Agreed to, Congressional Record, volume 62, part 12, page 12697. Examined and signed by the President pro tempore, September 16, 1922, Congressional Record, volume 62, part 12, page 12751. Examined and signed by the Speaker, September 16, 1922, Congressional Record, volume 62, part 12, page 12785. Presented to the President, September 18, 1922, Congressional Record, volume 62, part 12, page 12852. Veto message from President in House, September 19, 1922, Congressional Record, volume 62, part 12, pages 12946-12948 (S. Dc. 396). Passed over President's veto, Congressional Record, volume 62, part 12, pages 13004-13005, 13012-13013, 13042-13045, 13176–13170. Veto message received in Senate, debated and sustained, September 20, 1922, Congressional Record, volume 62, part 12, pages 12976–13000. SIXTY-EIGHTH CONGRESS, FIRST SESSION H. R. 7959, introduced by Mr. Green, March 15, 1924, Congressional Record, volume 65, part 5, page 4308. Reported back, Committee on Ways and Means, March 17, 1924 (H. Rept. 313), Congressional Record, volume 65, part 5, pages 4394–4395. Debated, Congressional Record, volume 65, part 4, page 4197; part 5, pages 4391-4393, 4394-4395, 4436-4444; part 6, pages 5531-5547; part 7, page 7115; part 8, pages 7773-7775; part 9, pages 8843-8845; part 11, pages 10761-10763, 10769-10771, 10914–10915. Review of history of adjusted compensation, Congressional Record, volume 65, part 11, pages 10762-10763. Passed House March 18, 1924, Congressional Record, volume 65, part 5, page 4444. Referred to Senate Committee on Finance March 19, 1924, Congressional Record, volume 65, part 5, page 4477. Reported with amendments (S. Rept. 403), April 15, 1924, Congressional Record, volume 65, part 6, page 6353. Minority views submitted (S. Rept. 403, pt. 2) April 21, 1924, Congressional Record, volume 65, part 7, pages 6779-6785. Debated, Congressional Record, volume 65, part 7, pages 6650-6651, 6690– 6704, 6705-6706, 6706-6713, 6767-6785, 6868-6893, 6935-6972. Amended and passed Senate April 23, 1924, Congressional Record, volume 65, part 7, page 6972. House disagrees to the Senate amendments; asks for a conference April 24, 1924, Congressional Record, volume 65, part 7, page 7114. Senate insists upon its amendments; agrees to conference, April 25, 1924, Congressional Record, volume 65, part 7, page 7123. Conferees appointed, Congressional Record, volume 65, part 7, pages 7114, 7123. Conference report submitted in Senate May 1, 1924, Congressional Record, volume 65, part 8, pages 7621-7622. Debated, Congressional Record, volume 65, part 8, pages 7621-7622. Agreed to May 1, 1924, Congressional Record, volume 65, part 8, page 7622. Conference report submitted in House (H: Rept. 624) May 2, 1924, Congressional Record, volume 65, part 8, pages 7722-7726. Debated, Congressional Record, volume 65, part 8, pages 7722-7726. Examined and signed by the Speaker May 2, 1924, Congressional Record, volume 65, part 8, page 7734. Examined and signed by the President pro tempore May 3, 1924, Congressional Record, volume 65, part 8, page 7736. Presented to the President May 5, 1924, Congressional Record, volume 65, part 8, page 7901. Vetoed by the President (H. Doc. 281) May 15, 1924, Congressional Record, volume 65, part 9, page 8660. Passed House over veto May 17, 1924, Congressional Record, volume 65, part 9, pages 8808-8814, 8819-8822, 8825-8826, 8844. Passed Senate over veto May 19, 1924, Congressional Record, volume 65, part 9, pages 8869-8872. Becomes a law without the President's signature (see Public No. 120). HEARINGS BEFORE THE COMMITTEE ON FINANCE, UNITED STATES SENATE, SIXTY-SIXTH CONGRESS, THIRD SESSION, ON H. R. 14157, "AN ACT TO PROVIDE ADJUSTED COMPENSATION FOR VETERANS OF THE WORLD WAR; TO PROVIDE REVENUE THEREFOR, AND FOR OTHER PURPOSES [Excerpt from the statement of Mr. Gilbert Bettman, of Ohio, chairman of national legislative committee of the American Legion] Mr. BETTMAN. That is true. The scheme of the bill is this: It is an attempt to approximately adjust the compensation of the men who served in the World War. As the needs of those men were very diverse, the plan was to provide either for a payment in cash or an advance in the shape of an adjusted-service certificate. That part of this bill was put in by the House of Representatives; it was not in the original bill propounded by the Legion. It is in the nature of an insurance for the men. It provides for no cash payment, but gives the men a certificate payable in 20 years if he lives, and payable on his death should he die; and it is the amount of his adjusted pay plus interest compounded for 20 years. Senator McCUMBER. After three years he may borrow 90 per cent of it? Senator McCUMBER. And after five years 80 per cent? Mr. BETTMAN. Yes. In addition to that insurance feature of it, it has the feature that Senator McCumber has just spoken of, being the basis of the loan to the service man from the Government. The next alternative was the alternative of taking his adjusted compensation in the