xt7wwp9t2q46_12 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/mets.xml https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61.dao.xml American Liberty League 37 linear feet archival material English University of Kentucky This digital resource may be freely searched and displayed.  Permission must be received for subsequent distribution in print or electronically.  Physical rights are retained by the owning repository.  Copyright is retained in accordance with U. S. copyright laws.  For information about permissions to reproduce or publish, contact the Special Collections Research Center. Jouett Shouse Collection (American Liberty League Pamphlets), No. 15 "The Bonus: An Endorsement of the Position Taken by President Roosevelt in His Letter of December 27, 1934, and an Analysis of Proposals for Pre-payment of the World War Adjusted Compensation Certificates" February 11, 1935 text No. 15 "The Bonus: An Endorsement of the Position Taken by President Roosevelt in His Letter of December 27, 1934, and an Analysis of Proposals for Pre-payment of the World War Adjusted Compensation Certificates" February 11, 1935 2013 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61/59m61_15/Am_Lib_Lg_15_001/Am_Lib_Lg_15_001.pdf section false xt7wwp9t2q46_12 xt7wwp9t2q46 assurance that an increase in currency would
advance prices, so also can there be no certainty * *
that a contraction would affect the situation if
an inflationary movement got under way.
The Vinson Bill would menace the govern-
ment’s credit while the Patman Bill would un- I I  
dermine the soundness of the monetary system. V
The Congress should reject both. The President’s
opposition to immediate payment of the entire ’
face value of the bonus certificates is based on B
sound principles and deserves to be upheld. His
firm position on this issue as shown in his letter
of December 27, 1934, and as previously made V
evident in an address at Roanoke, Virginia, on
V October 19, 1934, merits the approval of all citi- V
zens. Immediate payment of adjusted service - * * *
compensation certificates would not be to the
best interests of the veterans or of the nation.
It would be certain to encourage a drive for pen-
sions involving huge additional costs for an in-
definite period of years.
An Endorsement of the Position
Taken by President Roosevelt in His
Letter of December 2.7, 1934, and an
Analysis of Proposals for Pre»payment
. _ of the World War Adjusted Compen·
sation Certificates `
AMERICAN LIBERTY LEAGUE
National Headquarters
NATIONAL PRESS BUI`LDING
WASHINGTON, D. C.
ir j *
A Document N0. I5
February, 1935

 ° ’ States and 1.25 er da for services overseas in
Tno Soldiers Bonus tellccesaiott thetfirgt sixty datys ogsirvigg. The anlorllnt
us e ermine was increase er cen e-
* ca‘use_of deferment of payment._y p _
The Amerieerr Liberty Lee-ave euprerte the eeettsilgtettteaitlititfe?XSel-lZil$L”?eiE1é°E°iIi$§`$eoie1ii>°§
position of President Roosevelt in his letter of with interest at four per cent per annum, entitlement
December 27,1934,to Garland R. Farmer, Com- Wee grantod te the yetererre te _r>eyr¤e¤t- twenty
merder ef the Heeeereee- Teree- Amerieee Le- §‘”‘;-ie§l£.‘;i.‘Lef"2?..‘.§le°l$“e§§.e§iF1£?3$e§”rhZt ietf;
gierr Peet- The Leesue ie eppeeed te the imme- »e$§e edjuetrrllent. The leo per cent increase repre-
dlate payment of the full face value of adjusted sents the additional amount granted because of
Service compensation Cey{;ifjeateS_ deferment of payment and the compounded- interest.
Reasons underlying the League’s stand are itgntl? ge gltglltgal g"fgflt5ot $400 m 1925 W°“1d eeleree
tho following: 1 stlf iri)192h theiltl and $1.25 per day adjustment had
1. Bonus certificates are not due until 1945. been put in cash, the veterans would have received
2. Loans already made have exceeded original er tetel ef $1,400,0%,000, but by deferrnrs the Pey-
baslc cash Valuaa mall; twenty years the sum became $3,500,000,000.
