Mr. DITCHY. I will say this, that I also know that within the last year we have been operating a whole lot of these ships and putting them into ports where they have had to wait from 40 to 50 days at a time for a turn around, when I think the normal times, in order to get them out of the way, they will make the turn around in a great deal less time than that, and be able to earn more.

Tre CHAIRMAN. Do you know that these charges were not made against the operation of the ships?

Mr. DITCHY. I do not know exactly.

The CHAIRMAN. That is true. Do you know that few American ships sailing on the Atlantic Ocean ever made any money, in competition with the ships of foreign nations, in normal times?

Mr. DITCHY. In former years we did. In former years we carried 90 per cent of our own commerce.

The CHAIRMAN. That was in the days of sailing vessels, about the time of the war of 1812.

Mr. CRISP. Then they started this big protective tariff.

The CHAIRMAN. Is that all, my friend?

Now, Mr. Strong is here and wants to be heard.

STATEMENT OF HON. JAMES G. STRONG, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF KANSAS.

Mr. STRONG. Mr. Chairman, we have just heard a roll call from the House, I understand, and I know that you all want to respond. I will not keep you but a minute. I want to go myself. This is the third time I have appeared before this committee in behalf of legislation for the ex-service men. The father of a service man myself, and having my son here as my secretary, we have devoted a great deal of the time of our office to the men who were in the service, and I am very anxious that this Government should always show proper recognition to the men who go out and fight its battles. It has always done so up until this hour, and I do not want to see it fail the men that fought in this war.

I know the proposition up before you men is, what you can do without precipitating a financial crisis. I know, being a member of the Committee on Banking and Currency, of the great interestbearing debt of over twenty-six billions we are undertaking to carry; I know that the deficit in the Public Treasury this year will be over $3,000,000,000, and I know that you men fear the issuance of a large amount of bonds, fearing it will depress the market and bring about a financial panic, which will throw the very men we are trying to help out of work. If that should result, the $300 or $400 or $500 given them would not recompense the soldier for the loss that would befall him, and if a financial crisis is to threaten in this country, I for one do not want to see hasty action.

But, certainly, we should, as soon as possible do something for these men. Now, it is said that there are many of them that do not need it, and that it is true, many are rich men's sons, and many are themselves in good circumstances, but certainly there are many thousands who do need help. I have letters from ex-service men who say that $200 or $300 would help them through a year's schooling, or that they need a little money to help them to get into business, or give them a new start in life.

The $60 we gave them just about bought their first suit of civilian clothes; we should do something worth while.

Mr. GARNER. In line with your thought, how would it do for Congress to say that we will give compensation to those who are in need of it, and then describe the limitations under which they shall receive the funds?

Mr. STRONG. That would be one proposition that might be acceptable.

Mr. GARNER. It has been suggested that the men receiving less than $1,000 a year income or salary shall have something, say $100 or $200 or $400 or $500. Some have suggested so much a month, and some have said a lump sum. Would you say something of that kind would be advisable?

Mr. STRONG. It might be. I would, however, want to consult the men themselves. My boy does not need a bonus of $400 or $500, but there are many boys in my district that do need it, and whom I would like to see have it, and I am very anxious to have this Congress take some action along that line.

The CHAIRMAN. Now, if we are going to apply it only to the men who need it, we had a man here a few days ago, an ex-soldier who has been overseas, who testified that he had been court-martialed four times, and that when he came out of the Army he was in debt to the Government. Now, if we are going to limit it to the men who need something, do you think that a good, sober, sensible fellow who was not court-martialed but was up at the front fighting while this fellow was being court-martialed should go without aid and that we should compensate the fellow who was in jail half of his time? Mr. STRONG. No; certainly not.

The CHAIRMAN. That is what the proposal would mean.

Mr. STRONG. I say something of that kind might be worked out; but I think the ex-service men themselves should be consulted, and, personally, I would like to see every man who served in this war recognized by this Government substantially, if it is possible to do it.

