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Senator Couzens. Will the Congressman permit me to ask what his interpretation of that language in the resolution is?

Mr. CONNERY. I would say it was a straddle, myself.
Senator COUZENS. That is what I wanted to get.
Mr. CONNERY. I would like to say to the Senator also-
Senator WATSON. A sort of Wickersham report?

Mr. CONNERY. Yes. As Congressman Rankin said yesterday, it reminded him of the story of the jury that came in and said, “We, the jury, find the man who stole the horse not guilty,” or something like that.

Senator BARKLEY. It should be said that probably, in their desire not to take sides as among these various bills, they are sort of walking the tight rope, and that was the nearest they could come to getting a resolution to indorse the principles without drawing any particular distinction.

Mr. Connery. In justice to the Legion, I want to say this. I was at the Boston convention. You have heard the report of how the report of the subcommittee was brought in. The subcommittee of the legislative committee reported 4 to 1 in favor of the 80 per cent proposition introduced by Congressman Patman, who was at that time a member of the committee. Then it went on the floor of the convention. John Quinn spoke against it, and at the end of his remarks moved that it be tabled, which left no opportunity for debate. No one was allowed to debate it further, and it was just tabled. They were not expressing the views of the service men of the United States in tabling that motion. A great many of the men in the convention did not even have a chance to understand what was up before the convention. That was just a motion to table. It was railroaded through, to block this thing coming up, really, before the American Legion.

These executive committeemen who went to Indianapolis last Sunday were in a very difficult position. They were in the position that the by-laws and the constitution of the Legion make them abide by the action of the Legion. This proposition had been tabled. What could they say? They could not say, under the by-laws, “We are coming out flatfootedly in favor of this." What they were trying to do in that resolution, or what they were trying to say, is that 90 per cent, at least, of the American Legion representatives in the United States, the rank and file of the men, want this paid. “We are tied legally by the by-laws, but, in fact, we are in favor of this."

Senator BARKLEY. I will say, in corroboration of that, that I have received scores of resolutions from American Legion posts in my State, where there is one in practically every county, and that without exception these resolutions state unanimously that the members of the Legion voted for the cash payment to the full face value.

Mr. CONNERY. Yes, Senator. As I was about to remark, yesterday this young fellow from Lawrence, Mass., who has been touring the United States, hiking, to advertise the American Legion Convention in Detroit next year, went out to Detroit, and he has been practically all over the United States. He just hikes along. He is broke. He gets rides in machines, and he has this thing on his back advertising the American Legion Convention. He said, “Congressman, you have no idea how the service men in the country feel about this bonus proposition. They brought their wives and their children to Mayor Murphy, of Detroit, and showed him little children with their toes sticking out of their shoes. They had no work, no money, and were practically without hope.”' To

my mind, this is the most vital thing before the American people to-day. I am a member of the Veterans Committee in the House. We legionnaires, on the question of the disabled men, do not even think about it. What I mean by that is that it is understood in the mind of every Member of Congress and every Senator that the United States is going to take care of its disabled men. We are going to build hospitals if necessary. We are going to put in the beds. If the United States did not do that, it would be the most ungrateful nation in the world.

What I want to bring to your attention is the fact that some people are using the disabled men as a football to stop this legislation. I do not mean to refer to Mr. Kirby. They are trying to pretend to the American people that if we pass this bonus bill, we will not take care of the disabled. We know we are going to take care of our disabled.

Senator HARRISON. Were you a member of the resolutions committee at the Boston convention?

Mr. CONNERY. No; I was not a delegate.

Senator HARRISON. I understood you to say that they reported out a resolution to pay 80 per cent by vote of 4 to 1?

Mr. CONNERY. The subcommittee reported, 4 to 1 in favor of it, and the vote in the full committee was 10 to 10.

Senator HARRISON. I understood it was 12 to 12.
Mr. CONNERY. No; 10 to 10.
Senator HARRISON. How many are there on the subcommittee?
Mr. CONNERY. Five.

Senator Harrison. What was the vote on the question of paying it in full?

Mr. CONNERY. Well, Congressman Patman's bill, of course, called for the payment in full. I think the idea was that if we could do something to give the men an option-in other words, pay them 80 per cent now, and then, if they wanted to hold their certificates

Senator HARRISON. Of course, the proposition of paying it in full did not come to a vote, either in the full committee or the legislative committee?

