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

General HINES. As stated in the letter, Public, No. 257 was passed after you introduced this bill, providing 75 percent of the wartime. rates to men in the Regular Establishment. Further, you will recall my testimony before the committee to the effect that the bill did not undertake to modify the rates to dependents of men in the Regular Establishment, and that they were very close to the 75 percent which was being granted to the veterans of the peacetime establishment. Now, the tendency of the departments has been to compensate for hazardous service rather than to undertake to pay double indemnity in case of death. For instance, in those cases, and others, the information indicates that the men receive increased pay. That is mostly in the submarine service. It might be of interest to the committee if I indicated here-although some of this no doubt will be given by the Navy representative the regulations or rules covering extra pay for duty on board submarines, as follows:

Enlisted men assigned to duty on board submarines shall receive pay in addition to the pay and allowances of their rating and service, as follows:

(a) Enlisted men regularly attached to submarines in commission based at shore submarine bases as listed in the current "Operating Force Plan" of Chief of Naval Operations: Unqualified men, $5 per month; qualified men, $20 per month; chief petty officers and petty officers, first class, after 1 year from date of designation as "qualified for submarine torpedo-boat work," $25 per month. (b) Enlisted men regularly attached to submarines in commission, not based at shore submarine bases, as listed in the current "Operating Force Plan" of Chief of Naval Operations, and if those attached to submarines under construction for the Navy from the time builders' trials commence: Unqualified men, $10 per month; qualified men, $25 per month; chief petty officers and petty officers, first class, after 1 year from date of designation as "qualified for submarine torpedo-boat work," $30 per month.

The CHAIRMAN. That is in addition to the regular pay?

General HINES. Yes; in addition to the regular pay. The list furnished the Veterans' Administration indicates that those men lost had an increase in pay ranging from the rates given, and that most of them were receiving $10, $25, or $30 increase.

The number of enlisted men on board the U. S. submarine Squalus, the ill-fated submarine, at the date this report was made, June 2, 1939, was 25 enlisted men, 1 officer, and 2 civilians.

The CHAIRMAN. General, at that point, what would that $10 increase mean after they are dead and gone? It does not mean a thing, because they do not receive it.

General HINES. It does not mean a thing to dependents. The widow, of course, is just as dependent, you might say, no matter how her husband died, whether in war or peace, as she would be otherwise. I fully appreciate that fact, but what I was trying to indicate to the committee was that the service was undertaking to compensate for extra-hazardous service, and it seems to me that the proper approach for dependents would be to indicate what is a fair rate for the dependents of a man lost in the service and in line of duty. That is for enlisted men and, of course, the officers have a retired status. For enlisted men Congress, at the last session, reached the conclusion that 75 percent of the wartime rate was a fair rate.

224503-40- -2

Now, we have a little complication of rates for dependents that the committee should keep in mind. Under the regulations, for instance, the rate for a widow is $22 to $30 for peacetime service. The last Congress, for World War veterans' widows under 50 years of age, fixed the wartime rate of $38, and for widows over 50 years of age the rate fixed was $45. That is for the widow of a man who had a service-connected disability, and died from that cause.

Mr. SCHAFER. What is the nonservice rate for peacetime service? General HINES. The peacetime service-connected rates are $22 to $30. The service-connected wartime rates were increased by the last Congress to $38 and $45.

Mr. SCHAFER. In the case of a World War veteran who has a service-connected disability, and who dies, although the service disability or disease does not contribute to or cause his death-how much does his widow now receive?

General HINES. $30 now.

Mr. SCHAFER. Who gets $22?

General HINES. That is the peacetime widow under 50 years of age in the Regular Establishment cases.

Mr. SCHAFER. What act changed that rate of $30 from the prior $22 rate?

General HINES. That was the World War rate for non-service-connected death. The rate for the Regular Establishment for widows under 50 years of age is at present $22.

Mr. SCHAFER. What I am trying to get at is this: A World War veteran who has a service-connected disability dies, and we will assume that a service disability or disease does not cause or contribute to his death. The widow of that veteran formerly received $22, but now she gets $30. What is the date of the act making this change? General HINES. July 19, 1939. That is Public, No. 198, Seventysixth Congress, approved July 19, 1939.

Mr. SCHAFER. Let us have those figures again.

