needed, when we consider the fact that industry is inclined to let employees go because of increasing age and is inclined not to give them an opportunity for reinstatement of employment if they have passed certain ages.

A very careful study of that question was made a couple of years ago by the National Association of Manufacturers and I have prepared a brief resume of their compilation of statistics concerning this matter which I would like to have inserted in the testimony at this point.

The CHAIRMAN. Without objection, so ordered.

(The statement referred to is as follows:)

Workers more than 40 years of age are more highly valued by industry generally than are younger workers, as to their ability, efficiency, cooperation, absence from work because of illness, and lesser number of accidents, according to the results of a broad survey, recently compiled and published by the National Association of Manufacturers.

A study of the factors which have been responsible for increasing unemployment among older workers was suggested to the National Association of Manufacturers by representatives of the Veterans of Foreign Wars, accompanied by representatives of the Disabled American Veterans and American Legion, when they appeared before the resolutions committee of the association at its national convention in New York City on December 7, 1937. It will be recalled that the first result of this contact was the issuance of a bulletin, by the board of directors of such association, in February 1938, in which all employer members were requested to follow the policy of not placing any age limit below that fixed for permanent employment, and of using "ability to perform the task," rather than age, as the test for the selection of employees.

After several conferences between representatives of the three veteran organizations concerned and representatives of the Manufacturers Association, the association decided to send out detailed questionnaires to all of its members. Replies were received from 2,485 of the larger manufacturing companies throughout the Nation, covering more than 2,000,000 employees located in 43 States. One firm expended 700 man-hours of labor in order to compile the information needed to answer the questionnaire.

The results of this survey of workers over 40 have been published in a 68-page booklet, copies of which have been sent out to all national officers, department commanders, adjutants, and employment chairmen of the Veterans of Foreign Wars.

A careful study of the information revealed by this survey would enable employment officers, of the Veterans of Foreign Wars and other veterans' organizations, and public employment officials throughout the country, to convince many employers that it would prove advantageous to them, from a production and profit standpoint, to increase the number of their older employees.

Typical remarks made by many of the manufacturers who were asked about the work habits of older workers, are particularly encouraging, as follows: "The older man is steadier as a worker, more reliable when not under supervision, and usually more responsible."

"We have found men over 40 to be more valuable employees because they generally are more reliable, conscientious, and careful."

"Men over 40 are more stable, more consistent, more resolute, and generally more reliable."

"The worker 40 years or over is more agreeable, more conscientious, and very much more cooperative."

"It is my personal view that on the whole men 40 years old and over produce a more dependable product."

"Our experience indicates that men over 40 years of age are more cooperative, calmer in emergencies, more steady and trustworthy-their value as employees increases with age."

"Employees over 40 rank highest in cooperation and loyalty."

"We have found that men above 40 are generally more reliable than younger men and are infinitely more interested in the success of their employer."

"We consider men over 40 more desirable employees because of their greater responsibility, reliability, and loyalty."

Men 40 years of age and over have a better understanding of the proper relationship between employer and employees.

The older men are steadier workers.

Both men and women 40 and over are the backbone of the company and the best help we have.

We find older men preferable employees.

We would much prefer workers between the ages of 40 and 50, as we find them more faithful and industrious.

Employers were shown to have the following views on the work performance of employees 40 and over as compared with younger employees:

From these figures it may be seen that older workers are valued more highly in all respects above mentioned, except as to their psychological adjustment to new situations. Older workers are less likely to lose time because of illness or because of accidents, are definitely more cooperative, and are also more efficient on jobs for which they have been trained or have had experience than younger workers. Older workers, however, do not as quickly adapt themselves to new types of jobs.

The degree of adjustment to modern industrial operations of workers 40 and over, as compared with younger workers, was rated by the answering employers as follows:

Although there are numerous tables of statistics set forth in this excellent survey, it is believed that the two sets of statistics above furnish the key for all of the other conclusions which were arrived at.

Whenever it is necessary to decrease the total number of their employees, most employers extend a preference of retention to their older workers, on the basis of seniority. Most employers are likely to give preferred reemployment to their former employees when production is again expanded.

New businesses and and heavy production industries, on the other hand, appear to extend preference of original employment to younger men and women. Every change in the processes of business and of industry is therefore apparently scheduled to result in a new influx of younger workers. Older workers excel in the skilled crafts, and younger workers in the unskilled occupations.

