The Waterbury Democrat., 1935-05-22

OF outstanding obligations under
term insurance and the payment
OF the service certificates. u
seems safe to predict that BY the
year 1915 we Will have expefid-
ed $1s,se0, 600. 600. This II . sum
equal to more than three-f0urthn
OF the entire cost of our particle
patton In the World War, and
ten years from now most Of the
veterans of that war will be
barely past the half century
mark.
Payments Only to Veterans
Payments have been and are
being made only to veterans OF
the World War and their depen-
dents. ana not TO civilians work.
ers who helped to win that war.
In the light of our established
principles and policies let Us
consider the case Of adjusted
compensation. Soon after the
close of the war claim was
made by several veterans ogran-
izations that they should be paid
some adjusted compensation for
their time in uniform. After a
complete and fair presentation
Of the whole subject, followed
by full debate in the congress
OF the United States, settle.
ment was reached In 1924.
Additional Allowances
This settlement provided for
adjustment in compensation DUR
ing service by an additional al
lowance per day for actual serv-
ice rendered. Because cash pay
ment was not to be made inn
mediately, this basic allowance
was increased by rs per cent and
to this was added compound In
terest for twenty years, the
whole to be paid in 1916. The
result OF this computation was
that an amount two and one-hAlf
times the original grant would
be paid at maturity.
Taking the average case as an
example. the government ac-
knowledged claim Of $400 to
be due. This $500 under the
provisions of tn settlement, with
the addition Of the rs per cent
for deferred payment and the
compound interest from that
time until 1945, would amount to
the sum Of $1,000 in 1945. The
veteran was thereupon given a
certificate containing an agree
ment by the government to pay
him this $1,000 in 1916 or to
pay it to his family If he died at
any time before 1945. In effect,
It was a paid-up endowment
policy in the average case for
$1,000 payable in 1945, or soon.
er in the event Of death. Under
the provisions Of this settlement,
the total obligation Of $1,400,-
100000 in 1924 produced a ma
turity or face value OF $780,
100000 in 1945.
Since 1924, the only major
change in the original settlement
was the act Of 1881 under which
veterans were authorized to bor-
row up to firty per cent OF the
face value OF their certificates as
Of 1915. Three million veterans
have already borrowed under
this provision an amount which.
with interest charges, totals ST..
700,000,000.
More Than Present Value
The bill before me provides
for the immediate payment Of
the 1916 value Of the certificates.
It means paying $1,000, 600, 700
more than the present value Of
the certificates. It requires an
expenditure Of more than ST.
100000, 900 in cash for this pur.
upose. It directs payment to the
veterans Of q much larger sum
than was contemplated in the
1894 settlement. 1t is nothing
less than a complete abandon.
ment of that settlement. 1t is a
new straight gratuity or bounty
to the amount Of $1.600,o00.o00.
It destroys the insurance pro-
lection for the dependents OF the
veterans provided in the original
plan. For the remaining period
of ten years they will have lost
this insurance.
This proposal, I submit vio-
lates the entire principle of vet
erans' Dement'S 70 carefully for.
INFLATED at the time Of the war
ana also the entire principle Of
the adjusted certificate settle
ment OF 1924.
Criticizes Bonus Reasons
what are the reasons pre-.
scented in this bill for this fun
damental change in policy? They
are set forth with care in a
number OF whereas" clauses at
the beginning Of the bill.
The first Of these states az
reasons for the cash payment OF
these certificates at this time:
That It will increase the purchase
ing power OF millions OF the con-
suming public; that it will pro-
vide relief for many who are In
need because Of economic con-
ditions; and that it will tighten
the relief burden of cities, coun-
ties and states. The second states
that payment will not create any
additional debt. The third states
that payment now will be an eff
fective method OF spending
money to hasten recovery.
These are the enacted reasons
for the passage of this bill. Let
me briefly analyze them.
First. the spending OF this
sum, 1t cannot be denied, would
result in some expansion OF re-
tail trade. But 1t must be noted
that retail trade has already ex.
banded to q condition that com.
pares favorably with conditions
before the depression. However.
to resort to the kind OF financial
practice provided in this bill
would not improve the conditions
necessary to expand those indus
tries in which we have the
greatest unem ployment. The
treasury notes issued under the
terms OF this bill. we know from
past experience would return
quickly to the banks. WeNknow.
too. that the banks have at this
moment more than ample credit
with which to expand the ac-
tivities Of business and industry
generally. The ultimate effect of
this bill will not In the long run
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