sibility of the probate courts and the personal representative of the estate. I can visualize many unusual situations in that respect. Mr. LIPPS. May I suggest, sir, that, as far as real estate is concerned, it appears to me to be a minor problem because, as you gentlemen well know, in most States real estate does not become a part of the personal estate of the veteran. It descends directly to the heirs, except where it is necessary to dispose of it to pay debts. And I imagine in this situation that would be a very minor difficulty. Mr. SCHUYLER. May I add to that this thought, however, that, as you know, when your heirs survive and they want money they want the real estate liquidated in partition proceedings so that they can get cash rather than real estate. I am sure you are familiar with that. Mr. SHUFORD. I am familiar with that. But, of course, that comes down under the law of descent subject to the administration for payments of debts. I don't think we would be too much worried about real property. Do you have any other questions? Mr. ADAIR. No; I have no further questions. COUNSEL. Might I ask one question? Mr. SHUFORD. Yes. COUNSEL. On the question which you raise, sir, about the Veterans' Administration on its own initiative changing the interpretation of the money which is held for patients in hospitals, both State and VA, I would like to ask Mr. Lipps is it the view of the Veterans' Administration that such a change in interpretation will be made? Mr. LIPPS. I can't answer that question because the former interpretation was made by the former General Counsel. We have a new General Counsel. And I can say that if the new General Counsel requests reconsideration I am ready and willing to present to him an opinion which would sustain the view I have just indicated. Whether he will approve it or not I don't know as of this moment. Mr. DALEY. As of this moment the question is somewhat in the realm of the academic, Mr. Shuford. The Associate General Counsel, however, was suggesting a possible avenue of reconciliation without, I am sure, suggesting that that would be the interpretation. Mr. SHUFORD. So it may be that legislation would be necessary for that purpose? Mr. DALEY. As a part of this whole process. Mr. SHUFORD. Any further questions? Gentlemen, I appreciate very much your coming in this morning. I thank you for your indulgence. Mr. DALEY. Thank you, Mr. Chairman. (Whereupon, at 11:50 a. m., the committee was recessed subject to the call of the Chair.) CONGRESS OF THE UNITED STATES, HOUSE OF REPRESENTATIVES, Hon. OLIN E. TEAGUE, Chairman, Committee on Veterans' Affairs, MY DEAR COLLEAGUE: This is in further reference to my position on H. R. 72. It was with real regret that I found it necessary to vote for recommital of this bill. I have the greatest respect for the members of the Veterans' Affairs Committee, on which I once served myself, and for your own fine judgment in these matters, and almost invariably defer to the expert decisions of the committee. However, I found that in this instance I could not go along with the committee recommendation. I stated my objections in the comments on the floor as revised and extended in the Record on June 12. My first objection to the bill as reported was that, in effect, it amended the laws of descent of the several States, and did so only for one very small class of people, in one rather unusual set of circumstances. It seems to me that we should not interfere with State laws except under the most exceptional circumstances and only when matters of vital national interest are concerned. This was all the more disturbing to me because the change would discriminate against a very small group of persons who would be, in effect, singled out to suffer, through no fault of their own, a disadvantage which applied to no other persons. My second objection was that it discriminated against the heirs of veterans who were the victims of one type of disability. It seems difficult to me to justify penalizing the heirs of veterans who suffer from mental diseases, as against heirs of veterans suffering other diseases or disabilities. Indeed, it may well be that mental disability creates a greater hardship on the veteran's family and dependents than other disabilities. Thirdly, I am extremely dubious about the legality of the retroactive features of the proposed law. It seems to me to conflict with the constitutional provisions involving due process of laws. Aside from the above objections on the grounds of law and principle, it occurred to me that the enactment of the proposed law would encourage the dissipation of the estates of the veterans involved as a means of avoiding the penalty which this proposed law would place on certain heirs of the veteran and that, in consequence, in attempting to deal with one type of bad situation we might well create opportunity to create equally bad situations of another type. I am not fully informed on the seriousness of the situation this proposed legislation dealt with. But it seems to me that if it is serious enough to require attention, it should be possible to deal with it by means which do not raise the above legal and constitutional questions and do not present the aspect of special class legislation. I would be pleased to reconsider my position should legislation be presented which is free of the above-mentioned defects. With kindest regards and best wishes, I am Very sincerely yours, JOE L. EVINS, Member of Congress. STATEMENT OF HON. ALFRED E. SANTANGELO OF NEW YORK Mr. Chairman and members of the Committee on Veterans' Affairs, I appreciate this opportunity to make a statement before your committee concerning H. R. 72. My experience as a committee of an incompetent veteran indicates that the bill would be harmful to the incompetent veteran unless provision were made to reward the brothers or sisters who contribute towards the support of the incompetent veteran or who have custody over the incompetent veteran or who lived with the incompetent. The reasons which would require a brother and sister to inherit from the incompetent veteran apply to a child or grandchildren of the incompetent. While I am opposed to seeing distant relatives receive windfalls and inheritances from estates of incompetent veterans where they have contributed nothing to the welfare of the veteran, I favor those relatives sharing in the estate where they have been of some help to the incompetent. As an attorney and a committee of an incompetent veteran, I must report