The italicized sentence would be substituted for the following sentence as now contained in the veterans' regulation:

"Such pension shall include only payments due and unpaid at the time of death under then existing ratings or decisions."

Prior to the enactment of Public, No. 2, Seventy-third Congress, March 20, 1933, legislation governing payment of compensation to World War veterans and their dependents contained no limitation such as that last quoted above. As a consequence, compensation covering a long period of time and involving considerable sums of moey was frequently paid, based upon ratings made subsequent to the veteran's death. It was largely to obviate this situation that the above-quoted sentence was incorporated in the veterans regulations issued pursuant to Public, No. 2, Seventy-third Congress.

This regulation applied to payments based upon service in the World War, with the exception of compensation payable under Public, No. 484, Seventy-third Congress, as amended (under which law accrued amounts are not payable unless there are no assets to pay the cost of burial), and service in the Regular Establishment from and after April 21, 1898, and service in the Spanish-American War, Philippine Insurrection, and Boxer Rebellion, if pension was being paid under Public, No. 2, and the regulations issued thereunder. Accrued pension due on account of service in the Civil War, Indian wars, or the Regular Establishment prior to April 21, 1898, and the Spanish-American War, where pension was being paid under the laws reenacted by Public, No. 269, Seventy-fourth Congress, is payable under the provisions of the act of March 2, 1895 (28 Stat. 964; 38 U. S. C. 96), which reads as follows:

"The accrued pension to the date of the death of any pensioner, or of any person entitled to a pension having an application therefor pending, and whether a certificate therefor shall issue prior or subsequent to the death of such person, shall, in the case of a person pensioned, or applying for pension, on account of his disabilities or services, be paid, first, to his widow; second, if there is no widow, to his child or children under the age of sixteen years at his death; third, in case of a widow, to her minor children under the age of sixteen years at her death. Such accrued pension shall not be considered a part of the assets of the estate of such deceased person, nor be liable for the payment of the debts of said estate in any case whatsoever, but shall inure to the sole and exclusive benefit of the widow or children. And if no widow or child survive such pensioner, and in the case of his last surviving child who was such minor at his death, and in case of a dependent mother, father, sister, or brother, no payment whatsoever of their accrued pension shall be made or allowed except so much as may be necessary to reimburse the person who bore the expense of their last sickness and burial, if they did not leave sufficient assets to meet such expense."

The present regulation permits payment of accrued benefits after the death of the veteran to a widow or child, provided a rating or decision had been made prior to the veteran's death. The bill would permit a rating, decision, and award to be made after the death of the veteran provided a claim was pending at the time of death and evidence completed within the regulatory period. By removing the present limitation the bill would permit a return to the procedure as it existed prior to July 1, 1933, under the World War Veterans' Act, except that payment would be limited to the class of beneficiaries described in the bill rather than being considered an asset of the veteran's estate, the total amount allowed in any one case would not exceed $1,000, and there would be a time limitation upon the completion of evidence.

While the proposed limitations partially remove the objections to which the former procedure was subject, it is, nevertheless, felt that the regulation in its present form is equitable and should not be disturbed. In this connection, it will be recalled that the widow and children of a veteran who was eligible for pension or compensation at time of death is usually entitled to service-connected death benefits or benefits under Public, No. 484, Seventy-third Congress, as amended. Hence any payment of accrued benefits due the veteran represents a lump-sum award to the widow or child.

With regard to the cost of H. R. 7873, there are no figures available in the Veterans' Administration upon which to base an estimate of its cost.

For the reasons heretofore set forth, the Veterans' Administration is unable to recommend H. R. 7873 to the favorable consideration of your committee. Advice has been received from the Bureau of the Budget that there would be no objection by that office to the presentation of this report to your committee. Very truly yours,

FRANK T. HINES, Administrator.

REPORT OF THE VETERANS' ADMINISTRATION ON H. R. 7874, A BILL TO DEFINE THE TERM "PERMANENT AND TOTAL" DISABILITY AS APPLIED TO WORLD WAR VETERANS

Hon. JOHN E. RANKIN,

Chairman, Committee on World War Veterans' Legislation,

House of Representatives, Washington, D. C.

MY DEAR MR. RANKIN: Further reference is made to your letter dated January 18, 1940, requesting report on H. R. 7874, Seventy-sixth Congress, third session, A bill to define the term "permanent and total" disability as applied to World War veterans, which provides:

"That (1) the terms 'permanent and total' or 'total permanent' wherever used in laws relating to the payment of compensation or pension to veterans of the World War shall be defined as any reasonably permanent impairment or defect of mind or body, or both, which prevents the individual from following a substantially gainful occupation, providing that, without prejudice to any other cause of disability or employability, the permanent loss of the use of both feet, of both hands, or of both eyes, or of one foot and one hand, or of one foot and one eye, or of one hand and one eye, or the loss of hearing of both ears, or the organic loss of speech shall be deemed total permanent disability.

