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Now, Mr. Chairman, I understand the comptroller objects to that amendment.

The CHAIRMAN. Yes; I have a memorandum here.

General Hines. I would simply like to add this: That our sole interest in this matter is to have some system worked out whereby, when the veteran shows up, we can make prompt delivery of checks or money that is due the veteran. We have no desire to upset any accounting procedure, if we can bring about the prompt delivery of these checks in any way other than by the bureau holding the checks. These men, as you know, travel around a great deal. And they are not as careful about leaving their forwarding addresses, as many of of the rest of us are, and in many cases those checks will be returned to the comptroller, and then the men will show up at the disbursing office, while the checks are here, and the men will be many miles away from there. It has resulted in delay in delivery of the checks. In talking with the comptroller's representative, we feel that they have changed their procedure at the General Accounting Office on account of this complaint, so that a great deal of this delay would be avoided, If that is so, and if the delay can be avoided, we have no great objection to it.

The CHAIRMAN. The comptroller gives an explanation of it, General, which, in my opinion, looks very plausible on its face.

General Hines. I think the whole matter, Mr. Chairman, rests on whether he is able to make prompt delivery of the check.

The CHAIRMAN. Evidently, from his statement here, there is not any question about that at all, General.

Senator BINGHAM. What is the objection to having the checks accumulate with the bureau? The bureau is in direct touch with the soldier, whereas the comptroller is not. What is the objection to having checks accumulate with the bureau so that if the soldier does return prompt delivery thereof can be made?

General HINES. I think the principal objection is that this makes a departure from the procedure that is followed by every other department of the Government, and he feels that that should not be done.

Senator Bingham. That is a good bureaucratic excuse, with which I have no patience.

Senator SHORTRIDGE. What does he state in his letter, Mr. Chairman?

The ChairMAN. I think he states a good reason. I will read it. Senator SHORTRIDGE. I was about to ask you to do that.

The CHAIRMAN. This is a memorandum with reference to this bill in relation to section 7, page 12, amending section 37 of the World War veterans' act. [Reading:)

Sec. 37. Checks properly issued to beneficiaries and undelivered for any Teason shall be retained in the files of the bureau until such time as delivery may be accomplished, or, until three full fiscal years have elapsed after the end of the fiscal year in which issued.

That ends the quotation. (Continuing reading :)

This would result in excepting the Veterans' Bureau from other Federal departments and establishments for the purpose of the operation of an established accounting procedure, whereby disbursing officers generally (inclusive of those of the Veterans' Bureau) are required on the first of each quarter to forward undelivered checks in their possession for more than three months to the General Accounting Office for safekeeping and lawful disposition. (Bulletin No. 3 of General Accounting Office, issued May 19, 1923, and Supplement No. 1, issued August 16, 1927, copies herewith.)

The application of such existing accounting procedure to the Veterans' Bureau is material for reasons, as follows:

“1. As a proper administrative and fund accounting procedure in the settlement of claims and accounts for which the United States is concerned as debtor and as creditor. In the settlement of the accounts of disbursing agents credit is allowed by the General Accounting Office for expenditures reported as made by means of checks issued as described therein, the credit being given on the presumption that the checks were delivered. If it subsequently develops that delivery has not been made, and that the checks are in reality in the hands of the disbursing agent, the question presents itself whether a proper credit has been allowed, or whether the money is still in the hands of the disbursing officer, and, in consequence, the credit action should be reversed, there having in fact been no expenditure.

That seems perfectly reasonable on its face. As to the practice, I am not sure. Now let us see what he says further (reading]:

2. Pending claims often involve outstanding checks, resulting in their cancellation or deposit of the amount into the Treasury on account of an indebtedness to the United States. The law requires the General Accounting Office to report outstanding checks as pertaining to “Outstanding liabilities.” Under the old procedure—which the bill would restore the delay in forwarding and the failure to report the status of the pavee's accounts in many instances caused sums to be carried to the “Outstanding liabilities" fund in the Treasury which should have reached the general fund in the Treasury. By the existing procedure, substituted therefor, such conditions are remedied to a large extent.

