Evening star., 1934-03-18
BY OWEN L. SCOTT.

BY OWEN L. SCOTT.
Under cover of the drive in Con-
sress for full payment Of the face
value Of the bonus certificates. there
is taking place a maneuver by vet
greater longtime burden on the
Federal Treasury than the bonus
itself.
The bonus is quite certain. in any
event. to die at this particular time
by presidential veto, should the Sen
ate do what the House already has
done and pass the bill. But with the
bonus as a smoke screen. the veteran
groups are hoping and expecting to
drive In deeper the wedge that opens
the way for a bigger and better pen
sion system for former soldiers.
Payment of the bonus was not
even one Of the demands made In
the four-point program of the Amer
lean Legion. The Legion and other
representatives Of the veterans are
seeking more potent permanent gains
through restoration OF many of the
benefits lost when the economy act
was approved by the present Con-
gress and by President Roosevelt last
March.
Already the plan Of the service or
ganizations to restore thousands of
pensioners to the rolls, or to open
the way for their gradual restora-
ton, Is on the way to the President.
He has let 1t be known that in its
present form he would veto this pro-
posal. However, some compromise
is expected to be worked out. Then
later, when the groundwork is laid
for the long-range pension program,
the bonus can bob up again, should
it die in the Senate or in the PreSi-
dents office at this time.
The bonus to end bonus agitation
was enacted in 1925. It took the
form Of q 2o-year endowment insur-
ance policy, the first premium Of
which was paid by the Federal Gov
ernment In lump sum, based on the
length OF service Of the veteran. In
terest was paid at the rate Of per
cent compounded annually. SO that at
maturity In 1916 the policies would
have netted the holders about
four billions Of dollars.
Then, in 1881, Congress authorized
the holders of certificates to borrow
so per cent of their face value.
Nearly all took advantage of this
offer, so that about $1,700, 0,000, 900
soon was paid out. The veterans
agreed to pay interest at 315 per cent
annually on their borrowings.
But, by that act Of borrowing, the
bonus certificate holders wiped out
most Of the principal payment that
had accumulated under the insurance
plan. As q result. under the contracts
that the veterans now have, there
will be due them in 1e45 only about
S500,000,000. This Is because they
have borrowed most Of the principal
and are paying interest on 1t at Just
about the same rate that the Govern
nent Is paying interest on the amount
that remains.
So, actually, II 1t fulfilled the
agreement it now has with the for
mer soldiers, the Federal Govern
ment could wipe the bonus slate
clean with the payment of about half
q billion dollars. That Is not what
the veterans are asking for, however.
They want to receive the full face
value of the policies now, minus the
amount already borrowed.
This Is an entirely different agree
ment than the one they hold. and
represents the payment Of about
s1,700, ,o00, 900 more than the existing
contracts.
The history of veteran benefit legis-
lation has been much the same after
each Of this Nations major wars.
First there comes q bounty or bonus
of some kind to 60 directly to those
who served. Then there are pen
sions for those actually wounded and
pensions for the widows and depend
ents of those killed in the fighting.
The Nation always has sought to pro-
vide generously for these cases.
Soon, however, there comes period
when the veteran groups seek to
place on the Government the burden
of proving that partial disability
suffered by former service man did
not grow OUT OF MS war ACLlVlIy. ~
Is Just step from that to placing on
the rolls to receive pensions any per-
son presumed to have some disability
that might be connected with war
service. From that point 1t Is just
. short Jump to actual pensions for
all who served.
Last March, when President Roose-
velt called for . drastic cut In the
pension system built up for World
War and Spanish American War vet
Grams, the point had been reached
where presumptive cases were getting
attention in World War service, and
any disability. was ground for grant
ing a monthly pension check to the
Spanish War veteran.
The President laid down the dc
tun that persons who actually were
injured in service should be gener-
ously cared for. All others were to
be removed from the rolls. In the
case Of Spanish veterans there also
was to be q general tightening.
This dictum was written into The