from the income, and thereby will reduce the income. It is not so now, but in the bill that is being considered; is that not correct?

Mr. ALLEN. I think that is a point. But these gentlemen point out that it would probably be confusing; and as Mr. Rogers of Texas points out, it would be a little difficult to administer.

Mr. OLSON. We were talking now about disability pension and not the death pension.

Mr. ALLEN. Very well. If there are no further questions, thank you, gentlemen, very much for your appearance. We appreciate your statements.

Mr. Ketchum, come around, please. Mr. Ketchum, let me say we are very glad to have you. We are always very glad to have you. You are always helpful to the committee, and we will be glad to hear any statement you make now.

Mr. KETCHUM. Thank you, sir.

STATEMENT OF OMAR B. KETCHUM, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES; ACCOMPANIED BY ELMER P. RICHTER

Mr. KETCHUM. For the benefit of the record, my name is Omar B. Ketchum. I am director of the national legislative service of the Veterans of Foreign Wars of the United States.

Mr. Chairman and members of the committee, I have with me here this morning our national director of claims, Elmer P. Richter, who for many years has served the Veterans of Foreign Wars and the veterans of our Nation in a capacity of representing them on claims.

Mrs. ROGERS. He has done magnificent work.

Mr. KETCHUM. I think he is one of the best-qualified men in the country. I know he has been at it long enough. He himself is a badly disabled veteran and can appreciate some of the very things we are discussing.

Preliminary to Mr. Richter's presentation, I want to say that we consider this legislation that you are considering this morning and yesterday morning to be perhaps the most important legislation that can come before this Congress with respect to veterans.

I can only think of one or two of our objectives that we might consider more important. First, of course, is the increase in compensation to the service-disabled that we think should be done. Secondly, we are concerned about the hospitalization. We are concerned also about a reasonable pension program, but this income limitation certainly has proven to be one of the most irritating and vexing problems our service officers have encountered throughout the entire United States.

Mr. ALLEN. May I interrupt there, Mr. Ketchum, to say that we Members of Congress, and especially members of the committee, have felt the same situation with reference to the income limitation a long time. I recall that the gentle lady from Massachusetts and I have been diligent and we have tried to do something about it.

We have had it brought home to us in personal cases from our very dear friends in our home towns-I know I have cases which were meritorious. I know in one case the husband left a little insur

ance policy, very small; but it shut the lady off. I had to tell the lady she would have to wait and use that up, and so forth.

Mr. KETCHUM. Mr. Chairman, I think the committee realizes that the present income limitation was established back in the depression days when a dollar meant much more than it does today. It is completely unrealistic in the light of today's cost of living. It is serving to deny a large number of worth-while persons from receiving that small pension.

So I want to say we are emphatically for this legislation. We believe it is very important and it is very meritorious and deserving; and before I ask Mr. Richter to begin his statement, I should like to point out something to this committee perhaps you are familiar with, but it has not been emphasized enough.

I know that when a lot of people look at the total budget for the Veterans' Administration which has been running, as you know, around $5,500,000,000, $6,500,000,000, close to $7,000,000,000 in recent years, a hue and a cry goes up, "Look at the terrific amount of money that is being expended on veterans. Look at that terrific budget of the Veterans' Administration."

But how many of them ever stop to think that in relation to national income, the amount of money that has been expended in recent years for compensation, pensions, and hospitalization and medical treatment actually in relation to national income is less than what we were spending in 1890 in relation to national income?

And you can take the entire budget of the Veterans' Administration as requested for the present current year and relate it to national income, and you will find that it runs just a little bit over five-tenths of 1 percent more than what military pensions were costing this country in 1890 in relation to national income.

Now, I think that is an important point, and we cannot emphasize it too much throughout the length and breadth of this country, that when you stop to consider the national income of this Nation and the amount of money that we are spending on veterans, it has not soared completely to an unreasonable point. It is very much in relation to what was being expended many, many years ago. I think your own staff here during the Eighty-first Congress developed some very pertinent information showing what the percentage of the national income military pensions were. We had none of these fancy benefits back in 1890. Most of them were purely pension benefits. But today, even with all of the education and training, the so-called luxury or glamorous benefits which some people so describe, even with all of those today, it only runs about five-tenths of 1 percent more than the pure cost of military pensions in 1890 in relation to national income.

