To the House of Representatives:
I return herewith, without my approval, H.R. bill 9870, entitled "An Act to provide for the immediate payment of World War adjusted service certificates, for the cancelation of unpaid interest accrued on loans secured by such certificates, and for other purposes."
On May 22, 1935, in disapproving a bill to pay the bonus in full immediately instead of in 1945, I gave in person to a Joint Session of the Congress complete and explicit reasons for my action.
The bill I now return differs from last year's bill in only two important respects: first, it eliminates the issuance of unsecured paper currency to make the payments required and substitutes interest-bearing bonds, which, however, may be converted into cash for face value at any time; second, it adds $263,000,000 to the total payments by forgiving interest after October 1, 1931, on amounts borrowed.
In all other respects, the circumstances, arguments and facts remain essentially the same as those fully covered and explained by me only eight months ago.
I respectfully refer the members of the Senate and of the House of Representatives to every word of what I said then.
My convictions are as impelling today as they were then. Therefore I cannot change them.
January 27, 1936. Statement on the Payment of the Soldiers' Bonus.
In view of the fact that Congress has enacted the law authorizing the exchange of Adjusted Service Certificates for bonds, the President indicated today to the Veterans Administration and the Treasury Department that he desired the provisions of the new law carried out as expeditiously as accuracy will permit. The President also indicated that the magnitude of the administrative task of carrying the provisions of the new law into effect was so great that patience should be exercised in the matter.
The President was advised that more than seven million interest calculations will be necessary and that it will require between 2,500 and 3,000 additional personnel working for approximately six months to do this job. It should be remembered that the amount due each individual veteran must be separately worked out for each case. The additional personnel to handle this enormous figuring and clerical job must, under the law, come from the civil service rolls.
Application blanks will be available in all regional offices of the Veterans Administration and in the hands of Service Organizations within the next two or three days. If the veterans will keep in mind that the bonds are to be issued dated June 15, 1936, and after filing their applications will refrain from writing follow-up letters, they will greatly assist in the prompt administration of the new law.
January 27, 1936. Statement on Preserving Soldiers' Bonus Bonds.
The National Commanders of the three major ex-service organizations called upon the President today to assure him that they would do everything within their power to persuade veterans to retain the bonds issued to them in lieu of their Adjusted Service Certificates, unless they expected to use the cash for some permanently useful purpose.
The President, as well as the Commanders of the ex-service organizations, feel that the veterans should consider first of all the protection of their families. Immediate and urgent need for funds offers, of course, a valid reason for cashing the bonds.
In the same way, the paying off of indebtedness is wholly reasonable, just as using the cash for something of permanent value such as a new home or the definite improvement of an existing home, would be reasonable.
What the President and the Commanders were fully agreed on, however, is that every effort should be made by the veterans, by their organizations and by all who have their welfare at heart, to prevent the frittering away of cash obtained from the bonds. Permanent advantage as opposed to wholly temporary pleasure should be the criterion.
Those who keep the bonds or any part of them not only can get ready cash at any time if necessary, but while they hold these nontransferable bonds they will receive 3 percent interest on the safest imaginable investment. They are true "Thrift Bonds."
The President and the Commanders feel confident that very many veterans will keep these Government bonds in whole or in part for long-range protection of themselves and their families.
February 26, 1936. Veto of Crop Production Loans Bill.
To the Senate:
I return herewith, without my approval, S. 3612, a bill entitled "To provide loans to farmers for crop production and harvesting during the year 1936, and for other purposes."
This bill authorizes an appropriation of $50,000,000 from the general fund of the Treasury for loans to farmers during the year 1936 for production of crops—principally seed loans.
In approving the bill providing $40,000,000 for crop production loans for 1934, I stated that I did so on the theory that it was proper to taper off the crop loan system, which had been initiated on a large scale as early as 1931, rather than to cut it off abruptly, particularly since such loans would serve a useful purpose in aiding certain farmers unable to qualify for crop production loans through the newly established farmers' production credit associations, and that the 1934 loan by the Government should thus be considered as a tapering-off loan.
