sion and ask you when you are deliberating on matters of veteran legislation that you will bear one thought in your mind, which is

this:

The veteran-he was willing to go the limit for his country, and the ountry will go the limit for him.

And, now, Mr. Chairman and members of the committee, you will want to get down to the business you have before you. It has been a pleasure to be here with you at this opening session. I am sure that you know you have the cooperation and support of the Veterans of Foreign Wars. Capt. Edwin S. Bettelheim, jr., the chairman of our legislative committee, will, as in the past, attend your hearings and present the views of our organization. I also want to take this opportunity of saying that the Veterans of Foreign Wars is not unmindful of the excellent work of Capt. Watson B. Miller, the rehabilitation chairman of the American Legion and his associates, and also of Capt. Thomas Kirby, the legislative chairman of the Disabled American Veterans of the World War as well as Captain Bettelheim, our own legislative chairman. The result of the labors of these legislative chairmen should certainly perpetuate monuments of their devotion to their comrades. I am sure you and the country will find that the veterans are united in their work for the disabled. I am glad to look the members of this committee in the face, so that I may be able to tell the veterans throughout the country, as I travel about, that I have seen you and know that the veterans' cause is in good hands.

The CHAIRMAN. The commander of the American Legion has sent the following telegram to this committee, which I desire to insert in the record at this point:

Hon. ROYAL C. JOHNSON,

House of Representatives,

INDIANAPOLIS, IND., January 4, 1926.

Washington, D. C.:

I am extremely regretful that engagements of long standing make it impossible for me to meet with the Committee on World War Veterans' Legislation on January 6, following your kind invitation. I know through the American Legion's representatives in Washington of the serious and intelligent attention which the committee has given to the relief of our disabled comrades and I want you to know that we have complete confidence in you. Will you please present my regrets to the members of the committee that I could not be present.

JOHN R. MCQUIGG.

The commander of the Disabled American Veterans has sent to this committee the following telegram, which also will be inserted. in the record:

Hon. ROYAL C. JOHNSON,

Veterans' Committee,

Washington, D. C.:

JANUARY 4, 1926.

Deeply appreciative invitation to attend opening of hearings on proposed amendments to World War veterans' act, but sincerely regret imperative engagements up-State in New York make attendance impossible. Relief of disabled former service men overshadows all other activities of Disabled American Veterans and our legislative program was adopted only after calm deliberation of men thoroughly qualified by experience to tell of needed

changes. Attitude of you and your committee composed of both political parties has been constant inspiration to maimed men and Reed-Johuson bill did much to alleviate suffering. In light of experience, further changes are necessary and we commend to your most serious consideration the whole legislative program adopted by our fifth national convention last June. Disabled men of country will never forget fair attitude of Veterans Committee of House. JOHN W. MAHAN,

National Commander Disabled American Veterans.

Gentlemen, as you know, the committee has been called in accordance with the agreement made at our last executive session to discuss amendments to the World War veterans' act of 1924, and particularly to consider H. R. 4474, which was introduced by the chairman on December 9, 1925. This bill embodied recommendations made by the Veterans' Bureau and the service organizations, and was introduced by the chairman simply to place before the committee concrete proposals and amendments to the law for the consideration of the committee. Under the tentative agreement we agreed to take the testimony of the bureau and of representatives of the three service organizations, the American Legion, the Disabled American Veterans, and the Veterans of Foreign Wars. The chairman would say that it is very evident that much time can not be consumed in these hearings if legislation is to be enacted, and that there must be general consideration of legislation and not consideration of individuals, except where it is shown to affect a class of cases.

As the witnesses testify you will find with the clerk of the committee the testimony which the witnesses have given, which will be referred to the witnesses for the purpose of correcting, and the clerk will be responsible for all testimony.

At the request of the committee I have invited General Hines, Director of the Veterans' Bureau, to meet with us in order that he might give us a résumé of the Veterans' Bureau's activities for the past year, together with the bureau's reaction on the proposed amendments to the World War veterans' act, which is now before us for consideration. General Hines, you may proceed.