- · nder the original law veterans were permitted to
3· Fnmthss ef Vstsrnns now ats protootod te borrow on their certificates according to the reserve
the full face amount of certificates in the event value thereof, but in February, 1931, an amendment
of death; othlarwise provision is made toward irlizeeegdahwgllh0gt11§ea)r;Fdb;;O37;t(l1e€;elSgaljléi-Ogg?
the needs of _t eir later years. a ee ‘ . o Thi amen ment also amd
_ 4- The Uerted Stetee hee heeemere hherei te ?tett}§e§ti.t§iSIElt¥et2lE§e Wtlel. could ee eter-eee on
1tS veterans than any other natlon 1nVOlVed 1n loans at 4% per cent which rate was subsequently
the World War, · reduced to 3% per cent by the act of July 21, 1932."
5. Immediate payment would mean an out- V
right gift of $1,620,000,000, including remittance Amount of Loans
of interest on loans, in excess of the present _ _ _
Value OD an actuarial baSlS_ The l1€IlS 3lg3.11'lSl} C€I`t1flCBlt€S   I`€&SOH of
6. Actual cost of the pending proposal would l)%a)n3Oa)ndt tggtotoog elrrltaei totatod about tlrogof
be more than $2,000,000,000. » a _o on o_ _ · _
7_ If bot-rowodl tho $g,()()(),g(l(),(l(l() adds to The pending legislation proposes _the remit-
Treasury deficits with consequent inflationary tanoo ef moto tnan tasorooorooo rr? tntotost ao'
dangers; printing press Currency Would under- Crued on lO&I1S.   th1S 3-mount 1S Subtrai(g»°t:€d
mine the soundness of the monetary system. freer the ttrogoroonroonr tt todnoos tno .nons
g_ Recent oxpol-loooo lmlloatoo that no lasting against certificates to $1,470,000,000. The differ-
stimulus to business can be assured by this out- onoo between t1¤47Oz00O>00O ere t3>5O0¤Q0O>O00>
lay of government mol-loy_ the aggregate maturity value of the certificates,
9_ Wloo policy calls for avoidance by tha com is $2,030,000,000._ This represents the actual cost
gress either of additional burdens upon the Treas- te tno Ttoasnty tt tno oerereee approves 1mms'
ury or experimentation with fanciful monetary (ni; igjraytgeierltl etfhthlelgtlltjggglylglrtjgove quoted
7
theories. the original basic adjulatment amountcld tg t1,-
' · 400 000,000. Adding t e 25 per cent or e er-
Hlstory of Bonus Act ment of payment together with interest to the
With the passing of the years the eiyeum- • end of 1934 the present_value of the certificates
stances surrounding the enactment of the bonus , ie $2,1oo,0oo,0oo, rsrrerrrra toano inado against
legislation have become beclouded in the minds - them-
of many people, If the Congress were to approve merely the
A concise statement of what took place is con- payment ef the Prooont Vatdo» It weuld moan an
tained in a memorandum prepared by the Ad- outlay ef _e¤1y $‘t1o»ooo»ooo· Thre To obtalnod
ministrator of Veterans’ Affairs for President by deduntlng the aleogoyoooyooo ef hone frem
Roosevelt at the time of his letter of December $2,1Oo,o0o»oo0» the Prooont Vanta`- Ot the tftlof
27, 1934. The text follows in part; 000,000 only $130,030,01flO wogrld be payable; to
“The Congress, by the passage of the act of May Vetiglllansc who alma y ave Ormwcd on t BH
19, 1924, provided for the granting of additional Cer 1 ca 8S' . ,
compensation to each veteran, with certain specified Under tno Pondtng Proposal fer tno Paymont
exceptions, of $1 per day for services in the United of $2,030,000,000 it means a new bonus to the
2 . 3

 amount of $1,620,000,000, which represents the final form. It was then asserted by Mr. Taylor,
difference between $410,000,000 and the sum in- in a communication to Senator Joseph T. Robin-
volved. son of Arkansas, that "our membership over-
The maturity value of the certificates, $3,500,- whelmingly favors insurance features, with loan ,
000,000, plus the $220,000,000 for remittance of privileges, as shown in all national conventions, ‘
interest, is $2,320,000,000 greater than the orig- and more recently through a national poll cover-
inal adjustment total of $1,400,000,000.   ing every state in the Union."