It seems to me, however, that we must figure out some way of meeting this need without embarrassing the Government, without a large issue of bonds, which would be practically an inflation of the currency. I was wondering if we could not issue bonds, to be called exservice bonds, upon a fund set apart for that purpose, and into that fund contribute a tax of some kind. There is no question but what you men on the Ways and Means Committee have had more experience and are better able to judge as to what that tax might be derived from than myself. But I would like to suggest that such a fund might be derived principally from a stamp tax, like we had in the Spanish-American War. I would be glad for my part, as a business man, to pay a tax upon every check, every note, every bond, and every insurance policy to go into a fund to help meet these ex-service bonds, or we might establish a sales tax. Safe business has been made possible substantially by the sacrifice of these men, and I would like to see something of that kind done, and I have come to you to suggest it.

In May I introduced a bill and appeared before you in its behalf, exempting ex-service men from the income tax. It does not seem to me that it is right to ask these men to go out and fight in this war and then when they come back ask them to pay for the powder they

shot away, and I think they ought to be exempted from the payment of income taxes and I hope you will give that bill consideration. It is House bill H. R. 3732, introduced on May 28 last. I have letters from men inside and outside my district suggesting that such a law should be passed. The ex-service men trying to get a start in farming or in business and the boy that draws $1,500 from the Government, or a $2,000 salary, I do not think should be taxed.

Mr. KITCHIN. How about giving them a little more exemption. If a man is single he has a thousand dollars exemption now, and if he is married he has a $2.000 exemption; how about raising the exemption to $2,000 and $3,000, respectively.

Mr. STRONG. I have provided in my bill for an exemption of $5,000 for 10 years. Give them an exemption for a time. I do not think that ex-service men drawing a salary of $1,500 or $2.000 a year should have to make out an income-tax report and pay $40 or $50 back to this Government.

Mr. GREEN. They do not have to pay any such tax unless they have a larger income.

Mr. STRONG. It depends upon what his return is. I know of boys that are paying that.

Mr. GARNER. How much?

Mr. STRONG. $30, $40, $50; men working for the Government in this building, and also young farmers and business men.

Mr. HAWLEY. Would you favor a consumption tax?

Mr. STRONG. I would gladly pay a consumption tax, and I would gladly pay a stamp tax, and I believe the people of this country would willingly pay such a tax if they knew it was to assist the men who fought for them.

Mr. KITCHIN. How about increasing the taxes on large incomes? Mr. STRONG. If you think that is the best thing. You gentlemen ought to know. I do not want to play politics with this question. I want to do what is the best thing to do.

Mr. RAINEY. How about a tax on the so-called war profiteers! We can identify them all right now.

Mr. STRONG. If you can identify them for the purpose of that kind of a tax, I would be very glad to support it, and you could not make it high enough for me. I would take all the profits they made illegally out of this war and give them to these men who won it. Mr. GARNER. The fellow that made one of these cost-plus contracts would surely be one of them at least.

Mr. STRONG. I would be glad to support that proposition.
Mr. RAINEY. We will get some of them.

Mr. STRONG. Seriously, gentlemen, I want to urge this committee to frame a bill to give these boys some back pay. Do not call it a bonus; call it back pay. It is due them.

Mr. GARNER. Do you mean all of them?

Mr. STRONG. I would like to see all of them get it, but if that can not be done, give it to those who need it.

Mr. RAINEY. Would you include the officers?

Mr. STRONG. I do not care about including the officers, who do not need it, but there are many officers that do need it.

Mr. GARNER. You are making a proposition to give it to the men who need it?

Mr. STRONG. I did not make that proposition. That was your proposition. I say I want the boys to have some back pay. I want, first, to consult the boys as to what they want, but give them some just consideration, and give it to them as quick as possible, and if it is necessary to raise the money without issuing bonds upon an already exhausted Treasury, make a special fund, and into that fund raise and pay some special taxes. I do not care whether it is a consumption or sales tax, or a stamp tax, or a tax upon the fellows who have made money out of this war-though that would be the fellow that I would like to see pay; but I want to urge the committee to take action.

Mr. GARNER. May I ask you a question?

Mr. STRONG. Yes, sir.

Mr. GARNER. You said that you want to give the boys what they wanted, but you have not yet ascertained what they want; is that correct?

Mr. STRONG. I want to give them all we can, and I want to give it in a way that will satisfy the majority of them.

Mr. GARNER. Tell me what that is. That is what we are trying to ascertain now.

