Mr. Breining.] I stand correctea. The quickest way would be the payment of the face value.

Senator CONNALLY. There is another element in the raising of the money. You would nave to raise twice as much money. That might delay you.

Senator BARKLEY. No. You could raise $3,000,000,000 just as quickly as you could raise $1,000,000,000.

General HINES. I would prefer to have the Treasury Department tell you about that.

Senator CONNALLY. I want to ask you another question about this 25 per cent. These certificates did not begin to be issued until 1925, did they?

General HINES. That is correct.

Senator CONNALLY. The soldiers have had seven years, or nearly seven years after the war, in which there has been no interest paid. Is it not true that it was the thought of Congress that by giving them arbitrarily this 25 per cent, in addition to the basic allowance, that would compensate them and fix the interest during that period when there was no interest? It would figure about 4 per cent, which they bore under the law. My thought was that that was the purpose of Congress in adding the 25 per cent, to say that this 25 per cent will offset the fact that they have not been getting any interest for these six or seven years. With that thought, I then insist that the present value of certificates ought to be the $1 a day, or $1.25 a day, plus the 25 per cent, with compound interest from the date of the certificate-not the date of the war, but the date of the certificate because you have already paid them for the interest with that 25 per cent up to the date that the soldier receives it.

Senator COUZENS. May I suggest that yesterday I asked General Hines if he would give a short review of the history.

General HINES. We are having that made up for you, and I expect to cover that.

I was going to suggest, Senator Connally, that, of course, the gentlemen of the committees and the Congress themselves know best what their intent was at the time. The thing that has guided me in reaching the conclusion that the 25 per cent was added for the purpose of deferring payment is the fact that those veterans whose credit was $50 or less were paid in cash without increasing the amount by 25 per cent. The dependents of those who had been killed in action were likewise paid upon the same basis. Those payments amounted to over 100,000 cases, so that I had rather reached the conclusion that the 25 per cent was added. However, we are digging up the history of the legislation, and I will be able to give you, before your hearings are over, anything we can find bearing upon that subject. You will probably have some witness before you from the service organizations who advocated the legislation who will probably remember what took place. I was not here at that time, so I do not know the history of it, but I am looking it up. Senator WATSON. General Hines will be back again, Senator. understand there is one gentleman here who wants to get away, and I think possibly we ought to hear him.

General HINES. May I be excused?

Senator WATSON. Yes; you will come back from day to day.

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Senator HARRISON. Mr. Chairman, there are a lot of Congressmen here, and, as I understand it, it has been the policy to hear them when they want to be heard. I presume they do not want to be heard until the others get through.

Senator WATSON. I am assuming that Members of Congress can wait, unless they ask to be heard now.

Senator COUZENS. Who is the gentleman that wants to get away? Senator WATSON. Mr. Bettelheim says he has a gentleman here from the Veterans of Foreign Wars.

Senator COUZENS. I move that we hear him.

Senator WATSON. Very well. If there is no objection, we will hear him at this time.

Mr. Bettelheim.

STATEMENT OF CAPT. EDWIN S. BETTELHEIM, JR., CHAIRMAN, NATIONAL LEGISLATIVE COMMITTEE, VETERANS OF FOREIGN WARS

Mr. BETTELHEIM. Bettelheim is my name. I am chairman of the national legislative committee of the Veterans of Foreign Wars. My statement will be brief. I would like to insert in the record at this time, if I may, a resolution passed at our last national encampment, last September, asking for the immediate cash payment of the bonus. The Veterans of Foreign Wars have been consistently in favor of this proposition, and with the indulgence

Senator CONNALLY. Consistently, or insistently?

Mr. BETTELHEIM. Consistently. With the indulgence of the members of the committee, I would like to present our national commander in chief, who has come here to present our views.

Senator WATSON. Very well.

