Senator JORDAN. I have no questions, but I want to join in thanking Mr. Stover for a very comprehensive statement and to express our appreciation for his appearance here today, to give us the viewpoint of his veterans' organization.

Mr. STOVER. Thank you.

Senator YARBOROUGH. I want to say that my colleagues have stated my views, too. I join them in commending you and your organization for the careful study that it gives to all of these questions, to legislation affecting the veterans. Thank you for your study and for your concisely prepared statement.

Mr. STOVER. Thank you very much.

Senator YARBOROUGH. The next witness is Mr. Charles L. Huber, national director of legislation of the Disabled American Veterans, accompanied by Irving Peltz, national service director. We will be glad to hear from you now.

STATEMENT OF CHARLES L. HUBER, NATIONAL DIRECTOR OF LEGISLATION, ACCOMPANIED BY IRVING PELTZ, NATIONAL SERVICE DIRECTOR, DISABLED AMERICAN VETERANS

Mr. HUBER. Mr. Chairman and members of the committee, the Disabled American Veterans appreciate this opportunity to present our views on the merits of a bill now before this subcommittee which is included in our national legislative program.

We are mindful of the pressing problem that confronts this subcommittee, and that is the best and most equitable way to distribute the disability compensation dollar. In our attempt to solve this problem we are convinced that priority attention should be directed toward practical aid to the seriously disabled. Certainly that group is the subject of S. 449. This bill authorizes the Administrator of Veterans' Affairs to make grants toward the purchase of an automobile to seriously disabled veterans of the cold war on the same basis that such grants are now available to disabled veterans of World War II and the Korean conflict under chapter 39, title 38, United States Code. These grants, which could not exceed $1,600, would be available only to cold war veterans with disability that has resulted in the loss of use of one or both feet. The cold war veterans would only be entitled to the automobile grant if their disability was incurred in or aggravated by the military, naval, or air service if such disability was in line of duty and a direct result of armed conflict or while the veteran was engaged in extrahazardous service (including service under conditions simulating war).

Veterans made eligible for automobile grants by this bill must have suffered the indicated disabilities in military service during the period beginning February 1, 1955, and ending on the day before the first day thereafter on which individuals are no longer liable for induction for training and service into the Armed Forces under the Universal Military Training and Service Act.

The bill also contains a delimiting period for which the veteran may make application for this grant.

Congress has given study to the special needs of the seriously disabled service-connected veteran. This detailed work has resulted in good laws which are fair, both to the Government and to the veteran.

We believe that S. 449 would provide an enlargement of a substantial benefit that is both reasonable and timely, if amended.

As you gentlemen know, our organization was founded on the principle that this Nation's first duty is to the wartime disabled. For all practical purposes, the men embraced by this bill are wartime disabled. To implement this natural and logical conclusion, our most recent national convention adopted a resolution asking Congress for legislation granting all wartime benefits to the class of veterans partially specified in this Senate proposal.

We are somewhat at a loss to understand why the bill does not include those who suffered the loss or permanent loss of use of one or both hands or permanent visual impairment. Veterans of World War II and the Korean conflict who suffered the loss or permanent loss of use of one or both hands or permanent visual impairment are now entitled by law to the $1,600 automobile grant. We believe that the cold war veterans with equal disability should be treated no differently than those now entitled.

The conclusion that the loss of a hand or certain visual impairment does not affect a normal life as adversely as a loss of a foot would certainly be open to opposing and well-substantiated opinions. We firmly believe that, in fairness, they should be included in this bill, and we hope that this group will receive further consideration before any bill is finally reported.

We respectfully urge that you report a bill that will provide this benefit to those whose earning capacity, as well as their general wellbeing, has been most seriously affected by their service-connected dis

abilities.

The Disabled American Veterans National Convention did not adopt resolutions covering the subject matter of the other bills being considered at this hearing.

However, I do wish to thank the members of this subcommittee for the opportunity of appearing before you on S. 449.

Senator YARBOROUGH. In response to the question in your statement, since I am the author of this bill-the record should indicate at this point as to why those were not included-that is, those who suffered visual impairment or the loss or loss of use of hands, one or both. I had a bill in the previous session that included those categories. I agree with your thesis that those with the loss of their hands under these conditions, warlike conditions, or actual war, such as South Vietnam, should not be treated any differently than those who lost their hands in Korea or in World War II. In introducing this bill in the previous session we had great opposition to it, so it was felt that with the present wording, we could at least get this much, to give them comparative treatment with the veterans of World War II and those of the Korean war. I like the old language better. In executive session, I plan to bring this up with the committee members to see if it can be worked out. If the prospects appear favorable to be able to pass it, I would certainly like to include it. I do want to make that statement. In the previous legislation that we introduced, it was included, but we did not include it this time because of the reason stated. We should like to have that kind of treatment for them.

