ties for employees. It is believed that the providing of such facilities. for employees at isolated stations will greatly reduce the turnover in personnel. It will increase efficiency of the personnel assigned to such institutions by adding to their limited means of amusement. It is impossible to estimate the exact cost of this amendment, but it is contemplated that recommendations for the same will be submitted in connection with the appropriations for future hospital construction.

The CHAIRMAN. Then that is all right.

General HINES. Yes, sir; we have no objection to that.
The CHAIRMAN. You may continue your statement.

General HINES. Section 2 of the bill also amends section 10 of the act by authorizing and directing the transfer of the Battle Mountain Sanitarium and the Battle Mountain Sanitarium Reserve from the jurisdiction of the Board of Managers of the National Home for Disabled Volunteer Soldiers to the bureau. The bureau at the present time is using these facilities to the extent possible. However, it is apparent that if this hospital is transferred it will be used more nearly to capacity and will eliminate the demand for a new veterans' hospital in the South Dakota ares. In this way there will result a considerable saving.

At this point I might call the subcommittee's attention to a bill which recently passed the House, which calls for a consolidation of the Veterans' Bureau, the Pension Bureau, and the Bettle Mountain Sanitarium and the Battle Mountain Sanitarium Reserve under

one Federal agency. If that bill should become a law this language would of course be unnecessary. Personally I can see no very sound reason for singling out one extension as against all other extensions. Senator WALSH of Massachusetts. That is in conformity with the recommendation of the President, is it not?

General HINES. Yes; I think so. Of course, I would not want to say that it meets all of his views, but I think it brings about the principle he wishes of bringing these agencies all together.

Senator SHORTRIDGE. Your immediate comment is addressed to the provision found from line 3 to line 14 of the bill.

General HINES. Yes; it refers to the transfer of the Battle Mountain Sanitarium.

Senator WALSH of Massachusetts. And if the other bill goes through this should come out.

The CHAIRMAN. I think we should take this out, because the other bill is likely to go through, and it is only a piecemeal affair, and it should be in one piece of legislation.

General HINES. We could undoubtedly use it, but if the other bill is to go through I suggest that it be not put in here.

Senator WALSH of Massachusetts. Was there any objection made to the other bill in the House?

General HINES. There was considerable debate on it, but it passed by a large majority.

Representative RANKIN. The debate was upon the matter of the consolidation of the Pension Bureau.

Senator SHORTRIDGE. What is the scope of that bill?

General HINES. It contemplates consolidating in a new Federal agency, to be known as the administration of veterans' affairs, the Veteran's Bureau, the Pension Bureau, and the National Homes for

Disabled Volunteer Soldiers-that is, the soldiers' homes now administered by a Board of Managers. It brings about a consolidation and prevents overlapping, brings about a coordination of these agencies, leaving them as rather smaller units or bureaus in the larger units. Senator SHORTRIDGE. And it passed the House the other day? General HINES. Yes.

The CHAIRMAN. You may continue your statement.

General HINES. Section 3 of the bill amends section 16 of the act and authorizes the refund of premiums paid beyond the date of maturity on war-risk term insurance. The bureau has always refunded such premiums, but the Comptroller General recently held that the bureau appropriations were not available for such purpose. In view of the fact that no risk attached to the Government for the period covered by these premiums, and that it is the practice of commercial insurance companies to refund the same, it is believed that this amendment is proper. As the premiums to be refunded were paid by the insured beyond the date of maturity, the refund will not result in any increased cost to the Government.

The CHAIRMAN. Why do you add this "yearly renewable"? I think you put it in in three places, and I do not understand why it is there.

General HINES. In order to identify the insurance. The Government has two forms of insurance; the one being the everyday kind of insurance, which has a level premium and is continuing on now, in the commercial form of insurance. But the old war-risk insurance was renewable yearly. It has to be renewed each year so as to be kept in force. We have always referred to it as renewable.

The CHAIRMAN. It is not in the present law. And consequently this does not bear on it, does it?

General HINES. I think so.

The CHAIRMAN. In section 16, line 20, there appears "renewal," and at line 24 and at line 5, page 5. That is not in the existing law. General HINES. What we are really referring to is term insurance, which was the old war-risk yearly renewable term insurance. The CHAIRMAN. But is it necessary here?

