The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-02-04
BANKERS FEAR
PANIC IF Cash
BONUS IS PAID
Depression Will Be Made
Worse If Plan Carries.
FinanCierS Warn.
MARKET ALREADY HIT
New Yorker Shows Move
for Immediate Payment
Has Hurt Prices.
BY THOMAS L. STOKES
United Press STAFF Correspondent

WAO11ING ION, req. 4-The
most severe indictment yet made of
proposals to pay World war vet
Grams cash bonus was laid before
the house ways and means commit
tee today by George Z. Roberts.
vice-president of the National City
bank Of New York.
He said $3,4OO,O00 900 bond is
Sue-the amount estimated neces-
sary to pay the face value of COM
pensation ertihcates-would de-
press the government bond market
just that much, absorb half the
countryS available capital and re-
tard business recovery throughout
the world.
Analysing the domestic results
Roberts said the bond issue would
retard building an investment cap
ltal necessary to recovery from the
business depression. He gave fig
ures designed to show the depres-
sing effect the bonus agitation has
eXerted on the market.
B0ndS on Decline
In the period from Jan. 26 to 81.
he said, long-term government bonds
dropped 3 points; Liberty bonds Ia
points: industrials 10; high grade
municipals Is; with an aggregate
depreciation in value OF s1,1oe,
100000.
Proposals to pay the bonus drew
further opposition from Rome c.
Stephenson. South Bend, Ind, pres
ident of the American Bankers AS
ISOLATION. He said that if a cash
bonus is voted now lit is quite pos
sible that the result thereof would
be so serious that in the future the
public would be inclined to oppose
passage of other really deserving
bills for the relief of World war
veterans"
Meanwhile, it was reported admin
istration leaders had agreed on a
plan designed to kill all bonus pro-
posals at this session of congress by
prolonging the hearings in the house
until near adjournment time,
March 4.
Speaks for DepOsitOrs
Stephenson said he spoke in the
interests of depositors of banks
throughout the country, including
fifty million savings depositors.
1T appears" Stephenson told the
committee, that the nation is
headed back toward economic re-
covery and there is no further eco
nomic catastrophe lurking in the
future to retard gradual business
revival.
However, if this cash bonus pay
ment plan is to, eventuate, it would
seem that these hopes are i'll found
ed-that there is still another de-
pressing economic surprise in store
for the country to struggle with be-
fore it can consider itself on the
clear highway to better times"
1.-THE nation has suffered enough
economic adversely already" he
warned.
Roberts drew the pessiInistic pic
ture of effects of the proposed bo-
nus during a detailed analysis of
the domestic and international
financial situation.
Suggests Billion Dollar Issue
Stephenson suggested that bill
lion dollar bond issue might be
hoated and the bonds turned over
to the veterans for disposition Of
cash bonus.
Thornston Cooke, Kansas City
banker, opposed this proposal, along
with all other proposals before the
committee, and suggested that an
agency be set up in the veterans
bureau to care for the needy
veterans.
Stephenson testified in answer to
questions by Representative Hadley
rep, Wash) that billion dollar
bond issue fioated over a period Of
three to four months, and CONVEX
sion of the present $784,O00, 900
sinking fund short term notes
would have a far less serious effect
on business than the larger issue.
The smaller sum is the amount
estimated as necessary to comply
with the terms of the Garner bill
for the payment of the present
value Of the certificates rather than
their value at maturity.
Representative Estep (Rep.. Pa
expressed fear that loan sharks
might set up lin the public streets"
and take advantage of veterans in
trafhcking in the bonds.
Protected by Law
Stephenson replied he thought
the veterans would be protected
under the law. The banks, he said.
would be able to take care of these
bonds.
While the ways and means COM
mittee was considering the bonus
proposals, the house veterans com
mittee was hearing Administrators
Hines in reference to the hospital
ization program for war veteranz
Hines said no great increase was
needed at present to take care of
disabled veterans, but that many
non-fireproof structures ought to be
replaced.