ADDITIONAL APPROPRIATIONS FOR THE VETERANS' ADMINISTRATION, FISCAL YEAR 1932

DECEMBER 17, 1931.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. BYRNS, from the Committee on Appropriations, submitted the following

REPORT

[To accompany H. J. Res. 141]

The Committee on Appropriations submits the following report in explanation of the accompanying House Joint Resolution No. 141, "To provide additional appropriations for the Veterans' Administration for the fiscal year ending June 30, 1932."

The estimates upon which this joint resolution is based were submitted in House Document No. 135 of the present session, consisting of $200,000,000 for the adjusted service certificate fund (for making loans to veterans), $3,925,000 for adjusted service and dependent pay, and a provision pertaining to the appropriations now authorized by law for hospital and domiciliary facilities.

The committee recommends the granting of these appropriations in the amounts requested in the submission and the inclusion of the authority desired in respect to hospital construction. It is essential that action upon this measure be taken by the Congress before the holiday recess in order that there may be no stoppage in the making of loans to veterans on their adjusted service certificates or failure to meet the requirements of law in the matter of adjusted service and dependent pay. Appropriations available for both sources will be practically exhausted by December 31 next.

ADJUSTED SERVICE AND DEPENDENT PAY

The benefits provided under the appropriation for adjusted service and dependent pay consist of the following:

Section 401 of the World War adjusted compensation act provides that there will be paid to each veteran, as soon as practicable after the receipt of an application in accordance with the provisions of section 302 but not before March 1, 1925, in addition to any other amounts due such veteran in pursuance of law, the amount of his adjusted-service credit, if, and only if, such credit is not more than $50.

Section 601 provides that if the veteran has died before making application under section 302 or, if entitled to receive adjusted-service pay, has died after making application but before he has received payment under Title IV, then the amount of his adjusted-service credit shall, as soon as practicable after receipt of an application in accordance with the provisions of section 604 but not before March 1, 1925, be paid to his dependents.

Section 603 provides that the payments authorized by section 601 shall be made in 10 equal quarterly installments, unless the total amount of the payment is less than $50, in which event it shall be paid on the first installment.

Section 608, approved July 3, 1926, provides that if the veteran died while in service and before July 1, 1919, and if an adjusted-service credit has been or is. after this section takes effect, certified to the director, then the sum of $60 shall be paid in a lump sum to the dependents of such veteran in the same manner as provided in sections 601 and 602 of this act.

These benefits have been paid heretofore from a continuing appropriation which, due to the indeterminate nature of the demands upon it, has been of a continuing character and supplemented by Congress at irregular intervals. Due to unusual demands upon it since the enactment of the recent law for loans upon adjusted service certificates the fund became exhausted in October and under a decision of the Comptroller General payments to beneficiaries have continued and will continue until December 31 next by charging the amounts to the adjusted service certificate fund. Taking into consideration present and prospective awards, the Veterans' Administration estimates that $3,925,000 will be necessary to make the reimbursements to the adjusted service certificate fund for the amounts borrowed therefrom and to pay awards until June 30, 1933. For the period. commencing July 1, 1933, and thereafter it is anticipated that the awards will have become stabilized to such an extent that appropriations should be carried in the regular appropriation bill in the same manner as other funds for the Veterans' Administration and the committee desires that such practice shall be followed in order to avoid confusion. Including the amount carried in this joint resolution the total appropriations to date for these awards will exceed $45,000,000.

ADJUSTED SERVICE CERTIFICATE FUND

The sum of $200,000,000 is included for the adjusted service certificate fund with which to make loans to veterans upon their adjusted service certificates during the remainder of the current fiscal year. In connection with this appropriation it is desirable that an historical résumé of the adjusted compensation should be available, and the following extracts from the statement of the Director of Veterans' Affairs will be found informative:

Public No. 120, Sixty-eighth Congress, providing adjusted compensation for veterans of the World War, was enacted by the Congress on May 19, 1924. By the provisions of this act the United States Veterans' Bureau, upon receipt by the War and Navy Departments of the application by the veteran or his dependent and a certificate setting forth certain items of service record and the amount of adjusted service due, shall proceed to extend to the veteran the benefits provided. Section 201 of the act provides that the amount of adjusted-service credit shall be computed by allowing the following sums for each day of active service in excess of 60 days, in the military or naval forces of the United States after April 5, 1917, and before July 1, 1919, as shown by the service or other records of the veteran: $1.25 for each day of overseas service and $1 for each day of home service; but the amount of credit of each veteran who performed no overseas service shall not exceed $500, and the amount of credit of a veteran who performed any overseas service shall not exceed $625.

Section

Adjusted-service certificates are issued in the form of paid-up 20-year endowment insurance. To meet the payment of these certificates as they mature, either by death or by expiration of the provisionary 20-year period, the act authorizes the establishment of a fund designated as the adjusted-service certificate fund, which is to be maintained by means of an annual appropriation determined in accordance with the basis set forth in section 505 of the act. 505 of the act provides that an amount shall be appropriated yearly, beginning with the calendar year 1925 and ending with the calendar year 1946, sufficient as an annual premium to provide for the payment of the face value of each adjustedservice certificate in 20 years from its date or on the prior death of the veteran. The amount so required is to be determined by an actuarial compilation based on the American Experience Table of Mortality and an interest rate of 4 per cent compounded annually.

