This attitude applied to the plan of
lending to former soldiers 50 per cent,
of the amount of the certificates. It
was estimated that if the banks con
sented to use their resources for such
loans a sum approximating |1,000.000,
000 would bo tied up for three years,
j because the lending banks, under the
measure, could not begin to collect
t'rom the Government for a three year
I period.
I The opinidn was unanimous that
1 such an operation would cripple busi
iness; that bank credit facilities would
be forced into a frozen condition like
that of last year; that interest rates
would rise and the Treasury's vast re
funding transactions, which will in
volve more than $6,000,000,000 of Vic
tory notes, savings certificates, Ac.,
would be hampered grievously.
Opinion of George E. Roberta.
1 George E. Roberts, vice-president of
the National City Bank, summed up the
banking point of view in this way:
"The proposal would hav? the same
effect upon the money market as if the
Government borrowed the money itself
I and lent it to the soldiers."
i Other bankers echoed the same opin
ion and noted that, in essence, the new
program harked back to the scheme
which was tabooed by Presieent Har
ding and Secretary Mellon, when the
. Congressional bonus partisans sought to
float an issue of bonds to raise bonus
money, in some quarters it was said
flatly that the banks would not lend
| money on bonus certificates, for the
; reason, among others, that bank facil
ities never were Intended to carry so
heavy a load of collateral which had no
cash value until after three years.