General HINES. Mr. Chairman and gentlemen of the committee, with your permission, before commenting specifically on the various sections of H. R. 4474 I will give a résumé of bureau activities to date.

Decentralization of the activities of the bureau in so far as it is possible to decentralize and at the same time maintain an efficient and economic organization has been accomplished. There are at the present time 54 regional offices which have complete authority to adjudicate claims in almost every respect. There are, of course, maintained in the central office certain skeletonized organizations which by reason of their functions are not susceptible of decentralization.

There have been established, in each regional office, claims and rating boards which consist of five regular members, including one claims examiner, one claims reveiwer, one vocational specialist, and two general medical referees, one of whom is a general medical examiner. In addition to these there is assigned to the board such. special medical and dental members as may be necessary to determine the medical facts in each case. The claims and rating board

combines and coordinates the medical, legal, and vocational activities in rating disabilities for the adjudication of claims and employs a direct method which requires that the members of the board who make or determine ratings shall see the claimant in person. The decision of the claims and rating board is final and binding so far as any regional office is concerned and is subject to revision only by the central board of appeals in consideration of appeal cases and the director. The central board of appeals has been decentralized into five groups located in the various area headquarters. In other words, the rating of disabilities has been brought closer to the claimant, and as a result I believe claimants' disabilities have been more accurately determined.

The construction of modern fireproof hospital facilities has been expedited. Construction under the authority of the so-called second Langley bill has been completed and projects under subsequent authorities are either in the process of construction or being planned. Every effort in the design of these new facilities has been directed not only toward having the structures conform with the requirements of advanced therapeutics but also to the peculiar needs of the patients themselves, particularly in the line of greater personal comfort and adequate recreational facilities. Careful thought has been given to the selection of new sites and to the making permanent of existing hospitals to the end that the permanent hospital to be constructed will be, so far as practicable, so located as to serve most conveniently the beneficiaries in the areas assigned to it.

With reference to medical activities, particular effort has been made to systematize procedure governing admissions to and discharges and transfers from hospitals and to define hospitalization for observation, treatment and in emergency, with the intention of effecting such a control of hospital admissions and discharges as would minimize unnecessarily prolonged hospitalization for observation or treatment and would insure an available bed supply not only for beneficiaries whose disabilities are connected with the service but for the additional load of hospital patients suffering from conditions not due to service. For the purpose of aiding in the establishment of an adequate disability rating and in order to establish diagnosis and outline the treatment which must be given for physical improvement in the more difficult cases, two diagnostic centers have been established. These are located at the Cincinnati General Hospital, Cincinnati, Ohio, and Mount Alto, Washington, D. C. They afford the most modern facilities and equipment with attending specialists of superior qualifications and by their operation a claimant is given complete satisfaction as far as the limitations of medical science permit.

With the passing of the last date for original induction into training, June 30, 1925, the training program has resolved itself into two primary problems: First, the completion of training of men who have, for one reason or another, proved themselves difficult to train and who have lingered in courses beyond the normal time; and second, providing the most practical training leading to the earliest possible employment in the cases of men who entered within recent

months. Every effort is being directed toward rendering trainees employable within the time allotted by law. There still remains before the bureau the problem of those cases of men who have an actual service incurred disability with a resulting handicap in their pre-war occupations. Some of these men have just entered training or have not as yet been able to enter training because of their service incurred physical or mental disabilities. As the law now stands there is no provision for the industrial rehabilitation of these veterans after June 30, 1926. It is believed that the Government should provide some means to aid these men through the provision of some instruction to follow closely on, or possibly be in connection with, physical and mental improvement.

During the past year in claims work emphasis was placed on applying expeditiously to all claims the numerous provisions of the World War veterans' act and particularly the amendments of March 4, 1925. This was effected through a review of all claims in the field and central office and at the close of the fiscal year this review had been practically completed in the regional offices and of the 350,000 cases held in central office about 50 per cent had been surveyed. The net result of this review was a material increase in active awards and, consequently, in total disbursements for this purpose.