3. The inauguration of the existing procedure operated to reduce the number of checks formerly stolen or misplaced, due to insufficient safeguarding facilities, while being retained in the disbursing offices for indefinite periods, thereby effecting a reduction of need for check investigations and a monetary saving to the Government to the extent of such reduction. Approximately 67,000 of such checks are now on file in the General Accounting Office, where they are recorded, checked, and thoroughly safeguarded. Delivery or disposition of checks so filed in the General Accounting Office are made by it without delay, hardship, or the imposition of unnecessary requirements on applicants. The Veterans' Bureau is now being promptly informed of such deliveries as made. The former procedure in the Veterans' Bureau, which the bill would restore, in addition to giving rise to accounting complications as above indicated, makes it again possible for the checks to fall into unauthorized hands, and the consequent development of forgeries.

No reason is set forth or particular need appears why the Veterans' Bureau should be excepted from the requirement upon other departments and establishments of the established accounting procedure for the safeguarding of undelivered checks, and their availability for accounting purposes, as the bill would do.

Accordingly, it is believed that said proposed new section 37 (lines 24 and 25, p. 6, and lines 1 to 3, p. 7) should be stricken from the bill.

General HINES. Mr. Chairman, of course, I would have to take exception to the comptroller's statement that we are unable to safeguard our checks.

Senator Bingham. Before you do that, General, I wish you would give us some examples of the delays that have been caused, and the inconvenience that has resulted to the veterans. The comptroller claims there have been no delays; but he does not state anything about any new practice which would tend to alleviate any such delays.

General Hines. Well, of course, I have not before me any concrete examples; but I do know that we have had complaints in the past, and I think the comptroller's representative, who is present, will admit that the practice was changed on account of those complaints. The principal thing is that if the veteran comes in and asks for his check and it is not in our regional office, then he has to file a claim for it. That requires a blank to be filled out, and other procedure. In other words, these checks would be centralized, while the bureau has 54 regional offices scattered throughout the United States all in contact with the veteran, and in contact with our office, and we are better able to identify the veteran than anybody else and to bring the check to him directly. I know of no cases offhand where the checks have fallen into unauthorized hands. There may have been some in other years, but I mean since the setting up of the regional Veterans' Bureau offices, since the act authorizing it, and the setting up of the regional disbursing offices.

Mind you, gentlemen, we are handling matters of greater importance than this in connection with the adjusted loans, in the regional offices, and those checks are handled in our regional offices, and they are a live matter compared with other matters that the disbursing officers have as a responsibility. I can furnish the committee with some of the examples.

But I can say this: That the comptroller and the bureau have worked together very closely on these matters. I have had good cooperation from Judge McCarl's office. We have adopted procedure that has been helpful and beneficial to both offices. If we were clear on the statement that he can eliminate this delay, we would not object to the change; but we felt we had the basis for it when we made the suggestion. Just what changes have been made I am not familiar with in detail. But I do know, in all technical matters that we have to deal with, if relief is to be of any benefit, it must be prompt, because as soon as there is a delay the relief measures are not of great benefit.

The CHAIRMAN. That is true, but it does seem to me if you were building up now a system of receipts and disbursements of the Government, just the same as an individual or a corporation, or a corporate entity, I can not see for the life of me why this procedure would not be the better and proper one.

Senator BINGHAM. If it were keeping the checks here in the home office of the Veterans' Bureau, then I would agree with the chairman; but the real difference, as I see it, is between centralization and decentralization.

General HINES. That is it.

Senator BINGHAM. I think the argument does apply. Under the proposal of the comptroller, those checks have to come to his office here. We are dealing with 120,000,000 people here. And the checks, under this system, will be kept with the bonded disbursing officers in the district where the veteran lives, or is likely to turn up, where he is known, or where some means of identifying him are known. And the decentralization of these checks, it seems to me, is a very important matter of relief for the veteran.

The CHAIRMAN. But the veteran is apt to be in one State one month and in another the next. You do not know where he is going to be.

General HINES. But, Senator, we have a folder applying to each veteran. He advises us that he is at a certain place and is going to stay there, and his folder goes to that area.

We immediately get that contact. Now many of them show up after they have been away a year or so and claim their compensation. And frequently they get into other difficulties because they have not responded to our request for an examination. But the comptroller can not wipe off that obligation. It stands as an obligation against the United States.

The CHAIRMAN. Yes; but wherever they move, everybody would know there is one place to get information; one responsible head.

General Hines. Unfortunately, that is not so with the veteran. Many of them do, but the veterans generally look to the Veterans Bureau for almost everything. In other words, that is the agency of the Government they contact; that is the agency of the Government they know. Naturally, they come to the Veterans' Bureau regional offices first.

