under the World War veterans' act, as amended, for any period prior to June 7, 1924. This amendment is designed to place the stamp of approval on the interpretation of the World War veterans' act, 1924, by the bureau to the effect that in cases first brought within the purview of the statute by the act of June 7, 1924, no compensation could be paid for any period prior to that date.

Section 19 adds two provisos to section 212 of the World War veterans' act, 1924, as amended by adding (1) that where a veteran dies after June 7, 1924, as a result of disease or injury for which he was entitled to compensation by virtue of an accrued right under the war risk insurance act, as amended, his dependents shall be entitled to the compensation provided by section 201 of the act; and (2) that an application for compensation under the provisions of the war risk insurance act, as amended, or the World War veterans' act, 1924, as amended, shall be deemed to be a claim for compensation under all subsequent amendments. In connection with the first of these matters there were a small number of veterans who incurred disabilities between July 2, 1921, and June 7, 1924, and who, under the war risk insurance act as amended August 9, 1921, were entitled to disability compensation. The World War veterans' act, 1924, as amended, however, provides for payment of compensation only where death or disability was incurred between April 6, 1917, and July 2, 1921. Where a veteran of this class died before June 7, 1924, his dependents acquired an accrued right to compensation under the war risk insurance act, as amended, which is payable under the World War veterans' act, 1924, as amended, but in the event the veteran died subsequent to June 7, 1924, although he received disability compensation up to the time of his death by virtue of an accrued right under the war risk insurance act, as amended, his dependents (who acquired no such accrued right) are not entitled. to death compensation. It is the opinion of the committee that the widows, children, and dependent parents of these veterans should be entitled to compensation.

The second proviso is designed to overcome the ruling of the Comptroller General to the effect that a claim which has been disallowed under an earlier statute can not be reviewed and paid, under a subsequent amendment bringing the case within the purview of the law, without the filing of a new claim. The bureau has always followed the practice of reviewing these cases without requiring another application, on the theory that section 305 of the war risk insurance act, as amended, and section 205 of the World War veterans' act, 1924, as amended, which authorize the bureau at any time, upon its own motion or upon application, to review disallowed cases, permitted such action. The committee believes the practice of the bureau to be legally sound, administratively advisable, and reasonable from the point of view of both the veteran and the Government.

Section 20 adds a new section to the World War veterans' act. 1924, as amended, to be known as section 214 and to authorize the director, in his discretion, to pay to the dependents of a compensable incompetent veteran who disappears the same amount of compensation as is provided in section 201 of the World War veterans' act,

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1924, as amended, for dependents of veterans. When a veteran disappears it is necessary for the bureau to suspend all payments of compensation pending his reappearance or proof of his death. This works great hardship upon the dependents and it is the opinion of the committee that there should be legal authority for paying an allowance to the dependents under such circumstances.

Section 21 proposes a slight amendment to paragraph 3 of section 301 of the statute. This section now provides that where an insured whose yearly renewable term insurance has matured by reason of permanent and total disability is found and declared to be no longer permanently and totally disabled and is required to renew payment of premiums on said term insurance, and this contingency is extended beyond the period during which said yearly renewable term insurance otherwise must be converted, there shall be given an additional period of two years in which to renew payment of premiums and to convert said term insurance. The amendment provides that during the same two years he shall also have the right to reinstate his term insurance should it lapse. There are a number of cases in which the insured has permitted his insurance to lapse either by failure to pay the first premium at the required time or, having once renewed the payment of premiums and before conversion, has permitted the insurance to lapse. In such cases the insured, unless in a state of health which would meet the requirements for direct application for converted insurance under section 310 of the World War veterans' act, as amended, is precluded from carrying Government insurance. This amendment would, within the 2-year period prescribed, permit him to reinstate his old term insurance and convert it under less rigid requirements as to good health. The records of the bureau show that there are at present 100 cases in which insurance has been allowed to lapse after recovery from a disability rated permanent and total, 48 of which lapsed for the nonpayment of the first premium due after the rerating, and 52 for the nonpayment of premiums subsequent to the first. In a number of cases the remittance to cover the monthly premium was only a few days late. The fourth paragraph of this section is also amended, the purpose being merely to carry through the entire act the amendment included in section 3 of this bill, which, as explained heretofore, amends section 16 of the World War veterans' act, as amended, to authorize specifically refund of unearned premiums on yearly renewable term insurance.

Section 22 amends section 304 of the World War veterans' act, as amended, by changing the language of the last proviso thereof, which now states that no yearly renewable term insurance shall be reinstated after July 2, 1927, to provide an exception in favor of those who will reinstate term insurance during the 2-year period allowed in section 301 for those who have recovered from permanent and total disability.

