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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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71st CONGRESS

2d Session

SENATE

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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. Smoot, 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 thar 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.)

Section 2 (e) of the act provides for the deduction of one-half of 1 per cent from the amount of each payment under the act in respect of an award of the Mixed Claims Commission, and provides that the amount so deducted shall be deposited in the Treasury as reimbursement for the expenses incurred by the United States in respect thereof. Upon entering into the late-claims agreement the President agreed to recommend to the Congress that the amount so deducted from the late-claims awards of the Mixed Claims Commission shall be made available to the German Government for defraying its expenses in connection with the adjudication of such claims.

The German Goverment was under no legal duty to extend the time within which claims could be filed and awards based thereon entered on behalf of American nationals. As a result of the late-claims agreement, American nationals have been given an opportunity to present their claims and to receive awards against Germany the aggregate amount of which has been estimated to be between $8,000,000 and $10,000,000.

The committee believes that the request of Germany is reasonable, that the amounts so deducted (one-half of 1 per cent of the payments on account of awards to American nationals) be made available to Germany for application toward defraying its administrative expenses in connection with the adjudication of the late claims, and that the undertaking of the President should be carried out.

The bill adds a new subdivision to section 2 of the settlement of war claims act, there being no similar provision in the existing law. Section 2 (e) of the settlement of war claims act, under the authority of which the deductions are now being made, reads as follows:

“(e) There shall be deducted from the amount of each payment, as reimbursement for the expenses incurred by the United States in respect thereof, an amount equal to one-half of 1 per cent thereof. The amount so deducted shall be deposited in the Treasury as miscellaneous receipts. In computing the amounts payable under subsection (c) of section 4 (establishing the priority of payments) the fact that such deduction is required to be made from the payment when computed or that such deduction has been made from prior payments, shall be disregarded.”

The messages of the President (H. Doc. 556, 70th Cong., and S. Doc. 255, 70th Cong.) are as follows:

House Document No. 556, Seventieth Congress, second session

CLAIMS OF AMERICAN CITIZENS AGAINST GERMANY

MESSAGE

FROM

THE PRESIDENT OF THE UNITED STATES

TRANSMITTING

A REPORT FROM THE ECRETARY OF STATE IN RELATION TO THE

AGREEMENT BETWEEN THE UNITED STATES AND GERMANY OF DECEMBER 31, 1928, FOR THE ADJUDICATION OF CLAIMS OF AMERICAN CITIZENS AGAINST GERMANY ARISING OUT OF THE WORLD WAR

FEBRUARY 5, 1929.—Referred to the Committee on Ways and Means, and

ordered to be printed

а

To the Congress of the United States:

I transmit herewith a report from the Secretary of State in relation to the agreement between the United States and Germany of December 31, 1928, for the adjudication of claims of American citizens against Germany arising out of the World War, which were not notified to the commission in time to be considered under the agreement of August 10, 1922, between the United States and Germany for the adjudication of American claims.

Subsection (e) of section 2 of the “Settlement of war claims act of 1928" provides that there shall be deducted from the amount of each payment on awards of the Mixed Claims Commission, United States and Germany, as reimbursement for the expenses incurred by the United States in connection with the adjudication of the claims an amount "equal to one-half of 1 per centum thereof,” which amount it is provided shall be deposited in the Treasury as miscellaneous receipts.

I recommend that the one-half of 1 per cent which the Secretary of the Treasury is thus authorized to deduct from awards shall, in so far as regards these late claims, be made available to the German Government for defraying such expenses as may be incurred by that Government in connection with the adjudication of such claims.

CALVIN COOLIDGE. THE WHITE HOUSE,

February 5, 1929.

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