discharged December 6, 1945, by reason of demobilization. The report of physical examination at induction includes an entry that serological test, February 25, 1943, was negative. The entry concerning venereal disease states "none" and the nervous system is reported as normal. Report of physical examination prior to discharge is negative with respect to any venereal disease or its sequela. There is no record of the existence of or treatment for any venereal condition during service. The veteran was admitted to a Veterans' Administration hospital on December 19, 1945. A report of consultation thereafter states that last exposure was 37 days before onset of present condition. Three days before admission to hospital on December 19, 1945, he began to notice appearance of sores.

COMMENT: Section 2, Public Law 439; Seventy-eighth Congress, provides, in part:

That venereal disease shall not be presumed to be due to willful misconduct if the person in service complies with the Army or Navy regulations requiring him to report and receive treatment for such disease.

Instruction No. 1-A, Public Law 439, Seventy-eighth Congress, provides, in part, as follows:

2. Accordingly, there are three requirements, all of which must be met, for a finding of service incurrence in line of duty and rebuttal of the presumption of willful misconduct in venereal disease cases not shown to have been innocently acquired during service:

(A) The initial infection must have been incurred in active service in line of duty.

(B) The person must have reported promptly to proper authority the earliest manifestation of the venereal disease, and

(C) The person must have submitted to the treatment prescribed and continued such treatment until the approved conclusion thereof.

An affirmative determination as to each of the three foregoing requirements of law will be necessary for findings of service incurrence in line of duty and rebuttal of the presumption of willful misconduct. If any one of the three requirements is not met, a finding of service incurrence in line of duty and rebuttal of the presumption of willful misconduct may not be made for the purpose of Public Law 439, Seventy-eighth Congress.

The primary question for consideration is whether the presumption of willful misconduct as to venereal disease is applicable where the disease, allegedly incurred before separation from the service, did not manifest itself before discharge, so that the claimant could not while in service have reported and received treatment for such disease. In the consideration of questions involving venereal disease, it has been consistently held by the War and Navy Departments, by the Comptroller General, Bureau of War Risk Insurance, the Veterans' Bureau, the Pension Office, and the Veterans' Administration, that such diseases are inherently of a misconduct nature and are due to willful misconduct even without affirmative evidence to the contrary. The Congress was aware of these views. As a matter of fact an examination of the legislative history of section 200 of the World War Veterans' Act 1924

demonstrates beyond the shadow of a doubt that Congress regarded disabilities due to venereal infections as constituting willful misconduct within the meaning of the law. (See report of hearings before the Committee on World War Veterans' Legislation, House of Representatives, 1924, pts. 1 and 2, pp. 175, 193, 194, 305, 306, 639, 645, and report of hearings before Committee on World War Veterans' Legislation, 1926, pt. 1, pp. 301, 302, 344, 347, and 349.) * *

(Opinion of the Solicitor, Jan. 26, 1932, C-1,328,903; C-1,347,769, approved Jan. 27, 1932.)

The Congress took no action to effect a statutory change of this construction until Public Law 439, Seventy-eighth Congress, was enacted. Section 1 of the bill (and of the act) repealed section 2 of the act of May 17, 1926, which provided for the forfeiture of pay of persons in active military or naval service absent from duty on account of the effect of venereal disease due to misconduct. The report of the Military Affairs Committee of the House of Representatives (Report No. 1263, 78th Cong., 2d sess.), as to this section, reads, in part:

The forfeiture of pay required by the present law does not act as a deterrent to exposure to infection but has the effect of promoting concealment of infection, self-treatment, and treatment by nonmilitary personnel. Such action leads to several unfortunate results. Concealment precludes quarantine and allows a spread of the infection, while self-treatment and unauthorized treatment is usually inadequate and ineffective. A particularly dangerous situation arises in the case of persons on flying status who conceal the infection to avoid forfeiture of pay. The treatment for the disease necessitates the "grounding" of flying personnel. When these men administer self-treatment or receive unauthorized medical care they continue on flying status and endanger both men and equipment.

