General HINES. I think it should be centralized, because there is practically only one question involved, and that is the degree of disability of the man.

Senator STEIWER. I am not sure that I apprehend all the provisions of this act. I have not studied it very fully. But there is nothing in the act that would limit you or place any mandatory requirement upon you with respect to these matters about which I am now asking you?

General HINES. Not at all. I feel that it is the desire of Congress in this matter that these benefits be direct, and as prompt as possible, and in the simplest form. We have not drawn up any plan, because we have not had an opportunity to know what was coming.

Senator STEIWER. From your practical experience in the bureau in the administration of these claims contemplated under this amendment on page 15, is it your opinion that the veteran would be more embroiled with the doctors of the bureau than he now is, or less?

General HINES. Less. The doctors would have only one thing to do, and that is to examine the man and tell us what is the matter with him.

Senator STEIWER. What do you expect to do with respect to this 25 per cent spread that exists between disabilities? For instance, in this paragraph I am alluding to, the minimum basis would be a 25 per cent disability. Then the same rate would apply, apparently, until the disability could be classed as 50 per cent. Is there any way by which you can make an allowance in favor of the man whose disability is 45 per cent, as against a man whose disability is 55 per cent?

General HINES. I think the rules the bureau now has, for giving him a little more rather than a little less, would still apply. If a man is nearer 50 per cent disability than 25, he certainly should have the 50 per cent rating. I would not want to split those ratings. This law would make the ratings definite, but if a man is 37% per cent disabled, I should say he should get the higher rating.

Senator BARKLEY. If a man is actually only 371⁄2 per cent disabled, how would you have any authority to rate him as 50 per cent disabled? General HINES. I would not have any right to change it, but I have a feeling that the doctors would and should rate that man 50 per cent disabled.

Senator LA FOLLETTE. Would you have any objection to putting in a provision here that the veteran should have the nearest rating provided in the law?

General HINES. I would not object to it, but I think it is unnecessary. I think you will find that the veterans will get the higher rating.

Senator STEIWER. You have just assured me that the doctors will have nothing to do with it after the examination is made. General HINES. That is the examination.

Senator STEIWER. I was hoping that you were right in that; but if the doctors are going to have a latitude between 25 and 50 per cent, a latitude that might be as much as 24 per cent, would they not still have almost complete domination over the allowances under this act?

General HINES. No, sir; because I feel that leaving the law as it is with respect to appeals, this man is granted the right to appeal, and it finally goes to the board, which is made up of doctors and

lawyers, and then he may appeal finally to the director of the bureau. I can not agree that the disposition of the doctors is to give him a 25 per cent rating if he is 371⁄2 per cent disabled. I think the disposition of the doctors is to deal fairly with these men. I feel that if a man is 371⁄2 per cent disabled, the doctor, or doctors, who examine him would give him a 50 per cent rating.

Senator BARKLEY. What right would they have under the law to do that?

General HINES. That is the nearest rating.

Senator BARKLEY. If you are going to administer it that way, why not limit the brackets and say that the minimum disability shall be 25 per cent, and that he will receive $28, and then grade it on up?

General HINES. If we do that, we are going to be in the position of having another rating table in steps of one degree, which makes the cost of administration higher, and involves arguments over 1 or 2 per cent disability. I had hoped that we could avoid that. would be right in the complicated system we have no on serviceconnected disabilities.

Senator STEIWER. Would you, as director, have any objection to a provision that if the rating were nearer 50 per cent than 25 per cent, the veteran should receive the next higher rating?

General HINES. I would have no objection, but I do feel that that is an administrative matter that really should be intrusted to the bureau. Of course, if you attempt to write in the law the regulations, and you do not cover all the points, then you have tied the hands of the bureau.

Senator STEIWER. I agree that we should not attempt to write into the law the regulations, but I have this thought. You have suggested to us that the doctors would give the man the next higher rating. In the illustration you gave, if it were 35 or 37%1⁄2 per cent, the doctors would give him a rating of 50 per cent. By what right could the doctors do that?

