Mr. MORROW. When you deduct the probable loss of 22,319 pensioners at that rate, making an aggregate of $2,989,407 to be deducted from the aggregate sum of $72,000,000, you are simply proceeding on the experience of the office?

General RAUM. Exactly.

Mr. SAYERS. Have you any idea, or have you formed any estimate, as to the expenditure for the next fiscal year in consequence of the act of June 27, 1890 ?

General RAUM. Well, I have the honor of communicating some figures there. Mr. MORROW. The Commissioner does estimate the cost at $26,409,600 under the act of June 27, 1890. That is correct, is it, Mr. Commissioner, for the year 1892 ? General RAUM. Yes, sir; that is the estimate I have made; yes, sir.

Mr. MORROW. And you estimate that the cost under the other laws; that is, the old laws preceding this act of June 27, 1890, will be $106,763,485 ?

General RAUM. Yes, sir.

Mr. MORROW. Making a total of $133,173,085 for the year ending June 30, 1892? General RAUM. Yes, sir.

Mr. PETERS. Right there, Mr. Chairman; I want to ask you, Mr, Commissioner, isn't it a fact that under this new act there is less uncertainty, because of the maximum and minimum pension allowed? Any pension cau not be less than $6 nor more than $12, and consequently isn't it easier to make a careful estimate of the average cost of pensions under that law than under the old law, because there isn't so much allowed?

General RAUM. Yes; it isjust a question of the amount of work that the office can do and the amount of claims that can be allowed.

Mr. PETERS. And when you come to figure up the annual value of these pensions isn't it very easy to ascertain that the average pension will be about $9 a month, or $108?

General RAUM. That is what I fixed upon, and it is violating no privacy at all to say that I have discussed this subject with a great deal of care with the Secretary, and he and I are one as to these figures.

Mr. SAYERS. Have you got the entire force at work in your office that was allowed you at the first session of the present Congress; that is, the additional force?

General RAUM. There are a few places that have not been filled yet-some minor places. Here and there persons have declined, but they are nearly all in. They have some from your State, and little places. Many that were drawn-I just got a dispatch or two this morning that the parties could not come. You know they were drawn through the Civil Service Commission, and we notify them, and if they can not come we have to draw again, so that it makes it a little slow about getting in the last of those that are to go in. But the great bulk of them are in, and I drew in 175 special examiners as well.

Mr. MORROW. Now, Mr. Commissioner, in arriving at the estimate of the amount required for 1892, you start under the old laws-the laws prior to that of June 27, 1890-with the statement that there were 537,944 pensioners on the roll on July 1, 1890.

General RAUM. Yes; we state the value of those pensioners.

Mr. MORROW. To which number there will be added during 1892 (I am now reading from page 2 of your appendix) 45,000, which would make 52,944 pensioners. From that you deduct those that will be dropped during 1891, 22,319, making 560,625. Then there have to be restored during 1891, 2,088, so that the probable number of pensioners June 30, 1891, will be 562,713; but that, I understand, refers entirely to those that will be pensioned under the laws existing prior to June 27, 1890? General RAUM. Yes, sir.

Mr. MORROW. Now, then, you then proceed: The probable number of pensions July 1, 1891, 562,713, and the probable number to be added during the fiscal year 1892, 45,000, making a total of 607,713?

General RAUM. Yes.

Mr. PETERS. Is that 45,000 to be added under the old law?

Mr. MORROW. Under the old law. So that you will have, under the old law, 607,713; but there will be dropped from that during 1892 (21,392 plus 1,789) 23,181, leaving 584,532, and restored during 1892, 2,185; making the probable number of pensions July 1, 1892, 586,717. Now, it would appear that the two factors upon which you make your principal estimate are the probable number of pensions July 1, 1891, and the probable number of pensions July 1, 1892; that is the main estimate you make under the old law?

