Mr. WATSON, from the Committee on Finance, submitted the

following

REPORT

[To accompany H. R. 13174]

The Committee on Finance, to whom was referred the bill (H. R. 13174) to amend the World War veterans' act, 1924, as amended, having considered the same, report it back to the Senate with the following amendments and recommend that the bill do pass:

Amendment No. 1: Extending for one year time in which insurance. suits may be instituted.

Amendment No. 2: Authorizing Attorney General to compromise insurance suits.

Amendment No. 3: Eliminating provision discontinuing payments of compensation to veterans who enlisted subsequent to November 11, 1918.

Amendment No. 4: Eliminating requirement that veteran be entitled to exemption from payment of Federal income tax before receiving disability allowance.

Certain typographical errors appearing in the House bill are corrected.

Following is an analysis of the bill, as amended, section by section: Section 1: Section 1 of the bill amends section 5 of the act by directing that regulations relative to evidence shall provide that due regard be given to lay and other evidence not of a medical nature in connection with the adjudication of claims. It is the feeling of the committee that in certain border-line cases a more liberal evaluation of lay testimony. would enable the bureau to grant relief under the law. Although under existing law the bureau has the authority to consider such evidence in its proper light, it is felt that this amendment will constitute the express will of Congress regarding such evidence, and will enable the director of the bureau to issue more elastic regulations with regard thereto.

Section 2: Section 2 of the bill amends section 10 of the act by adding thereto a paragraph authorizing the director to secure such

recreational facilities, supplies, and equipment for the use of patients in hospitals, and for employees at isolated stations, as he may deem necessary, and the appropriations made available for the carrying out of the present provisions of section 10, which relate to the furnishing of medical and hospital treatment, are authorized to be expended for this purpose. The bureau is authorized under existing legislation to provide recreational facilities for patients in hospitals, but has no authority to provide such facilities for employees. Many of the employees are stationed at isolated places, so far removed from facilities provided by municipalities or clubs that it is practically impossible for them to avail themselves thereof. The committee, therefore, believes that the director should be authorized to provide facilities as part of the hospital reservation where they are needed.

Section 3: Section 3 of the bill amends section 16 of the act and authorizes the refund of premiums paid beyond the date of maturity on war risk term insurance. The bureau has always refunded such premiums, but the Comptroller General recently held that the bureau appropriations were not available for such purpose. In view of the

fact that no risk attached to the Government for the period covered by these premiums, and that it is the practice of commercial insurance companies under similar circumstances to refund premiums, it is believed that this amendment is proper.

Section 4: Section 4 of the bill amends section 19 of the act by authorizing the courts, as part of the judgment, to direct the refund of premiums. This amendment, which is in line with the preceding one, merely constitutes legislative approval of a practice carried on by the bureau prior to a recent decision of the Comptroller General. Section 4 of the bill also amends section 19 of the act in the following respects:

(1) Extends the time for bringing suits on insurance claims for one year from the date of the approval of the amendatory act or the date the director disallows the claim, whichever is the later date.

(2) Authorizes the issuance of subpoenas for witnesses who are required to attend trials and who live at a greater distance than 100 miles from the place where the case is to be tried. This provision is extremely important from the point of view of both the veteran and the Government, as under existing law it is necessary that the testimony of such witnesses be taken by depositions, which is highly unsatisfactory.

(3) Authorizes the payment of regular travel and subsistence allowances to attorneys of the bureau when assigned to assist at the trials of cases, and to employees of the bureau when ordered in writing by the director to appear as witnesses.

(4) Authorizes the director to order part-time and fee-basis employees of the bureau to appear as witnesses in suits against the Government under this section and to pay them in his discretion a fee in an amount not to exceed $20 a day.

(5) Authorizes official leave for bureau employees subpoenaed to attend trials as witnesses for veteran plaintiffs in suits under this section. At the present time these employees are required in answering subpoenas to take their time on annual leave. This is a hardship of which the committee believes they should be relieved.

