for said amounts may be used by the farm-loan banks as security for the farm-loan bonds, the same as notes made by other borrowers, and a second mortgage shall be taken upon the land and the permanent insured improvements thereon, to secure a second loan evidenced by a note for the remainder of the loan in each case, in an amount in the aggregate not to exceed 100 per cent of the value of the land and the permanent insured improvements thereon, which said second mortgages shall be held by the farm-land bank of the district in which the land and improvements so mortgaged are located, and collections shall be made on them, both as to principal and interest, the same as notes secured by first mortgages; and the United States shall issue its bonds, which shall be denominated 'soldiers' bonds,' to such an amount as may be necessary to make the proceeds equal the amount of the second mortgages, which said bonds shall be nontaxable and bear interest at a rate not to exceed 4 per cent and be sold for not less than par value, and the money shall be loaned to said honorably discharged soldiers, sailors, and marines at the same rate as paid upon the notes secured by the first mortgages, and the proceeds derived from the payment of the notes secured by the second mortgages shall, when collected, be used for the payment and retirement of the Government bonds herein authorized to be issued: Provided, however, That said second loan shall be made only to those honorably discharged soldiers, sailors, and marines who carry life insurance under the war-risk insurance act approved October 6, 1917, and acts amendatory thereof, in full force and effect, which shall be assigned and held as additional security for said second loan, and any policy that has lapsed because of the nonpayment of the premiums thereon may be reinstated within six months after the approval of this act by the payment of all back premiums due

thereon.

"In making said appraisal the value of the land for agricultural purposes shall be the basis of appraisal and the earning power of said land shall be a principal factor. "A reappraisal may be permitted at any time in the discretion of the Federal land bank, and such additional loan may be granted as such appraisal will warrant under the provisions of this paragraph. Whenever the amount of the loan applied for exceeds the amount that may be loaned under the appraisal as herein limited, such loan may be granted to the amount permitted under the terms of this paragraph without requiring a new application or appraisal.'

SEC. 3. That section 15 of said act shall be amended by adding at the end of said section the following paragraph:

"Each farm-land bank in its respective district is authorized to make loans to honorably discharged soldiers, sailors, and marines on farm lands through agents appointed by it and approved by the Federal Farm Loan Board, which agents may be other than duly incorporated banks, trust companies, mortgage companies, or savings institutions chartered by the State in which they have their principal office." SEC. 4. That in the event any honorably discharged soldier, sailor, or marine who served in the war with Germany does not want to take advantage of the provisions of this act and borrow money for the purpose of buying farm lands, but desires to borrow money for the purpose of acquiring a home in which to live in a city or town, there may be loaned to him for such purpose, under such rules and regulations as the Secretary of the Treasury may prescribe, out of the proceeds derived from the sale of soldiers' bonds authorized to be sold by section 2 hereon, in an amount not to exceed $2,500, at the same rate and upon the same terms and conditions of payment as may be made to soldiers, sailors, and marines who purchase farm lands.

SEC. 5. That all farm lands or homes in cities and towns purchased or built in whole or in part with money secured as provided in this act shall be nontaxable for a period of five years, providing the same is owned and occupied by the original soldier, sailor, or marine who borrowed the money upon the property. SEC. 6. That the short title of this act shall be the "Soldiers' Home Act."

SUMMARY.

To summarize: This bill, first, gives the returning soldier the preference right for two years to enter the remaining public lands and authorizes the waiving of the time limit of residence.

Second. Amends the farm loan act so as to permit two loans to be made to returning soldiers, aggregating not to exceed 100 per cent of the value of the land and the insured improvements through a first and second loan secured by the land and an assign

ment of the soldier's insurance. The soldier can borrow as much as $10,000 from 5 to 40 years at not to exceed 5 per cent interest. Third. Those soldiers not desiring to purchase farms can borrow not to exceed $2,500 to build or acquire homes in cities or towns. Fourth. All property upon which money is borrowed is exempt from taxation for a period of five years.

Fifth. No soldier need leave his own community to receive the benefits of this bill.

(Whereupon, at 4.45 o'clock p. m., the committee adjourned until 10 o'clock a. m., Thursday, March 11, 1920.)

PART 8.

SOLDIERS' ADJUSTED COMPENSATION.

COMMITTEE ON WAYS AND MEANS,

HOUSE OF REPRESENTATIVES,

Washington, D. C., Thursday, March 11, 1920.