Section 2 of the bill (and the act) liberalizes the misconduct bar as to the payment of pension or compensation. The report of the committee as to this, reads, in part, as follows:

The purpose of the new sections added to the bill is to liberalize the misconduct bar under existing law governing the payment of pension or compensation by the Veterans' Administration. The new provisions are definitely related to the repeal provision contained in section 1 of the bill inasmuch as they contain appropriate changes in the laws administered by the Veterans' Administration governing compensation and pension consistent with such repeal.

The language of the act is that venereal diseases "shall not be presumed to be due to willful misconduct" if the conditions stipulated in the act are met. This provision actually, therefore, constitutes a legislative declaration of the principle that willful misconduct is inherent in the acquirement of venereal disease. It is only when the conditions stipulated in the act are shown to have been met, i. e., "if the person in service complies with the Army or Navy regulations requiring him to report and receive treatment for such disease," that the presumption of willful misconduct is rebutted by the application of Public Law 439.

The statute, material to the question herein, provides specifically that venereal disease

* shall not be presumed to be due to willful misconduct if the person in service complies with the Army or Navy regulations requiring him to report and receive treatment for such disease. *

This statutory requirement is not met by the facts of this case. The veteran's reporting for diagnosis or treatment to civil authorities or to the Veterans' Administration does not either specifically or inferentially meet the language emphasized. Public Law 439, Seventy-eighth Congress, is clear and unambiguous. To be entitled thereunder the person "in service" must comply with "the Army or Navy regulations requiring him to report and receive treatment for such disease." Accepting as established the hypothesis that because of exposure preceding discharge, the veteran acquired this condition which, because of its pathology, did not become manifest until after separation from service, the requirements of the law, nevertheless, are not met. The law, enacted as the history thereof shows to encourage reporting for treatment in service of persons acquiring such conditions, requires the individual to report during service, for treatment.

HELD: As the facts show that the requirements of Public Law 439, Seventy-eighth Congress, are not met, it follows that the disease in this case may not be considered as having been incurred in line of duty under the provisions thereof. (Opinion of the Solicitor, Veterans' Administration, Aug. 26, 1946, approved Oct. 8, 1946, C-6,654,753.)

ADMINISTRATOR'S DECISION, VETERANS' ADMINISTRATION, NO. 727 OCTOBER 21, 1946.

Subject: Eligibility for readjustment allowance of veterans engaging in corporate enterprise under section 902, title V, Public Law 346, Seventyeighth Congress.

QUESTION PRESENTED: Whether veterans engaging in a corporate enterprise are eligible for readjustment allowances under the provisions of section 902, title V, Public Law 346, Seventy-eighth Congress.

FACTS: Five veterans of World War II organized a corporation for the purpose of establishing and operating a frequency modulation radio broadcast station. Three of these veterans were denied benefits under the provisions of section 902, title V, Public Law 346, Seventyeighth Congress, upon the ground that they were not self-employed. Each veteran owns 20 percent of the stock of the corporation. This ruling of the State agency has been protested with the assertion that the form of business organization employed by the veterans should not

be the sole determinative factor and that the corporate veil should be pierced in order to effectuate the legislative intent to provide the benefit. It has been suggested that there is a conflict between the action of the State agency in these cases and the conclusion reached in Administrator's Decision No. 707 wherein it was held that if the other requisite conditions of title III, Public Law 346, Seventy-eighth Congress, as amended, are, in fact, met, including that of direct, personal management of the business, the fact that a loan to be obtained by a veteran is for the purpose of purchasing stock in a corporation that is to operate the enterprise, does not alone make such loan ineligible for guarantee or insurance under Public Law 346, Seventyeighth Congress, as amended by Public Law 268, Seventy-ninth Congress, and the regulations promulgated pursuant thereto.