General HINES. The Regular Establishment widow under 50 years of age receives $22; the widow over 50 and under 65 receives $26, and the widow over 65 years of age receives $30.

Now, if you were to give the peacetime widow 75 percent of the service-connected wartime rate, World War, under the act of July 19, 1939, she would get a payment of $28.50 if under 50 years of age, and $33.75 if she were over 50 years of age.

Mr. SCHAFER. Then, as to that widow of peacetime service, in order to receive the rates which you have just mentioned, a service disability or disease must have caused or contributed to the husband's death.

General HINES. Yes; incurred in the line of duty.

Mr. SCHAFER. You will still have inequalities, because the widow whose husband died of a service-connected disability or disease would be getting less than the widow of a World War veteran whose husband died of a nonservice disability or disease, but who happened to have a 10-percent disability.

General HINES. Under the lower rate, under 50 years of age, there would be a difference of $1.50, and over 50 years of age she would get $3.75 more. That is the distinction, and that is the reason I mentioned that in the letter for purposes of comparison.

Mr. JONES. I understood you to mention two scales or rates.

General HINES. Yes; for those under 50 and those over 50. It was put on the basis of 75 percent of the World War rates. If you took the rates established in Veterans Regulation 1 (g), under Public, No. 2, it would be only 50 cents increase, or an increase to only $22.50.

As to the whole problem of the bill, as we see it, certainly the logical procedure under the bill, or under some bill, if you are to undertake to change the dependents' rates, it seems to me would be to put them on a parity with the veterans 75-percent act. I cannot see how we could well justify giving double indemnity without considering other services. For instance, we all know that when the Coast Artillery of the Army goes out to conduct target practice with big guns or to engage in mining practice in mine fields, they are undertaking a hazardous service that might result in a situation similar to that of the men on the Squalus. Flying today has become safe compared, I should say, to submarine activities, and, for that reason, we felt that we could not recommend a double rate, in view of the fact that the flying service, of both the Army and the Navy, is considered more hazardous than other duty, and therefore they allow an increase in the pay.

What you have said in reference to dependents is quite true: After the man is gone he is no longer in receipt of the pay, but every individual who undertakes that service is compensated for that hazardous service.

Mr. SCHAFER. You referred to widows of members of the Regular Establishment and members of the Regular Establishment receiving 75 percent of the World War rates. Then you referred to 75 percent of the service-connected World War rates. Will they receive a pension, provided the man had a service-connected disability, or disease, which did not cause or contribute to the death?

General HINES. No; the man in peacetime receives a pension for disabilities incurred in line of duty, and a bill was passed last year that gives him 75 percent of the wartime rate. As to widows of these veterans, service connection of death is required.

Mr. SCHAFER. That 75 percent would be based specifically on the service-connected World War rates, and the widow under 50 years of age would receive $30, and a widow over 50 would receive $45. Is that correct?

General HINES. Seventy-five percent of the Public, No. 198, rates would produce $28.50 and $33.75; 75 percent of the Public, No. 2, war rates would produce $22.50, $26.25, and $30.

Mr. SCHAFER. Along that line, in the case of service connecting a disability or disease of a member of the Regular Establishment, have you been following the penurious policy followed by the Commissioner of Pensions as to what they had to prove? For instance, in many cases a World War veteran may die of a constitutional disease which first shows up a year after leaving the service."

General HINES. We generally follow the findings of the service departments, but in some cases we have departed from that. In some of the cases where we have departed from the findings of the service department, our findings have been more liberal than the findings of the service departments. We have cases where the service department reports that it is in line of duty, and we have difficulty in finding that it is in the line of duty, but those cases very seldom arise, and we give them the benefit of the doubt, as we do in World War cases.

Mr. SCHAFER. There are many service incurred disabilities and diseases in the Regular Establishment, where there is a constitutional disease that even the medical records of the War and Navy Departments do not reveal. The condition might not be revealed by the medical survey report, but it may show up within a year after his discharge.

General HINES. If the man was in the Regular Establishment, and if the case should come up, it may be one where the service department has found that the disability was incurred in line of duty. The man might file a claim after they have discharged him, stating that it was in the line of duty, and on review, we have sometimes found that under our precedents and policies, and following the same rules that we would apply to World War veterans, he should be granted a pension.

