Jasper County Democrat, Volume 22, Number 100, Rensselaer, Jasper County, 13 March 1920 — FEARS DISASTER IN BONUS BONDS [ARTICLE]

FEARS DISASTER IN BONUS BONDS

Secretary Houston Says Raising Funds for Veterans Might Peril U. S. $2,500,000,000 IS NEEDED z Increased Taxes to Give Aid to Former Fighters Suggested as “Least Harmful Ways," but Would Be Hard on the People. Washington, March 12. —A bond issue of $2,500,000,(XX) to pay adjusted compensation to former service men “might result in disaster,” Secretary Houston told the house ways and means committee, which is considering soldier relief legislation. Increased taxes to extend aid to former service men was suggested by the secretary as “the least harmful way,” but he said the proposed expenditure of $2,000,000,000 “would be a serious one for people to confront at this time.” “The present financial situation is not critical,” Mr. Houston said. “Economy by the people, avoidant of waste in expenditures and prudence In handling these appropriations will naturally relieve the situation." Bond Sale Difficult. An attempt to sell bonds and place other paper on the market at existing rates of interest would be difficult.” he said. “I don’t know if we could float bonds at a higher rate of interest,” he told the committee. “If such bonds were floated it would tend to decrease values of present obligations." Further credit expansion which has been a factor in the upward trend of living costs would be Inevitable if another bond issue were approved, he said. “We are doing what we can by prudence to bring about normal conditions of affairs, but I can’t predict when we will return to the prewar state,” Mr. Houston continued. “The proposal to float additional bonds would set up grave situation which I am not sure we could handle.”

Harding Also Worried. The issuing of two billion dollars in bonds at this time would be “a much more serious proposition than It was during the war,” Gov. Harding of the federal reserve board told the committee. “First, there would be a lack of patriotism which helped In selling bonds during the war, and secondly we would come into competition with all sorts of commercial Investments,” he said. Gov. Harding , took issue with statements of representatives of soldier organizations that bonds issued to soldiers would be locked up. “If they could afford to lock up their bonds they don’t need them,” he declared. “An issue of small bonds for adjusted compensation is only slightly less vicious than the issuance of greenbacks.”