The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-12-31

firms another conviction have
that the service men generally have
The interests of their country and
| Government at heart. have had
prepared for me a memorandum
which outlines in detail exactly
what Congress did in 1924 when
they authorized the issuing of the
adjusted service certificates known
generally as the bonus
This memorandum I am inclosirg
herewith. I am sure that you will
find in this memorandum sufficient
information to enable you to de-
eide for yourself the stand you
should take on this issue, as we'll
as being in d position, as I feel you
should be, to advise Legionnaires
who come to you seeking informa-
ton in regard to the immediate
payment of the balance due en- the
adjusted service certificates.
1924 Congress Took Action
"It is quite apparent from your
letter in which you advise me Of
the reasons why the service men are
demanding immediate payment of
the bonus, that there is a general
misunderstanding in regard to the
Governments obligation in this
matter When, in 1924, Congress
decided to issue the adjusted service
certificates, they actually authorized
bonus of $1,400, 100000, but be-
cause of the stand taken at that
time by those advocating the meas
ure who felt that it would be in
the interest of the service men
themselves, this cash outlay was not
made Immediately, but was deferred
for twenty years. Because Of this
deferment the initial bonus was in
creased Is per cent so that the
$1,400, 100000 invested for the service
men at per cent compounded
annually, would mature in twenty
years $3,500,000,000
Cor putting it another way, sup
/ pose that a veterans original grant
by Congress in 1924 was $400 and
the veteran did not borrow on his
certificate, permitting the interest
to accumulate to maturity, the $500
would grow so that it would pay the
veteran when due in 1945 $1,000 In
other words, the amount which is
printed upon the face of every ad-
| justed service certificate is not the
amount of the basic or original
bonus voted by Congress, but is the
amount plus 25 per cent added for
deferred payment which with inter
est at 4 per cent compounded an
nually over a 20-year period, will
produce the face or maturity value.
This would seem to dispose of the
question as to whether the obliga-
ton is Immediately due.
Many Have Borrowed
There is another feature in con-
nection with this matter that i'm
presses me, and that is the fact that
out of 100000 certificates out
standing 3,03850O veterans have
borrowed thereon approximately
81, 500, 900 900. In other words,
some have borrowed more than the
present worth Of their bonus certi-
ficates. This is brought about by
the action of Congress permitting
veteran to borrow up to so per
cent of the face or maturity value
of his certificate, even though that
certificate may have been issued
from that date up to the present
time, so their present value or
earned value, as we may put it, IS
not the same IN all cases, but TAX
ing the aggregate of all the certiti-
Gates issued they have a present
value of $2,1OO,OO0, 900, whereas
their face value is $500, 100000.
Then, too, 1 believe it has been
suggested that the interest paid or
now accumulated be Cancelled or re-
mitted. If this plan were carried
out the total amount would increase
to SO, 100000 or putting it an
other way making the cost $780,
100000 over and above the present
value and $2,32O,O00,0OO above the
amount which the Congress fixed
as the original basic adjustment.
II feel sure that many OF the
veterans have not given the ques-
ton sufficient study to realize the
vast sums required to meet the de-
mands suggested.
Your statement advising me that
those who favor the immediate
payment of the bonus feel that a
good reason for doing so is because
the Government has spent millions
of dollars on the recovery program,
and that much of these funds will
not be repaid, while by the pay
ment of the bonus the Government
will be discharging an obligation,
and. by so discharging this obliga
ton the money spent by the veter-
ans will do much in practical way
of stimulating recovery, is interest
ing.
Need Burden Is Shared
IT know that you appreciate that
all expenditures for relief have been
made in the interest of recovery and
for all our citizens, veterans as
well as for veterans. All citizens in
need have shared in the direct dis
tribution for relief, and in employ
ment, as you no doubt are aware,
a very definite and distinct prefer
ence is given to veterans. am adj
vised that at the time the issue of
having the balance of the bonus