The plan for the amortization of the cost of   Inframing the Act the Congress properly de-
the adjusted service compensation certificates _ cided that an insurance certificate possessed ad-
contemplated annual appropriations of more Y vantages over immediate payment of a smaller
than $100,000,000. The money was invested V, amount which might be quickly dissipated. Two
in special government securities bearing in- humanitarian considerations were involved. The
terest. This sinking fund was intended to be families of veterans were given protection for a
sufficiently large at all times to care for loans 20-year period. If a veteran should die, his bene-
and eventually to retire the certificates at ma- ficiary would receive the entire face value of his
turity. The costs are reflected in the public certificate. If he lived to the maturity date, a
deb; tohthefamount of the sinking fund and loans sum of money considerably larger than the orig-
ma e t ere rom. inal cash value would be provided for his later
It has been suggested in some quarters that years when his needs and those of his family
a considerable part of the amount needed for im- conceivably might be greater than at the begin-
mediate payment is available in the sinking ning of the 20-year period. Both of these ad-
funél. Tlée falet is tha; gh; loans   were vangagles cg endowment insurance gvould be given
ma e un er t e act o e ruary,. , more upi t e ongress ap roves imme iate payment.
than exhausted the then existing fund invested The present ability of veterans to borrow
` in government securities. It was necessary to in- greater amounts on their certificates than they `
crease the annual appropriations. On January would have received in cash ten years ago if the
31, 1935, there was in the sinking fund only insurance plan had not been adopted is evidence
$163,000,000. To convert this into cash it is of the wisdom of the choice then made.
necessary to sell the securities in which the , ,
money is invested. The process is the same as Ge¤eI`OS1tY ef the United States
berrewine, the 0nfY diiterenee being that e een- There can be no question as to the generosity
rereien ef tnie fund deee net inereaee the in- ofthe United States tewetd World wet veterans.
tereetbearine debt· By the end of the current fiscal year the govern-
Immediate payment ef the entire maturity meet will have expended rm them more than
Vefue Weufd mean, tue apprepriatien ef funds seven and one-half billion dollars. This includes
net enfY fn adyanee ef the Sum? Wfueb were te all payments for disabilities, hospital care and
be eet eeide annually fer the efnkfng fund but for the adjusted service compensation fund.
also for interest which would be accumulated on The budget Submitted by the President to the
fnveetfnente net Yet made- · Congress in January for the fiscal year 1936 pro- 4
etneeeiea re veterans Qiifff.1§°3‘?}m‘i£tfZ?§’ii?£22e,f°§eI?2?S;E?t.’§3$-
It is perfectly true that the Adjusted Service   ance and the adjusted service certiucate fund.
Compensation Act represents an obligation to . This amount, which covers costs of veterans of
the World War veterans. That obligation has A   all wars, represents 16 per cent of all appropria-
been fulfilled to date and should be carried out ` tions requested for general purposes. Except for
to the letter. The subsequent enactments with interest on the public debt 1t is the largest single
reference to the conditions of loans to veterans item among generalexpenditures.
