We concur entirely in the statements made by Congressman Maas and Mr. Chittenden concerning the merits of the bill as now written. The CHAIRMAN. Mr. Rice, will you please leave copies of your amendment with the committee?

Mr. KELLER. It seems to me where men have contributed out of their own earnings or their own receipts for their own future security they ought not to have that advantage taken away from them under any conditions.

Mr. RICE. That is right, sir. We agree with that. The amendment that we propose would leave the language in this bill as it now is and in effect provide that there should be no reduction as to them.

Mr. KELLER. I am not so sure as to the amendment because I have not thought it all through. But this other thing keeps sticking in my mind, that if I go along for a number of years and contribute to life insurance or to anything else, as nearly all of us have done, I think we ought to have the advantage of that under all conditions. If that is provided for under the rules, then I am for that rule.

Mr. RICE. Of course, this bill should be further amended to change the figure of $15, wherever it appears, to the figure of $25, and to change the figure of $6 to $25. That would mean, as to those who are members of the United States Soldiers' Home in Washington, D. C., or members o fthe Naval Home in Philadelphia, that they would have no reduction whatsoever. But as to others, we propose that the reduction should not go below $25 a month. That would be in accordance with the principle which you have just enunciated. Mr. SCHAFER. I would like to ask one question on that $25. We have, let us say, a single man getting $100 a month in benefits from the Government, and he is maintained in the Soldiers' Home. Under your proposed amendment you maintain a man without dependents in the Soldiers' Home and pay him $25 a month

Mr. RICE. That is right, sir. He would only be entitled to $25 for a service-connected disability.

Mr. SCHAFER. How about a man with a non-service-connected disability; how much would you give to him?

Mr. RICE. If it is permanent and total disability he would be entitled to $30, and he would be reduced to $6 per month if he were put into a Government institution.

Mr. SCHAFER. You would leave that $6 as it now is.

Mr. RICE. No, sir; that would be increased to $25 in accordance with the proposal made. As to the veteran with a partial non-serviceconnected disability, he does not now receive any pension, and, therefore, there would be no deduction.

Mr. SCHAFER. A man with a disability who is getting $30, a man without dependents in the soldiers' home, would receive how much? Mr. RICE. What was that, sir?

Mr. SCHAFER. A single man without dependents, who has a disability allowance of $30 a month because of nonservice disability. Mr. RICE. Under our proposal he would get $25 a month.

Mr. SCHAFER. Do you think that is a fair proposition when we consider the great many benefits which the veterans had prior to the Economy Act which have not been restored, and when we consider the financial condition of the country? Don't you think it would be far better to leave this reduction stand and expand

the benefits when we have additional funds for more meritorious service-connected cases?

Mr. RICE. As a matter of fact, let me say that prior to the Economy Act that man was receiving $40 a month.

Mr. SCHAFER. That is correct. I have in mind the man who served 95 days in a camp and, who, after the war becomes totally disabled and gets $30 a month disability allowance. Is the Government going to maintain him in an institution and also pay him $25 a month. almost the full amount of the award, when he has no dependents, and pay a service-connected totally disabled man without dependents the same amount.

Mr. RICE. If the Government would pay him $60 a month for a disability which makes him unemployable, such as is now paid to a veteran of the Spanish-American War-a totally disabled person unable to earn a living-these governmental institutions would be able to weed out many of the veterans now there and thus save considerable money in the cost of furnishing domiciliary care, so far as that group is concerned.

Mr. SCHAFER. That sounds all right; but you have to study all sides of the question. Dr. Townsend's $200 a month for all of our elderly people sounds O. K. It would, however, lead to bankruptcy and inflation and the pension checks would be about as worthless as the 468 billion in inflation German marks and Russian rubles that I now have in my office.

Mr. RICE. I am not advocating the Townsend plan and am not condemning it, nor do I think it is pertinent to this matter.

Mr. SCHAFER. The Government has to run on a budget, does it not?

Mr. RICE. Yes, sir; that is true.

Mr. SCHAFER. No government can continue indefinitely to spend $2 and take in 1, can it?

Mr. RICE. I agree with that.

Mr. SCHAFER. In that budget there will be a certain amount that Uncle Sam will be expending for veterans' benefits.