"(2) That paragraph (f), section 1, part III, Veterans Regulation Numbered 1 (a), is hereby amended to read: "The amount of pension payable under the terms of part III shall be $50 monthly.'

Referring to lines 3 and 4 on page 1, and line 3 on page 2 of the bill, the words "permanent and total" and "total permanent" being used specifically would apply technically to any laws pertaining to World War veterans where such exact terms are used. Under the World War Veterans' Act, 1924, as amended, which was restored with limitations by Public, No. 141, Seventy-third Congress, March 28, 1934, and under part III of Veterans Regulation No. 1 (a), as amended, promulgated under Public, No. 2, Seventy-third Congress, these terms appear.

With reference to service-connected disabilities under part I of Veterans Regulation No. 1 (a), as amended, no distinction is made between temporary and permanent ratings, the rating for 100 percent disability being termed "total." However, in view of the fact that the concluding part of section 1 of the bill would include as "total permanent" disability "the loss of hearing of both ears, or the organic loss of speech" and such conditions are already included as "total permanent" disability under Public, No. 141, Seventy-third Congress, there would arise the question as to whether the inclusion of such conditions would affect the provisions of Veterans Regulation No. 1 (a), as amended, part I, governing service-connected disabilities, as well as part III of the same regulation which undoubtedly would be affected by the bill. As to the language used in the first part of section 1, a similar question arises as to the effect thereof on part I of Veterans Regulation No. 1 (a), as amended. For these reasons, to avoid any question of construction, it is suggested that, if further considered, the bill be amended to express more definitely the intent thereof.

A change in the existing law introduced by the bill is the inclusion of the words "or defect" following "impairment" in line 6, page 1 thereof. Under the existing laws compensation is payable in World War cases for serviceconnected disability, and showing of disability is required under part III of Veterans Regulation No. 1 (a), as amended, which provides a pension of $30 per month for non-service-connected permanent total disability. Where disability is superimposed on the defect and is shown to be due to service, or the case meets the requirements of part III of Veterans Regulation No. 1 (a), as amended, benefits are now payable. Experience under the present practice of recognizing aggravation of defect or superimposed pathology, together with the authority granted to the Administrator of Veterans' Affairs in connection with permanent total ratings under part III of Veterans Regulation No. 1 (a), as amended, does not indicate any necessity for the change provided in the bill. Introduction of the term "individual" in lieu of the term "average" in the basic definition of permanent total disability in the opinion of the Veterans' Administration would not have any material effect in the adjudication of claims. The essential question is whether the disability is the cause of unemployability. It is the further opinion of the Veterans' Administration that in the decentralized organization which obtains, it is essential that there be used a rating

schedule based upon average determinations with reasonable latitude for individualism.

Veterans Regulation No. 1 (a), part III, paragraph I (a), as amended, for non-service-connected permanent total disability, provides the following

definition:

"Except as provided in subparagraphs (g) and (h) of paragraph I hereof, no pension shall be payable under part III for permanent disability less than total. A permanent total disability shall be taken to exist when there is present any impairment of mind or body which is sufficient to render it impossible for the average person to follow a substantially gainful occupation and where it is reasonably certain that such impairment will continue throughout the life of the disabled person. Notwithstanding this definition the Administrator of Veterans' Affairs is hereby authorized to classify as permanent and total those diseases and disorders, the nature and extent of which in his judgment is such as to justify such a determination."

As to permanent total disability ratings under the World War Veterans' Act, 1924, as amended, and the Schedule of Disability Ratings, 1925, as restored by section 28 of Public, No. 141, Seventy-third Congress, March 28, 1934, Veterans' Administration Regulation and Procedure, R-1165, provides:

"Disability from an injury or disease will be rated as permanent total under the following conditions:

"(A) STATUTORY.-When a statutory permanent total disability is authorized by reason of 'Loss of the use of both feet, or both hands, or of both eyes, or of one foot and one hand, or of one foot and one eye, or of one hand and one eye, or the loss of hearing of both ears, or the organic loss of speech, or becoming permanently helpless or permanently bedridden'.

