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Senator BARKLEY. Would that include the expense of the veteran traveling from his home to the place of examination?
General Hines. It would include transportation, yes, sir but no per diem allowance, as there is in service-connected cases; meals, lodging, and transportation.
Senator WATSON. Are there any further questions of General Hines?
Senator SHORTRIDGE. I would like to ask the General one or two questions. General, as I understood you to state, under the law neither you nor the Attorney General has the power to compromise cases once begun.
General Hines. You mean to compromise suits?
Senator SHORTRIDGE. Actions at law brought in the court or causes of action growing out of insurance policies.
General Hines. That is correct; yes, sir.
Senator SHORTRIDGE. I understood you to say that you thought it would be wise to have the law so amended as to authorize you to compromise any such cases.
General HINES. I believe that would be very advisable, Senator, and very helpful.
Senator SHORTRIDGE. As I understand it, the Attorney General attends to the defense of the case when and after it is commenced.
General HINES. Yes; that is correct.
Senator SHORTRIDGE. And you cooperate with him in furnishing the evidence, and giving all proper assistance.
General HINES. Yes, sir.
Senator SHORTRIDGE. So that the authority should be given to him to compromise in a given case.
General HINES. I feel that if the authority is given to the Attorney General, he certainly will confer with the bureau before a compromise is made, and the desired results will be brought about.
Senator SHORTRIDGE. As to the extension of the statute of limitations, much has been said in regard to this question, and many of us have heretofore expressed our opinion that, for reasons given, the time as provided in the law now should be extended one year so that certain actions may be brought on and tried, or compromised, if the law is so amended, upon their merits. If the statute should be extended, approximately how many additional cases would that permit to be heard upon their merits, roughly speaking?
General Hines. I have a feeling that approximately 5,000 new cases would be filed against the Government.
Senator SHORTRIDGE. You have told us heretofore, I believe, that about 50 per cent of such cases are won by the Government.
General Hines. That is correct.
Senator SHORTRIDGE. If the power to compromise be given, on the assumption that, say, 5,000 should be brought, of course, we are not quite able to indicate how many would be compromised, are we?
General Hines. That would be rather difficult.
General Hines. There are two ways in which the claim would be settled out of court. One would be that the bureau, on its own motion, would allow the case upon review. Second, it would then compromise the case through the Attorney General, by the attorneys on both sides reaching some agreement before the court. I should say that in that event the cases won by the Government plus those
that would be settled by compromise, might be as much as between 70 and 75 per cent of the cases.
Senator ShortRIDGE. That would be either won or compromised. General HINES. Yes.
Senator SHORTRIDGE. Which would leave approximately 25 per cent.
General Hines. Approximately 25 per cent that would go to trial.
Senator SHORTRIDGE. That would go to trial, and be lost by the Government. Senator Walsh of Massachusetts. Of course,
all these cases, outside of those where legal technicalities are raised, are considered by the bureau to be without merit.
General Hines. They are considered by the bureau to be cases where we have gone as far as we can within our law.
Senator Walsh of Massachusetts. And cases in which you conclude that you would not be justified in making payment under the law as you interpret it.
Senator BARKLEY. To what extent do you have any authority now to compromise a claim prior to the institution of suit? You have to pay the whole thing or nothing, do you not?
General Hines. Yes, sir. I have no authority to compromise.
Senator BARKLEY. If you had authority to compromise a case after suit is brought, should it not include the power to compromise before suit?
General Hines. The case can be compromised before suit-in other words, by the bureau allowing it-but we would have to allow it in full.
Senator BARKLEY. That is no compromise. That is just payment of the whole amount of the claim.
Senator CONNALLY. He means by reducing the amount.
General Hines. I doubt the advisability of that, Senator. I think that the matter of compromising litigation should be centralized in one place.
Senator SHORTRIDGE. Mr. Chairman, I have asked the general here to prepare an amendment which would give to the Department of Justice and the Attorney General authority to compromise in particular cases, and also extending the statute. Finally, I would like to ask you if you can, in a few words, state when the statute of limitation commences to run against a given case.
General Hines. The statute commences to run when the contingency arises; that is, when the man believes that his permanent disability commenced. In most instances they attempt to prove that commencement date after date of discharge. It may be later than that. It may be the time when he allowed his insurance to lapse for nonpayment of premiums. That would then be the commencement date. He files his claim, claiming that he is permanently and totally disabled as of that time, and the bureau differs with him in that case. The statute would commence to run at that time, and would be stayed during the period that the bureau might have the claim under consideration. In other words, he would have six years from the date he alleges the right accrued forward, exclusive of the time the bureau was considering the matter.
Senator SHORTRIDGE. Can the law, then, be so stated as to make it clear, definite, and understandable?
General Hines. I think it can, Senator, by fixing a definite date when all suits growing out of the war-risk insurance would be barred. I refer to the old insurance, not the converted insurance that now exists on the books. That could be fixed at a definite date, and it would be definitely understood that no suit could be filed against the Government after that date. If Congress should once fix it and let it be understood that that is as far as you are going, we would not have these constant efforts to move the date forward all the time, which is confusing, and I think it would be in the interest of the veteran to fix a date and let it be well known in advance that that is the final date that the Government expects to permit itself to be sued on these old war-time insurance policies.
Senator SHORTRIDGE. There has been more or less confusion, has there not, General, as to that very point?
General HINES. Yes.
Senator SHORTRIDGE. As to when the statute commenced to run. I would like to have that cleared up if it can be cleared up.