It is true that I gave my approval to a $60,000,000 crop production loan for 1935, but this loan was primarily for relief purposes principally in the drought-stricken areas, and I recommended to the Congress that the cost of such loans should properly be defrayed from the appropriation for relief purposes. Accordingly $60,000,000 was reappropriated from unobligated balances under allocations from the appropriation of $525,000,000 for relief in stricken agricultural areas contained in the Emergency Appropriation Act passed the previous year. In my budget message, transmitting the 1937 Budget, I stated:
"If the Congress enacts legislation at the coming session which will impose additional charges upon the Treasury for which provision is not already made in this Budget, I strongly urge that additional taxes be provided to cover such charges."
No provision was made in the financial program for the fiscal year 1936, or the fiscal year 1937, for additional crop loans, and, notwithstanding my budget statement, quoted above, the Congress by this bill authorizes an additional draft upon the Treasury for $50,000,000 for new crop loans, without making provision for any revenue to cover such loans.
However, while I am returning this bill without my approval, I recognize that there still exists a need for crop production loans to farmers whose cash requirements are so small that the operating and supervisory costs, as well as the credit risk, make credit unavailable to them at this time through the usual commercial channels and who, unless extended assistance of this character, would no doubt find it necessary to seek some other form of relief from the Government. This is particularly true with respect to those areas in which unusual conditions prevail because of drought, dust storms, floods, rust and other unforeseen disasters.
I fully agree with the Congress that provision should be made for such. borrowers during the year 1936, but I feel that other borrowers should seek credit elsewhere.
I am convinced that the immediate and actual needs to which I have referred can be met during the year 1936 by an expenditure of funds materially less than that proposed in the bill under discussion.
Furthermore, these needs can be met, without the necessity of enacting authorizing legislation, through an allocation of funds by me from the appropriation provided in the Emergency Relief Appropriation Act for 1935, which appropriation, I am informally advised by the Comptroller General of the United States, can be utilized for such loans as I might indicate by Executive Order to be desirable and necessary for relief measures.
I believe, therefore, that a special appropriation by the Congress at this time is both inadvisable and unnecessary. That being so, and in the absence of such legislation, I proposed in order to meet this need to issue an Executive Order within the next few days.
March 9, 1936. Letter on Crop Production Loans.
My dear Senator:
This is in reply to the letter of March 5, 1936, addressed to me by yourself and other members of the Senate Committee on Agriculture and Forestry, with respect to the allotment of funds under my Executive Order of February 28, 1936, for the purpose of making loans to farmers during the year 1936 for production of crops.
I note that you and your committee members are of the opinion that at least $28,500,000 should be immediately allotted for the making of these loans and are requesting that this be done.
In my Executive Order I set aside, or earmarked, not to exceed $30,000,000 for this purpose, of which $7,000,000 was immediately allotted, and I stated that additional allotments would be made from time to time as might be necessary. I propose to carry out this program. The Governor of the Farm Credit Administration advises me that an additional $13,000,000 will be required on or about March 20th, at which time I shall cause that sum to be made available. He further advises that additional funds may be required on or about April 10th, at which time I shall take the necessary action to see that such amount as may be shown to be necessary is supplied. I cannot see why this arrangement should not be satisfactory to all concerned.
It is not practicable to make an immediate allotment of all of the funds estimated to be required, since it is necessary to follow the routine of drawing in unobligated balances from various allotments of emergency funds and making them available for the making of crop production loans. This will be done, of course, as rapidly as possible and in ample time to meet the needs of the Farm Credit Administration.
I trust that the foregoing will be sufficient to assure you and the members of your committee that adequate provision will be made for providing funds for the making of the loans in question as the need for them becomes necessary.
Honorable E. D. Smith,
Committee on Agriculture and Forestry,
United States Senate.