General RAUM. Yes, sir. Now you will observe that I take 45,000 there as the probable number that will be added under the old laws. Last year, as you will see from the report, there were 66,637 added. Well, it struck me, when I came to administer this new law, that there would be a probable falling off of at least a third in the number under the old law; and I would not be surprised, really, in 1892-you know we are asking for 1892 now-I would not be surprised if for 1892 that number would not be so great.

Mr. BRECKINRIDGE. Why is that?

General RAUM. Half of the claims which were pending on the passage of this new law have been absorbed, so to speak, by claims under the new law; so that when we come to consider them we consider them together. One-third of the pending claims are under the old law and two-thirds under the new.

Mr. SAYERS. When, for instance, you take a person that has made application for a pension under the old law, the same person applies for his pension under the new law, suppose you find he is entitled to a pension under the old law, and also to a pension under the new law; now please tell us how much will such an applicant receive upon the first payment after the allowance of his certificate. Does he go back to get his arrears to date with his first application, or after that?

General RAUM. I have issued an order covering that exact point. I will explain that. As I tell you, the claims were taken up together, and under the orders issued and approved by the Secretary, say this was an old claim. The evidence in this old claim will be used in considering the application under the new; so that it is not right to require a man to go over the whole ground again. Now if upon examination of the case in point it is found that the old claim has been proven, and that the applicant is entitled to $12, which would be the maximum of this new claim, why he is allowed under the old claim, and the new claim is rejected and put aside, because it is absorbed absolutely by the old claim, and one certificate is issued, and that of course goes back to the time at which his pension is entitled to commence. Mr. MORROW. Not earlier than the filing of the application?

General RAUM. Only what the old law gives him. Now that is one class. If, upon examining these claims, it is found that the applicant is entitled to a pension under the old law for less than $12, and under the new law he is entitled to the amount of $12-the disabilities that give him this increased amount not having been proven to have been increased in the service, or the whole of them--why then we issue two certificates-one certificate under the old claim, for $6 or $8 or $10, as the case may be, and the other certificate under the new claim. This will pay him to a certain point, so as not to pay him two pensions at the same time, and then he will get his second certificate under the new law, and then he will get what he is entitled to. Now, again, if it is found that he has not been able to show in the old claim the incurrence of his disability in the service, but has shown his disability, and has been examined within two years, so as to fix the rate of his disability, so that we can rate him, why then we reject the old claim, and allow under the new for such amount as seems proper, that is, from $6 to $12, that beginning of course from the date of the filing of the claim. That covers the three classes of cases.

Mr. PETERS. Now another class. Suppose a man has an application in under the old law and under the new law, and upon examination you find after a medical examination that he has not a disability equal to $6, and consequently would not come in under the new law but has a disability of $3 or $4 or $5 under the old law, you would then reject his application under the new law and grant that under the old law? General RAUM. Yes. When you come down to analyze this peusion business you find it all grows out of disability. Here you created a disability law, and the only thing you relieve him of is the necessity of proving the incurrence in the service.

Mr. SAYERS. General, what was your amount of expenditures for the first quarter of this year?

General RAUM. It is a fraction over $29,000,000.

Mr. MORROW. $29,567,434.03.

General RAUM. Yes. You have it there.

Mr. SAYERS. General, do you consider that expenditure a fair proportion of what will be expended during the remainder of the fiscal year? General RAUM. Now I will show you exactly.

Mr. SAYERS. I just want to know if you think it is.

General RAUM. Let me show you here, so that you will have as good an idea as I have. Turn to page 4 of my annual report, second paragraph. You will observe this is something that has never been incorporated into a report before: "At the close of the fiscal year there remained in the hands of pension agents the sum of $580,2-3.87 of the pension fund which had not been disbursed for want of time, and which has not been returned to the Treasury; and there were 20,683 pensioners unpaid at the close of the fiscal year who were entitled to receive $4,357,347.30, which has since been paid from the appropriation for pensions for the fiscal year 1891." Now, whatever was paid of that sum out of this year's appropriation went into that $29,000,000. Don't you see?

Mr. BRECKINRIDGE. Now, right there, general, by what authority do you take the appropriation for 1891 to pay for the pensions of 1890?

