Economy Veto

When the Bonus Bill was passed by both Houses and went to the President (TIME, May 12), the country settled down to wait--not to see what the President might do, but to hear his veto. The veto came.

John R. Quinn, Commander of the American Legion, was in Indianapolis when told that the veto had been issued. He said, without surprise: "I regret that the President has seen fit to veto the adjusted compensation measure. I am not familiar with his reasons. However, the ex-service men and women look with confidence to both Houses of Congress to enact this just measure into law."

When Mr. Quinn said: "I am not familiar with his reasons," he must have meant that he had not yet read the veto message. The President's reasons were well-known. They had been expressed in his message to Congress last December; they had been reiterated in subsequent speeches and they had been embodied in large measure in the veto of the Bursum Pension Bill. The President had set his style--it was to be "the economy veto."

Yet, although the President's reasons were foreknown, his restatement of them in the Coolidge vernacular did not lessen their force as an expression of the point of view for which he stands. Beginning his veto message, the second he had written, by rehearsing the provisions of the Bonus Bill--cash for those who would receive less than $50, 20-year endowment insurance policies for those who, by the length of their service, would receive greater amounts--he continued:

Cost of the Bonus. "An appropriation of $146,000,000 for the fiscal year 1925 will be required to provide the prorated annual cost of the insurance and to meet cash payments to those not receiving such insurance. This does not include administrative costs, which will amount to approximately $6,500,000 the first year. For the fiscal year 1926 an appropriation of $155,500,000 will be required and the annual appropriations for the 20-year period will aggregate, according to the lowest estimate, $2,280,758,542. These and the other figures herein are from the Veterans' Bureau, but the Treasury estimates are materially more. . .

"Manner of Payment. "That part of the annual appropriation not required to meet the cash bonus or to pay policies maturing on account of death will be invested in Government bonds. The face value of the bonds thus acquired, plus the interest thereon reinvested will equal during the 20-year period the maturity value of the insurance policies, aggregating at the lowest estimate $3,145,000,000. . . .

"In other words we will be committing this nation for a period of 20 years to an additional average annual appropriation of $114,000,000. . ..

"The Government will not have in the fund, in 1945, $2,500,000,000. All it will have will be its own obligations, and it will owe $2,500,000,000 cash. It will then be necessary to sell to the public this $2,500,000,000 of bonds--a major operation in finance which may be disastrous at that time and may jeopardize the value of federal securities then outstanding. ..."

The Burden. "If this bill becomes law, we wipe out at once almost all the progress five hard years have accomplished in reducing the national debt. . . . The prosperity of the nation, which is the prosperity of the people, rests primarily on reducing the existing tax burden. No other action would so encourage business. No other legislative enactment would do so much to relieve agriculture. The drastic executive campaign for economy in Government expenditures has but one purpose--that its benefits may accrue to the whole people in the form of reduction in taxes. I cannot recede from this purpose. I am for the interests of the whole people. . . .

"The debts of the nation must be paid. The sum of all these is a tremendous amount. At the present rate it is nearly $35 for each resident of our country, or $175 for each average family every year, and must be for some time. This bill calls for a further expenditure in the aggregate of nearly $35 for each inhabitant, and lays nearly $175 more on each family, to be spread over a period of 20 years. . . .

"Neither the rich nor the profiteers will meet this expense. All of this enormous sum has to be earned by the people of this country through their toil. It is taken from the returns of their production. They must earn it. They must pay it. The people of this country ought not to be required by their Government to bear any such additional burden. They are not deserving of such treatment. Our business is not to impose upon them, but to protect them. ..."

As Insurance. "If this bill be considered as insurance, the opportunity for such a provision has already been provided. Nearly $3,000,000,000 of War risk and Government life insurance is now outstanding, and over $500,000,000 has been paid on such policies. When this provision was made in 1917 it was on the explicit understanding of the Congress that such insurance was to relieve the Government of subsequent contributions. . ."

The Disabled. "I am not unmindful that this bill also embraces within its provisions the disabled of our veterans and the dependents of those who fell. To state that the disabled veterans and these dependents are entitled to this additional gratuity is to state that the nation is not meeting its obligation to them. Such a statement cannot truthfully be made. The nation has spent more than $2,000,000,000 in behalf of disabled veterans and dependents of those who died. It is now spending for compensation, training, insurance and hospitalization more than $400,000,000 annually."

Principles. "America entered the World War with a higher purpose than to secure material gain. Not greed, but duty, was the impelling motive. Our veterans as a whole responded to that motive. They are not asking as a whole, they do not want as a whole, any money recompense. Those who do seek a money recompense, for the most part, of course, prefer an immediate cash payment. We must either abandon our theory of patriotism or abandon this bill.

"Patriotism which is bought and paid for is not patriotism. . . .

"To attempt to make a money payment out of the earnings of the people to those who are physically well and financially able is to abandon one of our most cherished American ideals.

"The property of the people belongs to the people. To take it from them by taxation cannot be justified except by urgent public necessity. Unless this principle be recognized our country is no longer secure, our people no longer free. This bill would condemn those who are weak to turn over a part of their earnings to those who are strong. Our country cannot afford it. The veterans as a whole do not want it. All our American principles are opposed to it. There is no moral justification for it."