Mr. O'CONNOR. Right there, of course, the average security, the value of the average security could be found out by just taking down one of several books, Poor's, and so forth. Take these real-estate securities in Chicago, for instance; there is no great difficulty in finding out from the Veterans' Administration's connection with any brokerage or bond house in Chicago; they can find that out.

General HINES. Of course, the matter of securities varies in the States. Some States have a broader list of securities that are more suitable for trust investment than others. It is quite true that in normal times you can probably rely upon the ratings, Moody's ratings, and the many ratings of securities. I feel that generally in normal conditions, when we are not faced with what we have had since 1930 up to date, we probably would have little difficulty. And I am willing to repeat again that I feel that the estates of veterans, compared with the estates of others in the United States, as to their present condition, will be found much more favorable than the estates of guardians generally throughout the country.

Mr. O'CONNOR. Does this uniform guardianship law prescribe the type of investment?

General HINES. It simply says investments prescribed by the State, suitable for trust investments. That is the wording of it, as I understand.

Mr. O'CONNOR. It does not say savings banks, just trust investments?

General HINES. I think savings banks and trusts, trusteeships, words to that effect.

Mr. O'CONNOR. Substantially the same. They vary, of course, from week to week?

General HINES. Yes; and they vary a great deal in some of the States. Some States have much easier laws in that respect than others. Of course, the uniform guardianship law was desired primarily to get some uniformity in our practice in dealing with the courts, and gain the support of the State courts by having the States pass such a law. I think it has been a rather remarkable forward step in that regard. I think you will find that the courts generally will say that that was an excellent piece of work.

In some States it was not started soon enough. It will be recalled that the institution at Marion did not come into the Veterans' Administration for administration until after the consolidation in 1930. It was operated by the Soldiers' Home.

So if this investment were made prior to that-and undoubtedly many of them were-we had no opportunity to say anything about it. I have no doubt that the receiverships have had a great deal to do with our troubles. If the banks had not gone into receivership we would have heard nothing about this. When we were called for an accounting, if the securities were not proper, securities proper in the judgment of the court and of ourselves would undoubtedly have been substituted. We have no opportunity to do that now. Therefore they show up in their actual light.

Mr. O'CONNOR. You take this instance where that bank out there has filed a claim of its own in a certain receivership and has not filed. a claim in behalf of the guardianships it represented. Was there not

some way the Veterans' Administration could have found that out and taken proper steps to compel the

General HINES. Not until we did find it out. I think that unfortunately we had a regional attorney who died out there. He knew the back history of this. The new regional attorney has taken, I think, all the steps that he should have taken, and as soon as he could take them, in filing the suits.

Can you tell me when the suits was filed out there?

Mr. ODOм. The suits were filed, as far as the receiver of the old First National Bank was concerned, to get his final accounts prepared. Answering your question, sir, the claim was filed by the receiver of the bank. He no longer could act as guardian, and it was obligatory upon the new guardian to file the claim with respect to those funds.

May I make this statement, too, General, that when we discovered these facts, which have been so well presented to you by Mr. Cleland-and we did discover those in December 1932-our then chief attorney, Mr. Breedlove, informed the officials of the Marion National Bank as to what we had discovered, and told them that unless they restored dollar for dollar, and penny for penny, in cash or Government bonds, every cent that had been invested in these doubtful securities, he was going to do two things: First, the suspension of payments to them; and second, file petitions in court to force the resignation or retirement as guardian, and to appoint a successor guardian that would take the necessary steps to recover these assets. General HINES. What is the status of those now?

Mr. ODOм. The official of the bank, Mr. Williams, at that timeand this was about the first week in February 1933-promised that within 60 days, every one of these doubtful securities would be replaced by Government bonds. I do not need to remind you gentlemen what happened in the first week in March 1933 with respect to the banks.

Mr. O'CONNOR. Were they replaced?

Mr. ОDOм. They were not; because the bank went into a conservatorship the first week in March 1933 and went into receivership in November 1933. So we had to proceed to suspend payments, and we were saved the filing of the action to have the guardian removed by its resigning.

Mr. SABATH. I am very much interested, of course, in the situation in Chicago. I would like to know how far you have gone as to the investigation there.

General HINES. I might say to you, Congressman, that the situation in Chicago is working out very much to our satisfaction. We feel that we will get full recovery there.

Mr. SABATH. Who are the people that are still acting as guardians there? Have you that?

General HINES. What is the name of that trust there?

Mr. ODOм. The Foreman Bank was one of the banks in Chicago, and it held a number of guardianships, which have been distributed amongst some 10 or 12 other banks and trust companies in the Loop district and one or two outlying; is that the information you desire? General HINES. I can give you the list of those, if you wish. Mr. SABATH. I would like to have the names of them. Mr. ODOм. I cannot name them offhand.

Mr. SABATH. No, no.

Mr. ODOм. I can get them for you.

The CHAIRMAN. General, if that is all, sir, we are very much obliged to you for appearing.

