a report and favorable recommendation of the county committee and of the employee having charge of the claim, and any claim involving a principal balance of $150 or less may be charged off or released whenever it appears to the Secretary that further collection efforts would be ineffectual or likely to prove uneconomical; and

"(5) partial releases and subordination of mortgages may be granted either where the secured indebtedness remaining after the transaction will be adequately secured or the security interest of the Secretary will not be adversely affected, and the transaction and use of proceeds will further the purposes for which the loan was made, improve the borrower's debt-paying ability, permit payments on indebtedness owed to or insured by the Secretary, or permit payment of reasonable costs and expenses incident to the transaction, including taxes incident to or resulting from the transaction which the borrower is unable to pay from other sources: Provided further, That no such compromise, adjustment, or reduction shall be made hereunder after the claim has been referred to the Attorney General unless agreed to by the Attorney General.

"(e) collect all claims and obligations arising or administered under this title, or under any mortgage, lease, contract, or agreement entered into or administered pursuant to this title and, if in his judgment necessary and inadvisable, pursue the same to final collection in any court having jurisdiction."

Under this statutory authority, we have found it possible to reduce claims against real estate loan borrowers whose property has been destroyed by natural catastrophe if the borrower has no other reasonable repayment ability or property out of which the loan could be collected without depriving him of his dwelling or means of making a living. For example, in one case a flood caused a change in the river channel which destroyed some 20 acres of the most productive part of the borrower's farm. The claim was reduced on the basic earning capacity of the remaining part of the farm.

The mortgage contracts used by the Farmers Home Administration impose on borrowers the responsibility of protection of the security property and require them to obtain and pay for insurance against normal hazards. Upon default of the borrower in providing such insurance, the Farmers Home Administration protects its mortgage interest by separate insurance and charges the cost to the borrower's account. Nevertheless, there are many occasions in which the amount of insurance obtainable will not provide adequate funds for restoration of the buildings. In those cases, consideration may be given to a supplemental loan, if necessary, to complete the restoration of essential buildings. In such a case, it would be unusual, however, if consideration were given to adjustment of the personal liability before the loan fails and the remaining security is liquidated.

If you have any further questions pertaining to your present inquiry please let us know.

Sincerely yours,

JOHN C. BAGWELL, General Counsel.

(For additional information see p. 58.)

Senator YARBOROUGH. Are there any further questions from any member of the subcommittee? If not, thank you. I believe. Mr. Bland, that you have another statement on another measure.

Mr. BLAND. We have one other statement, Mr. Chairman, and I will ask Mr. Knapp to come forward on that.

I shall read the statement. Mr. Knapp is quite familiar with these bills and will undertake to answer any questions that you may have. This is Mr. Donald C. Knapp, who is Assistant General Counsel in the Veterans' Administration.

Senator YARBOROUGH. You may proceed.

S. 449 AND S. 384

STATEMENT OF THE VETERANS' ADMINISTRATION, PRESENTED BY R. P. BLAND, ASSISTANT GENERAL COUNSEL, ACCOMPANIED BY D. C. KNAPP, ASSISTANT GENERAL COUNSEL

Mr. BLAND. Mr. Chairman and members of the subcommittee, we are pleased to present this statement to the subcommittee on two bills, S. 449 and S. 384. As these bills involve different subject matter, we shall treat them separately in our discussion.

S. 449-TO EXTEND ASSISTANCE IN THE PURCHASE OF AUTOMOBILES TO CERTAIN DISABLED VETERANS

Chapter 39 of title 38, United States Code, currently authorizes a payment of not to exceed $1,600 toward the purchase of an automobile by World War II and Korean conflict veterans who have suffered the loss or permanent loss of use of one or both hands or feet, or permanent visual impairment to a prescribed degree as a result of such war service. S. 449, if enacted, would extend this benefit to veterans who suffer the loss or permanent loss of use of one or both feet due to disability incurred or aggravated in line of duty (1) as a direct result of armed conflict or (2) while engaged in extrahazardous service (including such service under conditions simulating war) during the period between January 31, 1955, and the date when individuals are no longer liable for induction into the Armed Forces under the Universal Military Training and Service Act.