(6) A paragraph is added to define the meaning of the term "claim" and the term "disagreement" as used therein. It has for its purpose

the establishment of a definite rule that before suit is brought a claimant must make a claim for insurance and prosecute his case on appeal through the appellate agencies of the bureau before he shall have the right to enter suit. Your committee felt that in view of the fact that the Government has set up in the bureau expensive machinery for hearing claims it was unfair for a veteran to disregard this machinery on the basis of the disallowance of his claim by some subordinate board and enter suit.

(7) A savings clause was added at the end to protect the suits already brought from adverse effect by any amendment included in this section.

(8) A new paragraph is added authorizing the Attorney General, with the approval of the court, to compromise suits. Your committee felt this would be beneficial to both ex-service men and the Government.

Section 5: Section 5 of the bill adds a subdivision to section 21 to place authority in the director to pay compensation to the person having custody and control of an incompetent or minor beneficiary during the time compensation payments to a guardian may be suspended or withheld under section 21 of the statute as it now stands. At the present time, when the director suspends payments to a guardian, there is no authority to pay any compensation unless the veteran is in a hospital, in which case all or any part of the compensation may be apportioned to his dependents, if any, and also to the medical officer in charge of the hospital for the benefit of the veteran himself under authority of section 202, subdivision (7). Section 23 of the war risk insurance act contained a provision similar to the one proposed by this bill, but it was eliminated by the act of June 7, 1924, apparently upon the assumption that these cases would be taken care of by section 202 (7). It has developed, however, that the provision of section 202 (7) is not adequate.

This section also authorizes the reestablishment of the fund known as "fund due incompetent beneficiaries," which was established under section 23 of the war risk insurance act and into which the bureau has always paid to the credit of an incompetent beneficiary any part of the fund not paid to the chief officer of the institution in which he is an inmate, or apportioned to his dependents under the provisions of section 202 (7). The Comptroller General has ruled, however, that subsequent to June 7, 1924, no legal authority existed for this fund and although he has permitted it to be continued until June 30, 1930, it will be necessary to amend the law to provide therefor subsequent to that date.

This section also provides that in case the incompetent veteran recovers and is found competent, the balance remaining in the fund may be paid to him, or, if he does not recover, to his guardian, or in the event of his death to his personal representative. In case, however, escheat would result upon death of the veteran, it is provided that the escheat shall be to the United States, as will also be the case with any funds derived from compensation or insurance that are in the hands of a guardian, curator, conservator, or other fiduciary at the time of the veteran's death.

Section 6: Section 6 of the bil roposes to amend section 28 of the World War veterans' act, as amended, to provide that said section,

as amended, shall be deemed to be in effect as of June 7, 1924. Section 28 of the World War veterans' act, as amended, authorizes the waiver of recovery of payments from any person, who, in the judgment of the director is without fault on his part, and where, in the judgment of the director such recovery would defeat the purpose of benefits otherwise authorized or would be against equity and good conscience, and further provides that no disbursing officer shall be held liable for any amount paid by him to any person where the recovery of such amount is waived under this section. The lastmentioned provision, relieving the disbursing officers from liability, was inserted in the statute at the second session of the Seventieth Congress on recommendation of the Director of the United States Veterans' Bureau, it having been shown that the Comptroller General of the United States had held that, although recovery might be waived so far as the payee was concerned, the disbursing officer was nevertheless liable under his bond for any erroneous disbursement. Although the committee believed that the language was sufficiently clear and unambiguous to express the intention of Congress that these disbursing officers should no longer be liable, for amounts, the recovery of which had been waived prior to the amendments, as well as those which might be waived prior to the amendments, as well as those which might be waived subsequent thereto, the Comptroller General has ruled that there is no authority to apply this amendment retroactively so as to relieve disbursing officers for disallowances set up against their accounts prior to May 29, 1928. This amendment specifically declaring that section 28, as amended, shall be deemed to be in effect as of June 7, 1924, is therefore now included at the request of the director of the bureau.