Mr. CONNERY. No.

Senator BINGHAM. Why could not the subcommittee do better than persuade half the full committee to go along with them? The. subcommittee constituted half of the full committee.

Mr. CONNERY. No; it was 10 to 10.

Senator WATSON. Regardless of what they did up there, or what they did out at Indianapolis, what is the right and proper thing to do under all the circumstances?

Mr. CONNERY. Pay the face value. That is what the men want, if you want to know.

Senator Watson. I am not asking what they want. I am asking what is the right and proper thing to do under all the circumstances. I would like to have you address yourself to that.

Mr. CONNERY. Senator, I introduced a bill in the House which goes further than the Patman bill, the Barkley bill, or any of the other bills.

Senator WATSON. What is that?

Mr. CONNERY. That is the Connery bill, which calls for the payment of the face value of the adjusted-service certificates if the man wants to take it. If he does not want to take it, give him 4 per cent interest with a cash surrender value, from now to 1945. In other words, suppose a man is entitled to $1,000 face value to-day. If he will keep the certificate until 1945, we will give him $2,000, and give him a cash surrender value in the mean time. Five years from now he may need it. He may not need it now. If he can hold it until 1945, give him $2,000; or, as a secondary plan to that, if he will take the $1,000 now, settle it now. If he will hold it, give him the $2,000.

Senator Watson. That is to say, you would give him an inducement to hold it?

Mr. CONNERY. Yes; 4 per cent interest, plus 25 per cent additional at 4 per cent.

Senator Watson. Of course, you go on the theory-and I suppose it is a proper assumption—that if we pass the redemption bill pro-viding for immediate cash, everybody will take it.

Mr. CONNERY. They will, Senator. They would be foolish not to. They can invest it and make more money than they could on the 4 per cent that would be given.

Furthermore, whatever you report or pass, I would like to see some inducement given to the man to hold his policy, because we want to take care of the wives and children if they die in the meantime. If you give him the full value now, he will take it. But I do not want to see them go half-way and say, “We will give them $600 now, and if they will keep it, we will give them $1,000.”

Originally, when the bonus bill was passed, there were four plans. Any one of them would have given a man more than $1,500, which is the limit he can get now until 1945.

I know what they will say. “You will go beyond the $3,500,000,000.” But I do not think you will be doing a great deal for the service men if you do go beyond the three and a half billion.

Senator HARRISON. May I ask you, as a member of the Veterans Committee of the House, when you expect they are going to bring out this bill with regard to hospitalization?

Mr. CONNERY. I have not the least idea. Senator BINGHAM. What is the cause of the delay? Mr. RANKIN. Mr. Chairman, I am on that subcommittee, and I will deal with that.

Senator BARKLEY. Do you think there is any danger that if the Senatz passed the bill first, the House would block it because of that fact?

Mr. Connery. I would not be surprised. I want to say right here--and I hope I will not be accused of any disloyalty to my side of the Capitol-that I think the most progressive legislation with reference to the veteran comes from this side of the Capitol.

Senator GEORGE. When you talk about disabled veterans' legislation, this committee and the majority of the Senate certainly stood for very much more liberalized disabled veterans' legislation last year.

Senator WATSON. There is no doubt about that.

Mr. CONNERY. I know, Senator; and in the last session, toward the end of the session, the Senate did the work for us, to enable us to bring out the pension bill.

But, Mr. Chairman, I do not want to take up any more of the committee's time. I listened to that very black picture which was painted yesterday by the Secretary of the Treasury and the undersecretary, but I am always mindful of the fact that Mr. Mellon seven years ago, when the bonus bill came up, made a mistake of a billion dollars. There was going to be a $300,000,000 deficit in the Treasury if we passed the bonus bill, and after we passed it there was a $500,000,000 surplus. So, I have faith in the United States, and I do not think the whole world is going to be disorganized if we do justice to the service men of the United States.

I thank the committee very much for their time, and I hope you will consider, Mr. Chairman and members of the committee, in whatever plan you bring out, giving the man the option to hold his certificate, and give him a little inducement to hold it.

Senator WATSON. We are very much obliged to you, Congressman. Congressman Clancy.

