STATEMENT OF O. J. RANDALL, CHIEF OF FINANCE DIVISION, BUREAU OF PENSIONS

Senator WATSON. How long have you been connected with the Pension Bureau, Doctor?

Mr. RANDALL. About 40 years.

Senator WATSON. What is your present position?

Mr. RANDALL. I am now Chief of the Finance Division of the Bureau of Pensions, and the budget officer of that bureau.

Senator WATSON. Senator Connally, have you any questions to ask?

Senator CONNALLY. I wanted to interrogate him on his estimates about the cost of this present bill on a $40 basis, and on a $60 basis, in the light of the experience of the Pension Bureau. I understood his calculations and figures are lower than those of General Hines.

Mr. RANDALL. I might say, in answer to that, Senator, that we have not had this bill before us to figure. I saw this bill for the first time this morning.

Senator CONNALLY. The House only saw it this morning. They voted on it yesterday, and saw it this morning.

Mr. RANDALL. We have figured extensively on a similar bill, known as the Swick bill, which provided rates ranging from $10 to $50 per month, based upon one-tenth, one-fourth, one-half, threefourths, and total disability. In approaching that problem, the only basis that we had at all that might be of value was our experience with the war with Spain survivors. So we took our experience covering the first five years subsequent to the passage of the act of June 5, 1920, and found what percentage of the then surviving war with Spain men were allowed a pension, and at what rate.

We found that at the end of 5 years approximately 25 per cent of the war with Spain men were on the roll drawing pensions. Incidentally, I might say that 43 per cent of those who filed were rejected. The 25 per cent on the roll represented 57 per cent of those who claimed pensions. I have not heard to-day any suggestion as to how many might claim and be rejected. The assumption has been that they would all be allowed, apparently.

Senator BARKLEY. Up to that time there had been no Spanish War pension.

Mr. RANDALL. Not a service pension.

Senator BARKLEY. And you did not have to deduct from those who subsequently applied so large a proportion as would be true in the case of the World War veterans, because of so many being already on the rolls for service connection.

Mr. RANDALL. We had 16,000 on the roll at that time for serviceconnected disabilities, under what we call the old general law pension. Senator WALSH of Massachusetts. What percentage of the total was that?

Mr. RANDALL. Of the total number of Spanish War veterans?
Senator WALSH of Massachusetts. Yes.

Mr. RANDALL. There were about 400,000 Spanish War veterans, and that would be about 4 per cent. About 4 per cent had already been allowed a pension for service-connected disabilities. The average disability at the end of this 5-year period was a little more. than one-fourth.

Senator CONNALLY. You started at 10 per cent. Mr. RANDALL. We started at 10 per cent. If we had not had a 10 per cent classification, I suppose the average would have been higher than that, because we would have done what is almost inevitable. If a man has one-tenth disability, or a little more, and there is no one-tenth rating, we are going to give him something, so the only thing to give him is 25 per cent. My opinion is that the 10 per cent rating is a valuable factor, for the reason that you can give a man a one-tenth rating, and the corresponding rate, and he is satisfied for the time being, and he will not come in for the 25 per cent rating until later. If you do not have a 10 per cent rating, you are confronted with the necessity of either giving him a 25 per cent rating, or giving him nothing; and I think that is a consideration of value.

Senator THOMAS of Idaho. In the event of not having the 10 per cent rating, would the chances be that more veterans would get the 25 per cent rating?

Mr. RANDALL. A larger percentage would get the 25 per cent rating than would be the case if you had a 10 per cent rating. Offhand, I would say that perhaps 50 per cent of those who might, under a strict interpretation of the 25 per cent proposition, fail to establish their right to it, nevertheless, would get it, because these doctors are sympathetic.

I have listened with considerable interest to what has been said-
Senator BARKLEY. Which doctors do you mean?
Mr. RANDALL. The examining surgeons.

Senator BARKLEY. You mean under the bureau?

Mr. RANDALL. Yes; the men out in the field who know these men and who are their neighbors. They are the family physicians in many cases. It is my feeling that they rate them not so much in terms or degrees of disability, but in terms of dollars. If they can give a man $20 a month they will say, "Now, that is pretty good to start him on. He ought to be satisfied with that. We will give him $20." There is no way of determining when a man is one-tenth disabled or one-fourth disabled.