So when these people unthinkingly say that the cost of veterans' benefits has soared to an unreasonable point, they fail to consider the relationship between the cost of those benefits and our national income. I wanted to bring that cut, because I know one of the arguments that will be used against this legislation is that it is going to increase the cost of veterans' benefits. But when you can show them in cold facts that, in relation to national income, the cost of veterans' benefits has not soared, and when you take the three fundamental benefits, pensions, compensation, and hospitalization and medical treatment in relation to national income today, it actually runs less percentagewise

than what this country was spending on military pensions alone in relation to national income in 1890.

You can add in, then, all of the other benefits, the training and education, all of the new benefits; and you still only get about five-tenths of 1 percent more in relation to cost than in 1890.

Now I wanted to bring that out. I wanted to again refresh the memory of this committee on that point, because I think it is very important; it is important to the Congress, and it is important to the socalled economy leagues that are constantly complaining about the cost of veterans' benefits in this country.

Mr. ALLEN. Let me say I want to thank you for bringing that out, because I had not received all that information boiled down in so few words. I think it is very pertinent.

Mr. KETCHUM. Well, Mr. Allen, it is a matter of simple mathematics. For example, we called the Department of Commerce this morning to get the most current estimate of national income. I was surprised to find it lower than what people have been talking about. Not too long ago I heard the President predicting in terms of round figures of $300,000,000,000 as an ideal goal for our national income. I have heard some people in the last 6 months refer to it as $250,000,000,000 to $260,000,000,000. The Department of Commerce advises us this morning that the current conservative estimate of national income for 1950 was about $236,000,000,000.

The total appropriation request for the Veterans' Administration, I think, that is now pending in the omnibus bill or the appropriations bills up here is about $5,800,000,000. So simple mathematics will show you what percentage of the national income that amounts to.

But if you segregate from that merely pensions and compensation and hospitalization and medical treatment, you would be surprised to learn that less than nine-tenths of 1 percent of the total national income will be allocated if this budget is granted for pensions, compensation, and hospitalization.

And by adding all of it in, all of the benefits such as education and training and prosthetic appliances and construction and all of the various things, you get about 2.4 percent, or running just about fivetenths of 1 percent higher than the cost of military pensions in relation to national income in 1890.

Mr. DEVEREUX. May I ask a question, Mr. Chairman?
Mr. ALLEN. Yes; go ahead.

Mr. DEVEREUX. Does that include administrative overhead?

Mr. KETCHUM. Everything. My statement is going to look even better with what Mr. Patterson just told me. I was estimating the present budget at $5,800,000,000. If the appropriation actually for the Veterans' Administration is only $4,000,000,000, then we have the situation of where the total appropriation for all of the benefits today would be less in relation to national income than what we were expending for military pensions alone in 1890 in relation to national income.

Mr. ALLEN. And it is well to point out, I think, that the cost of education will lessen under the GI bill.

Mr. KETCHUM. I wanted to bring that out. That is a benefit that is going to taper off. You have noticed the appropriations for the Veterans' Administration have been gradually tapering off in the last 3 or 4 years. At one time that reached a peak of $7,000,000,000. That is gradually coming down.

So I merely wanted to offer that, Mr. Chairman, what I think to be a very pertinent argument because the principal objection to this bill will be that it is going to increase the cost of benefits to veterans. I think that is the reason why the representative of the Veterans' Administration yesterday, while saying that the Administration itself is taking no stand one way or the other, said that the bill was not in accordance with the program of the Bureau of the Budget. I presume their objections are based on the fact that it is going to increase the cost.

That is why I thought it was so very important to bring out this question of total costs in relation to national income.

Mr. ROGERS. Mr. Chairman, may I ask a question?

Mr. ALLAN. Yes.

Mr. ROGERS. Mr. Ketchum, in view of a supposed increase in the number of veterans, that would be spread a good deal thinner as to each veteran, would it not, than it was in the past?

Mr. KETCHUM. That is right.

Mrs. ROGERS. Mr. Chairman, is it not because they are not very well organized? I mean, they have great strength in your veterans' organizations, but the people themselves are not organized as some other groups are to ask for more. I think that is one difficulty.