Mr. SCHAFER. A man might have served on a submarine, and the submarine itself may get into a difficulty. He might be a regular seaman, and his enlistment might expire, and the disability resulting from the service might not show up before the discharge.

General HINES. There we would follow the same rules. In other words, where he was discharged without report of disability, and yet claims for a disability after his discharge?

Mr. SCHAFER. Yes; after the discharge.

General HINES. We follow exactly the same policy in dealing with all of that type of cases.

The CHAIRMAN. You have heard General Hines' testimony, gentleAre there any other questions?

men.

Mr. KELLER. I think we should give a vote of thanks to General Hines for coming down here and giving us this information, and for making such a good job of it.

General HINES. Congressman, that is my job. I feel that it is a part of my duty to be here whenever a committee of Congress requires information from me.

Mr. SCHAFER. Did General Hines put in the record a statement of the approximate cost of this bill?

General HINES. The only cost I could estimate on it would be just a guess. It would be very difficult to estimate the total cost of such a bill as this, and I am sure you appreciate that, because we have no way of telling how many hazards would be undertaken, or how many submarines we will have.

Mr. SCHAFER. I am asking this, because I am opposed to the bill. It does not cost any more to take care of the widow of a service man killed in an airplane or a submarine than to take care of any other widow of any other service man, no matter in what service he was killed. I realize that under existing laws the widows and dependents of members of the Regular Establishments whose services cause or contribute to the members' death do not receive the benefits they should receive. I favor legislation which will increase these benefits without discrimination. This bill discriminates in favor of the few as against the many. With that thought in mind, could you give the committee an approximate estimate of the annual cost if we changed the Regular Establishment widows' and dependents' benefits to 75 percent of the World War rates, which are $38 per month for a widow under 50 years of age and $45 per month for widows over 50 years of age?

General HINES. We are making an estimate in connection with another bill before this committee, and it will be before you.

Mr. SCHAFER. Without too much additional work, would you be able to give the estimated cost if we extended the full World War rates?

General HINES. Yes, sir; I will be glad to do that.

Mr. ANDERSEN. Does this bill double the indemnity?

General HINES. Yes; in a measure.

Mr. ANDERSEN. It is in addition to the regular pension?

General HINES. It would approach doubling the existing rates. In other words, it would increase the existing rates of $22, $26, and $30 to $30, $37.50, and $45, respectively.

The CHAIRMAN. The reason for introducing the bill, or my idea was that, in case of the accident to the Squalus, there should be a special rate provided for them, as against the Regular Establishment rate of 75 percent. The General, in his testimony, said it was a question of doubling the rate, but this is not a question of doubling the rate except for paying these men the same pension that World War veterans are receiving today. That was my intention, and that is why the bill was introduced. I feel that where a submarine suddenly sinks, as the Squalus did, it indicates an extra hazardous service, or one involving more hazards than other hazardous service in the Army or Navy. It is more hazardous than we have in any floating service, or where they are conducting maneuvers, target practice, and so forth. However, that is up to the committee.

Mr. ANDERSEN. Why do you include aircraft in it?

The CHAIRMAN. In the case of aircraft, when they are conducting maneuvers, they are up in the air, and they cannot always bail out in parachutes. If the plane crashes, and the man is killed, his dependents are entitled to the same top pay or compensation as they would be if he were killed in actual war.

Mr. SCHAFER. In view of the extra hazard of serving on a submarine, is it not optional with the men as to whether they shall go into that service?

General HINES. I am not sure. Probably the representatives of the Navy can answer that.

Commander HATCH. Yes, sir; that is true.

Mr. GRANT. And, because of the fact that it is a hazardous service, they receive a 50-percent increase in pay? Commander HATCH. Yes, sir.

Commander ROBERTS. Those men are selected.

Mr. KELLER. Do the men seek that service?

Commander ROBERTS. We have the names of more officers and men than we are able to place in the service.

The CHAIRMAN. We will now hear the representative of the Navy Department.

STATEMENT OF LT. COM. C. B. HATCH, UNITED STATES NAVAL RESERVE

Commander HATCH. There is nothing that the Navy has to add to General Hines' testimony on the bill. The only thing I would mention is the designation. The part we approve is the designation of the submarine and aircraft, which would take in more than the accident