The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-05-13
ALL INITIATION,
ASSERTS FLYNN
OF BONUS BILLS
Paths Lead in Same DireC-
ton, He Says in Attack
ing ManeuverS.
BY JOHN T. FLYNN
Times Special Writer

NEW YORK, May 13.-Just what
would happen if the Patman bill
we're to become law? 1t is important
to answer that question in view Of
what is going on in Washington.
What is going on is quite obvious.
Never has there been such a spec
tacular windup by a President be-
fore pitching a veto message. The
performance has all the marks Of an
elaborate feint as the prelude to a
compromise.
There are two plans for paying the
bonus-one with greenbacks, one
through bonds. Some, like Senator
Elmer Thomas, see III the movement
an opportunity for putting over
their famous scheme for currency
imitation. But despite this there is
plenty of ground for supposing that
the bonus leaders will abandon the
greenback plan for the borrowing
plan as soon as they become con-
WINGED that they can not override
presidential veto.
Pooling Public, He Claims
The President knows that defeat
of the bonus now will not end the
agitation. 1t will return next year
with redoubled fury. And it will re-
turn in the midst of presidential
campaign. 1t will be better to get
the bonus out of the way this year.
Suppose, then, he can induce bonus
leaders to shift from the greenback
plan to the borrowing plan. The
veterans will get their money, which
is what they want. The President
will save his skin with the veterans.
And he will be able to claim that he
has defeated the infationary fea-
lures of the measure.
He will make this claim though it
will not be so. And he will be able
to make it because of the very fury
of the newspaper attack on the Pat
man bill. Thus by paying the bonus
from the sale of bonds he will pre-
tend to have averted imitation, and
the people will be fooled once again
as to the true character of what has
happened.
What if the Patman bill passes?
Then veteran is given $500 in
Treasury notes. What will he do
with them? He will put them in
bank. If he spends them, the man
he hands them to will put them in
bank. Thus all the greenbackS
will become bank deposits almost at
once and remain in the bank. But
the banks won't want that much
currency. Therefore they will find
a means of divesting themselves of
their excess currency by returning
Federal Reserve notes to the Re-
serve Banks for retirement. One
effect of the scheme will be, perhaps,
to substitute Treasury notes for Re-
serve notes in general use.
Sees Initiation Anyway
If the banks don't return their
currency the Reserve Board may
force such action by raising the re-
serve requirements of the banks. In
few months it is entirely possible
the currency would not be SO very
much larged than it is. But an in
jury would have been done to the
Reserve System.
And so far as our money supplies
are concerned, the chief result
would have been an imitation of
bank deposits. If the bonus is paid
by bonds the effect will be precisely
the same.
And, apparently, we are heading
for a compromise in which we will
travel the bond route to imitation in
stead of the Treasury note route.
And that route is being made more
easier for the President by the fool
ish focusing of the whole attack on
the Patman bill.
The attack should be on both
greenback and bond payment plans.
The President should be told that
he can not compromise with either
and make people believe he has won
victory against initiation.
Copyright. 1885, NEA Service. Incl