Veterans' Administration. At that time the Administrator in his letter to Chairman Rankin said, in part

Moreover, the Corporation would not have the advantage of the integrated services available in insurance matters under the management of insurance activities by the Veterans' Administration. The medical, legal, supply, finance, contact, and administrative, investigative, appellate, and other services of the Veterans' Administration are all presently utilized in the administration of insurance. The Corporation would presumably be required to provide such services for itself. This would result in the loss of substantial economy which is realized under the present method, and that loss could not be expected to be offset by any marked improvement in efficiency. *** Obviously, the adoption of such an overall measure would entail a substantial sacrifice of economy unaccompanied by any real prospects of improvement of operation * * *.

Thus, it will be noted the Administrator of Veterans' Affairs was concerned over setting up a duplication of services in a separate insurance corporation which were presently being utilized in the Veterans' Administration in the handling of insurance activities. It would seem to the Veterans of Foreign Wars that this same reasoning would apply in the reorganization plan now proposed by the Administrator whereby 2 supply services, 3 engineering services, 4 budget ⚫ and finance offices, and 4 personnel offices would be created within the Veterans' Administration. Nevertheless, we are willing to go along with the Administrator in testing his proposed plan of reorganization but to reserve the right to lift our voice in criticism if it results in decreased efficiency and excess administrative costs.

The Veterans of Foreign Wars has consistently concerned itself with the question of cost in the operation of the Veterans' Administration. We are gratified to note that the chairman of this committee has appointed subcommittees to give particular attention to the principal problems affecting the operation of the Veterans' Administration. We know that Congressman Adair and his subcommittee will give careful attention to administration and finance and will be deeply interested in any reorganization plans. We also know that Congressman Kearney, our respected past commander in chief, and his subcommittee on hospitals, will be vitally concerned with the construction and operation of VA hospitals. We urge the subcommittee on hospitals to keep a careful eye on plans, specifications, and construction of new hospitals and facilities.

In conclusion, may I again express my appreciation to Mrs. Rogers and the members of this committee for the courtesy in granting the Veterans of Foreign Wars this special meeting. May I also remind the committee members of our annual congressional dinner honoring Members of Congress who have served in the Armed Forces. That dinner will be held tonight in the Presidential Room of the Statler Hotel. All Members of Congress, including veterans and nonveterans, male and female, have been invited to join with us in honoring our congressional veterans and we are pleased that more than 400 have accepted invitations. We have planned a nice dinner with some entertainment and a minimum of speechmaking. We promise the affair will not be extended to a late hour and I am hopeful that all of you will be with us.

Thank you.

The CHAIRMAN. Thank you, Mr. Commander. That is a very fine and comprehensive statement and I think will be helpful to all of

us here, to the Congress, and to the country. Are you ready for questions by the committee now?

Mr. COTHRAN. Yes.

The CHAIRMAN. I would like to ask you first, Mr. Commander, whether you have heard of instances in other States of veterans who have committed suicide, of some who have even committed murder, because of a mental condition for which they could not receive hospitalization or because they were turned out of hospitals too soon!

Mr. COTHRAN. Yes, Madam Chairman; I think that is one of the tragic matters confronting the country at this time. It is a disgrace and almost a crime that we have allowed such inadequate hospitalization to exist.

The CHAIRMAN. I should like to ask one other thing of the Veterans of Foreign Wars and that is that they will consult with their Members of Congress to ask the Rules Committee to grant a rule for our resolution which calls for authorization to send our subcommittees out into the field, when such need is indicated, to make a survey of hospitals and the training program and the matter of loans, and so forth.

Mr. KETCHUM. May I interrupt there, Madam Chairman?
The CHAIRMAN. Yes.

Mr. KETCHUM. Do I understand that there is a proposal pending before the Rules Committee to authorize this committee to send out subcommittees to investigate specific conditions affecting the veterans? The CHAIRMAN. Yes. I have already appointed subcommittees. The members are very fine and interested and I think it would be enormously helpful if we could obtain your cooperation in attaining our objectives.

Mr. COTHRAN. I should be very happy to do that. We are certainly highly indebted to this committee and, as an organization, we will be very happy to render whatever assistance we can.

The CHAIRMAN. Are there any questions by the members of the committee?

Mr. KEARNEY. Madam Chairman, I would like to make one observation with reference to the statements of the commander in chief on the hospital situation. As chairman of the Subcommittee on Hospitals, I think the Veterans of Foreign Wars know my stand on consolidating our veterans' hospitals under any other agency of the Government. I am absolutely opposed to it. I have spoken on this in a great many States and the arguments against our keeping the hospitals as they are, and in favor of putting them under a separate agency, do not make sense to me. For that reason I say, as an individual member of the committee although I think I voice the sentiment of the majority of the committee-we are not in favor of consolidating Veterans' Administration hospitals with any other agency of the Government. We are in favor of leaving them as they are.

Mr. COTHRAN. I think it would be one of the greatest tragedies that could be visited upon the veterans of this country if that were done.

I would like to say to the members of the committee that I have here with me my legislative director, Omar B. Ketchum; my rehabilitation director, George Ijams, and the chief of claims, Elmer Richter. If I cannot answer any question of a technical nature, I shall ask for them to help me. I will be very happy to attempt to answer any question that is not technical, and refer any technical questions to them, if I may.

The CHAIRMAN. They are very fine aides, Commander. I have been on the committee for 28 years, and I have been watching them for a longer period than that. I remember Colonel Ijams when he was with the Veterans' Administration and Chairman of the Board of Hospitalization.

Mr. COTHRAN. Yes, he has a wonderful background. He has had the experience of working as a member of the Government trying to carry out some of these things that we know are unworkable.

The CHAIRMAN. I also know Mr. Richter and the good work that he is doing and I know of his understanding of our problems.

Mr. KETCHUM. Madam Chairman, it might be of interest to the committee if I were to mention briefly that Colonel Ijams, our director of rehabilitation, was for 27 years the top Assistant Administrator of the Veterans' Administration and at one time was the representative of the Administrator of the VA on the Federal Board of Hospitalization.

The CHAIRMAN. I believe he was the Chairman of it, in effect.
Mr. KETCHUM. By title, in effect, yes.

The CHAIRMAN. I think probably he shares the same opinion we all do on this subject.

Mr. KETCHUM. I think the question came up at the hearing last Tuesday about whether there should be another Federal Board of Hospitalization. I think Colonel Ijams is one of the best informed men in the United States on the question of the necessity for a Federal Board of Hospitalization and if he has any comment to make on that subject at this time, I am sure the committee would be interested.

Mr. IJAMS. The Federal Board of Hospitalization, as the chairman and the older members of the committee know, was established in the Harding administration for the purpose of coordinating the hospital construction program of all Federal departments that had to do with hospitalization.

They had on the board a representative of the Navy Department, the Surgeon General; the Surgeon General of the Army; the Surgeon General of the Public Health Service, and the Commissioner of Indian Affairs, because the Indian Affairs Service operates hospitals for Indians. Also later they put on that Board the Director of the Bureau of Prisons and, of course, a representative of the Veterans' Administration. I might say that we were all quite envious of Jim Bennett, the Director of the Bureau of Prisons, during the war, because he was the only man whose personnel did not get away from him.

I think there is a great need for the reestablishment of a Federal Board of Hospitalization as an advisory board to the President of the United States, which was why the original Board was created. Unfortunately, during the period of the war, the then President abolished the original Board and reestablished it as advisory to the Director of the Bureau of the Budget. And that is where the trouble started.

Later, the next President abolished the Federal Board of Hospitalization and the matter was handled by one man in the budget office and to him we owe a great deal of the troubles that have grown up since that time.

The CHAIRMAN. I wish he were here, so you could tell him so.

Mr. IJAMS. I might say that I have frequently told him so, Madam Chairman.

Mr. TEAGUE. Madam Chairman, I had the pleasure of meeting the commander in chief of the Veterans of Foreign Wars and other members of the VFW in Paris last fall. I should like to say that I have never seen a man who is a better representative of the American veterans than Commander Jim Cothran. [Applause.]

I should also like to mention another thing concerning the Veterans of Foreign Wars, and that is the community service program which I think is one of the finest services rendered by the VFW. I understand that they turn over $10,000 or $12,000 each year to posts all over the country for community services in those individual communities. I cannot help talking about what a fine job some of your posts are doing in that service and I hope that that program will be continued in the VFW.

