Needy Served First

"A message from the President of the U. S.!" shouted gruff little Bert Kennedy, Doorkeeper of the House of Representatives.

Ceremoniously he swung open the main chamber portal to admit big amiable Maurice Latta, White House clerk. Clerk Latta bowed low from the waist, handed in a paper, bowed low again, vanished. Representatives flocked excitedly into the House, filled its curved rows of black seats. Speaker Longworth drew himself up importantly in his high chair. Everything became quiet. A clerk on the rostrum cleared his throat, began to read the White House document:

"To the House of Representatives. I return herewith, without my approval, H. R. 17054, 'an act to increase the loan basis of adjusted service certificates.'-... A potential cash outlay of about $1,700,000.000. . . . The probable number [of veterans] who will avail themselves of the privilege under this bill will require approximately $1,000.000.000. There not being a penny in the Treasury to meet such a demand the Government must borrow ... or we must needs impose further taxation.

"The sole appeal made for [this bill] is the claim that funds should be provided to veterans in distress. . . . The number of veterans in need of such relief is a minor percentage of the whole. . . .

"We cannot further the restoration of prosperity by borrowing from some of our people to loan to some of our people who are not in need of the money. The theory of stimulation [of business] is based upon the anticipation of wasteful expenditure. If this argument is correct, we should make loans to the whole people. . . . We must not forget the millions of hard-working families in our country who are striving to pay their debts. They, in the last analysis, must bear the burden of increasing Government aid and taxes. It is not the rich who suffer. When we take employment and taxes from our people, it is the poor who suffer. . . .

"I regard the bill as unwise from the standpoint of the veterans themselves and unwise from the standpoint of the welfare of all the people. . . . But of much graver importance is the whole tendency to open up the Federal Treasury to a thousand purposes. . . . Each of them breaks the barriers of self-reliance and self-support in our people.

"Herbert Hoover."

As the clerk concluded, Floor Leader Tilson led a splattering of Republican applause. Cries of "Vote! Vote!'' tilled the air. Speaker Longworth repeated the ancient ritual: "The question is. will the House on reconsideration agree to pass the bill, the objections of the President to the contrary not with-standing?''

After 43 minutes "reconsideration," the House flouted the President by repassing the Bonus Loan Bill to the tune of 328-to-79, a surplus of 56 votes over the required two-thirds majority. Not a single Democrat was among the 79 who supported the President.

Next day it took the Senate three hours' debate to reach a second Bonus vote. The galleries were packed with ex-soldiery. Republican Senator Hastings of Delaware, upholding the President, complained that veterans would "blow in their loans on automobiles and riotous living." He exclaimed: "I do know many ex-soldiers who would steal their certificates from their wives and go out and spend the night with some other woman." Howls and hisses descended upon him from the galleries.

Finally H. R. 17054 automatically became the law of the land when the Senate with 14 votes to spare, overrode (76-to-17) the veto. Only one Democrat--King of Utah--joined the forlorn Republican opposition. President Hoover had suffered his most serious Congressional reversal.

The House and Senate Bonus vote was a triumph for at least three individuals-- Democratic Representative Wright Patman of Texas who started the prairie fire in Congress, National Commander Ralph O'Neil whose American Legion blew the blaze bigger, and Owen D. Young who deserted Big Business' fire-fighting squad.

Tall angular Congressman Patman, 37, a War machine gunner, early last winter began his agitation for Bonus-cashing. A missionary Baptist, he spread his gospel of full and immediate payments through the House when his friends assured him he was only crying in a wilderness. He gave the Republican House leadership a bad scare when he got almost 150 signatures to a petition to force the Bonus bill out of committee and into open debate. His converts gave the Battle for the Bonus its first real strength.

Late in entering the fight, Commander O'Neil made up for lost time by bringing the full political pressure of his huge organization to bear upon Congress. He virtually ordered the measure repassed over the President's veto and then complained that "a bill more liberal could have been enacted without disturbing national finances."

Mr. Young, pleading for "an effort" before the House Ways & Means Committee, contributed that intangible factor of prestige so necessary to start the Republican House machine to legislating in political self-defense.

The provisions of the new law are simple: 1) veterans borrow 50% of the face value of their certificates instead of 22 1/2%; 2) the interest rate is fixed at

4 1/2% ; 3) loans may be negotiated through the 52 branch offices of the Veterans Bureau.

What worried veterans most was President Hoover's statement about "there not being a penny in the Treasury" to make the loans. From a jumble of financial statements these facts emerged: 1) the Veterans Bureau has about $20,000,000 in cash on hand to start making loans; 2) income tax payments up to March 15 will supply enough additional cash to tide the bureau over until the Treasury's March financing; 3) short term loans will raise $200,000.000 in cash which will extinguish an equal amount of securities deposited in the $750,000,000 bonus reserve fund; 4) another $200,000,000 will come in the June financing.

Five minutes after the Senate made H. R. 17054 into law, the Veterans Bureau mailed out its first loan check at the new rate--$431.50 to a needy Baltimore veteran who wanted to have a sick son operated on. Lines quickly formed throughout the land before Veteran Bureau branches. Heading the Washington queue of loan applicants was Charles P. Ruby who got himself into the newspapers and in to breakfast with President Hoover by being first in the White House reception line on New Year's Day (TIME, Jan. 12).

President Hoover took his defeat with good grace. He announced the Government's loan policy: "Complete priority to applications from veterans who are in need." Commander O'Neil urged legionaries to let those in distress get their money first. Veterans Administrator Hines warned that a full loan on which a veteran paid no interest would virtually eat up the face value of the certificate in the 15 years before it matured. Wall Street recovered from its spasm of fear and began to agree with out-of-town businessmen that a billion dollars deflected into retail trade, into new automobiles, new clothes, new necessities might, after all, give Industry a helpful shove.

*To veto a measure all a President has to do is to withhold his signature and return it to the House in which it originated. The Constitution requires him to state his "objections" which compose his veto message.

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