have represented a greater liberality than was G Some ide? bf the Cligerafgyxbf thetUnited Stattes
contemplated in the original law. overnmen owar or ar ve erans may e
The American Legion, through its national gained from_a compilation by Brigadier-General
commander, John R. Quinn, and its legislative Frank T. Hines, Administrator of Yeterans’ Af-
representative, John Thomas Taylor, in state- fairs. According to his figures, which were pre-
ments issued on April 19, 1924, a month before sented to congressional committees two years
the passage of the bonus bill over the veto of ago, the annual expenditures per capita for
President Coolidge, approved the measure in its World War veterans and their dependents at
4 5

 that time based on the number of dead and   sents the lesser evil. It has the merit of remain-
wounded were as follows:   ing aloof from dangerous monetary experimenta-
United states ....................... $2,668.66 . heh- The eiieet ef this bill would be to force
great Britain .......................     ‘ Elie Treasury totborrow the money in its regular
THHCG ............................. .   nanclng Opera 1OnS•
 amy [Z`Z]Z"`][`fj[j]f[`[[ff`][ gg;   The_T1"eeeury has been borrowing huge Sums
canada`]Z..Z...]ZZ..K ....... i .... Q. 263.41 i. S0 eeelly thei there ie eh ihelinetien to think
nothing of two billions more or less. In the last
The expenditures per capita based on the num- fiscal year the deficit was four billions. In the
ber of men mobilized were as follows: X currlent year it will be close to five billions and
United States ......................... 180.91 lt lll l B ll€Xl· fieeel Year almost 38 much- T0 add
1éranr€eB. 1 ._ ........................... 3 gg.23 in more than two billions to the deficit of this year
Yea Y1 am ······-~·-··-----··----· - or next increases the danger that the Treasu
fi§i;“?’T?.;:::1;:;:;;:;;:;:;:;;:1:;:: iii? l gmllii will bghegmpelged tetlurh ie i¤¤=;1>i<>¤ei§i
Canada .............................. 98.64 n llallcmg me O S- 0 lla lloll een COD milf} 0
`| roll u lar e deficits ear after ear without
Thus there can be no ground for an accusation l encouriiering trouble. y y
that the United States has been remiss in ful- l History offers many instances in which the
filling its responsibility to War veterans. printing press has been used deliberately to
The plea for immediate payment of the bonus finance governments. In every instance disaster
can rest only on the need of the veterans due to ultimately ensued. Germany’s post—war infla-
existing economic conditions. This class of citi- tion offers the most outstanding example. France,
zens has been hit no harder than any other class Russia and other nations have experimented
and is rleceiving lan amount of relief proportion- ° vsgth printing press money. Again and again has
ate to t at o ot er citizens. t e specious argument been advanced that a cir-
The increase in the loan value of certificates culating non-interest-bearing government obliga-
in 1931 was intended to act as a stimulus to tion has exactly the same security as a non-cir-
indfistry. ékblpulgaii. billiorgdogagsdwlas dcftrilbuted culagng interest-bearing security. Those who
in oans a t a ime. s s a e y e resi- wou issue a er mone to a the bonus in
dent in his recent letter "this large payment re- preference topbldrrowing,ydelud)e Bthemselves into
sulted in little stimulation of business, and in y thinking that what is proposed is only a shifting
many og the lafger cities no material change was I from one type of obligation to another with the
indicate at a . ver obvious advanta e of a savin of interest.
The President in his letter pointed out that Thdie could be no gra§rer mistake. g
veterans as well as n0n—veterans have shared in
all expenditures for relief and reclovery purposes, Currency Inflation Futilc
itilltitliltiiiiiiitff‘i$"§lZty %§§‘§'tl3l‘til°2   bOfjggjgglyggggggcgegrgeeggliggitgegmer ef he
adjusted service compensation is not due at the I in Curmncg would tend to mise Com;] Zlitlncrlgase
present time, that the cost of immediate pay- l Them is gow 3 mater I f O 1 ylm°£iS‘
ment would represent a gratuity above the gov- , circulation than 53 th VCf{m?Ei) O. curmnfy win
ernment’s contract and that the insurance plan · - B pea O usmess as lvl Y
. . . prior to the depression. Present currency 1S am-
has proved to be benencial, as indicated by the , ·
ple for all business needs. More than 90 per cent
feet that ef deceadcd Veliirans 85 per Cen? here of all business is transacted by check A large
égftlxg azsgectggmtgigir families except the adjusted   Lixiziz in cgglcngyt would represmglt bug'? Sénag
ge o e o a currency an cre 1. uc
TWO Plans y anlincrcgasfz woigd thaive little effect éipon pricles
V y un ess u re ec e in a rami in in t e
The advocates of immediate payment of the i form of crgrdit. Efforts to stliilnulate tl§e use of
bonus are divided between two plans. One group l credit already available have been futile. Ex-
favors the Vinson Bill appropriating from the 2 cess reserves of the member banks of the Federal
` Treasury such amounts as may be necessary. Reserve system have continued to accumulate.
The other group favors the Patman Bill which The Patman Bill contains provision for a con-
provides for payment in printing press money. f traction of currency in the event of an undue in-
. Of the two measures the Vinson Bill repre- 2 crease in commodity prices. Just as there is no
6 7