General RAUM. That is the law.

Mr. BRECKINRIDGE. Can you turn me to the law?

General RAUM. Yes, I will.

Mr. BRECKINRIDGE. I wish you would send me the reference.

General RAUM. I will do that. That has been the law for

Mr. MORROW. That has been the habit.

General RAUM. Yes, and that is the law.

Mr. MORROW. Then that appropriation of $580,000 you must pay back into the Treasury?

General RAUM. Yes, sir.

Mr. MORROW. But you can go into the Treasury for this year to get whatever sum you may want, to pay the amount needed?

General RAUM. That comes out of the $96,000,000.

Mr. BRECKINRIDGE. That reduces your quarter down to $25,000,000 ?

General RAUM. Yes, sir; but you see the annual value of these pension certificates on the 30th of June was so much; there it is, $133.94. Now the aggregate of that is shown here in the report, $72,000,000 or $73,000,000. If it was not necessary to pay that, as a matter of course, the $29,000,000 would not have been paid. We had to pay this out of that first quarter's money to pay these fellows that were on the rolls, because this money was not paid in the last quarter of the last fiscal year. Now we have to set off against that in the next quarter the increase in the roll, and I have estimated that as about $2,000,000 a quarter; so that, while this first payment would be probably $2,357,000 more than the next quarter, yet it would not be fair to take the whole of that off from the next quarter, because the men who are constantly coming on have to be paid, and they are not only paid the annual value, but they are paid the first value.

Mr. MORROW. Now, Mr. Commissioner, that you cover in the subsequent items of your estimates?

General RAUM. Yes, sir.

Mr. BRECKINRIDGE. This $4,000,000 was really a deficiency over and above the estimate you made us and on which we made the deficiency bill of April?

General RAUM. Yes, but it was perfectly well understood that there was a certain lot that you could not provide for and could not pay if you did, and we did not pay out all you appropriated.

Mr. BRECKINRIDGE. Why was that.

General RAUM. You could not do it. It was impracticable.

Mr. BRECKINRIDGE. It seems to me the fellow can sign his checks and mail them. General RAUM. Well, they do the best they can. I have visited some of these agencies since Congress adjourned and they do the work in an admirable way. But it is a lot of old soldiers, and they send out the papers and they do not come in in time. You know they are receiving these new certificates all the time.. They are sent to the pension agent and he puts the man on the roll and sends the certificate. Suppose the agent gets a great lot of certificates six or eight days before the fiscal year ends. He puts them on the roll and sends them out, and some of them do not Mr. BRECKINRIDGE. General, do you think that this $133,000,000 and odd is really enough to pay your pensions for 1892?

get in in time.

General RAUM. I do, and I will tell you why I think it. Last year, under the rules which I adopted for the business of the office, the claims which had been pending for years, a great many of which were being pressed on the attention of the office by members of Congress and thousands of people, were taken up and they were adjudicated, and a great many of them were disposed of. You will see on the first page, right at the foot of the page, that there were 66,637 original cases, amounting to $32,478,941.18. Now that was the first payment on these 66,637 cases, and that was $11,036,492 more than the first payments for the original cases for the year before, and $10,179,225.72 more than for the year before the year 1888. Now, you will also see there that the number of originals there was considerably larger than for 1888. I took the pains to go over the subject of these payments in these big cases, and I have them classified. I could send you a copy of that.

Mr. BRECKINRIDGE. Thank you, sir.

Mr. SAYERS. I would like to have a copy, too.

General RAUM. There were five or six thousand of these cases that carried a little over $9,000,000. They were men who were insane, in insane hospitals and asylums; men who are blind, and men down with rheumatism and torn with pain, and all that, and they had their claims pending a great many years; and the Secretary's office aided me very largely in the settlement of that class of claims, and we have gotten them out of the way. We are not taking up the number of those old cases now that we did last year. They are disposed of.

Mr. MORROW. They are exceedingly expensive.