General HINES. Senator, on page 7 of the World War veterans' act of 1924, section 16, reads this way:

All sums heretofore appropriated for the military and naval insurance appropriation and all premiums collected for the yearly renewable term insurance. There the word used is "renewable" and not "renewal." That was to distinguish it from the convertible insurance now in force. That is a misprint in the bill. It was intended as renewable and they have it renewal. In other words, we have practically the same as the commercial practice, that when a premium was not earned, whatever the unearned portion was would be refunded. In other words, if a policy matures we would refund the unearned part, the same as if you had a commercial policy, or a fire insurance policy, or an automobile policy. If the full premium was not earned, the portion would be refunded at the end of the term.

Senator WALSH of Massachusetts. It was something to correct a ruling by the Comptroller General, something between his ruling and your own, as I understood it.

Senator SHORTRIDGE. It should be "renewable" then?

The CHAIRMAN. That is what I could not understand, why it should be "renewal".

General HINES. You should change it to "renewable" on lines 5, 20, and 24. I will have Mr. Roberts follow these things along and make these corrections for you, if that is agreeable.

The CHAIRMAN. All right.

Senator SHORTRIDGE. Then where the word "renewal" appears there it should be "renewable"?

General HINES. Yes.

The CHAIRMAN. You may proceed with your statement.

General HINES. Section 4 of the bill amends section 19 of the act by authorizing the courts as part of the judgment to direct the refund of premiums. This amendment will not result in any increased cost to the Government for the same reason pointed out in the comment on section 3 of the bill.

That is, we have collected premiums and if the courts so rule, all right.

The CHAIRMAN. You put in to include a claim for refund of premiums.

General HINES. Yes.

The CHAIRMAN. Isn't that the practice now?

General HINES. It has been the practice, but there is really no definite legal authority for it. I wanted it put into the law.

The CHAIRMAN. It is only carrying out what you are now doing? General HINES. That is right.

The CHAIRMAN. All right. Proceed with your statement.

General HINES. Section 4 of the bill also amends section 19 of the act which relates to the filing of suits on insurance contracts by extending the time during which suits may be instituted one year from the date of the approval of the amendatory act. Under existing law, suits may be instituted within six years after the date the right accrued for which the claim is made or prior to May 29, 1929, whichever is the later date. Certain exceptions are made in the statute to protect the interests of minor and incompetent beneficiaries and the running of the limitation period is suspended for the period elapsing between the filing in the bureau of the claim sued upon and the denial of said claim by the director.

There are now pending in the courts approximately 5,000 suits on insurance, 90 per cent of which are based upon a claim that permanent and total disability existed at the time of the discharge of the veteran from the military service some ten or more years ago. It would seem that if a claimant had actually been permanently and totally disabled six years or more he would have presented his claim before the bureau and, if disallowed, would have entered suit before this. There existed during the war approximately 4,500,000 contracts of insurance, the majority of which were permitted to lapse at date of discharge from the service. Suits on the greater number of these contracts are now barred by the statute of limitations. The number of suits now barred which might be filed if this amendment were adopted is, of course, rather difficult to estimate.

However, it is known that there are some firms of attorneys which are making a specialty of instituting these suits and which, up to the date of the application of the statute of limitations, brought them by the hundreds. Many cases upon which suits are filed have little or not merit. While it might seem that they would be easy of defense

by the Government, it must be remembered that courts and juries are naturally sympathetic to the veterans. Further, little evidence is required to sustain the burden of proof for the plaintiff, and cases are often decided in favor of the veterans where the only evidence presented is their own testimony and that of friends and relatives concerning their condition when they returned home from the military service and subsequent thereto. It is very difficult for the Government to secure evidence as to just what a man's disability was, if any, and whether or not he was actually able to carry on in a successfully gainful occupation during this period. For the reasons given it can be seen that an extension of time during which suits may be instituted is not desirable from a governmental standpoint. The bureau reported adversely on this amendment when it was pending before the veterans' committee.