Senator BINGHAM. Furthermore, the comptroller does not have the file of the veteran. He has got to go into it de novo. If he does not go into it de novo, what is the use for the check?

General Hines. It seems to me the whole matter rests on centralization or decentralization.

The CHAIRMAN. That is all there is to it.

General Hines. We have felt that decentralization has given us better results. Many differ with us, but we feel that we would not have been able to handle the volume of business we have if we were centralized.

The CHAIRMAN. Is there a representative here from the comptroller's office?

Mr. J. D. WOODSIDE. Yes, sir.

The CHAIRMAN. We would like to have a statement from the representative of the comptroller's office.

Senator SHORTRIDGE. Before you do that, Mr. Chairman, let me ask a question first.

The CHAIRMAN. Very well. The Senator from California wants to ask a question, and then we will have the statement from the comptroller's representative.

Senator SHORTRIDGE. I want to understand the procedure and the oute it takes to handle the ratte under the present plan of operation. General Hines. Yes, sir. Senator SHORTRIDGE. Now a check is given to a beneficiary

General Hines (interposing). They are given monthly to the beneficiary.

Senator SHORTRIDGE. I am speaking of the checks mentioned in that section (reading]:

Checks properly issued to beneficiaries and undelivered for any reason shall be retained in the files of the bureau

General HINES (interposing). First, as you know, Senator, we have about 54 regional offices. In your State we have one at San Francisco, and one at Los Angeles. Then in those offices we have a claims folder that pertains to each case.

Senator SHORTRIDGE. Take a given case.

General HINES. That gives the record of the man from the time he filed his claim, up to date; gives everything.

Senator SHORTRIDGE. All right.

General Hines. Then in that office the disbursing officer makes out the checks and mails them to the last known address of the beneficiary, or the veteran. Now the veteran has filed with us his address.

Senator SHORTRIDGE. Here, or yonder in the other office?
General HINES. No; in the regional office.
Senator SHORTRIDGE. In the regional office?

General HINES. Yes. And we do get a copy of it here in the Washington office; but the regional office is going to do the business in that area. Now as long as that address is unchanged, they go

out and are delivered promptly. They are mailed out every month, the address is mimeographed, and they go out to the veteran promptly.

Now, if they come back
Senator SHORTRIDGE (interposing). Undelivered.
General HINES. Yes; if they are undelivered-
Senator SHORTRIDGE (interposing). How soon are they returned?

General Hines. Generally within 5 days or 10 days. The post offices return them promptly to us.

Senator SHORTRIDGE. Now they are back in the regional office.

General Hines. Now they are back in the regional office. Now; as I understand the situation now, we hold them three months, when they must be sent to the comptroller's office, under the regulation.

Senator SHORTRIDGE. The Comptroller General's office here?

General HINES. The Comptroller General's office here, yes; under the regulations. We feel that three months is a short time. The veteran may have gone away and failed to give notice of a change of address; but he returns. And immediately when he returns he comes to the regional office and asks where is his compensation check.

Senator SHORTRIDGE. Yes.

General HINES. If it is within the three months and we have it, we can give it to him promptly. But if it is after the three months and it has been sent here, we have to get it from Washington for those checks that are past due. If he is still entitled to the compensation, we can not get it until it is issued.

Senator SHORTRIDGE. The check, when issued, is an outstanding obligation of the Government.

General HINES. Yes, sir.

Senator SHORTRIDGE. Does not General McCarl, here in Washington, know that?

General Hines. He does know it. We give him a list of the veterans, and the checks.

Senator SHORTRIDGE. I mean, as suggested in his letter, does he not wish to know and to keep account of the outstanding and undelivered checks which are obligations of the Government?

General Hines. Well, of course, he has all that; he has the status of the accounts, and the disbursing officers' accounts. They all go through his office. They come first to my office, and then go to the General Accounting Office.

Senator SHORTRIDGE. Then, as I understand it, if after three months the check as issued from the regional office in Los Angeles is sent to the beneficiary and is undelivered, it is returned to the regional office?

General Hines. Yes, sir.
Senator SHORTRIDGE. And is retained there for three months?
General HINES. And is retained there for three months.

Senator SHORTRIDGE. And then is sent on here to the General
Accounting Office?
General HINES. Yes, sir.

Senator SHORTRIDGE. If, after the three months, the beneficiary shows up, what is the procedure then?

General Hines. Then, to get that check, he has to file a claim for it with the General Accounting Office; and, of course, that will come through the bureau from the field office.

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