Section 23 amends section 307, which relates to the incontestability of insurance contracts. The purpose is to make all contracts or policies of insurance incontestable from date of issuance, reinstatement, or conversion, for all reasons except fraud, nonpayment of premiums, or that the applicant was not a member of the military

or naval forces of the United States. This incontestability would protect contracts where they were not applied for within the time limit required, where the applicant was not in the required state of health, or was permanently and totally disabled prior to the date of application, or for any other reasons except those specifically mentioned in the statute. It is appreciated that this is a broad provision, but it was felt that it was necessary in order to do justice to the veterans, to place this insurance on a parity with commercial insurance companies from a stability standpoint, and to overcome decisions of the Comptroller General which practically nullify the section as it now exists. Further provision is made permitting the insured to elect after a reinstatement or conversion to go back to some prior contract and claim rights thereunder; and if he proves himself entitled to such rights, upon surrender of the latter contract or contracts, to be paid under the prior contract. The purpose is to prohibit the raising of estoppel against the claimant either in or out of the courts because of his reinstatement or conversion of his insurance. Provision is also contained whereby suit may be brought either in the original action, or by alternative plea in the same suit with a subsequent contract or policy. Recovery, however, can only be effected upon one of the contracts or policies. The effect of the present practice of the bureau in raising estoppel is to penalize the man who pays his premiums or tries to continue all or a part of his insurance in force. This amendment is specifically made retroactive in order that in any case where the claim has been heretofore disallowed on the ground of estoppel, or because of the policy not being incontestable, the insured, or the beneficiary under such contract or policy may, if he/she so elects, have the benefit thereof. It is contemplated that payments in cases of contracts or policies incontestable under this section will begin from date of maturity of such contracts or policies.

Section 24 proposes to amend section 311 of the statute, which was added to the law at the last Congress (Public, No. 585, 70th Cong.), and was designed to authorize the director to include in the present United States Government life (converted) insurance policy a clause providing a new maturing factor. This amendment provided that where an insured was totally disabled for a period of 12 consecutive months he should receive disability benefits as if he were permanently and totally disabled, thus authorizing the payment of disability benefits of $5.75 for each $1,000 of insurance, the face of the policy being depleted by such payments. Prior to this amendment the man must have been permanently and totally disabled before any disability benefit was payable under his policy. The amendment in the present bill, however, provides for a disability benefit of $5.75 per $1,000 upon application of the insured, which, upon the happening of the contingency on which it is based, i. e., total disability for a period of four months or more, shall be paid independent of the present permanent and total disability clause in the policy and shall not deplete the face value of the policy. Payments begin on the first day of the fifth consecutive month. In the event the insured becomes actually permanently and totally disabled within the meaning of the present provision in the converted insurance policy, he

is, under the amendment, to receive payments under the new total disability clause concurrently with the payments under the permanent and total disability clause now in the converted policy, payments under the latter only depleting the face value. This new disability feature is limited to a rate of $5.75 on each $1,000 of insurance carried and may be less than the total amount carried, but not more. It is to be handled as a separate liability from the present provision for a permanent and total disability and will be so shown on the records, so that the present United States Government life insurance fund shall not be assessed for any losses to be paid under this provision. This insurance will be paid for by the insured and will not result in any increased cost to the Government except so far as the cost of administration is concerned.

Section 25 has for its purpose the protecting of rights existing under the World War veterans' act. 1924, and amendments thereto in effect prior to the passage of this amendatory act. Your committee was of the opinion that the rights granted by this amendatory bill should be in addition to those previously conferred, and in order that there might be no misunderstanding concerning the intention of Congress this section is included in the bill.

Your committee has also made some slight typographical changes in H. R. 10381, to correct manifest clerical errors. Such changes will be readily apparent.

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SENATE

71ST CONGRESS 2d Session

REPORT

No. 886

LATE-CLAIMS AGREEMENT PURSUANT TO SETTLEMENT OF WAR CLAIMS ACT OF 1928

JUNE 9 (calendar day, JUNE 11), 1930.—Ordered to be printed

Mr. SMOOт, from the Committee on Finance, submitted the following

REPORT

[To accompany H. R. 8881]

The Committee on Finance, to whom was referred the bill (H. R. 8881) to carry out the recommendation of the President in connection with the late-claims agreement entered into pursuant to the settlement of war claims act of 1928, having considered the same, report it back to the Senate without amendment and recommend that the bill do pass.

Following is the House report on the bill:

[House Report No. 694, Seventy-first Congress, second session]

The Committee on Ways and Means, to whom was referred the bill (H. R. 8881) to carry out the recommendation of the President in connection with the late-claims agreement entered into pursuant to the settlement of war claims act of 1928, having considered the same, report it back to the House without amendment, with the recommendation that the bill do pass.

The Mixed Claims Commission, United States and Germany, was created by the agreement between the United States and Germany of August 10, 1922. This agreement provided that the claims of American nationals for losses for which Germany was responsible should be submitted to the Mixed Claims Commission and awards entered against Germany. By an exchange of notes at the time the agreement was entered into it was agreed to restrict the jurisdiction of the commission to claims filed with it within six months from the date of its first meeting. This period expired on April 9, 1923.

However, the claims of a large number of American nationals were not presented within the time specified. Accordingly, the settlement of war claims act contained a provision (subsection (j) of section 2) requesting the President to enter into an agreement with the German Government under which the Mixed Claims Commission would be given jurisdiction of claims filed with the Department of State before July 1, 1928, if the claims were of the same character as those of which the commission had jurisdiction under the original agreement. In accordance with the above provision of the settlement of war claims act, the President, on December 31, 1928, entered into the agreement with the German Government extending the jurisdiction of the Mixed Claims Commission. (Treaty Series No. 766.)