This automobile assistance program, which has been in existence for about 17 years, has become an established and recognized special benefit for wartime veterans, and is directly conditioned on the presence of a service-connected disability. Although the induction period to which the bill applies is not a wartime period, the bill is limited to veterans disabled as a result of armed conflict or while engaged in extrahazardous service (including such service under conditions simulating war). This renders the bill consistent with a longstanding provision of existing law under which the Veterans' Administration pays wartime rates of disability compensation for disabilities received during peacetime service when they are incurred under the noted conditions. Under the circumstances, the Veterans' Administration believes that the extension of assistance in the purchase of an automobile to this group of veterans is justified, and we recommend that the bill receive favorable consideration by your subcommittee.

Alternative time limitations for filing of an application for this benefit is prescribed by 38 U.S.C. 1905. Section 2 of S. 449 proposes to extend to the date of enactment the start of any applicable time limitation which otherwise would have begun to run prior to that date. It is possible that some "inducion period" veterans who would meet the basic criteria of the bill would already be barred by the time limitation in section 1905. Hence, this extension of those limitations is appropriate.

Since under existing law, the induction period will expire on June 30 of this year, the bill if enacted will render some 75 veterans eligible for assistance in acquiring an automobile during the first fiscal year, at an estimated cost for that year of $120,000. Assuming that the Universal Military Training Act is extended and that applicable data on which our estimate is based are maintained at current levels, the bill will affect some 85 veterans the first year and cost about $136,000 additional for that year.

S. 384-TO INCREASE THE PROTECTION AGAINST EVICTION OF SERVICEMEN'S DEPENDENTS FROM RENTED DWELLINGS

Since 1940 the Soldiers' and Sailors' Civil Relief Act of 1940, as amended, has provided generally that in the absence of judicial consent it shall be a misdemeanor to evict the wife, children, or other dependents of a person in military service from any premises occupied chiefly as a dwelling, for which the agreed rent does not extend $80 per month. S. 384 proposes to increase this amount to $135 per month.

The Soldiers' and Sailors' Civil Relief Act was designed to afford broad protection to persons while in the military service. With one exception which is not involved in this bill, the provisions of the act are not administered by the Veterans' Administration, although our loan assistance activities are sometimes affected if the veteran has reentered service. Most of the provisions of the act, including the section here involved, are construed and enforced by the courts in individual cases.

It is apparent that the Department of Defense and the Department of Justice would have a considerable interest in this type of legislation, and under the circumstances the Veterans' Administration would defer to the views of those departments as to the merits of S. 384.

This concludes our formal statement on these measures, Mr. Chairman. I would be pleased to answer any questions that members of the subcommittee may care to ask.

Senator YARBOROUGH. Thank you for the statement. Are there any questions, Senator Burdick?

Senator BURDICK. No questions.

Senator YARBOROUGH. Any questions, Senator Jordan?
Senator JORDAN. No questions.

Senator YARBOROUGH. Thank you. If there are no further questions of the Veterans' Administration, you may be excused.

Our next witness on the list is Mr. Francis W. Stover, director, national legislative service, Veterans of Foreign Wars of the United States.

We shall be glad to hear from you now.

STATEMENT OF FRANCIS W. STOVER, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES

Mr. STOVER. Mr. Chairman and members of the subcommittee, may I first extend the deep appreciation and thanks of the Veterans of Foreign Wars for the privilege of appearing here today to present our views concerning this most important legislation. My name is

Francis W. Stover and my title is national legislative director of the Veterans of Foreign Wars of the United States.

The three bills, S. 625, S. 342, and S. 274, would expand the authority of the Veterans' Administrator to provide additional hospital and medical care for veterans residing in the States of Alaska and Hawaii. The proposals would include private contract facilities for wartime veterans needing care for non-service-connected conditions for those States where there is no Veterans' Administration hospital. It is further noted that S. 274 would be extremely helpful to veterans who are suffering from three diseases which require long-term care, namely, tuberculosis, leprosy, or neuropsychiatric ailments, but only where these diseases have rendered these veterans permanently and totally disabled.

The Veterans of Foreign Wars has long had as one of its priority objectives full and adequate medical treatment of wartime veterans. This year, for example, one of our key objectives is the immediate development by the Veterans' Administration of a plan for the longterm care of chronically ill veterans. Our last national convention held at Minneapolis, Minn., last August, adopted several resolutions dealing with the Veterans' Administration hospital and medical care program. So that this subcommittee will have the benefit of our thinking on this program, it is respectfully requested that these resolutions, which are attached to this statement, be made a part of my remarks at this point. These three proposals will help carry out our VFW objectives in this field.