Mr. STRONG. My dear sir, I am not able to speak for them. Since you ask me, I would think that a flat amount in the way of back. pay is the thing that most of the men want.

Mr. GARNER. What do you mean by a flat amount?

Mr. STRONG. So much per month for the time they served. The Swope bill, on behalf of which I spoke in September, provides for $30 a month up to a year for every man that served in the war. That seems to meet the desires of most of the men who have written me. I have received several petitions for it. Others have written me for $1 a day for the time they served in the Army. Others for $50 per month for a year. But you men are holdings these hearings and you are calling these men before you, and you can judge better than I can as to what most of them want. I simply want to urge action upon you.

Mr. KITCHIN. Out of the 4,800,000 "boys" we have had perhaps half a dozen or a dozen before us. Some want one thing and some another. Some said they represented 200,000 or 300,000, some 500,000, and some that they were speaking for their several organizations, so that we are in a muddle as to what they really do want, but it is my impression that most of them want cash, or as one put it, the "long green."

Mr. STRONG. I think that is true. I think most of them want the money, and I think most of them need it. One suggestion has been made to give them bonds nonnegotiable for three years, but that will not relieve them, because most of them need money now.

The CHAIRMAN. Out of a million bankers we have had some bankers and stockbrokers, all opposed to it.

Mr. STRONG. I understand so.

The CHAIRMAN. One, whose income was over $700,000 last year, was opposed to any bonus to ex-soldiers who received a dollar a day. Mr. STRONG. And probably the way he got that money was from the war won by these same unselfish, brave lads.

Mr. KITCHIN. We have had a gentleman here whose income is up in the thousands and whose salary as an officer of the organization

is, I think, about $6,000, who came here to ask for a bonus for himself and the other men, though he had profiteered out of the war, or his business had made extraordinary profits in spite of himself out of the war. He was a cotton yarn dealer or manufacturer, and he wanted it. So these same fellows who made money out of the war want the cash bonus as well as those who didn't make money, and some do not want it. We have all sides and all classes.

Mr. STRONG. I do not think there is anyone in this country who is worthy of any consideration who does not feel the obligation that this Government owes to these ex-service men and that they should have additional pay as soon as possible. I know the question is how to raise the money we are to give to them, and I thought I would just suggest to you bonds issued upon a special fund to be supplied by a special tax, which, I think, all loyal persons would willingly pay.

Mr. KITCHIN. There is one proposition I think you are sound on, and you may be on all others I have no opinion on them now-and that is that whatever bonus bill we do report out, we ought to support with a special tax to take care of it.

Mr. STRONG. I think that is true.

Mr. KITCHIN. I think you are right about that.

Mr. STRONG. I do not think you ought to run the risk of precipitating a financial crisis and throwing the men we are trying to help out of work, but I do think you could establish a special fund to be supplied by a special tax, and I believe every worthy man and woman will gladly pay it.

The CHAIRMAN. Suppose, my dear friend, that the committee decided that a bond issue maintained either out of a special fund or through the Government would not precipitate a crisis? Mr. STRONG. Then I am in favor of it at once.

The CHAIRMAN. I really sympathize with that poor fellow who was here yesterday whose income was only $750,000 a year. I pity him. He appealed to us not to touch the bond market, because it would ruin this Government and bankrupt the United States. Somebody asked what he thought about the wisdom of issuing bonds, and he said it would be silly, but later the committee developed that he was a stock broker and bond dealer and had only made some half a million last year, for he admitted that the tax on his income brought him within the 72 per cent class. Under the law, he has to have an income of over $500,000 to bring him within the 72 per cent class.

Mr. STRONG. Yes; I would like to take his hide and tallow and sell it to get the money to pay to these ex-service men.

In conclusion, I want to say that there is in the room an exCanadian soldier, Mr. W. H. Wolfe. He is an American and a resident of the District of Columbia. Prior to our entry into the war he enlisted in the Canadian Army and served overseas. On his discharge he was paid on the sliding scale under which Canada remunerated her discharged soldiers. He, having served over two years, received $70 for six months for himself and $30 for six months for his wife, making a total of $600. In addition, he received $50 for clothing and first-class transportation, which included Pullman fare, from the point of his discharge to his home in Washington.