(The resolution referred to by Mr. Bettelheim is as follows:)

RESOLUTION NO. 26. IMMEDIATE CASH PAYMENT OF BONUS

Whereas there has been enacted an adjusted-compensation certificate plan to partially reward men who served the United States in the late World War; and Whereas out of a total of 4,500,000 men eligible, some 4,000,000 have applied for this adjusted-compensation certificate plan and of these 4,000,000, over 3,000,000 have been forced to make loans on these certificates, and in many cases are unable to pay said loans back; and

Whereas these loans against these certificates draw 6 per cent compound interest per annum, and while our national convention at St. Paul indorsed a cash payment of the adjusted-compensation certificate, and as have several other veterans' organizations, yet Congress has deferred action on this cash payment; and

Whereas this adjusted-compensation certificate does not benefit the veteran greatly unless he is dead, and it is our firm belief that what the ex-service man of to-day needs is immediate cash to help him meet the obligations imposed upon him by his Army service, unemployment, business depression, etc.: Therefore be it

Resolved, That the thirty-first national encampment, Veterans of Foreign Wars of the United States, goes on record as favoring the immediate payment of these adjusted-compensation certificates in cash.

37803-31-4

STATEMENT OF PAUL C. WOLMAN, BALTIMORE, MD., COMMANDER IN CHIEF OF THE VETERANS OF FOREIGN WARS OF THE UNITED STATES

Mr. WOLMAN. Senator Watson and members of the committee, I certainly owe an apology to the committee for trying to inflict myself on you so early. However, I have just gotten back to the city, having been out through the Middle West, where I have tried to sound out the opinion of the rank and file of the service men on the bonus question. I want to get to New York this evening, and if I may be permitted at this time, I would like to make a brief statement. The Veterans of Foreign Wars of the United States is emphatically in favor of immediate cash payment of World War adjusted-compensation certificates and will do everything within its power to secure passage of legislation along this line before the present session of Congress comes to a close.

Back in 1923, our organization was definitely opposed to the endowment policy plan of adjusting the income received by the World War veteran while in the service with the income that was received by civilians who were employed by the Government during the war and were in no way called upon to risk their life and health in actual service.

Despite our protests, however, Congress in 1925 adopted legislation creating the adjusted-compensation certificate-a promise to paywhich does not mature until 1945. These certificates have been distributed to 3,680,704 World War veterans. Of this number, more than 2,294,161 veterans have found it necessary to secure loans on these certificates since they were first issued on January 1, 1925-a significant fact which gives proof of the serious need that these men are suffering.

For the past several years it has been very apparent that the average World War veteran is in serious need of definite financial relief. The problem of rehabilitation has by no means been solved with existing legislation and the disabled veteran especially has found the struggle to care for himself and his dependents extremely difficult.

When Congress created the adjusted-compensation certificate, it acknowledged a just debt to the World War veteran and one that should receive equal consideration with other World War debts met by the Government. For this reason, our national convention in 1929, in session at St. Paul, Minn., memorialized Congress to consider immediate cash payment of these certificates. This same recommendation was reiterated by the 1930 national encampment held at Baltimore in September.

Since our 1930 convention, this country has been in the grip of a devastating economic depression, and among those who are suffering the most are 3,500,000 World War veterans who are holding promissory notes from the Government that are not payable until 1945.

We believe that immediate cash payment of these certificates will not only be a distinct aid to the welfare of the disabled and needy ex-service men, but also act as a marvelous stimulant to existing economic conditions. The distribution of this money will have its effect in virtually every community throughout the Nation, and will create immediately a purchasing power that is sorely needed.

Immediate cash payment of these certificates at the present time would in no way create a new or additional debt. The Government would simply transfer an obligation, already assumed, from the shoulders of the veterans-who can not carry the burden-into the strong boxes of bondholders who would welcome the purchase of Government bonds issued in substitution of veterans' certificates.

The money to redeem these certificates can be secured by the Government at 2 per cent or less, thus saving one-half the interest these certificates now bear. Additional millions will be saved annually through immediate payment of these certificates by the elimination of administrative expenses attendant upon keeping the records of these certificates from now until 1945 when they mature. Since these certificates were created in 1925, the Government has set aside annually the sum of approximately $112,000,000 toward retirement of this debt in 1945. As a result, nearly $700,000,000 is already available for the payment of these certificates.

Short-term Treasury certificates bearing 14 per cent and 1 per cent have recently been accorded a ready sale. Treasury experts have been quoted in Congress with the statement that a bond issue bearing not higher than an average of 31⁄2 per cent, maturing in 1945 could be sold perhaps in two or three flotations, but in ample volume to pay in full with compound interest all the adjusted service certificates that would be surrendered under the holders' option. As a result, the United States Treasury would be benefited, instead of harmed.

