"The Young Plan"

Before the House Ways & Means Committee last week passed an unusual parade of potent bankers and businessmen. They had hurried anxiously to Washington to protest against any premature cashing of the Soldier Bonus as a form of Depression relief (TIME, Feb. 9). Charles Edwin Mitchell, board chairman of great National City Bank of New York, declared that a $3,500,000,000 U. S. bond issue to pay off the adjusted service certificates would cause "hundreds and hundreds of bank failures" throughout the land. Arthur Reynolds, board chairman of great Continental Illinois Bank & Trust Co. of Chicago, likened bonus cashing to a "hypodermic of strychnine given to a sick man." Clarence Mott Woolley, board chairman of American Radiator & Standard Sanitary Corp. warned that the scheme would "wreck all chance of economic recovery." Other critics included Edward Dickinson Duffield (Prudential Life Insurance), Samuel Wallace Reyburn (Associated Dry Goods Corp.), Henry T. Ferriss (National Investment Bankers Association).

The chorus of adverse testimony seemed to suffocate all Bonus legislation. Financial circles in Manhattan ceased their nervous buzzing. Bond prices recovered some of their losses. The Bonus idea was apparently dead.

Then, as a final witness, Ways & Means Chairman Hawley put on the stand Owen D. Young, confident that that tycoon would merely reiterate the business world's objections to any form of certificate payments at this time. But Mr. Young did not perform as expected. Like his banking friends, he did oppose a big bond issue to pay off the Bonus on the grounds that: 1) such an issue probably could not be sold; 2) savings necessary for business recovery would be absorbed otherwise; 3) "we should end worse off than we began." Unlike his associates, however, Democrat Young favored a compromise, favored upping the loan value of service certificates (now 22 1/2%) for the benefit of really needy cases. The Republican committeemen were thoroughly startled to hear a proposal so out of tune with the other songs of Big Business.

Mr. Young began with friendly words for veterans in distress: "They hold our promises to pay; they need money now. They, of all people, should not be left in want. We must approach the problem with a determination to do them not only justice but more."

He estimated that 30% of veterans needed financial help--10% jobless, 10% drought victims, 10% with diminished incomes. Said he: "The Government might advance to those in need a substantial percentage of the face value of their certificates. . . . The relief thus afforded should be real and not fanciful. . . . The amount of such payments would probably be not less than $300,000,000 and not more than $500,000,000. ... A diversion of funds in that amount would be wholly justified to meet this appealing need. ... In any event, I would make an effort to see that, so far as is humanly possible, all veterans in distress are relieved. ... If some such plan as I have proposed could be adopted at all, it should be done quickly. . . ."

If veterans not in distress complained against this loan plan which would leave them out, Mr. Young said: "I should pay no attention to it." Remarked Congressman Garner, the committee's leading Democrat: "You might if you came up for re-election next year." Retorted Mr. Young: "Well, I don't!"

The Young testimony made a big impression not only upon the committee and Congress but also upon the public. Republican Representative Crowther declared that Mr. Young was "the only witness who showed any tinge of human interest." The Press began to headline the "Young Plan," much to the concern of Republicans who hated to see so great a chunk of political capital being passed to a Democrat. Actually Mr. Young had proposed nothing new or original. The idea of upping Bonus loans was advocated last month by Director Hines of the Veterans' Bureau as the "least undesirable" plan for aiding the jobless ex-soldiery. Chairman Johnson of the House Veterans' Committee had suggested much the same thing months prior to Director Hines. But because Owen D. Young is Owen D. Young, a man of great personal and financial prestige, credit for the Bonus loan idea continued to accrue to him.

"A Great Favor." Evident to all was the fact that Mr. Young, purposely or not, had precisely obeyed Rule No. 4 in the realistic lexicon of How to Become President : Identify yourself early and firmly with a national issue (TIME, Nov. 24). To newshawks who pestered him with blunt questions on the subject of presidential politics, he gave this adroit statement:

"I am not in politics and anyone who prevents me from receiving the Democratic nomination for President will be doing me a great favor. However, I don't think I am in the least danger of getting it. I am not a candidate."

Republican Reaction. Bonus developments followed thick & fast in the wake of Mr. Young's trip to Washington. Ways & Means Republicans under the able leadership of New Jersey's Bacharach went to work on a bill for upping the certificates' loan value. The House Republican leadership (Speaker Longworth, Floorleader Tilson, Rules Chairman Snell) was frankly receptive to any compromise to stave off cash payments though it was denied that the G. O. P. had been inspired by "the Young Plan," that any Bonus Bill would be passed which distinguished between veterans who were needy and veterans who were not.

Secretary Mellon announced: "No compromise measures informally suggested to the Treasury up to the present time have received its approval." And again in the background of all the frantic Bonus proceedings in Congress loomed the possibility of a veto which would pit President Hoover and Mr. Young squarely against each other on a national issue.

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