"(B) WHEN SHOWN BY EVIDENCE.-When from the evidence submitted it is determined that there is present any impairment of mind or body which continuously renders it impossible for the average man to follow any occupation similar to that of the disabled veteran at the time of enlistment and which is founded upon conditions which render it reasonably certain that it will continue throughout the lifetime of the person suffering from it. The impairment in earning capacity in each individual case will not be considered so that there shall be no reduction in the rate of compensation for individual success in overcoming the handicap of an injury. In arriving at a decision the average impairment in ability to secure employment which results from the service-connected injuries will be considered.

"(1) A permanent total disability may be conceded in a proper case where there are present two or more disabilities, effecting entirely different functions, one of which is 65 percent disabling and which combine by present methods to 85 percent. These evaluations upon which permanent total disability may be conceded are not intended to be rigid unalterable standards. They are cited as illustrative and to be used as guides.

"(2) Permanent total ratings based on single disabilities for which the Schedule of Disability Ratings, 1925, provides specific, lesser ratings, are prohibited. The fact that for most diseases the 1925 schedule permitted a flexible range of ratings extending to total will not be interpreted as authorizing the making or continuance of total disability ratings in the absence of actual total disability, substantially as outlined in R. & P. R-1166 (C), except for the reference therein to specific percentages in the 1933 schedule. The provisions of regulations and schedules under the World War Veterans' Act, 1924, as amended, permitting ratings of temporary total disability on account of hospitalization or home treatment, are not effective in ratings under Public, No. 141, 73d Congress."

Under the provisions of section 202 (3), World War Veterans' Act, 1924, as amended, the loss of hearing of both ears, or the organic loss of speech, is deemed to be permanent and total disabiilty. The maximum rating assigned to either of these disabilties under the Schedule of Disability Ratings, 1933, promulgated under Public, No. 2, and the Veterans Regulations, is 80 percent. World War veterans, however, under the provisions of Public, No. 141, Seventythird Congress, June 30, 1935, are entitled to permanent total disability ratings for service-connected loss of hearing of both ears or organic loss of speech. There are some few World War veterans who have suffered loss of hearing of both ears or organic loss of speech who are entitled to a larger amount under

Public, No. 2, than they would be entitled to under Public, No. 141, by virtue of presumptive service connection, who might be entitled to a total rating under part I of Veterans Regulation No. 1 (a), as amended. In view of the comment regarding need for clasification of the bill no estimate of cost is furnished as to this particular item.

Section 1 of the bill restricts the application of its provisions to World War veterans. Parts I and III of Veterans Regulation No. 1 (a), as amended, apply to both World War veterans and veterans of the Spanish-American War, including the Boxer Rebellion and Philippine Insurrection. The bill would therefore create inequalities between these two groups.

Section 2 of the bill would increase rate of pension for non-service-connected permanent total disability provided by part III, Veterans Regulation No. 1 (a), as amended, from $30 to $50 per month. The increase as provided in the bill would be for application to both World War veterans and veterans of the Spanish-American War, including the Boxer Rebellion and Philippinė

Insurrection.

As of September 30, 1939, the average monthly pension to World War veterans for service-connected disabilities was $40. It will be noted that the proposed increase for non-service-connected disabilities would exceed the average payment for World War service-connected disabilities by approximately 25 percent.

The history of military pensions discloses that over a long period of years the non-service-connected disability grtoup of veterans would become more numerous and require a larger expenditure from the Public Treasury. In the case of the World War, the numbers involved and the high rates of compensation paid for service-connected disabilities have resulted in expenditures during the early years after the war that greatly surpass, and will continue to surpass, those which followed earlier wars.

Prior to the enactment of Public, No. 2, Seventy-third Congress, March 20, 1933, provision was made by the act of July 3, 1930, an amendment to the World War Veterans' Act, 1924, as amended, for the payment of disability allowance to honorably discharged World War veterans who entered service prior to November 11, 1918, and served 90 days or more in the active military or naval service, and who met the other requirements of that act. Benefits were payable at the rate of $12, $18, $24, and $40 per month for permanent disabilities rated at 25, 50, or 75 percent, or total permanent disability, respectively. One of the reasons which led to the enactment of Public, No. 2, was the feeling that the disability allowance law was too liberal and that a retrenchment should be effected in the field of non-service-connected benefits to World War veterans Public, No. 2, repealed the disability allowance provision and under that act and the Veterans Regulations promulgated pursuant thereto provision was made for the payment of non-service-connected pensions to World War veterans only for permanent total disability and at the rate of $30 per month.