annually to the court and to the Veterans' Administration as to my guardianship. In view of the fact that the funds of the incompetent veteran consist of his personal estate and funds derived from payments by the Veterans' Administration, it is administratively difficult to segregate the two types of funds, and consequently, it would be administratively impossible to determine which funds derived from the personal estate and which funds derived from the contributions by the Government. I believe that provision should be made which would require future earmarking of funds to eliminate the administrative difficulties. Consequently, I submit that the bill should be prospective and not retroactive, that all future benefits to the veteran shall escheat to the Treasury in the absence of eligible heirs, and that all funds presently in the estate of the incompetent veteran should be excluded from the provisions of the bill. While I am not a member of the Committee on Veterans' Affairs, and have not heard the testimony, I can only give you that which my personal experience, as a committee of an incompetent veteran, privileged to serve the needs of a worthy citizen, together with the aid of the brother of the incompetent, has shown me. I trust that your bill will contain provisions awarding considerate relatives and disinheriting those who make no contributions. In my opinion, other objections to the bill are minor and inconsequential. STATEMENT OF REPRESENTATIVE KENNETH B. KEATING ON H. R. 72, A BILL TO AMEND SECTION 21 OF THE World War VETERANS ACT, 1924 Mr. Chairman, I appreciate the opportunity you have accorded me to come before your committee to present my views with respect to H. R. 72. While I support the objectives of this legislation, I believe that, as it is now drafted, it would be ruled unconstitutional by the courts. This would render all the efforts that have been expended in its consideration of no avail. I do feel, however, that this objection to the bill can be removed by the amendments which I proposed when the bill was being considered in the committee of the whole. I have attached those amendments to my prepared statement and I would like to offer them to the committee for its consideration. H. R. 72 is designed to remedy the situation where distant relatives of deceased veterans fall heir to veterans' benefits never intended for them. It would allow the Federal Government to retain those benefits except where the veteran left close relatives. The veterans involved in these cases are those whose incompetence, or whose death, has made it impossible for the Government to pay benefits directly to them or to their infant heirs. In some instances the benefits have been and are being paid to the guardian or committee of the veteran or infant, while in other cases they are being retained by the Veterans' Administration or its representatives for the benefit of the veteran or infant. The law already provides that where the estate of the beneficiary would escheat to the State of his residence, the funds so held or retained shall be turned over to or retained by the Federal Government. H. R. 72 would provide that where the veteran or infant died leaving no members of his immediate family surviving him, the funds being held for his benefit, or which had already been paid to his guardian for his benefit, would revert to the Federal Government. The bill, as now drafted, would affect two sets of funds. First, there are those funds which have already accrued. Those funds, in some cases, have been retained by the Government for the benefit of the veteran. In other instances, they have already been paid directly to the guardian. The second class of funds are those which will be paid out hereafter. As to those funds which are to be paid out hereafter, there is no doubt in my mind but what the Government can attach any conditions to their receipt that it sees fit. There is, furthermore, no difficulty involved with those funds which have accrued, but which the Government has withheld and has never paid out to the guardian. The difficulty arises with those funds title to which his already passed to the guardian. In my opinion, for the Government, through this legislation, to reach out and retrieve such funds from the guardian, or estate of the beneficiary, would constitute a deprivation of property without due process of law. There appears in the report of your committee on this bill, beginning on page 37, a letter from the Administrator of Veterans' Affairs. In that letter he has stated that it is the view of the Veterans' Administration that the validity of this bill "would be highly questionable, in view of the fact that prior payments of the benefits involved have become fully vested and effectively a part of the estate of the incompetent or his minor beneficiary” (p. 38). The Veterans' Administration, in that letter, recommends that the retroactive provisions of the bill be removed, in which case they would support it. That is what the amendments which I have offered attempt to do. Those amendments were drafted by the legislative counsel and the staff of your committee as the proper way in which to render the provisions of this bill prospective only, and, thus, to eliminate the constitutional question. The amendment I propose would first make paragraph (5) of the bill apply only to future payments of veterans' benefits. It would then add a new paragraph (6) to cover those situations where the benefits have accrued, but have been withheld for the account of the beneficiary. That paragraph would provide that such funds be paid, on the death of the beneficiary, to that survivor of the beneficiary who qualifies under paragraph (3) of section 21, as amended by the bill. If there were no survivor who could so qualify the funds would be retained by the United States Government. Paragraph (7) makes provision for those funds which have already been paid over to the guardian or other person having charge of the veteran's, or the minor's affairs. Under that paragraph such funds would be subject to the normal administration of the veteran's estate, except that where the estate would otherwise escheat to the State of the veteran's residence, they would revert, or escheat to the United States. I feel that this bill, as it is now before your committee, is in considerable danger of being ruled unconstitutional unless its effect is made prospective only. I believe that the amendments, which I have offered, can accomplish that purpose. I strongly