On June 30, 1925, compensation payments were being made to 211,644 disabled veterans, the monthly value of these awards being $7,985,670. The total cases affected under the provisions of the World War veterans' act, 1924, as amended, were as of June 30, 1925, 33,491. As of the above date, compensation payments were being made to the dependents of 65,958 veterans. The total amount of payments to these dependents in June, 1925, was $1,744,090.

The bureau has established, effective January 1, 1926, the new rating schedule provided by the World War veterans' act. This schedule is based upon the average impairments of earning capacity resulting from injuries in civil occupations similar to the occupation of the injured man at the time of enlistment. The preparation of this schedule has required an unusual amount of research and work. It is the only schedule of its kind in existence, being more comprehensive in the matter of occupations covered and disabilities indexed than any similar schedule of rating. Its preparation involved the surveying and grouping of the many thousands of specialized occupations in the American industries, and the inherent difficulty of the work was increased by the scarcity of precedents. This schedule is to be placed into operation as claimants appear for reexamination or become ready for discharge from hospitals, and, of course, at all times upon appeal by the claimant.

During the year the bureau has perfected its system for protecting beneficiaries under guardianship. Guardianship officers have been appointed in regional offices who exercise a supervisory check over guardianship in their areas, and through these field representatives there have been uncovered many cases where guardians have not functioned in an efficient manner. A very thorough investigation in each case of this character is conducted, and in some instances, at the suggestion of the bureau, action looking toward the 83103-26-PT 1-2

forfeiture of bond as well as criminal proceedings has been instituted. This phase of bureau activities is relatively new, but the importance of the work itself can not be minimized, and the reception it has met throughout the country from all sources has been most gratifying.

In establishing the present organization of the bureau the policy has been continued to employ in key positions, so far as possible, properly qualified ex-service men and women. The percentage of male employees who are ex-service for the bureau as a whole is now 51.7, varying from 33.5 per cent at supply depots to 87.5 per cent for the central board of appeals. In the regional offices 70.4 per cent of the male employees are ex-service and for central office this percentage is 54.14. On July 1, 1924, these percentages were 67.9 and 51.9, respectively, indicating that with the turnover in personnel ex-service men are gradually taking the place of nonservice men. It is realized that the quality of the work of the bureau is dependent upon the morale of its personnel, and to encourage this morale every effort is directed toward placing personnel in positions according to their fitness and through the recognition of individual endeavor. A distinct phase of the personnel problem is the question of building up and maintaining a high standard of medical service sufficiently flexible to permit effective operation. One of the first and most necessary steps toward this goal is to make the medical service sufficiently attractive to secure and retain well trained, conscientious physicians.

On June 30, 1925, insurance records were maintained for 552,340 veterans carrying $2,865,028,729 of insurance. The total number of men carrying yearly renewable term insurance was 177,328. The amount of insurance carried was $1,372,091,391. Veterans carrying converted insurance numbered 375,012. The amount of insurance carried was $1,492,937,338. In maintaining the foregoing total insurance the average number of premium remittances received monthly during the fiscal year was approximately 320,000 and the amount of such premiums received monthly was more than $4,360,000. The total income from United States Government life (converted) insurance from premiums and interest on investments as of this date is $188,138,666.77. That part of this fund which is not required for the payment of claims and cash surrenders and loans to policyholders is invested in Government securities, the amount of such investments as of June 30, 1925, being $143,024,138.84. From excess interest earned on these investments and savings in mortality dividends are paid to policyholders which may be received in cash or applied to the purchase of paid-up or extended insurance. The total amount set aside for the payment of dividends is $10,366,748.69. With the passage of the World War veterans' act on June 7, 1924, it was anticipated that there would be a material increase in the number of hospital admissions during the year over the previous year and in the patient load at any one time. This expectation was borne out by experience, which shows that the total of 76,812 admissions exceeded the admissions for 1924 by 16 per cent although in fact this number was less than the admissions for the fiscal years