MESSRS. JOSEPH W. BYRNS (CHAIRMAN),

JAMES P. BUCHANAN, EDWARD T. TAYLOR, WILLIAM A. AYRES,
WILLIAM W. ARNOLD, ROSS A. COLLINS, WILLIAM R. WOOD, ·
EDWARD H. WASON, FRANK MURPHY, AND GUY U. HARDY

IN CHARGE OF

DEFICIENCY APPROPRIATIONS

SEVENTY-SECOND CONGRESS

FIRST SESSION

UNITED STATES
GOVERNMENT PRINTING OFFICE

WASHINGTON: 1931

COMMITTEE ON APPROPRIATIONS

HOUSE OF REPRESENTATIVES

SEVENTY-SECOND CONGRESS

JOSEPH W. BYRNS, Tennessee, Chairman

MARCELLUS C. SHEILD, Clerk

LIBRARY OF CONGRESS
RECEIVED

JAN 7-1932

DIVISION OF DOCUMENTS

STATEMENT OF BRIGADIER GENERAL FRANK T. HINES, ADMINISTRATOR OF VETERANS' AFFAIRS; HAROLD W. BREINING, ASSISTANT ADMINISTRATOR, FINANCE AND INSURANCE; AND SAMUEL M. MOORE, JR., BUDGET OFFICER AND CHIEF OF STATISTICS

MILITARY AND NAVAL COMPENSATION, 1932

The CHAIRMAN. General, you have an item here of $46,872,975 which is not urgent, but which you wish carried in the deficiency bill? General HINES. In the first deficiency bill.

The CHAIRMAN. Would you like to be heard on that now?

General HINES. I am prepared for it; yes, sir. It is a pretty clear

case.

The CHAIRMAN. Very well; you may proceed.

General HINES. Mr. Chairman and gentlemen of the committee, I am called before you to-day with reference to the item of $46,872,975, included as a part of the first urgent deficiency bill for the Veterans' Administration. This supplemental appropriation is required for the purpose of assisting in meeting payments for military and naval compensation for the fiscal year 1932. The appropriation for military and naval compensation for this period is $267,327,025, and this amount is insufficient to meet the complete anticipated expenditures for the balance of the fiscal year. The inadequacy of the appropriation was known at the time I appeared before the committee in connection with the 1932 estimate, and the attention of the committee was specifically invited to that fact in the following language which appears in the hearing on independent offices appropriation bill for 1932:

When the estimate for 1932 was submitted to the Bureau of the Budget, no action had resulted from the amendment to the World War veterans' act which had just been passed. (P. 273, hearing, January 6, 1931.)

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Extending the experience subsequent to the submission of the original estimate for 1932, and the best data obtainable at this time concerning future trends, the anticipated expenditure for the fiscal year 1932 for. Military and naval compensation" will be $288,151,848, or $20,824,823 in excess of the amount included in the 1932 Budget. (P. 274, hearing, January 6, 1931.)

I did not, at that time, advocate any increase in the amount then being considered, inasmuch as it was felt that sufficient experience had not been had in connection with the administering of the new benefits, upon which a reasonably accurate estimate could be based, Consequently, it is now necessary to request a supplemental appropriation and I will proceed to analyze developments so far during

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the fiscal year, which have been used in the formulation of this estimate.

The appropriation for 1932 for military and naval compensation is $267,327,025. However, $5,182,128 of this amount was disbursed in July, 1931, to meet payments of compensation accruing during the month of June, 1931, for which the appropriation for the fiscal year 1931 was insufficient.

The estimate, on which the appropriation for the fiscal year 1932 was based, was compiled upon the data available as of March 31, 1930, at which time the amendment to the World War veterans' act, Public No. 522, Seventy-first Congress, approved July 3, 1930, was not effective. A current estimate indicates that $309,017,826 will be required for the above purpose during the fiscal year 1932. This estimate, when combined with the amount expended during July, 1931, to meet the payments of compensation accruing during the month of June, 1931, indicates a total requirement for 1932 in the approximate amount of $314,200,000, and the necessity of a supplemental appropriation of $46,872,975.

The following summary is a comparison of the amounts indicated by the current estimate and the amount appropriated, subdivided by purpose of expenditure:

Taking this estimate up by individual item of major purpose, the reasons necessitating the submission of the supplemental estimate are developed in detail."

DISABILITY COMPENSATION

The estimate of March 31, 1930, on which the appropriation was based, indicated an expenditure of $171,138,025 during the fiscal year 1932 for the purpose of disability compensation. The current estimate, based on the trend of awards as affected by the amendment of July 3, 1930, referred to previously, indicates an expenditure of $187,469,446, or an increase of $16,331,421. This estimated additional requirement is a direct result of the increase in the average monthly value of awards and the modified trend of the increase in the number of applications received during the fiscal year 1931. The average monthly payments for disability compensation increased, as a direct result of the liberalizing provisions of the above amendatory legislation, from $44.04 as of December 31, 1929, to $44.28 as of September 30, 1931.

I would just like to call the committee's attention to that one thing: In dollars and cents per award, the increase is very, very small, but when multiplied by the numbers involved it runs into millions of dollars.

The special provisions of the amendment approved July 3, 1931, resulting in the average increase in monthly payments referred to above, are as follows: Paragraphs (3) and (5) of section 202 of the World War veterans' act were modified by section 13 of the above amendment to provide an additional award of $25 a month, independent of any other compensation, to be payable to any veteran who suffered the loss of the use of a creative organ, or one hand or one foot, or both hands or both feet, in active service in the line of duty between the dates of April 6, 1917, and November 11, 1918, which dates were extended to April 1, 1920, for those veterans who served in the military forces of the United States in Russia. This amendment also removed the necessity for showing "constant need" as a requirement for the granting of an allowance for a nurse or attendant. Section 14 of the amendment modified section 202, subdivision (7), of the act by providing a minimum rating of 25 per cent for an arrested or apparently cured tubercular condition.

A comparison of, the average monthly increase in the number of active awards, as shown by the original and current estimates, indicates an increase in the average of approximately 831 awards monthly. This increase in the trend of active awards may be attributed largely to the amendatory legislation authorizing the payment of claims for nonservice-connected disabilities, which resulted in the filing of many new claims subsequently disclosing service-connected disabilities.

As of October 31, 1931, 664,236 applications had been received for disability allowance. A majority of these veterans also filed claims for disability compensation, and in the adjudication of these claims many of the disabilities for which compensation was requested were connected with service, which has resulted in a material increase in the number of active disability compensation awards.

A further factor which has contributed to the unexpected increase in awards is the economic condition existing throughout the country during the past several months. This condition has had the effect of increasing the number of claims received for benefits under the World War veterans' act, and it would appear safe to assume that the increase in the number of applications for all benefits has been in direct ratio to the increase in unemployment.

The following table which, with your permission, I will insert in the record at this point shows a comparison by months of the number of active awards and disbursements shown by the original and current estimates: