headed by former President Hoover would recommend that we go back to the same intolerable conditions which existed when he issued the Executive order.

The Veterans of Foreign Wars shall continue to insist that the Veterans' Administration be retained as a single agency dealing specifically with problems affecting veterans and/or dependents in their relations with the Federal Government. This does not mean that the Veterans of Foreign Wars has opposed, or is opposing in general, all of the recommendations of the Hoover Commission. We have expressed no opposition to any recommendations of the Hoover Commission except some of those which deal with veteran preference and the transfer of authority and activities from the Veterans' Administration to some other agency of the Federal Government. We doubt the wisdom of transferring the veterans' home and business loan privileges from the Veterans' Administration to the Federal Housing Administration and we are apprehensive that the creation of a separate insurance corporation would result in increased costs without increased efficiency.

Our national staff has carefully studied the highly publicized BoozAllen-Hamilton report on a survey and analysis of the Veterans' Administration. There is some question in the minds of our staff members as to the value of this survey. We are of the opinion that the advisory staff to the Administrator of Veterans' Affairs was available, ready and competent to prepare a workable reorganization at a savings of some $600,000—the cost of the Booz-Allen-Hamilton report-if they had been called upon to make such a recommendation. We are gratified, however, that the Administrator of Veterans' Affairs was not persuaded to adopt the complete findings and recommendation of the report.

Our national staff has also made a careful study of a proposed reorganization outlined by the Administrator of Veterans Affairs which was based, to some extent, on the Booz-Allen-Hamilton report. In view of the fact that the Administrator's reorganization plan is the only specific proposal to change the existing VA organization structure, which, no doubt, is in need of some changes, we are willing to go along with the proposal but with certain reservations. When the Administrator's reorganization plan was first proposed our reaction was somewhat unfavorable and in a letter to former President Truman we suggested that the reorganization be deferred until after January 20, 1953. This would give President Eisenhower and his advisers an opportunity to decide changes in policy and future operation. In suggesting that the Administrator's reorganization plan be deferred we took the liberty of pointing out some of our objections. We pointed out that the Administrator's proposed reorganization plan would, in effect, create duplication of services, substantially increase the number of Assistant Administrators, or persons of equal rank and would move farther away from a functional type of administration in the Veterans' Administration. Specifically, the plan would create 2 supply services, 3 engineering services, 4 budget and finance offices, and 4 personnel offices. It is difficult to believe such duplication will actually result in either increased efficiency or economy. It seems to the Veterans of Foreign Wars that a return to a simplified functional operation of the Veterans' Administration which existed for several years prior to 1945, with 1 or 2 changes, would result in a

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.