Mr. COTHRAN. You may be assured, Congressman Teague, that it will. And we appreciate the fine work that you did as one of the judges.

Mr. TEAGUE. I wish you would tell this committee how that program works, because it is a wonderful program.

Mr. COTHRAN. Last year virtually every post in the country-every VFW post-participated in our community service program. We actually got reports from between 6,000 and 7,000 of the 10,000 posts in the country-written reports from them.

From our records we find that the Veterans of Foreign Wars posts throughout the country completed more than 211,000 separate community service projects last year. We think it is a fine thing, making the communities throughout America better places in which to live. We think it is one of our best long-range means of combatting communism because when we eliminate poverty and want from our communities, the seeds of communism or any other foreign ism or ideology fall on barren soil.

The CHAIRMAN. Commander, is the president of your auxiliary here?

Mr. COTHRAN. No, but she has a representative here, Mrs. Atkinson from Nebraska. I might add that the Ladies' Auxiliary in the Veterans of Foreign Wars participated equally in that community service program. They put up half the money for the prizes and ran the thing, and made a very great contribution.

Mr. TEAGUE. I remember one example of that in a small town in Tennessee where, because of the VFW efforts, they were able to secure more blood donations than in a town adjoining that was almost four times its size.

Mr. COTHRAN. I remember how you fell in love with that post and I might say that I had the pleasure of visiting it a short time ago when I was in Tennessee. It is the town of Etowah, not far from Greenville. We only gave prizes to the first three, but Greenville was next. I am sure Congressman Evins is interested in that.

Mr. EvINS. It is in the same area. And, of course, Tennessee is always on top.

Mr. COTHRAN. Also, Congressman Evins, the post in Bristol is actually in the Department of Virginia, but they claim they embrace two States, Virginia and Tennessee, and it has won first place for 2 consecu

tive years. Dr. Richardson is a member of community service committee and one of the driving forces in that post.

Mr. AYRES. Mr. Commander on page 4 of your statement under point No. 5 you state:

The VFW is traditionally opposed to increasing the present 4-percent interest rate applying to GI home and business loans.

Mr. COTHRAN. Yes, sir.

Mr. AYRES. Our most able chairman has named me the chairman of a Subcommittee on Housing, and since then I have been literally swamped with requests from all over the country to get the boys a home.

In your opinion, what is the basic reason why more homes are not available to the GI's who want them?

Mr. COTHRAN. In my opinion, Congressman Ayres, there is a concerted effort to get interest rates up. I believe if they were raised, it would still be hard to get homes, because they would want to edge them up a little further. It would just be the opening wedge to raise interest rates. It looks as though it was the private loan concerns who do not want 4 percent on loans, because they think they can get a little more interest. We think we should extend the direct loan program to enable the GI to get a 4-percent loan.

Mr. AYRES. Do you feel that there are homes completed and ready for occupancy and which the GI would like to have but on which he cannot get a loan?

Mr. COTHRAN. Yes, sir; that is very true.

Mr. AYRES. And do you feel that that condition is more or less national and not necesarily a local one?

Mr. COTHRAN. I think it is pretty much national. I believe there would be more available if they could get the finances.

Mr. AYRES. Do you think that holding hearings to determine how many homes are available, how many are contemplated to be built, how many loans have been made, and so forth, would be a constructive thing for this committee to do?

Mr. COTHRAN. I think it would be. Mr. AYRES. Just one other question. This morning I met with Secretary of Labor Durkin in regard to complaints that he has received from some of the builders that there was a deficiency in the labor supply, so why worry about pushing a big GI building program when you cannot get the labor? He tells me that that is not so; that labor is available to the contractors who would build these houses, but they want to know whether the prospective buyers are going to be able to get a loan on the house before they invest their money in putting them up.

Mr. COTHRAN. I think that is exactly right, Congressman Ayres. I do not think there is any serious shortage of labor in the country at all.

Mr. AYRES. That is all.

Mr. EVINS. Commander, I was very much interested in your statement covering your historical study of payments to veterans, contrasting two different periods, in one case 3 percent of the veterans being covered and in another 13 percent. The contrast was between 3 percent and 13 percent. Your analysis shows that the cost for taking care of the veterans in the country has not gone up as much as has been generally heralded; is that correct?