General HINES. The doctor himself has to reach a conclusion on the degree of disability of the man. He does not reach the conclusion on paper that he is 37%1⁄2 per cent disabled. He knows that he is more than 25 per cent disabled. He is nearer 50 per cent, and in reaching a conclusion in his mind on the degree to which that man is impaired in earning a living, he says "He is 50 per cent disabled," and that is what he would indicate on the report.

Senator STEIWER. You would expect, by regulations, to provide that the ratings should jump from 25 to 50 per cent?

General HINES. I would have to provide by regulations that the ratings to be given these men must be 25, 50, 75, or 100 per cent, because the law is so written.

Senator STEIWER. In other words, there would be no ratings made, for example, at 40 per cent.

General HINES. No.

Senator STEIWER. There would be no such ratings made in the reports of the doctors or the rating boards, with an allowance made to the veteran on the basis of 25 per cent merely because the rating was less than 50 per cent.

General HINES. No, sir.

Senator BINGHAM. In other words, if the doctor were permitted to make any rating that he pleased, and his figures added up to 19

per cent, you would expect the doctor to give the man a rating of 25 per cent.

General HINES. I should think so, although as to reaching the minimum of 25 per cent required by law it is a bit more difficult to say offhand.

Senator BINGHAM. If the figures added up to 39 per cent, you would expect him to give the man a rating of 50 per cent?

General HINES. I would. I think we can draw regulations that will cover that. But, Senator, I hope that in this bill we can get away from the proposition of having a man rated, say, at 92 per cent, brought about by the present rating table, with the vocational factor, which the law requires, and the factor which results when you take the disability and consider it in connection with his pre-war occupation. You go into the table, and you come out with 92 per cent. I hope we can avoid that in this larger group, because it is administratively almost impossible, I think, to judge as between a man who is 92 per cent disabled and a man who is 100 per cent disabled.

Senator STEIWER. I share your hope in that, but I also hope you can get away from the doctors to a certain extent.

Senator CONNALLY. How can you get away from the doctors? General, as a matter of fact, when we classify these men, or establish these ratings of 25, 50, 75 and 100 per cent, we are really making classes, are we not?

General HINES. We are.

Senator CONNALLY. Of course, when you say that a man must go in some class, he would naturally go into the class to which he is closest.

General HINES. He has to be put in one of the four classes.

Senator CONNALLY. If a man is 37% per cent, 38 per cent, or 39 per cent disabled, he has to be classified e'ther as 50 per cent or 25 per cent disabled. He certainly ought to go into the 50 per cent class, because he is nearer to that than to the 25 per cent class.

General HINES. That would be the natural thing for any sensible man to decide.

Senator CONNALLY. You have four holes here, and you have to put a peg in one of them. You have to put it in the one where it fits. General HINES. I am frank to say that the Pension Bureau has had a lot of experience with this matter, not on the definite percentages fixed, because the new law is the first time they have had a definite rating, but I hope to take advantage of their experience, even though we are not all brought together in one agency. Because of their long experience in dealing with pension matters, too, I feel confident that the Congress can trust to the administration of the bureau that these men will be given a fair rating and will be put under some one of those four headings. As a guess as to what will happen in the future, I look to see rather an increased cost, due to the fact that many of them will hit the higher brackets, probably more than we estimated.

Senator GEORGE. Under this act as drawn, no pension allowance would commence earlier than the date of the application.

General Hines. That is true.

Senator GEORGE. With respect to the particular class that would be affected by the income tax, for example, can you estimate that number?

General HINES. No; but I think it is very small. I doubt that the number that would be affected would be very large.

Senator BINGHAM. The income-tax provision has sometimes been referred to as a "pauper" clause; but is it not true that the exemptions under the income tax law are now so large that it is not fair to refer to it as a pauper clause, because there are certain people with incomes of $4,000 who would not have to pay any income tax.

General HINES. There is no desire in any way to ask for a pauper's certificate, or anything of that kind. It is the desire to spread that money over as large a group of needy veterans as possible.

Senator BINGHAM. And to prevent the man who is fortunate enough to get a large salary, or to have independent means, and who, at the same time, has a very considerable disability allowance, from drawing something which really somebody else ought to have. General HINES. Yes; and which, in fact, he does not need. He in no way jeopardizes his right, at some later date, to claim if it he wishes.

