Evening star., 1934-12-31
letter to Texan Holds Orig
inal Sum Voted by Con-
gress Was Contingent on
Maturity in 20 Years.
FRIENDS OF VETERANS
WELD OPPOSING MOVE
Report From Gen. Hines Submit
ted to Legion Post Commander
to Explain Amount Printed on
Service Certificates Is Not U. s.
Obligation at Present. -
BY J. RUSSELL YOUNG.

President Roosevelt today opened
his fight against the immediate pay
ment of the Soldiers bonus by max
ing public at the White House letter
in which he said that those who
advocated the payment of these Ger
tificates at this time for the purpose
of stimulating business certainly can
not have given the interest of the
veterans much thought"
This opening gun in the forthcom-
ing bonus fight on Capitol Hill was
sounded in a letter to Garland r.
Farmer, commander of the American
Legion Post, Henderson, Tex. It was
in reply to a letter asking for in
formation regarding the so-called
bonus issue.
General Misunderstanding"
"It is quite apparent from your let
ter in which you advise me of the rea-
sons why the service men are de-
manding immediate payment of the
bonus,'' the President wrote, that
there is a general MISUNDERSTANDING
in regard to the Governments obliga-
ton in this matter"
Attached to the Presidents letter
was a memorandum prepared by Brig.
Gen. Frank T. Hines, administrator Of
veterans affairs, which explained the
act of Congress authorizing the ad-
justed service certificates, better
known as the bonus, and traced the
history of the bonus subject from
then on up to the present time.
The President said in his letter that
when Congress in 1924 decided to is
sue the adjusted service certificates,
1t actually authorized bonus Of ST.
400, 1000, 900, but because of the stand
taken at that time by those advocat-
ing the measure who felt that it would
in the interest of the service men
themselves, this cash outlay was not
made Immediately, but was deferred
for 20 years.
The President explained further
that because Of this deferment the
initial bonus was increased rs per
cent, so that the 81 400 900 900 invest
ed for the service men at per cent
compounded annually would mature
in 20 years $500, 900, 900.
Amount Due in 20 Years.
The President held the amount
which is printed upon the face
of every adjusted service certifii-
cate is not the amount of the basic
or original bonus voted by Con-
gress, but is an amount plus Is
per cent added for deferred payment,
which, with interest at per cent COM
pounded annually over a 20-year
period, would produce the face or ma
turity value. The President singled
out this fact as being important be-
cause, according to him, this would
seem to dispose of the question as to
whether the obligation is Immediately
due"
The President does not believe that
the paying of the bonus at this time
would go far in stimulating recovery.
In answer to the argument to this
effect advanced by those advocating
immediate payment, he said that at
the time the issue Of paying the bal
ance of the bonus was up before and
q compromise was made by increasing
the loan value to so per cent of the
face value, there resulted distribu-
ton of approximately 100000, 900,
and at that time the same argument
was advanced that the expenditure
would stimulate business and aid re-
covery, but a survey of the results
showed otherwise.
According to the President, this
large payment resulted in little stimu-
lation of business, and in many of
the large cities no material change
was indicated at all.
Doubts Benefits.
Indicating his present feelings. the
President then wrote: mo doubt the
same results would obtain If the bal
ance were now paid"
In answer to those who favor imme-
diate payment because the Govern
ment has spent millions of dollars on
relief, which will not be repaid, while
by the payment of the bonus the Gov
ernment will be discharging an obliga-
ton and at the same time taking a
practical step toward stimulating re-
covery, the President wrote that all
expenditures for relief have been made
in the interests of recovery and for all
citizens, non-veteranS as well as vet
Grams, and that in the distribution of
relief and employment the veteran has
been given definite and distinct pref
erence.
The text of President Roosevelt's
letter on the bonus follows:
st appreciate your letter of recent
date, and it is particularly interest
ing in that it confirms an impression
that I have had for some time: that