We have something like 678,000 policyholders at this time in converted insurance.

Senator SHORTRIDGE. I note here on page 29 of the bill that there are two provisos. They are not new matter, are they? That is under section 23, which you have been discussing.

On page 29 of the copy of the bill which I hold in my hand I note that there are two provisos, one beginning on line 3 and the other on line 9. Merely for my information, is that new matter?

General HINES. Which bill have you, Senator?

The CHAIRMAN. In the bill that you have it is page 31, line 12. Mr. ROBERTS. That is new matter.

Senator SHORTRIDGE. What is the meaning or significance of the language?

Mr. ROBERTS. The significance of that language, Senator, is simply this: Under the present law as interpreted by the bureau and the courts, the man applies for reinstatement of his insurance or for conversion of his term insurance. He is thereafter estopped to set up a claim on his original contract and is bound by that reinstatement or conversion, as well as the Government being bound by it.

Many of these men who have paid premiums right straight along on their policies and have converted or have reinstated and converted, are now endeavoring to get back to the date of discharge in 1919, alleging that they were permanently and totally disabled at that time. If there has been a reinstatement or conversion intervening he is estopped to go back of that reinstatement or conversion under the interpretation that I have just stated.

This was to give him the option, as it was felt by the sponsors of the amendment that as long as a man had endeavored to keep faith with his Government and paid the premiums he should not be penalized for having done it. In other words, if he had not paid any premiums he could allege a date back at the time of discharge as the date of permanent and total disability, and collect. If, however, he had paid premiums and reinstated or converted his insurance, he would not be able to go back of the date of reinstatement or conversion.

Senator SHORTRIDGE. And that second proviso fixes a certain date? Mr. ROBERTS. That is to give retroactive effect to the section so that those men who have heretofore been denied will be able to come in under this amendment and claim the benefit of it.

Senator WALSH. Generally speaking, General, how much cheaper are the premiums on converted insurance policies than those of commercial companies?

General HINES. They vary, of course, with the character of policy; but I think it is safe to say that the cost in each group is dependent upon the commercial charge for the contingency of permanent and total disability. We charge no premium for that. In other words, we take the straight American experience table of mortality and 3%1⁄2 per cent, as against death, and we make no charge or the premium. is not loaded for permanent total disability. The charge in commercial companies varies; it is not uniform at all. I should think it is safe to say, generally, that our policies are at least 10 or 15 per cent cheaper.

The CHAIRMAN. Just that one class of policies?

General HINES. Yes, converted. All of our policies carry that clause, maturing in the event of permanent and total disability or death.

Section 24 of the bill amends section 311 of the act by clarifying the provisions thereof relative to insurance against total disability to be issued by the Government at a premium rate commensurate with the risk. This amendment merely changes the language of the existing law so as to make these provisions which have been authorized to be placed in existing policies more nearly in line with similar provisions in commercial contracts. This amendment is recommended by the bureau and will result in no additional cost to the Government. Section 25 of the bill amends the law by adding a new provision protecting the existing rights of veterans under the World War veterans' act. As a result of the enactment of this measure, the preset rights of veterans will not be adversely affected.

Senator SHORTRIDGE. That is what we might term a saving clause. General HINES. Their rights would not be affected by any changes of this act.

Now, Mr. Chairman, may I enter at this place in the record a summary of the cost of these various amendments? I have referred to them as each amendment was taken up, and I believe it would be convenient to the committee to have this in the record; and I will hand to the reporter the statement which gives the same amounts that I have read and which totals $181,040,650 as the minimum cost of this bill.

The CHAIRMAN. As it passed the House?

General HINES. Yes, sir. The statement showing the study both by the Pension Bureau and the Veterans' Bureau as to the maximum cost that might be reached under the most liberal interpretation has already been entered in the record.

The CHAIRMAN. This statement will be placed in the record. (The statement referred to and submitted by the witness is here printed in full as follows:)

Section 5. Restoring service connection_
Section 200. Disability awards (new)..

Section 200. Death..

Misconduct cases:

Disallowed cases.

Terminated cases.

Furnishing flags..

Loss of hands or feet_

Payment of $50 in tuberculosis cases_

Rating of 25 per cent for arrested tuberculosis_

Section 202 (10). Family allowance..

Section 202 (10). $8 to hospitalize veterans.

Accumulation of Adjutant General's Office records.

Administrative cost of section 200

Hospitalization of 3,500 section 202 (10) veterans now awaiting

hospitalization

Uniforms to elevator men.