Mr. KETCHUM. Sometimes I think the veterans are not very well organized, Mrs. Rogers. We have organizations, but they are not nearly as effective as they should be, in my opinion.

Mrs. ROGERS. You cannot reach everybody constantly, and people get discouraged and give up. I think that is one reason.

Mr. KETCHUM. Probably I should not say this. It is revealing trade secrets. But we find as a general rule a veteran is something else first before he becomes a veteran. He is first a Republican or a Democrat or he is either prolabor or antilabor; and last, when everything else has been dissipated, if there are any other arguments left, he then becomes a veteran.

So you can appreciate that we don't always have the full force and strength of the veterans. I think the country greatly overestimates and exaggerates the terrific pressure from the veterans' organizations. I recall a few years ago there was a very high-powered little digest magazine that decided to discuss the high-powered lobbies here in Washington. It pointed out that the American Legion and the Veterans of Foreign Wars were two of the most high-powered pressure lobbies in the United States, and went on to indicate how we operate.

I never got such a kick out of anything in my life. I think the total appropriation for my office, including everything rent, assistants, stenographers-everything that we have to do is $35,000 for 1 year. Actually all we can do is to present our program to the Congress, principally through this committee.

Mrs. ROGERS. You do it very effectively, too.

Mr. KETCHUM. If it is good, the committee goes along with us. If they do not think they can go along with us, they turn thumbs down. That is about what it amounts to.

Mr. ALLEN. As a matter of fact, less than half the veterans belong to any organization at all.

Mr. KETCHUM. That is correct. I think you could say about a third. I think if you would add up the membership of all of the veterans' organizations, it probably would not go much over 5,500,000

to 6,000,000, if it went that high, out of a total of approximately 20,000,000 veterans in this country.

I

Í just wish that we could get our veterans into a cohesive group like some of these labor organizations. But you just do not have the economic interest that you do in the other groups. There, it is a bread and butter proposition and they are bound together by the economic ties. They feel they have either got to go together or they all go down.

Veterans are very loosely tied together. As I say, they are first Republicans or Democrats; then they are first prolabor or antilabor, or pro this and anti that, and finally they become veterans.

Mr. ALLEN. Thank you, Mr. Ketchum. Proceed, Mr. Richter. Mr. RICHTER. Mr. Chairman and members of this committee, we are, of course, grateful for the opportunity afforded us by your subcommittee to testify on the merits of H. R. 310. Various provisions of this bill are in accordance with the desires of the Veterans of Foreign Wars of the United States, as expressed by our last national encampment and almost uniformly by our preceding annual encampments over the past decade.

H. R. 310, paradoxically, is a cost-of-living bill. While it would not in any sense increase the current rates of pension being paid by the Federal Government on behalf of war veterans or the dependents of war veterans who have passed on, generally its provisions would liberalize certain income and dependency limitations long since in effect. Under its terms some veterans and some dependents might for the first time qualify for pension.

Mr. ALLEN. Are you talking about H. R. 310? Which bill are you talking about?

Mr. RICHTER. 310; yes, sir. Section 1 of this bill would amend that part of Veterans Regulation No. 1 (a), part III, containing the income limitation on the payment of pension to veterans of World War I and World War II which has been in effect since the Economy Act of March 20, 1933.

Parenthetically, part III started off by authorizing the payment of pension in the amount of $20 per month to veterans of World War I who were found by the Veterans' Administration to be permanently and totally disabled. That $20 rate eventually was increased to the present $60 a month, and to $72 in some cases.

By the act approved on May 27, 1944, part III was broadened or extended to cover veterans of World War II. On the same date another act was approved to include widows and orphans of World War II veterans.

As of a recent date, 262,000 veterans of World War I and 28,000 veterans of World War II were in receipt of benefits under part III. At the same time, approximately 203,000 widows and 133,000 children of World War I veterans were in receipt of similar benefits. Likewise, 8,430 widows and 19,738 children are represented in the World War II group.

However, there remains a margin or percentage of highly deserving veterans and dependents who have not been able to qualify for this small monthly pension because of the stringent income limitations continuing in effect under part III.

These limitations are an annual income not in excess of $1,000 in the case of a veteran who has neither wife nor minor child. If the