Senator SHORTRIDGE. I do not see how you could determine that mathematically a man is 10 per cent deficient.

Mr. RANDALL. I have asked our doctors about it, and they say they can not tell.

Senator THOMAS of Idaho. You feel, then, that the veteran would get the benefit of the doubt.

Mr. RANDALL. Yes. I have been interested in the testimony here to-day with respect to the rating of, say, 37%1⁄2 per cent being made practically, 50 per cent. Our examining surgeons do not indicate a percentage. That is, they confine themselves to the terminology of the law, or the regulations, of the office, and they say one-fourth, onetenth, one-half, three-fourths, or total. They do not say 37 per cent. They do not have any fractional percentages at all. They size a man up. They look him over, and if he is anemic, even though he may not have an organic disease, they say, "Well, that fellow couldn't work." That is another thing that makes it difficult for us to compare our figures with General Hines's figures, for the reason that this law specifies that the disability is permanent, as defined by the director.

If a man has it

We do not raise the question as to permanency. to-day, he goes on the roll and stays on the roll until, by a subsequent application, he opens up the case and we then discover, perhaps, that he has to some extent recovered from his former disability, or we may reduce him; but that is a very remote possibility. We do not often do it.

Senator WALSH of Massachusetts. That would tend to make the number of veterans who would come under the provisions of this pension much less, proportionately, than under your law.

Mr. RANDALL. Yes; I would say so, if the matter of permanency is taken into consideration, as, of course, it will have to be if the law is carried out strictly. This, as defined by the director

Senator WALSH of Massachusetts. The word "permanency" is not in the Spanish American War law.

Mr. RANDALL. No. The term in the Spanish-American War act is "a disability which so incapacitates them for the performance of manual labor as to render them unable to earn a support."

Senator CONNALLY. That, in itself, is more or less permanent. If a man was sick a couple of weeks you would not give him a pension, but you figure that if he can not earn a support it means that he is permanently disabled.

Mr. RANDALL. The examining surgeon would have to take that into consideration.

Senator CONNALLY. So far as you can see, at the time he is unable to make a livelihood.

Mr. RANDALL. Yes; we never raise the question again.

The question of the degree of disability must be resolved by the director. As indicated by General Hines, it would be based upon the degree of decreased ability to earn a livelihood at his present occupation. Of course, we do not ever take that into consideration. A man might be a banker getting $50,000 a year salary, and if he was one-half disabled for the performance of manual labor, we would give him a corresponding rating.

Senator ROBSION. I wonder if I would be permitted to ask a question. I was for 10 years on the Pension Committee.

Senator WATSON. Certainly.

Senator ROBSION. Is there any really economical way of administering the pension law, or disability law, without service connection, unless you base it on his ability to perform manual labor? In other words, if you consider occupations, do you not enter into a hundred fields that have to be investigated?

Mr. RANDALL. It would seem so to me. Of course, I am not capable of answering that question.

Senator BARKLEY. How would you determine the degree of incapacity of a man who was not actually engaged in manual labor? He might be able to carry on in some profession without any pension. He might be disabled to the extent of 50 per cent, to perform actual manual labor; but if he is incapacitated to perform the duties of the work in which he is engaged, would you deny him a pension on the ground that he is not actually engaged in manual labor?

Mr. RANDALL. No..

Senator BARKLEY. Or would you just take into consideration the assumption that if he were engaged in manual labor he would be disabled a certain percentage?

Mr. RANDALL. We do not take into consideration at all the question of what he is now doing.

Senator SHORTRIDGE. What is manual labor? Take a building. There is the architect. There is the artisan; and there is the artist. Are they all engaged in manual labor?

Senator ROBSION. The question is the physical condition of the man. That enters into the whole question.

Mr. RANDALL. Yes. Of course, strictly speaking, manual labor is labor with the hands.

Senator SHORTRIDGE. Guided by the brain.

Mr. RANDALL. Yes.

Senator ROBSION. I would like to ask this man another question. that is very interesting. You are going to have, perhaps, half a million, or a million men, applying for pensions. Under the present law and the administration of the Veterans Bureau, you are going to have them, as we have had them in our State for years, traveling clear across the State to be examined. I investigated that a year or two ago, and I really think there is a possibility of a saving of $20,000,000 a year by having these men examined in their counties, as you do the Spanish-American war veterans. I wanted to ask this witness about that.