Section 7: Section 7 of the bill contains new matter proposed by your committee and provides an amendment to section 30 to enable the director of the bureau, under such rules and regulations as he may prescribe, to permit the representatives of ex-service organizations mentioned in section 500 to inspect bureau records. As the members are aware, the provisions in the existing law makes confidential the records of bureau claimants, except in certain instances which are specified in the law. Section 500 of the act, however, authorizes the recognized representatives of the American Red Cross, the American Legion, the Disabled American Veterans of the World War, the Veterans of Foreign Wars, and such other organizations as shall be approved by the director to represent claimants before the bureau, and to be recognized by the bureau in connection with this work. To effectively carry out this responsibility it is believed to be essential that representatives of these organizations be permitted to inspect the bureau records under appropriate regulations, with the understanding, of course, that the information thereby obtained will be kept absolutely confidential and be used only in presenting claims before the bureau.

Section 8: Section 8 of the bill provides that checks properly issued to beneficiaries which are undelivered for any reason shall be retained in the files of the bureau until such time as delivery may be accomplished or until three full fiscal years have elapsed after the end of the fiscal year in which issued. At the present time these checks are forwarded to the General Accounting Office when they are undelivered

and more than three months old. This is in accordance with the established regulations of the Comptroller General. It is believed that this amendment will facilitate the delivery of these checks, as the work of the bureau is now unduly complicated under existing procedure, especially in the supervision of awards to fiduciaries for minors and incompetent beneficiaries. In such cases, when the checks are remailed by the General Accounting Office, the bureau receives no notice thereof, unless certification is made to the payee other than the one in whose favor the checks were originally drawn. It will readily be seen therefore, that fiduciaries may receive payments of which the bureau will have no knowledge and will therefore be unable to require a proper accounting as contemplated by section 21 of the World War veterans' act, as amended.

Section 9: Section 9 adds a section to Title I of the World War veterans' act, as amended, to be known as section 38, to authorize the director to buy uniforms for all personnel employed as watchmen, elevator operators, and elevator starters in the Arlington Building, in order that they may present an appearance indicating the official capacity in which they serve. This follows the practice in other governmental departments.

Section 10: Section 10 adds a section to be known as section 39 to enable the Secretary of War to accumulate in the city of Washington all medical and service records now scattered throughout the United States in many Army stations. The records are with particular regard to veterans of the World War and are of inestimable value in enabling both the veterans and the Veteran's Bureau to determine if certain allegations made in connection with claim for compensation. can be supported by the records, thus eliminating delay and the necessity for much affidavit evidence which must now be furnished in lieu of such records. The approximate cost of the enactment is not estimated but it has several times been recommended in connection with appropriation acts submitted for the War Department.

Section 11 also amends section 200 of the act by adding a paragraph authorizing the payment of a disability allowance to any honorably discharged ex-service man who entered the service prior to November 11, 1918, and served 90 days or more during the World War, and who is suffering from a 25 per cent or more permanent disability not the result of his own willful misconduct which was not acquired in the service during the World War, or for which compensation is not payable. The disability allowance is as follows: 25 per cent permanent disability, $12 per month; 50 per cent permanent disability, $18 per month; 75 per cent permanent disability, $24 per month; total permanent disability, $40 per month. The disability allowance provided by this paragraph is in no event to commence prior to the passage of the amendatory act; is to date only from the time of application therefor. The application for the benefit is to be made on such forms as the director shall prescribe. Provision is made whereby a person drawing either compensation or disability allowance, who later becomes entitled to the other in a greater amount than the one he is receiving, may elect to take the greater benefit, but in no event can one person draw the two benefits at the same time, and any payments previously made over the period covered by a new award are to be deducted from the amount payable under the new award.