Evening star., 1932-11-21
VETERANS BUREAU
I HAS BONUS PLAN
Mines Studies Proposal for
! Prepayment Without
Extra Funds.
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Legion has voted at its national conven-
tions to insist upon prepayment of the
bonus, Gen. Frank T. Hines, Veterans
Administrator, has been studying various
plans looking toward a possible elimi-
nation of the issue and settlement on
basis satisfactory to the ex-serVice
men as well as to the Treasury.
Gen. Hines is not yet prepared to
make any recommendation, though he
is studying the question in preparation
for the hearings which are to be he'd
the end of this month by the Joint Con-
gressional Committee appointed at tne
last session to survey the whole problem
Of veterans compensation, allowances
and pensions.
Roosevelt Gets Data.
II became known today that Gov.
Roosevelt on his Western campaign
trip sought and obtained data on
whether there was any possible way py
which the bonus could be prepaid.
The conclusion reached by his ad-
visers was that only two methods pre-
sented themselves-either the accept
ance BY ex-service men Of the present
value Of their certificates as basis for
consideration, or else the payment OF
the full face value. The latter meant
o heavier expenditure than was or1g1-
nally contemplated by Congress and was
deemed out of the question. The former
was studied. but 1t was discovered that
unless the ex-service men would agree
to the present value, it would be diff
cult TO promise a prepayment OF the
bonus. The issue was finally taken out
of the campaign by statement on the
part of the New York Governor that
the bonus would be paid when the
Treasury condition permitted it.
This correspondent inquired at the
Veterans Administration today wheth-
or, in view of the oft-repeated state
ment that a substantial economy could
be made in veterans expenses, the Gov
ernment could set aside this same sum
each year and thus accelerate the pay
ment of the bonus.
Study Being Made.
Gen. Hines, it was learned, has been
studying the possibilities of applying
the same idea, namely, the saving of a
particular sum annually which could go
toward paying off the bonus within a
year or so to all who desired payment.
The generals plan, which IS not yet
PC1ACNtC0 4AChC4 NC dOOPlCd
unless Congress feels SO inclined and
the veterans groups support the propos-
NJ, is that sinking fund should be
established from which every veteran
could get the cash surrender value of
his present bonus certificate at any
time. For this sinking fund it is esti-
mated that at least S100, 100000 a year
can be saved for the next five years, or
possibly total of approximately $780,
100000 by repeating what are known as
the non-service disability allowances.
This would be the nucleus of a fund
out of which the bonus certificates
could be prepaid. If the Government
paid IN 1882 the full face value of the
bonds it would mean that S2,000,e00,-
600 expended today and compounded at
per cent interest would cost the Gov
eminent more than was originally in
tended. So the question really is
whether the veterans would accept pres
ent value, take their money, and in
vest it themselves at per cent and
thus have by 1945 exactly the
same amount which the Government
promised.
Full Face Value.
At present the full face value of the
bonus certificates amounts to about S.
SOC. 100000. OF this sum approximately
Sl,500, DOC. 900 has been loaned, SO that
$1,000, 100000 remains outstanding as
the sum that the Government would
have to provide by 1945 The present
value, however, of all the bonus GER
tifcates Is approximately 81 800 ,000, 900,
and since 81 500 000. 900 has been loaned
already, only $500, 100000 of present
value remains. To this, 1t has been
suggested, should be added the full 25
Per cent increase which Congress in
1924 pledged as an incentive to the
veterans not to cash their certificates
for 20 years. Thus about 81 ,0O0, ,000, 900
IN all would fbe needed to pay present
value, plus the Is per cent increment.
Tt is estimated that about 600 900 vet
Grams out of the 5000, 600, who hold
certificates Of adjusted compensation,
have not requested any loans. It is
believed, therefore, that not all veterans
would wish to see their policies sur
rendered for cash and that as economic
conditions improved many more vet
Grams would hesitate to cash their
policies.
Assuming that one-third Of the vet
Grams would not take advantage of the
sinking fund plan, since they have not
borrowed anything on their certificates
thus far, it would mean that approx
mately two-thirds of a billion dollars
would have to be provided for the new
sinking fund. This could be obtained
by an economy over the next five years