Mr. RANDALL. The average cost per examination now is a little over $5. Up to a couple of years ago we had boards of examining surgeons, made up of three physicians who received each a fee of $3 for each examination. The law was changed so that instead of a board of three, we now have single surgeons making these examinations alone. Their fee is $5 plus their traveling expenses-that is, the physician's traveling expenses, when it is necessary for him to visit the home of the applicant. A man may not be able to travel to the office of the doctor, so the doctor goes there. A recent check up shows that the average cost is about $5.05 per examination.

Senator SHORTRIDGE. The cost to the Government?

Mr. RANDALL. To the Government; yes. We have 5,000 of these examining surgeons scattered throughout the United States, and they are carefully selected. No doubt the members of the committee know how it is done.

Senator CONNALLY. Would there be any reason why the Veterans' Bureau could not utilize that same doctor and pay him the same fee? Mr. RANDALL. I should think the director, under this bill, would have ample authority to utilize the present examining surgeons of the Bureau of Pensions.

Senator CONNALLY. It would save a great deal of money.

Mr. RANDALL. Section 5 says: "The director, subject to the general direction of the President, shall administer, execute, and enforce the provisions of this act." The law which created the Commissioner of Pensions states that he is under the direction of the President of the United States; so that could be worked out.

Senator CONNALLY. The Executive, if necessary, could authorize him to employ all your doctors, could he not?

Mr. RANDALL. I should think so. We would have to increase the number of our doctors, no doubt.

Senator ROBSION. For merely a service disability pension, based merely upon the physical condition, would there be any good reason to have a man travel 100 or 200 miles, pay railroad fare, Pullman

fare, and hotel bills, to be examined in connection with an application for a pension?

Senator SHORTRIDGE. Is that necessary?

Senator BOBSION. That is the way it is done under the Veterans' Bureau.

Senator SHORTRIDGE. That would seem to be very wasteful.

Senator ROBSION. I had a man in my district who had been examined 13 times, and that expense was something over $1,200 in a single year.

Senator SHORTRIDGE. It would seem to me that if there were a competent physician locally, he might be appointed.

Senator ROBSION. But the Veterans' Bureau does not have such a system. The Pension Bureau does have such a system of examination. Senator LA FOLLETTE. I would like to get to these estimates, Doctor, if you please.

Mr. RANDALL. On the basis that I outlined, and the experience that we had in the first five years, assuming that there were 4,000,000 men in the World War who might be pensionable, based on the experience of having 25 per cent of the Spanish War men coming in in the first five years, we estimated that the first year 10 per cent of 1,000,000, which is 25 per cent of 4,000,000, would come in, and that at the end of five years would have 1,000,000 men on the roll. Of course, they would not all get on the first year. So, basing the estimate on the experience we had with the War with Spain group, I believe that 10 per cent would come in the first year.

That would mean that there would be 100,000 come in and be allowed, at a cost of $18,000,000. That, of course, was on the basis of the original bill, which fixed a rate of $15 for one-fourth disability, and the experience of the bureau was that that was the average disability-one-fourth at the end of five years.

So, notwithstanding the fact that the World War men were about 10 years younger than the war with Spain men, yet, for the sake of safeguarding the interest of the Government, and not figuring this bill to cost so much less than it really might cost, we leaned over backwards in trying to be safe.

Senator ROBSION. Is not that based on the Swick bill, where you begin with 10 per cent and $10, and go up to $50?

Mr. RANDALL. That is based on the Swick bill, because that is the only thing we ever had before us. Between this morning's session and this afternoon I tried to make a guess as to what might be the cost based upon the $25 rate, instead of $15. Using the same percentage of allowances for each of the five years, I find that the cost the first year would be about $30,000,000. I am assuming that 25 per cent are one-fourth disabled.

Senator WALSH of Massachusetts. $25.

Mr. RANDALL. Yes. If you are going to eliminate the 10 per cent, I do not know how many of those are going to lose out altogether, or how many are going to come in and get the $25.

Senator CONNALLY. One hundred thousand at $25 would be $25,000,000.

Mr. RANDALL. At $25 a month, that would be $30,000,000 a year. That is $30,000,000 in one year. The cumulative cost in one year would be $105,000,000.