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1302. That unless otherwise herein specially

2 provided, this Act shall take effect on the day following

3 its passage enactment.

Passed the House of Representatives May 23, 1917.

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FAMILY ALLOWANCE, INDEMNITY, AND INSURANCE FOR OFFICERS AND ENLISTED MEN OF

THE ARMY AND NAVY

CORRESPONDENCE BETWEEN PRESIDENT WILSON AND HON. W. G. MCADOO, SECRETARY OF THE TREASURY, RELATING TO THE BILL PROVIDING FOR FAMILY ALLOWANCES, INDEMNIFICATION, REEDUCATION, AND INSURANCE IN BEHALF OF OFFICERS AND ENLISTED MEN OF THE ARMY AND NAVY OF

THE UNITED STATES

PRESENTED BY MR. FLETCHER
AUGUST 10, 1917.-Ordered to be printed

WASHINGTON
GOVERNMENT PRINTING OFFICE

SD-65–1–vol 11-15

FAMILY ALLOWANCE, INDEMNITY, AND INSURANCE FOR OFFICERS

AND ENLIS TED MEN OF THE ARMY AND NAVY.

Correspondence between President Wilson and Hon. W. G. McAdoo, Secretary of

the Treasury, relating to the bill providing for family allowances, indemnification, reeducation, and insurance in behalf of officers and enlisted men of the Army and Navy of the United States.

THE WHITE HOUSE,

Washington, August 7, 1917. MY DEAR MR. SECRETARY: I have examined the inclosed papers very carefully and take pleasure in returning them with my entire approval Faithfully, yours,

WOODROW WILSON. Hon. WILLIAM G. McAdoo,

Secretary of the Treasury.

THE SECRETARY OF THE TREASURY,

Washington, July 31, 1917. DEAR MR. PRESIDENT: In accordance with your direction, I have made a careful study of the question of compensation, indemnity, and insurance for the officers and enlisted men of the military and naval forces of the United States.

In this work the Treasury Department was represented by Assistant Secretary Rowe; Mr. William C. DeLanoy, Director of the War Risk Insurance Bureau; and Mr. Hendon Chubb, chairman of the advisory board of that bureau.

I have had the cordial cooperation of the committee on labor of the advisory commission of the Council of National Defense, Mr. Samuel Gompers, chairman. Mr. Gompers appointed a special subcommittee on compensation for enlisted men and ther dependents, of which the Hon. Julian W. Mack, United States circuit judge, was made chairman.

The bill which I am submitting for your consideration was drafted by Judge Mack. Capt. S. H. Wolfe, detailed by the Secretary of War, both to the committee on labor and to this department for cooperation in the work, has been very helpful. Representatives from other departments, as well as an advisory draft committee of the committee on labor, have assisted. The

Department of Commerce was represented by Assistant Secretary Edwin F. Sweet, the Navy Department by Máj. Henry Leonard, and the Department of Labor by Miss Julia Č. Lathrop.

The advisory committee included Mr. P. Tecumseh Sherman, Mr. J. W. Sullivan, Mr. Frank Whiting, Mr. F. Spencer Baldwin, and Mr. D. L. Coase, and was aided by Mr. V. Everit Macy, Mr. A. Parker Nevin, and Dr. Lee K. Frankel, members of the executive committee of the committee on labor, and others. The legislative drafting bureau, through M. Beeman, also rendered valuable aid.

After Judge Mack had completed a revision of the bill I submitted the measure to the advisory committee of insurance representatives appointed as a result of the insurance conference held July 2. This committee considered it over a period of two days and reported its general approval of the several parts of the bill, except that providing for Government insurance. They made a number of suggestions of change in details, some of which have been accepted. They opposed, however, the grant of any Government insurance over and above the compensation, on the ground that the other provisions were liberal enough and might be made more liberal in ways suggested by them. They favored, over and above compensation, the payment by the Government of $1,000 in each case of death during service, or within five years after discharge from the service, to such beneficiary as the 'man may nominate or to his estate in lieu of insurance.

One of their fundamental objections to the proposed plan of in surance whereby any man in the service can purchase from $1,000 to $10,000 of insurance was that this gave an opportunity to the wealthier men to get something which the poorer men could not obtain. They admitted that they had failed to ascertain the premium rates to be charged under the plan contemplated. This objection is not tenable, because the president of the Actuarial Society of America stated in their presence, in response to my question, that the premium rate to be made by the Government during the war would be between $7 and $8 per $1,000 of insurance. This rate would make the cost of $10,000 insurance only $80 per year

:-and only $40 per year for half that amount-and would enable practically every private to take the maximum amount.

I realize that the cost involved in the promulgation of such a comprehensive plan is a most important factor to be considered. Actuarial estimates were submitted to me. These estimates are necessarily of a tentative character owing to the fact that it is impossible to secure accurate data upon which to base calculations. After careful consideration of these estimates, and after consultåtion with Capt. S. H. Wolfe, of the War Department, one of the leading actuaries of the country, I have reached the conclusion that if the bill is promptly enacted into law the total expenditure for the first and second years will be as follows:

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I have not attempted to estimate the cost for the third year because it is difficult to construct at this time even reasonable assumptions for that year.

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