The payment of these certificates would rid the Treasury of an obligation bearing 4 per cent interest compounded, taking in exchange an obligation bearing only 3% per cent not compounded. Moreover, the Government will be relieved of the liability of paying this certificate in full upon the death of the veteran before maturity.

It has been estimated that $2,000,000,000 would pay off all certificates that would probably be surrendered for payment. The difference of one-half per cent interest on an issue of bonds of that magnitude is $10,000,000 a year. As an ordinary refunding proposition, the United States Treasury would be distinctly benefited.

The recommendation of the Veterans of Foreign Wars in favor of the immediate cash payment of the adjusted-service certificates has been included in our legislative program for the past several years, and has just recently been placed before President Hoover as an important plank in our legislative program for the coming year. As a major veteran organization, the Veterans of Foreign Wars of the United States has taken the lead in this movement which has become nation-wide, in its increasing sentiment, and one of the most important questions facing the present session of Congress.

Senator HARRISON. What did the President tell you?

Mr. WOLMAN. I am sorry; I will have to decline to answer that question. I wish I could answer it, however. I do not believe that the attitude of one individual should have controlling weight. By that, I do not mean to infer that I am referring to the President, but I think the view of the general public, and especially the views of the service men should have more weight than the views of one individual anywhere.

During the past four or five months I think I have covered, conservatively speaking, about 50,000 miles in traveling throughout the

United States. I have not spoken with any of the men where I did not find a preponderance of testimony and views on the part of those men with whom I have spoken in favor of the bonus.

A direct indication of that might be shown by an opportunity I had to address the State Legislature of Minnesota last week. A question, in the form of a resolution, was introduced on the floor of the State Legislature of Minnesota asking that legislature to memoralize Congress to pass a bill-not caring which one it might be-calling for the immediate payment of the adjusted-service certificates in cash. There were only three dissenting votes to that resolution. Two of those took particular care to have entered in the record the fact that their position was not one of opposition to the plan, but to the idea of setting aside the rules of the State legislature in calling for an immediate vote instead of letting it go through committee. The third one made no statement.

Senator HARRISON. Have they indorsed any particular bill or particular measure?

Mr. WOLMAN. No, sir. The Veterans of Foreign Wars has indorsed any plan that will call for the immediate payment of the face value of the adjusted-service certificates.

Senator THOMAS of Idaho. When you say immediate cash payment, do you mean face value?

Mr. WOLMAN. Yes, Senator.

Senator THOMAS of Idaho. Or the net value?

Mr. WOLMAN. Face value. Perhaps my system of calculation may be a bit different from that of some others. However, my view is this. The adjusted service certificate plan was passed in Congress in 1924, the certificates being issued about the 1st of January, 1925.. Interest at the rate of 4 per cent was allowed to us up to 1945. Those men who had to borrow on those certificates, however, in the main were called upon to pay 6 per cent interest. The war ended, to my mind, in 1918 and not in 1924. We feel, therefore, that if the men were called upon to pay 6 per cent interest on the loans they made, they should be entitled to the same rate in any relief measure. other words, we believe we should be allowed, roughly, 6 per cent on those certificates, dating from the close of hostilities up to the present time, and if you figure that up, I think-not being a mathematician myself that toward the end of 1931, which time would come, possibly, before these certificates would be paid off, it will amount to almost 100 per cent of that face value.

Senator COUZENS. May I ask you a question?

Mr. WOLMAN. Yes.

In

Senator COUZENS. Those who oppose this legislation argue that by 1945 you will be back here again for some more money, and that if you are not paid now, the money you would get now will be used in 1945 instead of now. Is there any sentiment to the effect that in 1945 you will be back here again?

Mr. WOLMAN. The attitude of the rank and file of soldiers I have spoken with and I am referring mainly to the men who served overseas-is this, that in 1945 they will either be on their feet or they will be in a soldier's home, to be perfectly frank with you. We feel that this sum of money, averaging slightly over a thousand dollars throughout the rank and file, will assist the men in paying a lot of their debts, paying off mortgages, and paying off a number of calls.