Evening star., 1935-01-03
BONUS PAYMENT
IS HELD LOGICAL
ADpeaI Declared Justified in
View of New Deal Ex-
penditures.
BY DAVID LAWRENCE.


understand and judge, If you can free
your mind from preconceived pref
udices about the bonus question, so
many of which have arisen in the
last decade of controversy.
But it doesn't require one to pos
sess a veterans bonus certificate to
feel sympathetic with the veterans.
They may have been wrong in the
past in seeking cash payment when
the Treasury could not afford it. but
they are logical today in asking for
payment when the New Deal is
spending billions for all sorts of
things that involve direct subsidies to
different classes OF citizens.
Recommendation Overlooked.
This, indeed, is the hardest argu
Ynent for the President to overcome.
When he said, for example. that the
veterans, if paid the bonus, would use
it to clear up Indebtedness and not
to stimulate business, he was over
looking the recommendations of one
Of his own agencies fortnight ago
after an exhaustive study of credit
conditions in the seventh Federal
3NCoC1 VIC 0LoIl1Cb. IdlGSI lCkOI Y
made 1t clear that one of the things
holding back business recovery is the
reluctance of the Government with
its industrial loans to permit the
money to be used to clear up existing
Indebtedness.
The principle is just as sound
whether it applies to the condition
of the individual veteran or businesses
generally.
The weak spot in the Presi-
dents armor is that he allowed him
self to discuss what the veterans would
do with their money. If it we're a
loan, this might be a function of
the Government. But when the 80
per cent doles, or gifts, are handed
out through the Public Works Ad-
ministration to projects that are ad-
mittedly paying 1929 wages the Fed
eral administration doesn't undertake
to argue how the 80 per cent doles
shall or shall not be spent.
Two Propositions Raised.
The real question is not how the
veterans will use the money but
whether the bonus is owed to them
and whether the Treasury is in a
condition to provide the funds. This
raises two separate propositions.
Now, there is no doubt that the
money is owed to the veterans. The
Presidents letter to Comdr. G.. r.
Farmer Of Henderson, Tex, admits
that Congress a decade ago voted
sum equal to about $500. 900 600,
payable in 20 years from 1924. He
also makes it clear that, of this sum,
about $1,470 100000 has actually been
disbursed on account of loans, so
that when an item of 1920 1000, 900 for
interest on these loans is deducted
from the unborrowed balance there
remains about S1,8l0,000,000 as the
sum owed by the Government to the
veterans in 1914
The argument that Congress used
a device of compound interest and
that the interest hasn't actually been
earned would have been a lot more
convincing if the New Deal had not
embarked upon several adventures in
which direct subsidies and gifts are
made to various groups Thus, for
instance, the whole Tennessee Valley
is to get cheaper electricity by means
of a Federal subsidy which is more
or less confused by a system of book
keeping charges which permits many
millions of investment to be regarded
as being for navigation"
Strong Sentiment Created.
Under the circumstance, the aver
age ex-doughboy is going to repeat
the philosophy expressed so often in
American Legion meetings, that IF
everybody else is getting theirs" why
isn't 1t proper for the doughboy to
get his, too? Il is this curbstone
logic which has developed such
powerful sentiment in Congress for
the payment of the bonus, and the
bonus isn't thought of as it was orig
inally planned, namely as an insur-
ance certificate, but as a lump sum
figured out by Congress 10 years ago
to be given the veterans some day
as gift from a grateful Govern
ment.
The sum, therefore, of s1,sl0,0oo.-
900 Is plainly due some time to the
veterans. The veterans who are in
distress want it now and not 10 years
hence. For one thing. the New Deal
has announced that it intends to
raise prices and to make the purchas-
Ing power Of the dollar less and less
until an equilibrium is reached, when
the dollar will be held at or as near
q fixed point as possible.
Thus, a dollar given to a veteran
these days may buy more things, or.
II invested in bonds or equities of
various kinds, may bring him more
RETURN thor
under the New Deal philosophy, the
veterans plainly will not get as much
purchasing power later on
Loan Power Unlimited.
But can the Treasury afford a pay
inent of Sl,8l0,00O 900? OF course.
under old deal economics, it could not.
Under the New Deal, however. there
Is no limit to the borrowing capacity
OF the Federal Government. II the
Treasury were to borrow 81 ,810 900 900
in. say four installments, during the
next IL months and pay the veterans
about $3.50, 100000 each time, the op-
Grafton would be scarcely different
from what has been happening when
immense funds have been placed at
the Treasury's disposal by the public
to be used in unspecified objects, all
the way from raking leaves to building
unneeded bridges or dams to make
electric power when there is an excess
Of capacity today.
If the New Deal, beginning with the
forthcoming Presidents message,
should turn economical, and all the
wasteful projects on which spending
has been done are brought to an end.
the veterans probably would have to
be satisfied with an installment pay
ment to those who do not need the
money and full payment to those in
distress. Compromises of various kinds
are being discussed. But the sequel
to the orgy of public spending of the
last IL months is the payment OF
something to keep the veterans group
satisfied.
(Copyright, 1880