That there have been favorable results for the older workers, by reason of the itnerest in this problem on the part of the National Association of Manufacturers, is shown by the fact that, as to its reporting members, for the year 1937, only 28 percent of all employees were 40 and over, whereas, in 1938, nearly 34 percent of all employees were 40 and over. Thus there was an increase of nearly 20 percent in the proportion of older employees for the year 1938 as compared with the year 1937. If, because of intelligent interest in this problem,

this proportionate increase in the number of older employees could be continued during this year and succeeding year, there would be a real hope for the reemployment of many, if not most, of the older workers.

V. F. W. members can do much toward this desirable end by pointing out to employers the many favorable factors revealed in this comprehensive survey by the Manufacturers Association.

That the problem is a serious one is evident when we learn that 45 percent of all male workers and potential workers are more than 40 years of age. An employer is, therefore, doing his share toward the employment of older workers only if more than 45 percent of all of his male employees are more than 40 years of age. Because a proportionate volume of work has not been given to the Nation's older male citizens, including war veterans, during recent years, the V. F. W. 2 years ago first issued the warning to all employers and taxpayers that the inevitable choice which must be made is "jobs or pensions for all war veterans."

On the basis of the results of this splendid analysis by the National Association of Manufacturers, there is reason for believing that an increasing number of employers have and will come to the conclusion that it is advantageous for them to extend employment to more qualified older workers. The motives for doing so are powerful, efficient, and dependable production, fewer labor troubles, increased profits and eventual savings in taxes. (Copies of the booklet survey of Workers Over 40 can be secured at the cost of 20 cents each from the National Association of Manufacturers, 14 West Forty-ninth Street, New York, N. Y.)

Mr. RICE. Section 17, separately by Congressman McCormack as H. R. 7339, would correct a provision which was enacted into law during the first session of the Seventy-sixth Congress, which was favorably reported out by this committee. That is the section which was intended, I believe, in the minds of the members of this committee to increase by $10 per month the amount of the statutory award to those suffering the loss of use of a limb or the loss of limb.

I believe that the members of this committee had in mind that that provision in Public Law No. 198 should apply as to all amputation cases. When administered by the Veterans' Administration, however, we find that its language legally was applicable only as to provisions of the 1933 rating schedule and not as to the provisions of the 1925 rating schedule. Therefore, there are some amputated veterans who found they received an increase of only $1, or $2, or $3 per month, but not $10, as they had anticipated they would get. There are a good many who found that because of the provision they could select to receive the greater benefits receivable under the 1925 or the 1933 schedulue and that they would therefore be unable to get any increased compensation whatsoever on the basis of this provision.

Section 17, separately introduced by Mr. McCormack as H. R. 7339, would correct this and provides that there would be a statutory award of $35 for all such cases for the loss of the use of a limb. Since we cannot help but believe that it was the intention of the committee to put that sort of law into effect last year, we believe the committee ought now to take action to correct the defect which was found in he law which was enacted.

The CHAIRMAN. What we were trying to do was to correct some inequalities. A man losing a hand is just about as bad off as a man who loses his arm above the elbow.

Mr. RICE. Yes, sir.

The CHAIRMAN. If he loses a foot he is just about as bad off as a man who loses his leg above the knee. But in the rating schedule the difference is vast, and it is too great.

Mr. RICE. That is right.

The CHAIRMAN. And you were trying to correct that as to those men who had lost a hand or an eye or a foot or the use thereof, and to merely equalize those benefits.

Mr. RICE. That is what I am driving at. I am sure the committee had in mind to affect all of these cases where they lost the use of a hand or a foot. We hope therefore, that this corrective provision will be enacted into law.

Section 22, separately introduced by Mr. Routzohn as H. R. 7446, is a very brief section which would, however, prove to be very helpful in a good many so-called borderline cases. It would change the definition of misconduct so as to make it applicable only when misconduct is due to felonious misconduct. The present provision of law is rather involved and refers to various kinds of misconductdue to drunkenness, due to gross carelessness, due to venereal disease, etc., etc. We believe that, if a disability was incurred while in military service or in line of duty while in military service, it should be pensionable, unless the disability was due to the veterans' own felonious misconduct.

