EXHIBIT 3-B-Continued.

General HINES. I shall be glad to furnish the statement in the form you have asked for. It may be of interest in a general way to state, in considering the matter of personnel, that commencing with July 1, 1925, to the close of business, December 1, 1925, there was a net reduction of 1,653 employees in regional offices with a saving of $2,400,670 in annual salaries.

Mr. LUCE. Will you please repeat those figures?

General HINES. The net reduction in personnel in regional offices from July 1, 1925, to December 1, 1925, was 1,653 employees, with an annual saving of $2,400,670.

I had occasion yesterday to furnish a statement for the calendar year 1925 to the Director of the Bureau of the Budget, which showed a gross reduction of 3,518 employees in regional offices, sub-offices, and central office and an increase in the assignment of personnel for hospitals of 1,424, giving us a net reduction of 2,094 employees during that period.

Mr. HAYDEN. How were you able to accomplish that?

General HINES. That has been brought about by the decentralization and establishment of regional offices, where we have eliminated any duplication of action on the part of administrative personnel, making the line more direct between the field activity and the central office.

Part of the reduction, of course, is due to a reduction in central office where we have decentralized activities to the field.

We expect to bring about some further reductions. The estimates for the next fiscal year are based on further reduction of 657 employees.

The medical personnel, naturally, in hospitals is increasing, because we are opening more hospitals. We contemplate an increase there of probably 1,200 employees.

Mr. VINCENT. As I recall it, the increase in this last calendar year was 1,200 for the hospitals?

General HINES. Yes, sir.

The CHAIRMAN. General Hines, if I might interrupt you at this point, some misinformed individuals are continually making statements to the effect that a very large proportion of the money appropriated by Congress to the Veterans' Bureau goes in payment of administrative expenses, rather than to the disabled. I would like to have you insert the proportion of those expenditures for the purposes of the record, so that those statements can be refuted.

Mr. RANKIN. That is the reason I asked for that detailed statement.

General HINES. I have a statement which appears on page 35 of the annual report of the Director of the Veterans' Bureau for 1925, which covers that very thing in detail, showing a comparison between 1924 and 1925. I will insert that in the record, but for your information now, I will read it.

This shows that under salaries, based on 100 per cent of the whole appropriation, for hospitals there was paid 3.67 per cent; field offices, 4.71 per cent; central office, 1.94 per cent; administrative expense other than salaries, 1.37 per cent; vocational rehabilitation training allowance, 13.61 per cent; medical and hospital expenses other than salaries, 8.39 per cent; hospital facilities and services that would be repairs and alterations-0.99 per centless than 1 per cent; compensation, 32.91 per cent; term insurance, 26.44 per cent; United States Government life insurance, which is the converted insurance, 2.88 per cent; adjusted service and dependency pay, 0.77 per cent; adjusted service certificate fund, 1.17

per cent.

There is shown a comparison of 1924, which indicates that the administrative expenses has been reduced along with the reduction of personnel.

Mr. LUCE. General, would it not be well for you to say a word. about the continuance of the vocational expense, which I think you indicated as 13 per cent of the whole, in view of the fact that this is so long after the war?

General HINES. I can take that up now. However, that is one of the provisions which will come up in the bill.

The CHAIRMAN. It is the last section of the bill, Mr. Luce, but if you desire, the General can answer your question now.

Mr. LUCE. I simply meant a general statement, because anybody reading the record might desire to know just at this point the reason for that. I would suggest just a few words as to why we are still paying so much money for vocational training.

General HINES. We are, of course, continuing our activities now on vocational training principally in those cases of men who, for some reason or other, had their entrance into training deferred.

The law contemplates that the bureau will complete all vocational training by June 30 of this year, and our programs of instruction are so laid out that the bureau will complete that training by that time.

There has been a marked reduction in vocational activities from March 1, 1923, up to date.