The committee this day met, Hon. Joseph W. Fordney (chairman) presiding.

STATEMENT OF HON. JOHN N. TILLMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARKANSAS.

Mr. TILLMAN. Mr. Chairman and gentlemen, I do not want but very little time. My bill is No. 12582, and it is similar to most of the other bonus bills. It provides for the issuance of the bonds to each soldier who served as much as 30 days in the Army; it provides for the payment of $50 per month for the number of months served, and provides for the issuance of bonds to him by way of compensation or adjustment of his services, and it looks to the raising of the revenue by means of a tax upon luxuries.

I want to rewrite it and insert more luxuries than I have done already. These luxury stamps are to be known as "soldier bonus stamps," or "soldier payment stamps."

I think the committee should report a new bonus bill for the soldiers. I do not think we can very well afford to go before our people, after we have been voting for a $240 bonus annually for Government clerks who stayed in Washington during the war and put in 7 or 8 hours a day, and not give a larger bonus or an adjustment of pay to the soldiers who fought for their country or offered themselves as willing to fight for it.

I am aware of the fact that the Nation is in a serious condition financially, but I believe that if we can collect this money from luxuries such as cold drinks and tobaccos, fine clothes and jewelry, and things of that character as provided in my bill that it would not be a very great burden and, in my judgment, these taxes so imposed and collected ought to be sufficient to retire these bonds in a short time.

I provide in this bill that these bonds shall draw 4 per cent, which is a less rate of interest than the 44 per cent drawn by the other bonds.

Mr. HAWLEY. Tax free?

Mr. TILLMAN. Yes, sir. That is about all I desire to say. I am very much obliged to the committee for this hearing.

Mr. YOUNG. If all the other gentlemen who have bills here will show the same consideration for this committee, we will get through before Christmas.

Mr. TILLMAN. I have had to listen at great length to many Members who have appeared before my committees from time to time, and the longer I serve here the more I appreciate brevity in speech. Mr. GARNER. You may file an additional statement if you so desire.

Mr. TILLMAN. Yes; I will do that.

STATEMENT OF HON. JOHN W. SUMMERS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON.

Mr. SUMMERS. Mr. Chairman and gentlemen, on February 13, I introduced a bill, H. R. 12505, which is a soldier compensation bill, and provides a bond of $25 for every one-half month or major fraction thereof during the term of service, exclusive of the first 60 days. I divided it into the half month, making that the unit, because it permits the issuance of $25 bonds and multiplies thereof, and in no case will a soldier receive more than 7 days compensation beyond the time he has served, and in no case would a soldier be deprived of more than 7 days pay, whereas if you make the month the unit, the man who served 6 months and 1 day and the man who served 6 months and 30 days would receive the same, and it did not seem to me, since you are basing it in most of these bills on the actual service, that that was quite a fair and equitable proposition for the soldier.

My bill provides that this amount shall be paid in addition to all other compensation and allowances heretofore authorized by law. I believe that that should be amended so as to read, "Upon application therefor."

These bonds are to bear 4 per cent interest and to be dated as of March 1, 1920. This bill excludes those who did civilian work at civilian pay after being inducted into the service. I provide for bonds instead of cash, because I do not believe that a cash settlement would be possible to attain at this time, although I would be very glad for the boys to have the cash, because cash is the thing that probably most of them need at this particular time.

Mr. TREADWAY. Do you think it is just as easy to provide cash as bonds?

Mr. SUMMERS. If you issue bonds to the soldier himself, then he may sell that bond, or he may retain that bond for 10, 15, or 20 years, and it does not put the strain on the Federal Treasury.

Mr. TREADWAY. You say that they want the cash now. Suppose they at once realized on the bond, what would be the difference, whether the Government issued it or the men themselves sold it?

Mr. SUMMERS. Well, I think it would be very different, because you would have, even in that case, probably 4,000,000 of men presenting a few bonds, probably to somebody in the family, instead of floating a large bond issue through the regular channels, and having a big flurry in financial circles, and that sort of thing, which you would have by the floating of the bonds by the United States.

Mr. TREADWAY. Would it be necessary to assume that the greater number of them, admitting, as you say, that they need the cash now, would float them in some way or other? Would they not get into the market, and the effect on the market be practically the same whether you make this payment in bonds or in cash?