Are there any questions, Senator Burdick?

Senator BURDICK. None, Mr. Chairman, except that I want to thank you and the Disabled American Veterans organization for coming forward with this. You can be sure that from the testimony you have given it will be given great weight and consideration. We thank

you.

Senator YARBOROUGH. Senator Jordan.

Senator JORDAN. I want to add my voice to that of my colleague's in thanking you, Mr. Huber, for your very fine statement. So far as I am personally concerned, I think that the casualties of peacetime should have equal treatment with the casualties of wartime.

Senator YARBOROUGH. I want to thank you and to thank Senator Jordan and to thank you, Senator Burdick. I want to congratulate you on the impression that you have made with this testimony. You can see that the majority of the subcommittee feels this way. You have made a real impression here. Thank you for your statement. Mr. HUBER. Thank you very much.

Senator YARBOROUGH. Are there any further statements by anyone? Are there any further witnesses who desire to be heard? If not, gentlemen, we will close the oral testimony, but we will leave the record open for a few days for any supplemental statements that any Member of the Congress, any department of the Government, any Government organization, or any individual may desire to file. We will order that the record will be left open for 1 week from this date. That will be until March 20, 1963, for the filing of additional statements. We will place in the record at this point additional material received by the subcommittee.

PREPARED STATEMENT OF CLARENCE W. BIRD, DIRECTOR, NATIONAL ECONOMIC COMMISSION, THE AMERICAN LEGION

Mr. Chairman and members of the subcommittee, on behalf of the American Legion I express appreciation for this opportunity to submit testimony with respect to S. 384, a bill to amend the Soldiers' and Sailors' Civil Relief Act of 1940 in order to provide increased protection against eviction of dependents from premises rented for dwelling purposes.

We of the American Legion have consistently supported a strong Military Establishment. It follows, therefore, that we are vitally interested in seeing that the rights of all persons called upon to perform military service in time of war or national crisis are protected.

The Soldiers' and Sailors' Civil Relief Act approved October 17, 1940, provides for the temporary suspension of civil legal proceedings and transactions which may prejudice the rights of persons who are requested to give up their normal civilian pursuit and enter the armed services. It is felt this is necessary in order that those in the Armed Forces may devote their entire energy to the defense needs of the Nation.

Subsection (1) of section 300 of the Soldiers' and Sailors' Civil Relief Act protects the dependents of inservice personnel from eviction without court permission provided the rent for such dwelling does not exceed $80 per month.

As a result of the Berlin crisis The American Legion reviewed the provisions of the Soldiers' and Sailors' Civil Relief Act to determine which sections needed updating. Resolution No. 626 (attached) adopted by our 1962 national convention resulted from these studies and grants us authority to support S. 384.

Because of the passage of time and the rise in the cost of living, The American Legion is of the opinion that the $80 maximum permissible under subsection (1), section 300 of the act is currently insufficient and should be increased in accordance with the present cost of living index.

Statistical Abstract of the United States based on Bureau of Labor Statistics Consumer Price Index (p. 348, 83d annual edition) shows a percentage increase of 57.9 percent between 1940 and March 1962 for average rentals.

Applying this to the $80 maximum under the Soldiers' and Sailors' Civil Relief Act of 1940, maximum rental would be $126.20 for March 1962. Thus, The American Legion's support for the figure of $133 would appear justified, allowing for Consumer Price Index increase in last year and for increases in Consumer Price Index rental costs in the foreseeable future.

The bill S. 384 specifies that the $80 ceiling be increased to $135. The American Legion feels this requested increase is necessary and reasonable, and more in line with the current cost of living, especially dwelling rentals.

In view of present world conditions it does not appear likely that involuntary service will be discontinued in the near future. S. 384 will provide additional protection to military personnel who are drafted or involuntarily called to active duty.

With respect to the aforegoing considerations, The American Legion respectfully urges this subcommittee to favorably consider S. 384.

We now refer briefly to S. 412, a bill also before this subcommittee to amend title 38 of the United States Code to provide for waiver of indebtedness to the United States in certain cases arising out of default on loans guaranteed or made by the Veterans' Administration.

While The American Legion does not have an official position on this subject, I personally feel the legislative proposal as set forth in S. 412 is very much needed.

We thank you for this opportunity to submit this statement.

FORTY-FOURTH ANNUAL NATIONAL CONVENTION OF THE AMERICAN LEGION LAS VEGAS, NEV., OCTOBER 9-11, 1962

Resolution No. 626.

Committee: Economic. Subject: Amendment to section 300 of the Soldiers' and Sailors' Civil Relief Act of 1940.