COMMENT: Section 902, Public Law 346, Seventy-eighth Congress, provides, in substance, that any person "who is self-employed for profit in an independent establishment, trade, business. profession, or other vocation, shall be eligible for readjustment allowance" under conditions specified therein. Self-employment, and more particularly the term "self-employed," is not defined in the instructions issued under title V of the act, unless paragraph 14 (A), Veterans' Administration Instruction No. 1, title V, Public Law 346, be regarded as adopting a variable definition conforming, in each State, to the definition provided by its unemployment compensation laws: Paragraph 14 (A) reads as follows: "Each agency shall determine whether a veteran is engaged in self-employment, consistently with the definition of the employment relationship provided in its unemployment compensation law." Since State unemployment compensation laws contain no provision for the allowance of benefits to the self-employed, it is not apparent in what manner state statutory or regulatory definitions, if any, could be accepted and applied in respect to a dissimilar benefit allowed by title V of the Servicemen's Readjustment Act. Hence, it seems that, with a single exception hereinafter to be noted, the definition of the term is in some measure left to chance and may vary according to the views of the particular State agency. The exception to be noted can hardly be regarded as a definition of self-employment. It appears merely by inference in paragraphs 6 and 7 of Veterans' Administration Instruction No. 3, title V, Public Law 346, and in item 16, Form 1387, Veteran's Claim and Statement of Net Earnings, in which the applicant is required to certify that the business in which he is engaged is not incorporated. From these instructions and from the nature of the certificate which an applicant is asked to submit, it may be inferred that a veteran whose business venture is a partnership and is only partly owned by him is not regarded as disqualified, but

one whose business is incorporated is considered as ineligible for benefits.

Section 503, title III, of the Servicemen's Readjustment Act of 1944, as amended by Public Law 268, Seventy-ninth Congress, provides, in pertinent part:

*

Any loan made to a veteran under this title, the proceeds of which are to be used for the purpose of engaging in business or pursuing a gainful occupation, * * or to provide the funds needed for working capital, is automatically guaranteed if made pursuant to the provisions of this title, including the following:

(1) That the proceeds of such loan will be used for any of the specified purposes in connection with bona fide pursuit of gainful occupation by the veteran; (2) That such property will be useful in and reasonably necessary for the sufficient and successful pursuit of such business or occupation;

(3) That the ability and experience of the veteran, and the conditions under which he proposes to pursue such business or occupation, are such that there is a reasonable likelihood that he will be successful in the pursuit of such business or occupation;

The regulations issued under title III, as amended, became effective March 1, 1946. In section 36: 4301 the terms "engaging in business" and "pursuing a gainful occupation" are defined in subparagraph (1) as follows: "Engaging in business' or 'pursuing a gainful occupation' (sec. 503)—active personal operation or supervision of an enterprise or practice of a profession on a full or part time basis.”

The terms used in section 503, which, incidentally, does not contain such expressions as "self-employed" or "self-employment," are not the same as those which appear in section 902. Eligibility for a loan under section 503, has not been made to depend upon the nonincorporation of the veteran's enterprise or business, although his connection with the corporate organization must be shown to be such as to assure him a continuing opportunity for direct, personal management of the business. Thus, in Loan Guarantee Division Letter No. 24, dated October 29, 1945, it was provided that an application for guaranty of a loan under section 503 for the purchase of intangible property, such as corporate stock, or partnership or association shares, may be approved if it is found, among other things, that the interest acquired by the veteran be in connection with his pursuit of a gainful occupation and be such as to entitle him to participate to a substantial degree in the control and management of the business. And in Administrator's Decision No. 707, in which a loan to purchase stock in a corporation was held to be ineligible for guaranty under the circumstances there considered, it was said that if the other requisite conditions are met, including that of direct, personal management of the business, a loan to a veteran for the purpose of purchasing stock in a corporation is not for that reason alone ineligible for guaranty. The decision emphasizes, however, that the controlling principle is that, whatever the