shape of vocational training with the vocational training board already in existence. The next is the land-settlement feature, which is part of a project to settle the ex-service men upon the lands in the West mainly, and to aid them in acquiring their land by giving them their adjusted service pay in the shape of an advance toward that payment for their land. Now, then, in order that the obligation to the country might be performed, and to see that the adjusted service pay was used in productive channels as far as possible, the American Legion devised the plan of making those service-pay adjustments taken in the productive channels of a greater value. Senator SIMMONS. Pardon me just one moment. You consider this as an optional plan. But if all the veterans would see fit to take cash would they all be entitled to cash? Mr. BETTMAN. Under the bill they would. But the answer to that is they will not all accept the option that way. Senator WATSON. Have you any idea how many will avail themselves of these options? Is there any way to determine that? Mr. BETTMAN. There is no way, Senator Watson, to determine that. Mr. BETTMAN. That is only a matter for judgment and estimation. Mr. BETTMAN. Our best judgment is that the number wno will take cash is small. I was just about to say that those four avenues of adjusted compensation—vocational training aid, land project, and the insurance, etc., are so sweetened in this bill 40 per cent-that is, a man will get say, $1.25 a day if he takes it in cash, but if he takes it in any of those other four forms he will get $1.25 plus 40 per cent of $1.25. The idea was to encorage the men to take it in the productive channels, to take it as home aid or as a part of payment in acquiring a home in the West, or as vocational training. To come back to your question, Senator Watson, it is the opinion of many men who have thought of this question that in view of the diverse needs of the men over the country, in view of the fact that, these productive avenues of adjusted compensation, home aid, etc., have the attractive feature of 40 per cent more than the cash, our judgment is that not over 50 per cent of the men, if that many, will exercise their option for cash. It is only an estimate, Senator. Senator MCLEAN. Upon what do you base your judgment? Mr. BETTMAN. We base it simply upon the greater attractiveness of the other features of the bill. The fact that 300,000 men are now trying to learn from the Interior Department how they can get farms, and they are waiting for information and showing their interest in farm and land projects as well as the men who are showing their interest in cash. Senator MCCUMBER. The farm conditions at the present time would not encourage them very much along that line, would they? Mr. BETTMAN. Of course, many men think that is just a temporary situation. Senator MCLEAN. There has been no canvass made of the personnel at the different posts to find out what proportion would prefer cash? Mr. BETTMAN. Such a canvass would be practically impossible. How could you take a poll before there is any assurance that the bill would be passed? Senator SMOOт. Let me ask you a question. Mr. BETTMAN. Yes. Senator SMOOT. There is some organization or association-I do not know whether it is the American Legion or some other organization of the soldiersthat has taken action in this regard, and I have tabulated the post cards I have received from all over the United States as to just what the soldiers who have sent me these postal cards want, and I want to say to you that there is 98 per cent of those who have written to me who want cash. I do not know whether the organization that is asking for cash is more active than the other organizations, but 98 per cent of those sending postal cards to me from all over the United States are asking for cash. Mr. BETTMAN. Possibly that is a propaganda against the bill; I do not know. Senator SMOOт. Oh, no. It is not from my State alone. I know people in my State who have asked for cash not through a propaganda; it comes through other organizations and it is in the form of printed postal cards. I can show them to you by the thousands if you will come to my office. Senator SIMMONS. I understood you to say awhile ago that you thought a great many would select one of these methods of settlement, because they would get 40 per cent more than they would if they got cash. I want you to explain to us exactly the method by which they would get this additional percentage. Mr. BETTMAN. That is the provision in the bill. Senator SIMMONS. Explain it to us, please. I do not catch it. I have not read the bill very carefully. I would prefer to hear you gentlemen before I do read it. Senator McCUMBER. I have made up a very short statement of each one of these systems, and if I may read them to you Senator SIMMONS (interposing). Is it in the record, Mr. ChairmanSenator MCCUMBER (interposing). They have not been put in the record, but I will read them into the record now. Senator SIMMONS. All