J60
F4

71st

TO AMEND THE WORLD WAR VETERANS' ACT, 1924

FRIDAY, JUNE 27, 1930

UNITED STATES SENATE,
COMMITTEE ON FINANCE,
Washington, D. C.

The committee met at 3 o'clock and 15 minutes p. m., in the room of the Senate Military Affairs Committee, Senator James E. Watson presiding.

Present: Senators Watson (acting chairman), Reed, Deneen, La Follette, George, Walsh of Massachusetts, Barkley and Connally. Present also: Senators Steiwer, Cutting, and Robsion.

Present also: Gen. Frank T. Hines, Director and Mr. J. O'C. Roberts, Assistant General Counsel of the United States Veterans' Bureau.

Mr. WALSH of Massachusetts. Mr. Chairman, General Hines, at my request, will now give the committee some new estimates of the cost to the Government of the plan of pensioning based upon the payments authorized in the Spanish-American War veterans' act of June 2, 1930.

General HINES. Under these new conditions the total permanent. cases, modified by the exclusion of the 90-day requirement as to service and modified by the requirement that the enlistment begin prior to November 11, 1918, based on the range of rates, $20 to $60, or an average of $35.

Senator WALSH of Massachusetts. And excluding disabilities of less than 25 per cent.

General HINES. The cost there would be for 156,000 men, in 1931, $49,157,640. The first table I have here is from 10 per cent to 100 per cent disability.

Permanent cases only (excluding less than 90-day men, at rate provided for Spanish War veterans by act of June 2, 1930)

Gentlemen, let me state the basis of the estimate on the Johnson bill, which I gave the committee this morning, ranges from $25,281,000 for 1931, to $80,570,000 for 1935, commencing with 156,056 men and

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increasing in 1935 to 380,622 men. That estimate is based upon a 25 per cent degree of disability or more, in rates ranging from $12 to $40, the average used being taken at $18, because the bill itself provides that for 50 per cent disability the rate will be $18. On the basis of the Spanish War rates, from $20 to $60, using $40 as the average that average rate really should be $35, in order to be comparable with this last bill

Senator WALSH of Massachusetts. The estimated rate you gave me was $31.50.

General HINES. That did not take into account the new 90-day provision or the limitation of November 11. We did not have that at that time.

Senator WALSH of Massachusetts. The number of cases would be the same, of course, 156,056 to 380,622, during a period of five years. The only question would be the difference in the amount each year. General HINES. There would be a difference in the amount. Senator WALSH of Massachusetts. What is that difference? General HINES. The first year, 1931, using the average of $40, as I have explained

Senator LA FOLLETTE. I thought you said that was not the right. average.

General HINES. That is true. I will give you the figures for the $35 rate. Using $35 instead of $40, the first year would be $49,157,640 for the same number of men, 156,056. The next year would be $107,506,875. The third year would be $133,484,190. The fourth year we will have to work out for you as we go along. That is at the new rate.

Senator WALSH of Massachusetts. The fifth year would be about $25,000,000 more.

General HINES. Not quite that much. It would be $144,674,670. Senator WALSH of Massachusetts. You say the average is $31.50? General HINES. We had not taken into account the limitation of November 11 as to the number of men. It would be from 10 per cent up, Senator, instead of 25 per cent.

Senator WALSH of Massachusetts. I should think, if you took it on the basis of 10 per cent up, it would be more rather than less, on the average.

Mr. ROBERTS. From 10 per cent to 100 per cent, Senator, with rates from $12 to $30, would give you an average of $18.

Senator WALSH of Massachusetts. It would bring in more cases. The number of cases was 304,201, when the disability was to begin at 10 per cent.

Mr. ROBERTS. Yes, sir.

Senator BARKLEY. Taking the basis of 25 per cent disability as a minimum, going up to 50 per cent, 75 per cent, and on to 100, what proportion of the number of men coming within those ranges would be between 25 and 50 per cent, if you know?

General HINES. I do not know; we could work it out.

Senator BARKLEY. The smaller the disability the larger the proportion.

General HINES. The larger the group, yes.

Senator WALSH of Massachusetts. In view of his fixing the average rate at $35, it would indicate that the average was 50 per cent.

General HINES. I took that on the basis of the Spanish War figures. Before they used to have rates from $20 to $40. I do not know that we can get each group, unless we take our experience from the compensation rates.

Senator LA FOLLETTE. Please speak a little louder. It is impossible to hear at this end of the table.