Senator CONNALLY. There are very few of those cases. Have you made any estimate of how much that would involve?

General HINES. No, I have not; but at this time I know there are very few cases.

Senator CONNALLY. That is just a gesture. Why put it in. It is an affront to every soldier.

Senator BARKLEY. If there is going to be as big a deficit as the Secretary of the Treasury predicts, you may have to lower the exemption.

Senator SHORTRIDGE. Finally, as to the opportunity of the claimant for hearings, will you just state the steps in the procedure?

General HINES. The claimant would first have an opportunity for hearing before the doctor who examined him.

Senator SHORTRIDGE. Suppose that were in Portland, Oreg.? General HINES. It would be in the regional office at Portland, Oreg. The next opportunity, if the claim is disallowed there, would be before the board of appeals in San Francisco. If that is turned down, the next would be before the council of appeals in the central office.

Senator SHORTRIDGE. Here in Washington?

General HINES. Here in Washington. And if he fails there it I would be before the director.

Senator SHORTRIDGE. So that there are at least four hearings he might have; is that irght?

General HINES. Yes.

Senator CUTTING. As to the allowance provided in this bill, it is, to all intents and purposes, a pension, is it not?

General HINES. Yes.

Senator CUTTING. Why don't you call it a pension?

General HINES. Simply because I feel that we, in the bureau had been dealing with disabilities, and I thought we ought to keep the language, and call it a disability allowance. To me the word ."pension" is not objectionable, but I think this covers the field very well. The word "pension" may be objectionable to the American Legion.

Senator CUTTING. If it is a pension, why would it not be better to have it administered by the Pension Bureau, already established?

General HINES. Because the Veterans' Bureau was established to handle the claims and hospitalization of the World War veterans, and I believe it is their desire that their matters be handled that way. Personally, I strongly feel, as you know, that all these agencies should be put in one Federal agency dealing with all the problems of the veterans, because we are running together. This is the best illustration you have just mentioned. We are now reaching the time when the World War men have to be taken care of on another basis than the basis we started with, that of compensating them for service-connected disabilities under the law. We are dealing with all the veterans of all wars in the Veterans' Bureau, in the matter of hospitalization. These things are going to run together, through the soldiers' homes, the hospitalization, and the pension proposition, sooner or later. I feel that it would be good business to get it placed in one Federal agency, under one head. Whether it is administered through separate sections or not is not so material, but there should be one place in which all matters dealing with the veterans can be handled, under all appropriations.

Senator WALSH of Massachusetts. Is it not a fact that we have extensive records in your bureau now for practically all these claimants?

General HINES. Yes. To put this part of the act in the Pension Bureau for administration would rather complicate matters, because most of the records of the men who will apply, at least in the beginning, are now in the Veterans' Bureau.

Senator CUTTING. You would have to have an entirely different set-up, then, to handle these claims, of course.

General HINES. No. I do not feel that we will need a new department, or a new service. Of course, they will have to be tabulated and kept track of separately, but it will not be a new set-up. It will be an extension of what we have.

Senator CUTTING. There would be a saving if all pension cases were handled by the same department, would there not?

General HINES. I have felt that there would be economy, as always results when you bring Federal agencies together, eventually, by keeping all these agencies together. But I feel that it would cost more to administer it if this part of the law were put in the Pension Bureau and the rest of the compensation and hospitalization of World War veterans were left with the Veterans' Bureau.

Senator CUTTING. There is one other question that I would like to have answered, General. On what basis, as long as we are starting on a pension system for these World War veterans, do you justify their getting less than the Spanish War veterans of equal permanent total disability?

General HINES. I covered that this morning, Senator. I feel that we are beginning with men who are younger, and we are starting them, as we did the veterans of other wars, at lower rates. Probably we will be in a position later to increase the rates, but we certainly should not start at rates which we might have to subtract from rather than add to, due to the number of men involved in this matter. The Spanish War men started at lower rates than these, and wound up at lower rates than these, and I feel, in fairness, that the World War men that will come in under this law are being treated equally as well, or a little better than their comrades of previous wars.