General RAUM. They are very expensive kind of cases; you will see that. On page 9, in the center, you will observe that there were 5,273 of these 66,000 claims that earried $1,000 and upwards. That class of claims carried over $9,000,000. Now, what I said to Secretary Windom-I had a conference with him last night, and I have conferred with Secretary Noble, and the President understands it, too-I find

it impossible that the first payments this year will be as great as last year's. I think next year it will be $10,000,000 short, because these big claims are not in the office now, and the average first payments will not be so great."

Mr. SAYERS. I would like now for you to explain fully as to your estimate for the deficiency for the present fiscal year, how much you anticipate it to be, and so on. General RAUM. It is about $33,000,000 a quarter. The Secretary has the exact figures and the paper I made up.

Mr. BRECKINRIDGE. How do you make that up?

General RAUM. That is all under the old law except four million and something. Mr. BRECKINRIDGE. We gave you $97,000,000 ?

General RAUM. Yes, $97,000,000.

Mr. BRECKINRIDGE. How do you account for the discrepancy?

General RAUM. My dear, sir, I have been doing more work. I have made that office do more business.

Mr. SAYERS. Won't you do more work during the balance of the next fiscal year? General RAUM. Yes; but that will be done on a lower rate of pensioners. There are two items that go into this deficiency and also into the next year, and that is this thing that we have just been discussing with you. The average of these first payments, as you will see on the first page of this report, was $485.71. Now that average will be reduced, because it was made up to that, as you see, by these 5,000 cases that carry $9,000,000.

Mr. SAYERS. Now, general, how many of these old cases remain undisposed of? General RAUM. I haven't the inventory I am going to take that very soon. Mr. SAYERS. Take a rough guess. Are there several hundred thousand yet undisposed of?

General RAUM. Oh, no; not that.

Mr. SAYERS. How many would you guess?

General RAUM. I would not be able to tell. But I will get at that.

Mr. SAYERS. I mean the cases that were filed under the old law.

General RAUM. I will lay that all before you without any guesswork about it.

Mr. MORROW. That is on page 3 of the Appendix.

Mr. SAYERS. But I wanted to know up to the date of these claims.

General RAUM. I am going to take an inventory as I did last year, an inventory of the office.

Mr. BRECKINRIDGE. The reason I asked you under what laws this deficiency was made up was because in talking with Mr. Morrow this morning and examining your Appendix, I came to the conclusion that you hadn't estimated what we will have to pay, because it seemed to me that you hadn't made sufficient allowance for increased deficiencies in your office under the new rules; and it seemed that in 1892 the same thing would occur as has occurred this year in creating a deficiency of $24,000,000 or $25,000,000 over your old estimate, growing out of the increased number of cases you dispose of.

Mr. MORROW. In that connection I would like to suggest to the Commissioner that. while he only provides in this estimate for 45,000 added to the roll, still at the same time his force must be employed on claims under the new act; and under that he proposes to allow 80,000 during this year and 80,000 during 1892. Instead of adding 66,000, he proposes to add 126,000. But, as I understand it, taking the allowances under the old and the allowances under the new law, you expect to add to your pensionroll during the current year 45,000 under the old law, and 80,000 under the new law; and during the year 1892, for which this appropriation is now to be made, on which we are now interrogating you, there will be added for that year 45,000 under the old law and 80,000 under the new?

General RAUM. Yes.

Mr. MORROW. That is an absolute addition; that doesn't mean cases where two claims are merged into one and disposed of that way, but an actual addition?

General RAUM. Yes. You see that is double the work of last year, 66,637 were the original claims last year. Now if you double that I think it will be well. Of course I didn't go in there until the fiscal year had been pretty well started, and they had lost about 16,000 as compared with the previous year in certificates. And of course 1 had to look it all over and study the problem, and get the thing all balanced up and get it started; and so it was the last half of that fiscal year that did the big work. Mr. PETERS. Now, with the force in your office, is it physically possible to examine and pass upon more than 125,000 claims in a year?