Recoveries (sec. 28)_

Total..

$702, 000 103, 200, 000 48, 700, 000

5, 086, 000 335, 100 40, 250

1, 000, 000 4, 000, 000 8,000

4, 000, 000

1, 300, 000

3, 000, 000

5, 000, 000

4, 449, 000

1, 800 218, 500

181, 040, 650

Senator SHORTRIDGE. Have you gone through the bill, General, in detail and pointed out severally the sections that your bureau, or that you, speaking for it, approve?

General HINES. Yes, sir. The statement shows that, and we have submitted to the committee this confidential committee print of a bill which we feel carries out those suggestions.

Senator SHORTRIDGE. I am prompted to ask that question because have been unable to be here all the time you have been testifying.

General HINES. The bureau is desirous, of course, of seeing some legislation go through at this session of Congress and in such form that we can approve it and which will not prove to be embarrassing by a further study of the relief which the Congress ultimately will wish to give to the veterans.

The CHAIRMAN. What is the estimated cost of your suggested provision?

General HINES. $20,000,000 more annually. I think the main points of difference that will arise between the bureau and the service organizations, if I may point them out, as to the date of the presumptive provisions of section 200 as against the bureau's suggestions for those disabilities which we feel should be brought in to make them on a parity with other presumptive provisions given to other veterans. January 1, 1925, is the date the bureau recommends. Some of the service organizations will feel, I am sure, that that date should be January 1, 1930, which of course brings in a broader group and takes in many of the veterans who are now in our hospitals and can only be considered as having disabilities not due to service.

The other contention will undoubtedly arise probably on the allowance to uncompensated veterans for their dependents that are in our hospitals at this time.

There may be some contention relative to extending the time of filing suits against the Government; and I believe that those three provisions will be the ones in controversy. I think the service organizations would be in accord with the bureau on most of the others, although I am saying that without having conferred with them.

I just wish to point out those three points.

Senator SHORTRIDGE. Finally, to sum up, if the bill should pass as it comes from the House it would entail an additional expenditure by the Government to meet all requirements of the bill?

General HINES. Yes, sir.

Senator SHORTRIDGE. As a minimum, how much?

General HINES. A minimum of $181,000,000 annually.

Senator SHORTRIDGE. And a possible maximum of how much?
General HINES. $400,000,000.

Senator SHORTRIDGE. What was the item of $20,000,000 you mentioned just now?

General HINES. The item of $20,000,000 is the proposed substitute bill which is offered by the bureau as a compromise.

Senator SHORTRIDGE. The bill that you suggest you estimate would add a minimum of $20,000,000?

General HINES. Yes, sir; annually.

Senator SHORTRIDGE. And a possible maximum of what?

General HINES. I doubt if it would run much over that; but if you put a maximum on it, I would say $25,000,000.

Senator SHORTRIDGE. And the additions in the suggested additional cost to the Government spring out of one, two, or three provisions in the bill?

General HINES. Yes, sir; which I have just referred to.

Senator SHORTRIDGE. And thus far, as I understand you, those speaking for the organizations are urging the bill that is before the Senate now?

The CHAIRMAN. Not all the organizations. I do not know.

There may be some;

Senator SHORTRIDGE. Well, let us say certain of the organizations, then.

Senator BINGHAM. The American Legion expressed approval of your draft.

General HINES. I think they differ on the allowances to the uncompensated veterans.

Senator SHORTRIDGE. What I am seeking to get at is this. You advance your views; others entertain, perhaps, contrary views; and the query is in my mind whether there might be a coming together of minds and an adjustment reasonably satisfactory to all parties, each of whom, of course, is in sympathy with the main purposes of the legislation.

General HINES. I think that is possible, Senator.

The CHAIRMAN. Is that all?

General HINES. That is all, Mr. Chairman, unless the committee desires me further.

The CHAIRMAN. I would like to have an executive session at this time, and then have all of you come here tomorrow morning.

Senator SHORTRIDGE. If the date in question should be moved up to 1930 in the bill as you suggest, what additional amount would that cost the Government, if you have estimated it?

General HINES. Senator, we have not estimated that, but by tomorrow morning I can have an estimate to give you on that. Senator SHORTRIDGE. That will be interesting, I think. General HINES. I would rather do that than to guess at it.

(Whereupon, at 11.20 o'clock a. m., the hearing in the aboveentitled matter adjourned until to-morrow, Tuesday, May 6, 1930, at 10 o'clock a. m., and the committee proceeded to the consideration of business in executive session.)

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