Mr. RICE. Yes, sir; that is right.

Mr. SCHAFER. Do you not believe that there are a great many places where Uncle Sam can extend veterans' benefits and do more justice than by paying $25 a month for nonservice disabilities to a man who has no dependents, and who is being cared for in his institution?

Mr. RICE. Exactly so. I do believe it. That is why I mentioned the fact that we strongly believe that any World War veteran or any veteran who is so disabled as to be unemployable should be entitled to a pension of $60 a month.

Mr. SCHAFER. How much would that bill cost?

Mr. RICE. Perhaps a hundred million dollars or 200 million dollars a year; but it would reduce the amount needed to be expended through other forms of governmental pump priming, such as the W. P. Ã., P. W. A., N. Y. A., and so forth.

Mr. SCHAFER. You would pay the man a pension in spite of the fact that he might have had only 95 days service in a camp?

Mr. RICE. If they had become unemployables they would become a burden on their community and would have to be taken care of

by society. That burden should be assumed by the Federal Government rather than by local governments and States.

Mr. KELLER. Isn't that true of every other American citizen?

Mr. RICE. You are trying to get me over onto the Townsend plan discussion again.

Mr. KELLER. No; not a bit. But I was trying to see if I could get clearly the application of the principle that you just now started, which seems to be a fair one; but it applies as well to a citizen not a soldier.

Mr. RICE. The social-security benefits had their precedent in the benefits to veterans?

Mr. KELLER. Yes; we were wise enough to apply it to everyone. Mr. RICE. Let me say first, Mr. Congressman, that veterans served the entire country in its most hazardous employment-military_and naval service and not merely local communities and States. Such Federal employment of veterans constitutes a very big difference between them and other needy citizens generally. Secondly, let me say that disabled handicapped veterans, as well as the dependents of deceased veterans, are now a burden upon their respective local communities and States. If that burden should be transferred from their local communities and States to the Federal Government, where it properly belongs, then they would be converted from local liabilities into local assets.

Their respective States would thus be enabled to provide more adequate public assistance benefits for other aged, destitute, and dependent citizens, which, in turn, would entitle such States to greater amounts of matched funds from the Federal Social Security Board, thus increasing the purchasing power in every State, (1) by reason of such pensions direct to veterans and their dependents, and (2) by reason of the increased social security benefits to other destitute citizens. In other words, by having the Federal Government assume the sole responsibility and financial burden of caring for disabled veterans and the dependents of deceased veterans, State and Federal matched social security funds will thereby be enabled to provide more liberal old-age pensions for other citizens and more liberal aid to dependent children, aid to the blind, and so on. Federal pensions to veterans and their dependents will thus directly result in raising and equalizing social security benefits for other aged and needy citizens, without increasing the load upon organized society. I thank you, gentlemen.

The CHAIRMAN. Mr. Updike has a statement which he would like to make.

STATEMENT OF RALPH E. UPDIKE, NATIONAL LEGISLATIVE

OFFICER, NATIONAL ASSOCIATION OF REGULARS

Mr. UPDIKE. Mr. Chairman and gentlemen of the committee, my name is Ralph E. Undike, and I am here representing the National Association of Regulars, an organization composed of those who serve and who have served in the Army, Navy, Marine Corps, and Coast Guard, and having its national headquarters in the Victor Building. Washington. D. C. We were chartered under the laws of the District of Columbia in the year 1936, and now have membership in every State in the Union and 12 foreign countries.

In connection with H. R. 901, I wish to state that the organization which I represent has always taken an opposite view to that of the Veterans' Administration which contends that the U. S. Naval Home and United States Soldiers' Home are being maintained in part at least out of Government funds. We hold that the Veterans' Administration's rulings in this matter are both arbitrary and capri

cious.

Regarding the United States Soldiers' Home, it has been shown that the property was originally made up of five parcels of land, some of which was purchased and some donated on the condition that this land would revert to the heirs of the original owners should the Government ever attempt to dispose of the property. There is also the matter of $118,791 which this Government levied against Mexico after the War of 1834 "for the benefit of United States soldiers engaged in that war." A small unexpended balance of that fund was donated to the home in the year 1851. This money was levied against Mexico for a distinct purpose and even though it first went into the United States Treasury it did not lose its identity, and was not in any sense of the word an appropriation by the Government for the Soldiers' Home.