General HINES. Thank you, Mr. Chairman, and gentlemen of the committee.

STATEMENT OF HON. GLENN GRISWOLD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF INDIANA

Mr. GRISWOLD. It was suggested by General Hines that these be handled by the Veterans' Affairs Committee. I want to say to the committee that I am a member of the Veterans' Affairs Committee. I endeavored to get some investigation made for the past 3 years, through Mr. Rankin. I want further to suggest to the committee that the Veterans' Affairs Committee has met once during the Seventy third Congress, although there are at present some 145 bills referred to that committee, and pending; so that the chances of getting any action whatsoever through the Veterans' Affairs Committee on that state of facts would be very limited.

Mr. RANSLEY. He probably thought he cannot get any of it to become a law, even if it passed.

Mr. GRISWOLD. That may be.

Mr. Cox. Do you not think that you are now getting what you wanted, or what you want? In other words, are you not getting the effect of the adoption of the resolution and the setting up of the committee?

Mr. GRISWOLD. We are getting what happened in the past. You have the facts, probably, on which to base something in the future. Mr. Cox. You are getting more than that, you are getting immediate and direct and thorough consideration of the question by the Veterans' Administration, which, of course, works to the end of correcting the situation as far as it is possible for the Administration to so do.

Mr. GRISWOLD. As far as possible, probably, for the Administration to do so. However, I wish just to bring out a few instances now, and if I am wrong in regard to the practice

Mr. Cox. I am in sympathy with you.

Mr. GRISWOLD. I wish Mr. Cleland would correct me on this.

Under our act in Indiana it is provided that the Veterans' Bureau can file objections to the appointment of a guardian, of any guardian. It is also provided that in case any of these accountings are filed, that the court cannot act upon this for 15 days. It cannot approve any accounting for 15 days, but must allow 15 days for the Veterans' Administration to file their objections thereto. I have in my files certain copies of where the Veterans' Administration did actually file their written approval of these, some cases that Mr. Cleland is reciting to you. That is a matter of record, these very cases.

Mr. O'CONNOR. Did they have any opportunity to look at the accounting?

Mr. GRISWOLD. Fifteen days under the law.

Mr. O'CONNOR. Do you know whether they saw the accounting? Mr. GRISWOLD. I am presuming that the law was complied with. They filed a report, their statement, with the clerk of the court-Mr. Breedlove did that he had no objection to these accountings. I presume that they filed that report.

Mr. GREENWOOD. Is it your opinion that the independent committee set up under your resolution would discover facts to bring to the Veterans' Affairs Committee that would be more extensive than the Cleland report?

Mr. GRISWOLD. Not to bring to the Veterans' Affairs Committee, but to bring to Congress.

Mr. Cox. It would be simply cumulative of the things that Mr. Cleland has already developed.

Mr. GRISWOLD. The information that is needed is some information to base future information on. Mr. Hines has suggested that whether it is proper that the Government interfere further with the courts is a question, whether it is proper that they should interfere further or whether they should not interfere at all.

Mr. RANSLEY. Any of that legislation would be obliged to be considered by your Veterans' Affairs Committee before it could reach Congress?

Mr. GRISWOLD. Perhaps.

Mr. RANSLEY. They could make a report, but the Veterans' Committee would finally have to report out the legislation.

The CHAIRMAN. Does your resolution provide for the recommendation of legislation to the House?

Mr. GRISWOLD. Yes; it does.

The CHAIRMAN. Are you contemplating by that to take jurisdiction away from the Veterans' Affairs Committee?

Mr. GRISWOLD. I contemplate that only in this particular instance in regard to these guardianships they should have the authority to recommend to the House.

Mr. GREENWOOD. Your resolution was on the theory that the Veterans' Affairs Committee had had abundant opportunity to act, and never had acted, and you thought the special committee should investigate and act?

Mr. Cox. That involves something of an indictment against the Veterans' Affairs Committee. I am sure the gentleman does not mean that.

Mr. GRISWOLD. I am not making an indictment against the committee. I would be exceedingly adverse to indicting myself.

Mr. O'CONNOR. There is no question about that they did not want to undertake this. They said so frankly. That is why we are considering this special committee. In answer to Judge Čox, Mr. Cleland himself says he could not go far enough, because he did not have the power, and the special committee, with the power to subpena, could go much further and overcome the handicap that he felt out there without the power of subpena and having witnesses under oath. You were not here, Judge Cox

Mr. Cox. But if Mr. Cleland met with any handicap he did not overcome, it has not been disclosed so far.

Mr. O'CONNOR. It was disclosed before you came in; before you came in he said he could not even find the books of account.

Mr. Cox. I beg your pardon then, I did not hear that.

Mr. O'CONNOR. With a subpena he might have found them and put these people under oath.

The CHAIRMAN. If there is no further question, Mr. Griswold, you are excused. Thank you very much.

(The committee then proceeded with other business.)