Senator BARKLEY. You stated this morning the number that the number of men between 10 and 25 per cent disability was 46 per cent. of the total.

General HINES. That is in connection with our compensation rates.

Senator BARKLEY. Assuming that that would be a fair average for those included in this bill, we could expect that probably 30 or 40 per cent of those coming under this provision would be between 25 and 50 per cent disability.

General HINES. I think that would be fair, yes.

Senator LA FOLLETTE. General, how much do you estimate it will cost the bureau to administer this disability pension?

General HINES. We have included in the total cost of the bill $2,000,000 for the first two years with a decrease after that.

Senator LA FOLLETTE. Do you think you could administer it for $2,000,000?

General HINES. I think so. At least I am willing to try it.
Senator CONNALLY. Annually, of course.

General HINES. Annually. I would not say it would continue after we got over the peak, and as I say a decrease is estimated after the first two years.

Senator BARKLEY. Does that include the medical examination of all these men to determine their disability?

General HINES. Yes; everything. In addition to what personnel we have now, I figure that the added cost would be about $2,000,000, the first two years.

Senator BARKLEY. How far, on the average, would each man have to travel in order to get to an examining board?

General HINES. That would be a difficult thing for me to say, on the average. We have a pretty broad distribution of facilities throughout the country. There are facilities in every state, at every regional office, and every hospital.

Senator BARKLEY. Take my state. There is one regional office at Louisville, and one at Lexington.

General HINES. There is a suboffice at Lexington.

Senator BARKLEY. Under the present condition many of these men have to go a hundred miles to be examined.

General HINES. Of course, in the large centers where the great majority of these men are the distances would be small, as our regional offices are there.

Senator BARKLEY. I was wondering whether it would be possible to work out a plan by which the local boards already in existence in the counties serving the pension bureau could examine these nonserviceconnected men so as to eliminate a large amount of railroad expense.

General HINES. I was going to suggest to this committee, when you are through with me, that this new provision in this bill only emphasizes a little more strongly the necessity of all these activities being brought together in one place, and I was going to ask the

committee to give some consideration to reporting out that bill (H. R. 10360) which does that. Regardless of that, however, your suggestion is a good one, and the bureau will certainly ask the Pension Bureau to cooperate with us in the examination.

Senator BARKLEY. Where there is no technicality involved in tracing a man's disability back to service, it is much more simple. The only question is a medical question, as to how much he is really disabled.

General HINES. Under this bill it is necessary to look at the man as he stands to-day, with his disability, measured in terms of how able he is to carry on, and convert it simply into one of these percentages.

Senator BARKLEY. It occurred to me that it might save a lot of money if you could have them examined locally.

General HINES. I think it would.

Senator WALSH of Massachusetts. Do you not want uniformity of examination?

Senator BARKLEY. Yes.

Senator WALSH of Massachusetts. You do not want to have it easier to get a disability rating in one place than in another place. General HINES. Of course, we have two problems if this bill becomes a law. We know, or rather feel, under the disability system that we have for the service-connected cases, that there will be a large number of claims filed. Whether they are all allowed or not, they will all have to be examined. The second feature is the new disability feature, which will be simple in administration, but undoubtedly will involve the filing of a large number of claims. We have calculated that only about 41 per cent of them will come in the first year, but that does not mean that they will all necessarily stop filing. The greater percentage may file claims. I think the Pension Bureau's experience is that our estimate of 41 per cent coming in the first year is high. I think they calculate a smaller percentage which, of course, would make their first year estimates lower. But with all the agitation, and the way the country is advised that something of this kind is going to go in, I have a feeling that many men will file immediately upon the passage of the bill.

Senator GEORGE. Is it not true, especially, General, when you consider that some four hundred and eighty thousand and odd, or four hundred and sixty thousand and odd, or whatever the number is, have already made application for compensation?

General HINES. The bureau would feel that without any action on part of the men except to fill out a formal application, which would be simple we should immediately review the claims that have been. filed in each regional office and see how many of those come in without any motion on the part of the men.

Senator GEORGE. That might bring in a pretty high number.

General HINES. It would. That caused us to move up the percentage used by the Pension Bureau to 41 per cent, and increase the first year estimate accordingly. I feel that $2,000,000 is a fair estimate for the increased cost of administration for the first year, Senator.

Senator BARKLEY. Does that include these extra examinations? General HINES. Yes. Of course, we have a large personnel that could conduct examinations both in hospitals and regional offices, and we have fee base doctors now all over the country.