right. Senator McCUMBER (reading): 66 BONUS PLAN "1. Adjusted service pay: This pay is $1.25 for each day of overseas service and $1 for each day of home service; the former not to exceed $625, the latter not to exceed $500. Service is between April 5, 1917, and July 1, 1919. "2. Adjusted service certificates: These certificates add 40 per cent to the adjusted service pay, plus interest thereon for 20 years at the rate of 41⁄2 per cent per annum compounded annually Senator SIMMONS (interposing). Let me ask the witness a question. that mean you would add 40 per cent to the $1.25 before you begin? Mr. BETTMAN. Yes, sir. Does Senator McCUMBER. Let me finish putting this in, because I think it will help the committee understand this. Senator SMOOT. For instance, under the adjusted-service certificate, a man whose adjusted service is $500 has only to wait three years and he can borrow $491.40 on it; and there is not any doubt but what he will do that. So we have got to make up our minds that we have to provide money to meet the cost under either plan. Senator SIMMONS. If this information was obtainable, and was gathered by you and presented, and we should find too large a percentage were going to ask cash for us to pass the bill in a certain form, we might amend it by making the other schemes a little bit more acceptbable, so as to attract some of the men who under the proposed bill would want cash. Mr. BETTMAN. Of course, such a poll would be helpful; that is admitted. Senator SMOOT. Senator, I think under this the 40 per cent granted is all the Government ought to do, because the Government has to meet the situation in the end, and the amount of money would be a great deal more in the end than if they took cash. As a business proposition, of course, you or anybody else would not offer an increase of 40 per cent. In five years they would have a borrowing privilege of more than $500 in cash; so that is 8 per cent increase, dividing the 40 per cent into the five years. (Pt. 3, p. 45) Mr. HALE. That is the cash payment Senator. The bill provides also for vocational education and carries added payment of 40 per cent, which would make the average payment, if that feature of the bill was chosen and I am basing my statement on the assumption that all the men will accept either one or the other; so that we can clarify the discussion and see what each feature of the bill would cost the Government. If all the men took advantage of the vocational training it would be $1.75 a day for 300 days, which would be $525 a man; and if 4,000,000 men took advantage of that it would mean an expenditure of over $2,000,000,000. The disagreeable feature and the objectionable feature to that part of the bill is the fact that that amount would become immediately due if the men took advantage of vocational training and entered into vocational training, because the period to which they are entitled to pay is simply on an average of 300 days, and if they take 300 days for vocational training their vocational training would not extend over a year. So that if Congress passed that feature of the bill, and the men took advantage of it, it would mean that over $2,000,000 would have to be available within a year. That statement also applies, so far as the availability of the money and the amount of money that would be involved is concerned, if the home feature of the bill and the landsettlement feature of the bill are put into effect, because the bill provides that if a man takes advantage of the home proposition or the land-settlement proposition, the money to which he is entitled, plus this 40 per cent, will constitute his initial payment, and if it constitutes his initial payment it necessarily follows that it must be immediately available. Senator SMOOT. I think myself that if the second proposition, or the service certificates, are explained to the men there would be few of them but what will accept it. Mr. HALE. I would not want to contradict the Senator, but I would not want to say that that was correct. Senator SMOOT. Those who want cash down are those who will spend it as quickly as possible. But anybody who wants the greatest assistance of the Government certainly would accept the second proposition-the service certificate-in other words, instead of payment down of the amount, for if he accepts cash he has to wait almost as long as the third period in the service certificates, and at the end of the service certificates he can get, if he had home service, within $8.60 in a loan of what he would get in cash if he accepted a cash proposition, and he gets 40 per cent more thereafter. [Debates, Congressional Record, March 3, 1921, Vol. 60, pt. 4, p. 4396, on H. R. 14157] Mr. JONES of New Mexico. Yes; the Senator is quite right about that. The next feature of the bill is a most interesting one. It comes under title 3 and bears the title of adjusted-service certificates. I wish to state just briefly what the adjusted-service certificates are and show the advantage which any