Senator YARBOROUGH. They will be so included. The resolutions will be made a part of the record at this point and are ordered printed together with your statement.

Mr. STOVER. Thank you. I would, also, like to read a resolution which is not a part of the mandates that were adopted at our convention. The resolution, No. 45, is very pertinent to the bill introduced by Senators Bartlett and Gruening. The resolution reads as follows:

Whereas there are more than 22,000 veterans of American wars now living in and residing in Alaska; and

Whereas Alaskan population is increasing at a vast pace and more veterans are constantly coming to Alaska than any other area under the American flag; and

Whereas Alaska is one of two States which have noncontiguous area not connected with the other 48 continental United States; and

Whereas the need for medical and hospitalization of Alaskan veterans is constantly increasing because of the increased age of the veterans; and

Whereas there is a complete lack of medical and hospital facilities in the State of Alaska to care for Alaskan veterans; and

Whereas the people of Alaska desire help from the Veterans' Administration in order to establish a veterans hospital within the jurisdictional limits of the State of Alaska: Now, therefore, be it

Resolved by the 63d National Convention of the Veterans of Foreign Wars of the United States, That the Veterans' Administration be urged to establish a veterans hospital within the jurisdictional limits of the State of Alaska; that the said hospital be adequately equipped and staffed.

This was submitted to our convention. It was approved by the convention committee on rehabilitation and welfare and was approved in principle and referred to our national rehabilitation service. So it does not constitute a full national mandate, but it does show that the delegates at our national convention did consider the question of

the Veterans' Administration hospital in Alaska and that they are in favor of it in principle as outlined in the resolution.

Specifically, this subcommittee knows that there are presently no VA hospitals in either Alaska or Hawaii and that hospital care in the case of non-service-connected veterans is provided in Government hospitals if beds are available.

I would like to point out in reference to hospital care of veterans by the Veterans' Administration that this is provided for non-serviceconnected conditions if (1) beds are available, and (2) very important if the veteran cannot afford to pay for it. The veteran has to file an oath or a statement to that effect. And recently the Veterans' Administration has implemented the application for hospital treatment by asking in much greater detail more questions concerning the financial statement and ability of the veteran to pay than it did in previous years. It is a far cry from being an automatic thing.

Senator YARBOROUGH. You mean it is harder for the veteran to get in a hospital if his disability is non-service-connected?

Mr. STOVER. That is correct, especially as it relates to hospital insurance. If he has complete or substantially complete insurance, generally speaking, to pay for the non-service-connected condition I think it is a fair conclusion that the veteran will withdraw his application for Veterans' Administration care under present procedures.

These bills would permit the VA to contract for beds and hospital care in private hospitals in the veteran's hometown where there are no Government hospitals.

Alaska, of course, is our largest State and also the road system is not as developed as in other States. Veterans are forced, therefore, to travel extremely long distances to obtain necessary care. Veterans living on islands in Hawaii where there are no Government hospitals are forced to do likewise.

For these reasons, the Veterans of Foreign Wars urges your favorable consideration of the proposals contained in these bills.

S. 449 would provide an automobile for certain disabled veterans suffering the service-connected loss of or loss of use of one or both feet. It is noted that the disability must have been incurred or aggravated as a direct result of armed conflict or under extrahazardous service, including such service under conditions simulating war. This assistance would be extended to include post-Korean veterans and would extend a type of compensation granted to veterans of World War II and the Korean conflict.

The Veterans of Foreign Wars has no resolution with respect to this proposal. However, the membership of our organization includes, in addition to veterans of oversea and wartime service, those veterans who have served in campaigns and expeditions for which service a campaign badge or medal was authorized. While entitlement to the automobile assistance as proposed in this bill does not make the service of such a nature that a campaign badge was authorized, unquestionably many veterans who would qualify for this assistance would also qualify for VFW membership. The VFW has long urged the Congress to elevate campaign service to wartime service for the purpose of veterans' benefits. There are many inequities that exist in varying degrees between so-called peacetime and wartime service. This would fill one of the gaps.