As a general provision, each veteran is entitled to receive an adjusted-service certificate as provided in section 201 if his adjusted-service credit amounts to more than $50.

Provision is also made in section 502 of the act for the granting of loans. The extent of the loan value was fixed after a period of two years from the date of the issuance of the certificate at 90 per cent of the reserve value of the certificate on the last day of the current certificate year. The reserve value of a certificate on the last day of a current certificate year is defined by the act as the full reserve required on such certificate, based on an annual level net premium for 20 years and calculated in accordance with the American Experience Table of Mortality with interest at 4 per cent per annum compounded annually.

In accordance with the above provisions, the following appropriations have been made during the fiscal years 1925 to 1932 inclusive:

The trend of disbursements from the adjusted-service certificate fund has been materially affected by amendments to the original act which have extended the time limit for filing claims and increased the loan value from an amount not in excess of 90 per cent of the reserve value of the certificate to 50 per cent of the face value of the certificate at maturity.

The act provides that the loan value of a certificate will not be effective until two years after the date of issuance. This provision was not modified at the time the loan value was increased from 90 per cent of the reserve value to 50 per cent of the face value of the certificate at the date of maturity.

The average face value of certificates in force as of September 30, 1931, was $1,000.97 and the average loan value was approximately $503.18.

The current loan value of certificates outstanding on September 30, 1931, was approximately $1,710,000,000, and on that date loans amounting to $1,228,000,000 had been made and were outstanding. Of this latter sum $1,153,000,000 represented loans made directly to veterans and $75,000,000 was the estimated amount of loans made by banks which the Veterans' Administration must redeem upon demand. The difference between the current loan value of outstanding certificates on that date and the amount of direct loans represented the potential gross balance of securities available for additional loans which the Veterans' Administration might be called upon to meet, and is approximately $557,000,000.

This figure will be influenced somewhat by new certificates arriving in a loan value status and certificates withdrawn from such status by death but such factors will not vary it by any substantial amount. The estimate considered by the committee is based upon a total of additional loans from October 1 to June 30, 1932, of $168,000,000 direct to veterans, $75,000,000 for the redemption of loans made by

'Available Mar. 4, 1931.

banks, and $15,000,000 for payment of certificates matured by death, making a total of $258,000,000. Against this estimated liability there was on hand on October 1, 1931, a total of $58,000,000, leaving a net deficiency appropriation needed of $200,000,000. Since October 1 the cash balance of $58,000,000 has been reduced to such an extent that very little will remain at the end of the current calendar year.

The amount of $168,000,000 included for direct loans to veterans represents only 29 per cent of the total potential loan value of certificates during the period mentioned and in view of the fact that loans have been heretofore made on about 66 per cent of the total certificates to date the amount of the appropriation carried is conservative. It represents the best estimate that can be made at this time.

HOSPITAL FACILITIES

Under the provisions of the acts of June 21, 1930, July 3, 1930, and March 4, 1931, a total of authorizations for hospital construction of $24,877,000 was granted. Against this authorization appropriations aggregating $7,000,000 have been made, leaving the total authorization unappropriated for of $17,877,000. The accompanying bill carries authority for the Director of Veterans' Affairs to enter into contracts for hospital construction in the full amount. It is not necessary at this time to provide the full amount of appropriations as the time required for drawing of plans, placing work under contract, and proceeding with actual construction will be such that additional appropriations will not be needed until the regular 1933 bill. A statement is included in the hearings upon this measure giving a status of the projects, the estimated monthly contract awards, and the facilities to be obtained.

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ADDITIONAL APPROPRIATION FOR THE EMPLOYMENT SERVICE, DEPARTMENT OF LABOR, FISCAL YEAR 1932

DECEMBER 17, 1931.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. BYRNS, from the Committee on Appropriations, submitted the following

REPORT

[To accompany H. J. Res. 142]

The Committee on Appropriations submits the following report in explanation of the accompanying House Joint Resolution No. 142, "Making an additional appropriation for the employment service, Department of Labor, for the fiscal year ending June 30, 1932."

The estimate upon which this joint resolution is based was submitted to Congress in House Document No. 162 of this session in the sum of $168,000.

The appropriations made at the last session for the employment service consist of $383,780 in the regular annual appropriaton act and $500,000 additional in the second deficiency act, making a total of $883,780. The supplemental amount in the deficiency act was immediately available and approximately $65,000 thereof was expended prior to July 1 last, leaving a total of $818,780 for the present fiscal year.

With this amount there is now being maintained a total of 96 employment offices throughout the country. The supplemental estimate of $168,000 contemplated the establishment and maintenance. of 54 additional offices for the full period from January 1 to June 30, 1932, with 3 employees to each office, consisting of a manager at $2,000 per annum, an assistant manager at $1,800, and a clerkstenographer at $1,440, together with rentals and other incidental expenses of maintenance.

The committee has reduced the amount of the estimate to $120,000 and believes that this sum will be sufficient to establish the offices as rapidly as the personnel can be recruited and maintain them adequately until June 30, 1932.