The CHAIRMAN. Now, instead of saying "felonious," which has a rather broad implication, suppose you were to say "unless it was an offense" for which he would be dishonorably discharged from the army or from the service?

Mr. RICE. The result, I think, would be much the same in most instances. But sometimes there are some capricious decisions made by the Army in discharging persons dishonorably. For example, it could be that a person would be discharged dishonorably because of a leave of absence in going home to a dying mother and I do not think that should be punishable by forfeiture of compensation.

The CHAIRMAN. If he was discharged from the Army, it would be a dishonorable discharge.

Mr. RICE. It would. That is right; it would be a dishonorable discharge. Of course, no veteran with a dishonorable discharge is now eligible to receive compensation. Therefore, such a provision would be a very substantial liberalization, Mr. Chairman.

The CHAIRMAN. If you go ahead and virtually condone these alleged offenses during the war and then when it is over penalize those men because of that, it is just so preposterous to me that I have tried to get a different law ever since I have been in Congress, or since the law was passed.

Mr. RICE. We would be well satisfied with such a definition or liberalization in the law.

The CHAIRMAN. I just made that suggestion. So far as I am individually concerned I would like to see some provisions in the law on that subject in World War veterans' legislation as we have in Spanish-American War veterans' legislation.

Mr. RICE. Right.

The CHAIRMAN. What is that law?

Mr. RICE. The law relative to Spanish-American War veterans at first made them eligible for pension except for disabilities due to their own vicious habits, but now there is no so-called misconduct bar as to their eligibility for pensions.

The CHAIRMAN. Do they have a different construction for SpanishAmerican War veterans than that which they have for World War veterans?

Mr. RICE. Yes, indeed. They have a different construction.
The CHAIRMAN. They are the same human habits.

Mr. RICE. There was a misconduct bar until 1930 and then that vicious-habits bar was removed so far as entitlement to Spanish War veterans' pensions are concerned. There is now no bar whatsoever, except dishonorable discharge.

The CHAIRMAN. What is the provision of law?

Mr. RICE. The law is that if a man has served honorably for 90 days or more during the 1898 war, the Philippine Insurrection, the Boxer Rebellion, or a combination of those services, then he would be entitled to receive a pension for any disability ranging from 10 percent to permanent and total.

The CHAIRMAN. And he was honorably discharged?

Mr. RICE. Yes.

The CHAIRMAN. The same provision ought to be in the World War legislation.

Mr. RICE. We would be very grateful for such a provision in the law. This provision we have suggested would entitle some to benefits who were not given a dishonorable discharge, but not to all of them, and, therefore, your proposal is more liberal than the proposal which we have made. And we would be very happy to have either enacted into law. But we do believe there ought to be a very substantial liberalization on this matter.

Section 23 separately introduced by Mr. Routzohn as H. R. 7947, would make eligible for pension for permanent and total non-serviceconnected disability any war, campaign, or expedition veteran suffering with any permanent and total disability not the result of his felonious misconduct. The same reasoning applies as concerning the preceding section. The one would apply to both pension and compensation cases. The second would apply only to pension cases for permanent and total non-service-connected disabilities.

Section 24, separately introduced by Mr. Grant as H. R. 2772, would provide for the restoration of full compensation to so-called presumptives. The committee has already heard considerable discussion concerning that matter. Let me say that the Veterans of Foreign Wars have for the last several years been advocating that there should be a restoration of the full payment of compensation to so-called presumptives. In other words, if the disabilities are service connected, even under the so-called legal presumption of service connection, they ought to be treated on exactly the same basis. Many inequalities prevail because of the fact that the President's boards of review decided that one case is entitled to a direct service connection where it had previously found a presumptive service connection and in other cases that they are not entitled to it. There are about 27,000 now living who still receive compensation equivalent to 75 percent of the amount to which they would otherwise be entitled, if they were not classified as so-called presumptives. There has been a long delay what was taken away by reason of the so-called Economy Act, and we believe this session of Congress is fully warranted in restoring benefits to this group of badly disabled men, most of them suffering from tuberculosis or N. P. disabilities.

Section 25, separately introduced by Mr. Grant as H. R. 2771, would provide that any reduction of the compensation, pension, or emergency officers' retirement pay of a veteran required under paragraph