urge that all those who support the objectives of this legislation, as I do, give their support also to these amendments. AMENDMENTS TO H. R. 72, OFFERED BY REPRESENTATIVE KENNETH B. KEATING On page 3, line 14, immediately after "institution" insert the following: "(other than a Veterans' Administration institution)"; On page 3, line 20, strike out "before or"; On page 4, line 15, strike out the quotation mark, and immediately below line 15 insert the following: (6) Where a beneficiary dies, any funds in the hands of the chief officer of a Veterans' Administration institution in which the beneficiary was an inmate which were derived from payments of compensation, dependency, and indemnity compensation, pension (including pension under private acts), emergency officers' retirement pay, servicemen's indemnity, or retirement pay, made to or on on behalf of the beneficiary before or after the date of enactment of this paragraph by the Administrator of Veterans' Affairs, shall be paid to the survivor or survivors of the beneficiary first listed in paragraph (3) living at the time the payment is made. If there are no survivors in the classes listed in that paragraph, such funds shall be deposited in the Treasury to the credit of the current appropriation or appropriations (as determined by the Administrator of Veterans' Affairs) from which such funds were appropriated. (7) Where a beneficiary dies, any funds or property in the hands of a person who is a guardian, curator, conservator, chief officer of an institution (other than a Veterans' Administration institution) in which the beneficiary was an inmate, or person legally vested with his care or the care of his estate, which funds or property were derived from payments of compensation, dependency, and indemnity compensation, pension (including pension under private acts), emergency officers' retirement pay, servicemen's indemnity, or retirement pay made to such person on behalf of the beneficiary before the date of enactment of this paragraph by the Administrator of Veterans' Affairs, which under the law of the State wherein the beneficiary has his last legal residence would escheat to the State, shall escheat to the United States and shall be returned by such guardian, curator, conservator, chief officer, or person legally vested with the care of the beneficiary or his estate, or by the personal representative of the deceased beneficiary, less legal expenses of any administration necessary to determine that an escheat is in order, to the Veterans' Administration, and shall be deposited to the credit of the applicable current appropriation or appropriations (as determined by the Administrator of Veterans' Affairs). The CHAIRMAN. Our first witness this morning is our colleague, Mr. Flynt, of Georgia. STATEMENT OF HON. JOHN JAMES FLYNT, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA Mr. FLYNT. Mr. Chairman and members of the committee, as some of you no doubt recall, when H. R. 72 was recently considered on the floor of the House, I offered three amendments which might be termed "substantive changes." On the other hand, they might be termed "clarifying amendments." I expressed my feelings on this bill to several members of the committee, including my friend, your distinguished chairman, and the gentleman from North Carolina (Mr. Shufford), who was acting as floor manager for the bill. I told them that I was in sympathy and accord with the purposes and objectives of this piece of legislation. I also told them—and I made similar re marks in at least two appearances in the well of the House when this bill was up for consideration-that I thought there definitely should be a cutoff point somewhere, that the first and underlying and primary purpose and intention of all beneficial veterans' legislation providing grantuities, grants, compensation, or pensions, was that the disabled veteran himself be taken care of and protected in accordance with the express purpose of the laws which have been enacted in behalf of such person. There is of course the possibility, as in the situation covered by H. R. 72, that the interests of either close or distant relatives of a competent or incompetent veteran, still living or decreased or assumed to be deceased, must be taken into consideration. I think that we are all aware that there have been many abuses under the law as it now stands where veterans prior to their death accumulated substantial property or funds as a result of gratuities and compensation which had been paid to their guardian or retained by the Veterans' Administration during the incompetent period of their lifetime. It is unthinkable that such proceeds should go to persons who never had any direct connection with the veteran, but I am sure, as your report so well shows and as the transcript of the hearings concerning this legislation shows, that in many instances very distant cousins, many of whom are residents or citizens of foreign nations, have been the only persons to whom the proceeds could be paid. As I stated before, I am in accord with the general purposes and objectives of this legislation. I would suggest, however, a committee amendment, if the committee in its judgment sees fit so to provide, to include brothers and sisters and, although I know that in this instance my feeling is different from that of some members of the committee, to include brothers and sisters without regard to whether or not they have contributed financially to the support and maintenance of such veteran. The CHAIRMAN. You will remember my position on that. Mr. FLYNT. I remember it very well. Quite frankly, there is not a great deal of difference. There is, however, a small difference between that position and the position which I take. The other point on which I think the bill could be made more acceptable to more people would be to include all children of a deceased veteran. The CHAIRMAN. Children of any age? Mr. FLYNT. Of any age. And to include also, as the laws of all States presently include, a child of a deceased child, so a grandchild whose intermediate parent is dead would stand in the same position as his living uncles and aunts. The CHAIRMAN. Also at any age? Mr. FLYNT. Also of any age. The CHAIRMAN. Mr. Long? Mr. LONG. I do not believe I understand just what you mean by brothers and sisters. Do you mean that the children of those brothers and sisters were they deceased? Mr. FLYNT. No, indeed. Mr. LONG. I just wanted to clarify that. Mr. FLYNT. I am glad you asked that question. |