ex-service man would have in taking one of the certificates rather than taking cash payment. The cash payment to which he would be entitled is ascertained. To that is added 40 per cent, and then to that is added compound interest at 41⁄2 per cent for 20 years, in order to ascertain the amount of the certificate. In other words, to use roughly an illustration, an ex-service man who would be entitled to $500 as ex-service pay would be entitled under the certificate plan to a certificate of approximately $2,000. What is this certificate? It is a contract very similar to an endowment lifeinsurance policy on which the person owning the policy may obtain a loan. It means that at the end of 20 years if the ex-service man is still alive he will get $2,000. If he dies the next day after he gets his certificate his dependents will get $2,000. After two years he may make a loan and may obtain from the Government Treasury 90 per cent of his ex-service adjusted pay plus 41⁄2 per cent interest, which will be a little more than the total amount of his adjusted service pay. Do not Senators believe that the great majority of the ex-service men will avail themselves of the plan? If they do, there will be no drain upon the Treasury under that plan for at least two years, except for those who may die in the meantime. I desire to have the Senate consider whether that is not one of the arguments which makes for the adoption of the bill as an emergency measure at this session of Congress. If we are going to provide the adjusted service pay for these people, if we are going to give to them this endowment insurance policy, ought it not to be given to them now, so that the dependents of those who may pass to the great beyond within the next two years will get some of the benefits of it? That would not make any great drain upon the Treasury of the United States. Mr. WADSWORTH. Mr. President, has the Senator explained the principle upon which the adjusted pay, known as the cash bonus, is increased by 40 per cent under the provision for a certificate? Mr. JONES of New Mexico. I believe I have already explained that. Another provision of the bill is that we loan an ex-service man the amount of his adjusted pay with 40 per cent added for the purchase of a home or a farm. Provision is made to see that it shall go into the home or the farm. That might ' make a considerable drain upon the Treasury of the United States at this time, but if we desire to withhold that provision it would be easy to do it. It is proposed in the bill as presented to the Senate by the committee not only to withhold that provision until January, 1923, but to withhold every other provision of the bill until that time. So far as I am concerned I would let that provision go into the bill now and go into operation now. I do not believe there would be any excessive drain upon the Treasury of the United States by reason of that plan. [Debates, Congressional Record, July 8, 1921, Vol. 61, pt. 4, p. 3466, S 506] Mr. NORRIS. I wish the Senator would explain the insurance feature in a little more detail. The soldier, if he takes that option, gets a paid-up policy for the amount of insurance that could be purchased by the sum that would be due him if it were paid in cash? Mr. MCCUMBER. No; not quite, Mr. President. Suppose the soldier's service is of a number of days that would entitle him to $400 in cash. I will take that as the basis. If, instead of saying, "I will take the cash, $50 every quarter for two years," he says, "I will accept, in lieu of my right to take the cash, the insurance plan," then he would receive a certificate not for $400 but for $400 plus 40 per cent, or $560,. bearing interest at the rate of 41⁄2 per cent compounded annually for 20 years, which, I think, in that instance, would make it amount to thirteen hundred and some dollars. With the average soldier I think it would amount to about $1,100. That is paid up. He would receive, 20 years from that time, the $560 with interest at 42 per cent, compounded annually. At the end of two years he can draw 90 per cent of his $400 in cash, as a loan, paying 4% per cent interest, canceling the one against the other; and if he dies before the expiration of the 20 years, his estate would receive the whole sum which would be due at the end of the 20 years. That is the insurance feature of it. Mr. NORRIS. Assuming he was going to take the insurance plan, and did not want to borrow any money, and did not want to pay any more money, getting it all in the insurance plan, what would he get? As I understand it, if he lived 20 years he would then get the cash, would he not? Mr. McCUMBER. Yes. Mr. NORRIS. If he died within the 20 years, it would go to his beneficiary? Mr. McCUMBER. To his beneficiary or his estate; that is right. Mr. NORRIS. That would be a clear insurance policy. Mr. McCUMBER. That is just what it is, a clear endowment insurance policy. Mr. NORRIS. Paid up? Mr. McCUMBER. Paid up for 20 years, at the end of which the whole sum becomes due. |