Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-28
Cashing the Bonus.

OoCAAhb bAO OOHuS'
Agitation for cashing the veterans
adjusted compensation certificates has
undoubtedly received impetus through
favorable action on the part of the
Legion, and the introduction of some
twoscore and more bills suggesting vari-
Gus plans for cashing the certificates is
indicative Of the great pressure on
Congress for some sort of legislation at
this session. Despite the objections OF
the administration, voiced several times
by Secretary Mellon, and the huge drain
ON the Treasury that such schemes
would entail. it is probable that If any
Of the bills reaches vote before
March 4 this particular form of relief"
will be enacted. There is already dis
cussion as TO whether it would meet the
fate of the original bonus legislation
and be vetoed by the President.
The bills can be grouped generally
into three classes. Some Of them pro-
pose cashing the certificates at face
value as Of the maturity date, 1945, at
q net cost to the Government Of about
s2,7O0, O00, 900. Other bills propose CASH
ing the certificates at their present
value, at an estimated cost Of $l.707,-
5000, less loans that are outstanding,
while a third plan contemplates per-
hitting leans on the certificates up to
50 per cent Of their face value, a.
against the approximate 22ha per CEN
now allowed. Gen. Hines. in his testi-
mony before the Senate Finance Com
mittee, reported that this plan would
exhaust the loan value of the certifi-
Gates up to 1913, two years before ma
turity, and that 1t would probably pay
the veterans to take the loan and let
the certificates 60.
Secretary Mellon believes that any Of
the plans would seriously affect ma
tional financing, and it is obvious that
the money could not come out Of taxes
or current revenue. Special financing
doubtless would be necessary and the
public debt increased.
The adjusted service certificates are
paid-up endowment insurance policies
and the insurance feature was approved
and accepted by the veterans organiza-
lions at the time Of the enactment Of
the legislation. The arguments against
cashing any insurance policy, Of course.
prevail In this case. The diniculty In
making It stick Is that the veterans
for the most part accepted the insur-
ance at the time a. representing the
Nations debt to them for services In
the war and many Of them probably
feel that the rainy day, for which 1t
was set aside, has already arrived and
1e45 is long way OF.
For those veterans In destitute cir
cunstances and in need of the cash
represented by their certificates, this
point Of view is readily understood. 1t
10 often necessary TO borrow against
insurance when the payments have
been made under stress and strain by
the insured, and in this case the insur-
ance represents an outright gift. OF
the 3,3e7,s73 veterans now holding the
certificates, however, less than half OF
them have borrowed, and Of these only
one or two per cent have made any
effort to repay the loans. The demand
for loans Is increasing, and the present
average Of from five to seven millions
q month paid out In loans is expected
TO reach $40 ,o00, 900 Q month before the
end of the year.
About the only good points in the
original bonus legislation were the in
surance feature and the substitute for
pensions that 1t was then supposed to
be. But 1t has acted as teaser to the
veterans who feel that something is due
them now, and IN hard cash. The worst
part Of the move now to pay Of the
bonus certificates Is its destruction Of
the insurance plan and the knowledge
that once the cash Is paid and this
debt discharged, agitation will begin for
pension legislation and the original
understanding that the bonus would be
. substitute for other pension plans will
b forgotten.