Inasmuch as it is believed that the Government's first obligation should be to those disabled in active duty i the military or naval service, and to the dependents of such persons who die as a result of such disability, and bearing in mind that in at least one instance in the past, relief extended to non-serviceconnected groups, as the result of depression, resulted in decreased relief to service-connected groups, as witness the effect of Public, No. 2, Seventy-third Congress, the increase in the monthly pension rate as proposed by the bill from $30 to $50 is not recommended.

It is estimated that for the fiscal year 1941 the bill would provide increased pension for approximately 180 veterans of the Spanish-American War, including the Boxer Rebellion and Philippine Insurrection, at an additional cost of $44,000, and approximately 55,000 World War veterans, at an additional cost of $13,141.000. the total additional cost for the fiscal year 1941 being approximately $13,185,000.

In view of the foregoing, the Veterans' Administration is unable to recommend favorable consideration of this bill to your committee.

Advice has been received from the Director, Bureau of the Budget, that the proposed legislation would not be in accord with the program of the President.

Very truly yours,

FRANK T. HINES, Administrator.

REPORT OF THE VETERANS' ADMINISTRATION ON H. R. 7895, A BILL TO AUTHORIZE WAIVER OF RECOVERY OF PAYMENTS UNDER PUBLIC LAW NO. 484, SEVENTY-THIRD CONGRESS, AS AMENDED, AND FOR OTHER PURPOSES

Hon. JOHN E. RANKIN,

FEBRUARY 29, 1940.

Chairman, Committee on World War Veterans' Legislation,

House of Representatives, Washington, D. C. MY DEAR MR. RANKIN: Further reference is made to your letter dated January 18, 1940, requesting a report on H. R. 7895, Seventy-sixth Congress, third session, a bill to authorize waiver of recovery of payments under Public Law No. 484, Seventy-third Congress, as amended, and for other purposes, which provides:

"That Public Law Numbered 484, Seventy-third Congress, approved June 28, 1934, as amended, is hereby amended by adding a new section thereto, numbered 6, to read as follows:

'SEC. 6. There shall be no recovery of payments heretofore or hereafter made under the provisions of this Act from any person who, in the judgment of the Administrator, is without fault on his part and where, in the judgment of the Administrator, such recovery would defeat the purpose of benefits otherwise authorized or would be against equity and good conscience. No disbursing officer and no certifying officer shall be held liable for any amount paid to any person where the recovery of such amount from the payee is waived under the provisions of this section. This section shall be deemed to be in effect as of June 28, 1934.''

Section 28 of the World War Veterans Act, 1924, as amended, provides :

"There shall be no recovery of payments from any person who, in the judgment of the director, is without fault on his part and where, in the judgment of the director, such recovery would defeat the purpose of benefits otherwise authorized or would be against equity and good conscience. No disbursing officer shall be held liable for any amount paid by him to any person where the recovery of such amount is waived under this section.

"When under the provisions of this section the recovery of a payment made from the United States Government life insurance fund is waived, the United States Government life insurance fund shall be reimbursed for the amount involved from the current appropriation for military and naval insurance. "This section, as amended, shall be deemed to be in effect as of June 7, 1924."

Section 4 of the act of June 9, 1930 (46 Stat. 629; 38 U. S. C. 33), provides:

"SEC. 4. That there should be no recovery of pension payments from any beneficiary of the Bureau of Pensions, who, in the judgment of the Commissioner of Pensions, is without fault, when in the judgment of the Commissioner of Pensions, such recovery would be contrary to equity and good conscience."

The provisions of section 28 of the World War Veterans' Act, 1924, as amended, and the provisions of section 4 of the act of June 9, 1930, were saved from repeal and carried forward by section 7 of Public, No. 2 Seventy-third Congress, in the language of that section which exempted from repeal certain specified statutes and such other sections of title 38 (U. S. C.) as relate to the administration of the laws granting pensions.

Public, No. 324, Seventy-sixth Congress, approved August 7, 1939, provides as follows:

"That no disbursing officer and no certifying officer of the Veterans' Administration shall be held liable for any amount paid to any person where the recovery of such amount from the payee is waived under existing laws administered by the Veterans' Administration.

"SEC. 2. This Act shall be deemed to be in effect as of June 10, 1933." Under the provisions of laws above quoted, the Administrator of Veterans' Affairs has authority to waive recovery of overpayments of death compensation or pension paid under Public, No. 2, Seventy-third Congress, March 20, 1933, and the Veterans Regulations promulgated pursuant thereto, laws restored by Public, No. 141, Seventy-third Congress, March 28, 1934, laws restored by Public, No. 269, Seventy-fourth Congress, August 13, 1935, and laws providing death pension on account of service prior to April 21, 1898. Some of the death pensions in