At the present time enlisted men of the Army have 25 cents per month deducted from their pay for the Soldiers' Home fund, and men of the Navy 20 cents for the hospital and home fund. While the Treasurer of the United States may act in the capacity of custodian of these funds, it cannot rightfully be said that these are Government funds since they are actually deductions from the pay of the enlisted men.

And right here I might say that while I was a Member of Congress I opposed the deduction of 20 cents for enlisted men of the Navy. I was a member of the Naval Affairs Committee, and I opposed the deduction of 20 cents for enlisted men of the Navy, and at that time I advocated that a direct appropriation be made for the maintenance of the hospitals out of the United States Treasury.

Furthermore, a lot of the money that goes for maintaining the hospital fund is collected from fines and court martials. And after a check by the Navy Department at that time I found that during the year 1928, I think it was, more than one-third of the entire personnel of the United States Navy was court-martialed.

Mr. SCHAFER. How much did they collect during that period? Mr. UPDIKE. I do not have the figures on that at this time, but I think they are in the record during the hearing before the Naval Affairs Committee at that time.

It is also called to the committee's attention that the Attorney General of the United States has held in volume 20, Opinions Attorney General, page 350, that ice, milk, vegetables, and money flowing from the United States Soldiers' Home did not flow from the funds of the Treasury of the United States. In rendering his opinion the Attorney General went exhaustively into the Soldiers' Home property and funds and sources of such property and funds. The opinion of the Veterans' Administration actually reverses the opinion of the Attorney General of the United States, but there is no judicial

appeal from such rulings, as the law holds the decisions of the Veterans' Administrator shall be final in such cases and not subject to the review of any court.

Should an enlisted man in the Army today become totally disabled he would be entitled to a pension of $75 monthly, but upon entering the United States Soldiers' Home, and having no wife or dependents, his pension would immediately be cut to only $15 monthly, this in spite of the fact that he had been contributing regularly out of his small pay to the Soldiers' Home fund.

The National Association of Regulars therefore recommends immediate passage of H. R. 901.

The bill should read "members" instead of "inmates." The men in the homes do not like the latter term.

Mr. SCHAFER. How about the case of a man drawing the retired pay? Are deductions made in that case also?

Mr. UPDIKE. I am not familiar with that, sir.

General HINES. He would not draw both retired pay and pension. Under section 4 of the act of July 19, 1939, reduction of retired pay is possible.

Mr. UPDIKE. I would not think it could be cut, because it would not be a matter of pensions.

The CHAIRMAN. Thank you, Mr. Updike.

I will now ask General Hines to take the stand.

STATEMENT OF BRIG. GEN. FRANK T. HINES, ADMINISTRATOR OF VETERANS' AFFAIRS

General HINES. Mr. Chairman and gentlemen of the committee, at the outset I would like to say that the Presidential Regulation that has brought about this controversy is known as Veterans Regulation numbered 6-series A, paragraph VI, which reads in this manner:

(A) Where any disabled veteran having neither wife, child, nor dependent parent is being furnished hospital treatment, institutional or domiciliary care by the United States or any political subdivision thereof, the pension, compensation, or emergency officers' retirement pay shall not exceed $15 per month, provided that the amount payable for such disabled veteran entitled to pension for disability the result of injury or disease incurred after active military or naval service shall not exceed $6 per month.

In other words, a man with a service-connected disability goes into an institution run by the Government and is furnished hospital care, food, clothing under certain conditions, and whatever he needs, even a toothbrush and tooth powder, shaving cream, and so on; and the principle underlying this regulation was that single men did not really require more than $15 per month in the service-connected case or $6 per month in the non-service-connected case. I still feel that that principle is sound.

It is not the intent of the Veterans' Administration, and I feel confident it is not the intent of the Federal Government, to deal unfairly with these men. But let us consider what actually takes place, not what is assumed to take place.

These deductions are made from the Regular Army and Navy peacetime forces, and wartime as it occurred in the past war, in the case