Whereas The American Legion has consistently supported a strong Military Establishment with full recognition of the justice in protecting ex-servicemen, reservists, and members of the National Guard against the loss of their jobs and reemployment benefits as well as protection to persons in the military under the Soldiers' and Sailors' Civil Relief Act; and

Whereas the Soldiers' and Sailors' Civil Relief Act provides for the temporary suspension of legal proceedings and transactions which may prejudice the civil rights of persons in the military service of the United States in order to enable such persons to devote their entire energy to the defense needs of the Nation; and Whereas section 300 of the Soldiers' and Sailors' Civil Relief Act, approved October 17, 1940, limits protection from evictions to cases wherein the agreed rent does not exceed $80 per month; and

Whereas the rent index in the business Consumer Price Index is now $67.40 higher than in 1940 and thus rents are about two-thirds higher than the 1940 statistics; and

Whereas, because of the rise in the cost of living since 1940 the $80 maximum permissible under the act is not an equitable amount: Now, therefore, be it

Resolved, by The American Legion in national convention assembled in Las Vegas, Nev., October 9-11, 1962, That the national legislative commission be, and it is hereby authorized and directed to sponsor legislation in the Congress of the United States to amend paragraph 1, section 300 (50 app. U.S.C. 530), of the Soldiers' and Sailors' Civil Relief Act of 1940 by inserting $133 per month in lieu of the presently stated $80 per month.

FEDERAL HOUSING ADMINISTRATION,

OFFICE OF THE COMMISSIONER,
Washington, D.C., March 22, 1963.

Hon. RALPH W. YARBOROUGH, Chairman, Senate Subcommittee of Veterans' Affairs of the Senate Committee on Labor and Public Welfare, U.S. Senate, Washington, D.C.

DEAR Mr. YARBOROUGH: We have received a request from Mr. Charles Johnston, Veterans' Affairs Subcommittee, to furnish a summarization of the legal position and practice of the FHA with regard to the waiver of indebtedness in hardship cases following default and loss of property.

Except in those relatively few instances where mortgages are assigned to the FHA, pursuant to statutory authority, for the purpose of assisting mortgagors who are unable to meet their payments as a result of hardship, foreclosure action is taken by the lending institution before it submits a claim for insurance. Since its inception in 1934, the FHA has followed the policy of leaving for the determination of the lending institution the question of whether a deficiency judgment should be obtained against a family losing its home through foreclosure. This policy is based, in part, upon the difficulties involved in attempting to achieve uniform treatment of all of our citizens in an area where there exists. a vast difference in the various State laws. It is also based, in part, upon the various causes underlying the foreclosure action. These range from irresponsibility on the part of indivduals ignoring their obligations to loss as a result of financial distress caused by death, prolonged illness, or unemployment.

If, however, a mortgagee obtains a deficiency judgment as a part of the foreclosure proceedings, or has any claim arising out of the mortgage action, it is required, pursuant to section 204(a) (2), National Housing Act, as amended, 12 U.S.C. 1710, to assign such judgment or claim to the Commissioner as a part of its claim for debentures. As to the disposition of such assigned claim, section 204(g), National Housing Act, as amended, 12 U.S.C. 1710, provides as follows:

"Notwithstanding any other provision of law, the Commissioner shall also have power to pursue to final collection by way of compromise or otherwise all claims against mortgagors assigned by mortgagees to the Commissioner as proIvided in this section."

While this provision has been interpreted as granting the Commissioner the authority to release such a claim upon the payment of consideration, it has not been construed as authorizing the forgiveness or waiver of indebtedness.

It has been our experience that the time and expense involved in attempting collection of assigned claims is not justified by the amount of recovery. Due to the varied laws concerning the collection of deficiency judgment, the divergent practices as to obtaining such judgments, and the cost of collection, it has been our policy not to take affirmative collection action on assigned claims. However, when a request for a release of an assigned claim is received, consideration is required before such release is granted.

Sincerely yours,

P. N. BROWNSTEIN, Commissioner.

FHA FORBEARANCE PROVISIONS

(Prepared by the Office of Public Information)

INTRODUCTION

Sometimes unforeseen hardship puts a homeowner into such a tight spot financially that he cannot prevent his mortgage from going into default. Then, unless some relief from financial stress is forthcoming, he may eventually lose his home through foreclosure.

The Federal Housing Administration does not want this to happen, so on FHA-insured mortgages it takes steps in cooperation with the lender to avoid foreclosure in such cases and to help the homeowner restore his mortgage to good standing.

During 1961 we clarified and amplified FHA's forbearance procedures. Our policy is to see that every effort is made to avoid foreclosure of mortgages that become delinquent because a homeowner is suffering hardship brought about by temporary loss of income, by disaster, or by other circumstances beyond his control.