The cost of this amendment can not be estimated, but there is no question but that if it is adopted a large number of cases which would not otherwise be payable will be paid. In this connection it should be understood that judgment results in a setting up of a minimum. liability against the Government of $13,800 in each case, unless before all payments are made an escheat is effected. In view of the fact that the Government's liability term insurance now exceeds the premium income on such insurance which has ceased by approximately $1,300,000,000, it can be seen that the entry of additional judgments will materially increase the cost to the Government. Also, there is for consideration the cost of the defense of these suits. It is estimated that the cost of defending one of these suits is approximately $4,000. Therefore, even though the Government may receive judgment against the plaintiff, the cost of the defense of the suit has to be paid by the Government.

Mr. Chairman, I should like to state further to this subcommittee that in my judgment that is one of the very serious problems in the bill to-day. We all know that in considering insurance suits against insurance companies the tendencies of courts and juries is to side. rather with the claimant. With the veteran we have all that influence in suits and more, in that in a community it is a difficult thing for the district attorney to make a defense. They dislike that character of suits, against veterans. If I felt that these claims were meritorious of course I would not ask that this amendment be taken out, but many of these suits involved in such cases

Senator WALSH of Massachusetts (interposing). Do you mean suits that might be brought in the future?

General HINES. Yes. They may involve his estate. They do not always involve him or his dependents. If it involved wife and children it would be different. But it seems to involve persons at a greater distance from the veteran. If we could bring about a more uniform position in decisions it would be different. So that it would seem we should not extend the time for filing suits.

Senator WALSH of Massachusetts. A good many of these cases filed on the last day were filed for the purpose of preserving any loss of rights of beneficiaries, I take it. You do not anticipate that all of them will be seriously pushed, do you?

General HINES. No; but we have the unfortunate situation that some cases which we have have no merit. For instance, if a man can show to a jury that he has been unable to carry on in a gainful occu

pation regardless of what the medical facts may show in our records of his condition when he came out of the service, and he has since been declared permanently and totally disabled by the bureau, he will get his judgment.

Senator SHOrtridge. You advocate that?

General HINES. Yes, sir.

Senator SHORTRIDGE. What is the statute of limitation now?
General HINES. Six years.

Senator WALSH of Massachusetts. This time would only apply to cases where the six years have expired?

General HINES. That is right.

Senator SHORTRIDGE. Under the present law the statute of limitations for commencing action is six years.

General HINES. Yes, sir. And he has time out in the bureau also. In other words, the statute of limitations is held up during the time the bureau is considering his claim.

Senator SHORTRIDGE. It begins to run at what time?

General HINES. At the date when the situation is determined. Senator SHORTRIDGE. He has six years plus the time it takes the bureau to adjudicate or determine the matter?

General HINES. Yes, sir.

Senator SHORTRIDGE. Now, the proposition is to extend that period of limitations.

General HINES. Yes. They put in a limiting date as of May 29, 1929, and it has now expired. At this time they want to extend it to May 29, 1930, or one year from the date of this act.

Senator SHORTRIDGE. So that it would permit the legal commencing of certain actions of this character within the added period.

General HINES. Yes; and a large number of other cases would undoubtedly be brought.

Senator SHORTRIDGE. And in all probability a large number of additional cases would come in?

General HINES. Yes.

The CHAIRMAN. I notice on page 6, lines 23 and 24, the House put in section 346 and section 347 that are not in the existing law there— the existing law, sections 239 and 240 of the Judicial Code.

General HINES. That is it.

The CHAIRMAN. That is what it is to-day?

General HINES. It is 346 and 347 of title 28 United States Code to-day. They inserted, as I understand it, merely the sections and the title of the United States Code in lieu of sections 239 and 240 of the Judicial Code.

The CHAIRMAN. Isn't it under the practice to-day, sections 239 and 240 of the Judicial Code?

General HINES. Yes, sir.

The CHAIRMAN. Now, the House changed that to sections 346 and 347, title 28, of the United States Code.

General HINES. They are the same sections.

The CHAIRMAN. They are the same identical sections?

General HINES. Yes, sir.

The CHAIRMAN. So that it makes no difference.

General HINES. Except by making it refer to the United States Code instead of the Judicial Code.

The CHAIRMAN. All right.