General RAUM. Well, I have talked that over very carefully with the people there, and Secretary Noble thought I was making a very big estimate of the increase of the work; and if I had put it at 15,000 or 20,000 less than that, I think he would have approved it, and thought conscientiously that it was big enough. But I have been very sincerely trying to make an estimate there that would be big enough.

Mr. PETERS. Now, that takes 80,000 claims under the new law, and there are now 515,000, according to your report here, that have already been filed; and it is safe to

say that 85 per cent., and possibly as high as 90 per cent., of these claims will be allowed.

General RAUM. I figure on 80 per cent. I don't know how it will be.

Mr. PETERS. Now, on that basis, unless you have additional force in your office, it will be six or seven years before you can pass upon these 515,000 claims. I have had some considerable experience in this pension business, and I don't think that there will be much trouble in establishing the claims when you come to relieve a man of proving that his disability originated in the service. That is half the battle with him.

Mr. BRECKINRIDGE. And that is half the battle of the examiner ?
General RAUM. Yes, half the battle.

Mr. PETERS. Now, the office there, in the first place, has got to take up every one of those applications and give them a number. Well, that, you know, is difficult. General RAUM. As you are aware, there has been largely over 500,000 applications made under this new law. Now when you contemplate the receiving and the handling of a half a million of papers in so short a time as has followed the passage of that act, you can see what an enormous weight of labor and responsibility came on to the office; and it has taken all the people that I could pile into that record division to bring the work up. Every one of these claims must be carefully examined and must be compared with the old records to see whether the man has a pending claim, because the law says he shall not have two pensions. Now we have had to compare with these records these 530,000 cases. There is a limit to the number of people who can get around the books; but I have put on there three hundred and fifty-eight people in the record division. It amounts to a department in itself.

Mr. SAYERS. As against how many formerly?

General RAUM. I have added over two hundred to that division. Now they have gone on and made those examinations; they have given to each case a number; they have notified the claimant and put a jacket on the case with the proper endorsement on it, and then it goes down to the other divisions. I found it absolutely impossible that all branches of that work could be carried on, uniformly alike, because it seemed that some were more pressing than others. For example, a person filing a claim; if it was in there some little time, he would want to know whether it had been received or not, and so I put that entire force on the business of examining the records concerning these claims and giving them a number and notifying the claimant; and they were piled up there like a cord of wood, nearly a quarter of a million of these pension cases that hadn't a jacket on them. When nearing the end of giving notice to the claimants, then I turned the whole office to the work of putting on jackets; and I expect by the time you meet we will have all the jackets on. We put on between nine and ten thousand a day. That work of jacketing itself has been an enormous labor.

During the months of July, August, and September, as you see by that report, we received over a million and a quarter of letters. They were received and all acknowledged. So that you see I had to strengthen the mail division as well, so as to handle that enormous mail, sometimes, 32,000 and 33,000 a day. But we did handle them and acknowledged the receipt of them, and put them in their proper places; and we have now gotten the office, or I will in the next ten or twelve days, I will have every scrap of paper in its proper place, and every claim with a jacket on it, and every man furnished with his acknowledgment, and every case ready to be adjndicated.

Mr. SAYERS. And will not the result be that you have got your business now all ready, for examining and issuing these certificates with more rapidity really than you anticipated?

That

General RAUM. Well, I have put down, as you see here, 125,000 new cases. doesn't include any increase cases under the old law, you see, because while I issued 66,000 and odd original certificates last year, I issued a total of 151,000. You know there will be quite a lot of work to do besides issuing these new certificates.

Mr. SAYERS. It seems, general, that you are now just in condition to go into the fight?

General RAUM. Well, I will say that while I stay there I will proceed to execute the law. As I understand, you have put the law on the statute book to be executed, and not to be a dead letter.

Mr. PETERS. Now I want to call your attention, the Commissioner's attention, to another fact. Now, Governor Sayers, from his remarks, seems to have an idea that, the certificates. Isn't it a fact that with all these cases an order must be made to after all you speak of has been done, there will be but very little to do except issue send

and the report made to the office, then the result of that examination has to be ex

amined by a board of medical review.

H. Rep. 1-2