It will be noted that for the period immediately prior to World War II, the purchasing power of the compensation dollar, the Consumer's Price Index and the rates of disability were, with few minor exceptions, constant and equal. At that time, however, and until January 1946, the purchasing power of the dollar plunged and the Consumer's Price Index soared to unprecedented heights.

In January 1946, and for several months thereafter, Congress once again brought the rates of disability compensation in line with the Consumer's Price Index. With the removal of price controls in 1946, the Consumer's Price Index once again started its precipitous rise which has never halted except for a brief period in the early months of 1950, and since then has steadily ascended.

Even though Congress again revised the rates of disability compensation in 1949, it was an inadequate adjustment then and even more so today.

Again may I emphasize that it was in 1934 that the rates of disability compensation were fixed at $100 and, with few minor fluctuations, it remained fairly constant with purchasing power of the dollar until the end of 1940.

Since 1941, however, with the exception of a few months in 1946, as above noted, disability compensation has never achieved its prewar relationship to either the Consumer's Price Index or dollar valuation. We feel that it is just as important today for Congress to readjust the rates of disability compensation to their prewar positions as it was in 1934.

Inasmuch as we have talked a great deal today about the Consumers' Price Index, a brief description of it may be in order.

The Consumer's Price Index, prepared by the Bureau of Labor Statistics of the United States Department of Labor, based on the average for the years 1935 through 1939, is equal to 100. This index is computed monthly and relates to prices in effect on the 15th day of the month.

The goods and services for the index were selected on the basis of an extensive study of an actual annual expenditure of about 14,500 urban families of wage earners and lower-salaried clerical workers whose incomes during the 1934-36 period averaged $1,524.

These items represent all the family living essentials: Food, apparel, rent, fuel, utilities, house furnishings, and miscellaneous goods and services, such as medical care, personal care, transportation, laundry service, and recreation.

Federal, State, and local income taxes are not included in the index, but sales taxes are included in the prices of goods sold. The list of items priced include 49 foods, 58 articles of clothing, 10 fuels, 23 kinds of house furnishings, 49 miscellaneous goods and services, and rent, a total of 192 individual items. Since 2 or more qualities are priced for some articles, about 270 different articles and qualities are used in the computation of the index.

Should this committee favorably report a bill authorizing an increase in the rates of disability compensation a tremendous hue and cry will arise throughout the country that the veteran and the friends of the veterans in Congress are wrecking our economy. I think the falsity of these charges can be proved by making a few comparisons. In the year 1890 the Federal Government paid to the veterans of this country's wars, or to their legal survivors, an average of slightly more than $45 per veteran per year. In the year 1900 after the SpanishAmerican War the average payment per veteran per year, by the Federal Government had increased to $65. In the calendar year 1950, the average payment per veteran per year, by the Federal Government, amounted to just slightly more than $34 per veteran. We think that these figures are quite significant. The DAV, with 30 years of rich experience as the spokesman for America's wartime disabled veterans, is firmly convinced that the Congress should proceed to readjust the rates of disability compensation.

The figures and charts set forth above are indicative of two things: (1) That the present rates are inadequate due to run-away inflation and, (2) that a 15 percent increase in the present rates is not excessive when compared with payments made to veterans in the past 60 years. The DAV urges this committee to carefully consider the facts set forth above and to favorably report a bill readjusting the monthly rates of compensation and pensions payable to veterans and their dependents under laws administered by the Veterans' Administration without delay.

Mr. FOSTER. I might say, Mr. Chairman, that like the other organizations, we did not have the opportunity to have this mimeographed, so we will have some copies run off and furnished to the clerk.

Mr. DONOHUE. If you will, please.

Any questions?

Mr. SPRINGER. What date was that in 1949 that the last raise was made?

Mr. FOSTER. October 1949.

Mr. SPRINGER. Have you figured it since October 10? I was listening for that in the statement, but I did not hear it. What has been the increase in the cost of living percentage since that date down to, we will say, March 1 or January 1, 1951?

Mr. FOSTER. I think it would show on that chart. It is about 15 points in that period that you mentioned.

Mr. SPRINGER. It is 15 points, not 15 percent?

Mr. FOSTER. Fifteen points.

Mr. PATTERSON (staff). 169.1 in 1949 and the latest figures from the Bureau of Labor Statistics show 184 plus, which would mean about 15 points.

Mr. SPRINGER. What date was that?

Mr. FOSTER. The last day for which figures are available, March 15, 1951.

Mr. PROUTY. Approximately 14.5 isn't it?

Mr. FOSTER. Yes.

Mr. SPRINGER. In the neighborhood of 9 or 10 percent roughly. Mr. FOSTER. Just between 9 and 10 percent. However, our position is that the increase in 1949

Mr. SPRINGER. Was not enough?

Mr. FOSTER. That is why the convention went on record for a 15-percent increase.

Mr. SPRINGER. How much was your increase in 1946?

Mr. HOGAN. In 1946 it was 15 percent.

Mr. FOSTER. Twenty percent.

Mr. HOGAN. Twenty percent. We had received a 15-percent increase and then we received an increase on September 1, 1946, to $138 from $115.

Mr. SPRINGER. When was the last raise before 1946?

Mr. HOGAN. June 1, 1944.

Mr. SPRINGER. How much?

Mr. HOGAN. Fifteen. That raised it from $100 to $115.

Mr. SPRINGER. What was the last before that?

Mr. FOSTER. January 1944. It was fixed by Executive order at that time at $100.

