sitting on one side Of Senator
Watson, who presided over the COM
mittee, then read Secretary Melons
prepared statement.
Secretary Mellon sat on the other
side Of Watson at the head of the long
committee table.
Mellon seemed eager to answer Sena-
tor Couzens inquiries. and leaned over
the table to face his foe of long stand
ing when he addressed him.
Mellon said even the proposal of the
cash bonus measure h q already had |
an effect on the bond market by de-
pressing prices within the past three |
daya.