STATEMENT OF HON. ROBERT H. CLANCY, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF MICHIGAN Mr. Clancy. I wish to thank the committee very much for indulging me for a few moments. I promise to be very brief. I hope you will allow me to extend my remarks in the record very briefly.

Senator Watson. Certainly. That privilege will be granted to all the witnesses, if they care to avail themselves of it.

Mr. CLANCY. I have seven bills for relief of veterans before the House Ways and Means Committee. I think Senator Couzens knows that Detroit has been a hot spot in this agitation for payment of certificates--probably the hottest spot in the United States. The movement really originated there I believe.

I went to the American Legion Convention last September at Boston. I thought the entering wedge was this high interest rate of 6 per cent compounded, and the only victory which the veterans who wanted relief through their certificates won there was that victory. The American Legion Convention did go on record that the interest rate should be cut from 6 per cent to 4 per cent, and the recommendation should have been lower, I believe, because I know that on my committee of the House, the Committee on Merchant Marine and Fisheries, we loan millions of dollars to shipbuilders at a rate slightly above 2 per cent while the boats are on the ways, and, while the boats are operating in the water, at a rate between 3 and 4 per cent. I presume you know that we loan millions and millions to farmers at a rate slightly in excess of 3 per cent, and we loan to the District of Columbia interest free. It is unfair to charge the veteran 6 per cent compounded, because if he borrows $200 on a $1,500 certificate, that eats up the certificate.

Senator HARRISON. We are getting about one-eighth of 1 per cent from some foreign countries.

Mr. Clancy. Yes. I think you could go into this interest question almost without end and justify a reduction to the veteran on loans.

Senator BINGHAM. Is there a bill before us to consider that? It seems a very reasonable request.

Mr. CLANCY. My bill before the House was to kill all the interest. At the time this convention met

Senator Watson. To do wnat?

Mr. CLANCY. To kill all the interest if the veteran is starving, as many thousands are in Detroit. They are in destitute circumstances. When the Legion did take the aforesaid action, I introduced a bill in consonance with that, reducing the rate from 6 to 4 per cent.

Senator COUZENS. I do not understand the Congressman to mean that he wants a pauper clause in this bill.

Mr. CLANCY. Not necessarily, but I do think that if the veteran could show that he needs the money, he should be able to borrow on his certificate without paying any interest.

Senator BINGHAM. It seems to me a very reasonable thing. The veteran ought to be able to borrow at 4 per cent. That is what the Legion recommended, is it not?

Mr. CLANCY. That is what the Legion recommended.

Because, as one veterans' representative has stated, some of these soldiers have been afllicted with wanderlust, and because Detroit has paid such high wages, they flocked to my city. We have a very acute situation in Detroit. At one time I think we had at least 200,000 men out of work, which means that 800,000 people are on the verge of starvation. We are paying over $1,000,000 a month out of our city poor fund alone to provide these people with the necessities of life. Then we have many private funds. I have been at meetings, where there have been as many as four or five thousand veterans, and there is no doubt that their attitude is that they want the adjustedcompensation certificates paid in full, in cash, immediately, as Congressman Connery has said to-day.

I started a little questionnaire a few days ago, in which you might be interested. In Detroit we have some of the largest factories in the world, not only automobile factories, but we have the largest drug factory, the largest rubber factory, the largest stove factory, and the largest adding machine factory, with agencies all over the United States and all over the world.

As you know, of course, business men, capitalists, bankers, and so forth, opposed the bonus in 1923, 1924, and 1925, but we have been so acutely in touch with suffering of these men, I think that our capitalists are a little more generous and philanthropic than the average business man. They have been going down in their pockets very generously to provide for these starving men, women, and children. I asked them, in telegrams, if the payments of this cash would tend to a business revival and restoration of good times.

I got a telegram from the president of what I think is the largest stove company in the world, the Detroit-Michigan Stove Co., Mr. W. T. Barbour, saying that it was impossible for him to come down here personally, but he says:

I believe at least a part payment in cash of Great War veterans' adjustedcompensation certificates is justified and would be of benefit to those entitled to it, and the placing of added money in circulation would be helpful.

I have a telegram from the Purchasing Agents Association of Detroit, who were particularly affected by the hard times, in which they express themselves as being in favor of the immediate cash payment in full.

I have a letter from a very brainy banker and bond dealer there, Matthew Finn, who did run formerly his own bank. He says the

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