Bid & Ask

Be it enacted by the Senate and the House of Representatives . . . that in view of the generous benefits accorded by the Government to veterans of the World War . . . it is hereby expressly declared to be the policy of Congress that there should not be any general pension laws enacted for the veterans of the World War or their dependents. . . .

With these words the Administration last week offered veterans a new bonus of a round half-billion dollars provided they would desist, at least for a time, from hounding the Government for cash. The offer appeared to sprout out of a White House heart-to-heart between President Roosevelt and Senator Pat Harrison of Mississippi early in the week.

The House had already passed the Patman Bill providing for immediate payment in greenbacks of the Bonus due in 1945 (TIME, Jan. 21). What lay ahead was well known: Passage of a cash Bonus bill; a Presidential veto; an overriding of the veto by the House; a nip & tuck contest in the Senate in which the veto would probably be sustained on condition the President accept a compromise.

To Senator Harrison who needs the veterans' vote for re-election next year and who, as chairman of the Senate Finance Committee, must fight the Administration's anti-Bonus battle in the Senate, voluntary compromise now looked more desirable than an enforced compromise weeks hence. President Roosevelt could see Senator Harrison's point. Obviously it would be economy in politics to have a compromise after one wrangle rather than a compromise after many wrangles. So Senator Harrison marched into the Senate and popped a bonus bill into the hopper.

New Offer. Not for one minute did Franklin Roosevelt, expert political horse trader that he is, weaken his bargaining power by admitting he would accept the Harrison compromise. But Senator Harrison flatly asserted that the President would accept it, for his bill offered a very nice compromise.

Every bonus bill has to be concocted by a mathematical expert who can make it look cheap to taxpayers, liberal to veterans, possible to the Treasury. Senator Harrison did not try to concoct anything so difficult out of his own head. He went to the Veterans' Administration, got its best wizard with figures to do the job. Assistant Administrator Harold Walker Breining is a fat, fortyish actuary who, since 1917, when he went overseas in field service for the Division of War Risk Insurance, has been making statistical tables dance jigs for the Government. Mr. Breining found a way to calculate interest on the Bonus starting from 1918 instead of 1925 and still let the Treasury off for something like half a billion dollars. Charles F. Boots, who gets $7,000 for helping the Senate draft its bills, put Actuary Breining's mathematical gymnastics into legal language. Then Senator Harrison had his bill.

The Patman bill would pay all adjusted certificates at face value less any loans obtained on them (in most cases 50% of the face value) but without deduction for unpaid interest accrued on such loans. The Harrison bill would not forgive the interest due on the loans. And it would pay not the face value of the certificates but the current value freshly figured on the basis of 4% interest from Nov. 11, 1918. The payment would, moreover, be made not in greenbacks but in 3% Government bonds which veterans could sell for cash. The Patman bill would increase the cost of the Bonus by $1,500,000,000, Senator Harrison's bill, according to his own estimate, by only $500,000,000.

Thus under the present law a veteran who has a $1,000 certificate due in 1945, with a $500 loan against it, would receive $1,000 less $500 less accrued interest on his loan (about $315)--about $184 ten years hence. Under the Patman bill he would receive just $500 in greenbacks right away ($1,000 less $500, and interest forgiven). Under the Harrison bill, if he demanded immediate payment, he would receive in negotiable bonds and cash about $175 (the current value of the certificate, about $775 less the $500 loan less about $100 in accrued interest). But as a special inducement not to cash the certificate until 1945, its value would be increased 4% per year. So, on Jan. 1, 1945 it would be worth not $1,000 but $1,115, and the veteran would get about $300 in cash ($1,115 less his $500 loan less about $315 in interest).

Kicks. "Millions for defense, but not one cent for tribute," cried Charles Cotesworth Pinckney of South Carolina. Those who consider payment of the Bonus an item in national defense last week cried out that the Harrison bill was not enough in millions. Said National Commander Frank N. Belgrano Jr. of the American Legion: "This is just what the Legion has feared. . . . The Legion is doing things to make the nation a better nation in years to come." Representative Wright Patman, Senator Elmer Thomas, Senator Ellison Smith all deplored the shabby notion of appropriating only $500,000,000 more for defense.

Those Congressmen who considered payment of the bonus an item of tribute said little. For they, too, hope to be re-elected in 1936. And President Roosevelt by his open-handed policy for the needy had deprived his followers of their best argument: need for economy. Thus no New Dealer had an answer ready when South Carolina's Senator Smith cried: "If Congress can appropriate $5,000,000,000 to meet exigencies not as obligatory as the debt to War veterans, I think we can take care of those men."

This file is automatically generated by a robot program, so reader's discretion is required.