Mr. HOGAN. It had been reduced to $90, but was restored by Executive order within the year to $100 from $90.

Mr. DONOHUE. You have been talking about the veteran that is 100 percent disabled. What about those veterans, Mr. Hogan, that have, say, 10-percent disability? Have their incomes not been increased as a result of the inflationary period that we have gone through; that is dollar-wise?

Mr. HOGAN. It is true that there are some veterans drawing 10 percent or 20 percent that are gainfully employed, in fact, this organization is urging the continued employment of many disabled veterans. But many of these veterans with 10 or 20 are merely just drawing their

10 or 20 because they had been reduced from 80 or 60 down to 20 or 10. Many of them have never adjusted themselves financially to the reduction in compensation brought about because of the improvement in the service-connected disability.

While I can sense that the Congress or the members of this committee may feel that they are willing to give an increase to those drawing compensation in the upper brackets, we of our organization do not feel that we or the Congress have any right to state that a man with 50 or 60 or 75 percent should be the only one given the consideration. I am sure also, in fact, I believe there was some comment yesterday at another hearing, a comment made by the officials of the Veterans' Administration that if there was a break it would further involve the administration of compensation. Personally I feel that a man who is given a 10 percent rating is being compensated to the degree of his disability and right down the line.

I think he should be given the same consideration also right up the line up to the 100 percent.

Mr. DONOHUE. Well, I have in mind this: The person that is 100 percent disabled; that is, has a total case that prevents him from engaging in any useful employment, equitably he should, without question, have his pension or compensation increased because of the increased cost of living.

I have in mind also the person at the other end of the bracket that is getting 10 percent who is gainfully employed and who has profited dollar-wise as a result of now being employed. In other words, we will say back in 1946 he probably was getting 40 percent less by way of a week's pay than he is getting now.

Mr. PROUTY. I have some figures here, Mr. Chairman, which indicate that the average weekly wage in March of this year was $64.36 as compared to $44.39 in 1945.

Mr. SPRINGER. After taxes?

Mr. PROUTY. I presume it is before taxes.

Mr. HOGAN. Of the disabled veteran?

Mr. PROUTY. No; that is the general wage average.

Mr. DONOHUE. What are those figures again?

Mr. PROUTY. For 1940 it was $25.20; in March of this year, $64.36. Mr. HOGAN. But that is not the man drawing compensation, that is not confined to the man drawing compensation.

Mr. PROUTY. That is the general average for the country as a whole. Mr. DONOHUE. I agree with Mr. Ketchum that it is a most difficult thing to come up with a formula that is equitable to all parties concerned. But in the matter of equity we would like to take care of those that need it the most; those that are really victims of this inflationary period that we have gone through and are going through and probably we will continue to go through for some period to come.

Mr. HOGAN. Well, the Disabled American Veterans have, from the time of its existence, taken the stand that the man who has been disabled should be compensated according to the schedule or measuring stick under the rating schedule. At no time have we felt that there should be any discrimination from one end to the other. Of course, all the time we have urged increases in compensation. I think that has been the immediate cause of the statutory awards where there was a loss of limb, loss of an eye, and we have sponsored and secured

and we believe we have had a lot to do with it in getting the statutory awards for those seriously disabled.

The thing I know you are thinking about is that you merely want to take care of those who are actually unemployable.

Mr. DONOHUE. Might I interrupt you? No; I did not mean to convey that thought. I have in mind this thought, that we should take into consideration as a factor whether or not a person is totally employable or if he is 75 percent employable; if he is 50 percent employable, or in other words only consider partial disability from the standpoint of employment.

Mr. HOGAN. Yes.

Mr. DONOHUE. As well as total disability.

Mr. HOGAN. That is the principle of the compensation percentage rates, that is the principle of the whole thing right down the line. How much has his disability interfered with his complete rehabilitation?

Mr. DONOHUE. The captions of these different bills might be misleading. They are mostly based upon providing certain equitable adjustments in disability compensation and pensions to meet the rising cost of living. Now, you have, as I pointed out a few moments ago, many situations where those receiving disability compensations at the rate of from 10 percent, say, up to 50 percent that are fully employed at the present time and that are benefiting by the increased income associated with the inflationary period that we are going through.

Now certainly there is no need of adjustments from the standpoint of enabling them to meet the high cost of living. Their incomes have not been affected.

I agree with both you and Mr. Ketchum and the other representatives that that should not be the criteria. The table is set up, and if you have flat feet and the table says you are entitled to 10 percent you should get that 10 percent whether times are good or bad, and that is why a bill along the line that has been suggested should be drawn that would bring about some uniformity of awards that would not in any way be affected by the consumer indexes or the cost of living.

Mr. HOGAN. Mr. Chairman, I wish, too, however, you would consider this. We have had to consider it all during the years. This man who is getting 10 percent for his service-connected flat feet, and I mention flat feet because a lot of people do not believe anyone should get 10 percent for flat feet, the maximum amount ever paid by the Veterans' Administration has been 30 percent. May I present an example.

This man may have been a bricklayer before he got into the war and was put on a battleship or was in the Battle of the Bulge. He might have been a bricklayer today earning $25 a day if it were not for his flat feet. He may be gainfully employed, fully employed at this time, but he is doing work that will not permit him to work at his trade. He has done the best he can, he has shown courage and found employment in other fields, but he does not begin to get the money he might have received had he not gotten the flat feet.

When you are considering what a man is receiving by way of compensation, you mentioned 50 percent. I think you should keep in mind, and I think that you do, that if it had not been for this man's