Senator Walsh of Massachusetts. General, have you considered that giving to your bureau the power to compromise suits at this time, involving so much money, would be, judging by past experience, a temptation for fraud and deceit?
General Hines. I am not advocating that it be given to the bureau, but that it be given to the Attorney General. I feel that it should be given to him.
The only question that is going to arise, I think, on the whole matter, will probably arise between the Attorney General and the Comptroller General, who, I believe, feels that he has the final authority to compromise actions against the Government.
Senator WATSON. Are there any other questions of General Hines by any member of the committee?
Senator CONNALLY. That objection could be obviated by making the compromise approved by the court, could it not? The compromise could be approved by the court and entered as a judgment.
Senator SHORTRIDGE. I imagine it would be, of course, reported to the court.
Senator CONNALLY. If you provided that, and it becomes a judgment, the Comptroller General would have nothing to do with it.
Senator LA FOLLETTE. Mr. Chairman, I would like to ask the general to furnish for the record all the tables that he used in his testimony this morning.
General Hines. I will be glad to do that. I will be glad to furnish all the tables we have, Senator, on this subject, and we will correct that second table to make the average $35 instead of $40.
(The tables referred to will be found at the conclusion of General Hines's statement.)
Senator GEORGE. General, in giving your estimate of the cost of this bill this morning, beginning the first year at some $25,000,000
General Hines. That was not the total cost of the bill. That was the total cost of the section.
Senator GEORGE. What is the total cost of the bill exclusive of this section?
General HINES. Exclusive of the section?
General Hines. The total bill is approximately-
General Hines. Taking the estimate used by Royal Johnson, that 61 per cent of the men would come in
Senator CONNALLY. Do not take that. Take your own estimate.
General Hines. No; that is our estimate. I will insert, item by item, a statement we have here on the cost, and where no cost is indicated
Senator BARKLEY. Will you carry that on up to five years?
General HINES. Yes. We do not have those figures, but I will introduce them, item by item, in the testimony here.
The difference, in connection with this particular section, between Congressman Johnson's estimate of $40,000,000 and the estimate I gave you is brought about by his estimate that 60 per cent would come in the first year, as against our 41 per cent.
Senator BARKLEY. He has figured on a different basis.
Senator CONNALLY. Under the existing Spanish War rates, according to your estimates, if we amend the bill by putting them in this bill, the whole bill would cost only $55,000,000.
General Hines. I would like to check that, but I will put both of them in
Senator CONNALLY. You said it would cost $45,000,000, and on the other basis it would be $49,000,000. That is $24,000,000 more. So, if you add $24,000,000 to $31,000,000, you get $55,000,000.
General HINES. That is about right. In order that there will be no misunderstanding, I will put in each item so that we will have it definitely.
Senator Watson. Senator Cutting, do you want to ask General Hines any questions?
Senator CUTTING. I do not think so.
Senator STEIWER. You have just stated that the total cost of the bill would be $31,000,000, as I understand you.
General Hines. Based on the 1920 Spanish War rates, with the exception that we added $10 to the permanent total rate. Instead of $30, we brought it up to $40.
Senator STEIWER. The question is suggested by reason of the language employed on page 15. It is there stated that if the veteran is suffering from a disability of 25 per cent or more, permanent total disability as defined by the director, then follows an outline of certain rates.
General Hines. I have outlined to Senator George and to the committee here this morning the feeling that this disability allowance should not be on the basis of the compensation table, but should be rather on the average impairment of the man to carry on the vocation in which he is engaged and earn a living, which would make it a simple proposition, and not involve the factors of the pre-war occupation, as our present disability compensation does.
Senator STEIWER. Assuming that this bill is passed, you, as director, would define disability along that general line?
General HINES. Exactly.
Senator STEIWER. The estimate of the cost which you have made is based upon the assumption that that definition would be made.
General HINES. Yes.
Senator Walsh of Massachusetts. The same factors employed by the Pension Bureau in administering the Spanish-American War pension?
Senator GEORGE. Not exactly. That takes into consideration manual labor. This is based on manual labor in the occupation in which he is engaged.
General HINES. Yes. In other words, it is the handicap of the man to carry on in his line of endeavor.
Senator STEIWER. Later in the same paragraph I find that the application shall be in the form as the director may prescribe. If that is merely the outward form of the application, of course it is not very important. But did you have in mind, by the use of that language, that the substantial right of the veteran would be affected one way or the other by further rules made by the director?
General HINES. No; I did not. I want to make this as simple and direct as possible.
Senator STEIWER. The form of the application would neither add to nor detract from the disability as defined along the theory which you have explained just now?
General Hines. No; and it would not in any way jeopardize the intent of this bill to give the man all he is entitled to. In other words, I feel that the application should be in the simplest form that it is possible to make it, because you are dealing with men who probably are not able to understand everything in an application, and this will also carry with it the provision that where a man has once claimed benefits in the bureau, that application means for all benefits, not for one particular point.
Senator STEIWER. Do you contemplate the same organization of machinery that has been passing upon the compensation, to pass upon the disability allowances?
General HINES. There will have to be some modification of it in order to meet the ratings we have.
Senator STEIWER. For instance?
General Hines. There is no necessity of as much technical expert advice in these cases as there would be in the service-connected cases.
Senator STEIWER. But you will still have a rating board.
General Hines. I expect to maintain that, so that the man will have a right to appeal.
Senator STEIWER. Then, he can appeal direct from that to the organization here.
General Hines. He would appeal to the Council of Appeals and the director.
Senator STEIWER. He would not go through as many boards of appeal.