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are asking for here carries us right along pretty close to the end of the application time in 1933.
The CHAIRMAN. I have had some letters recently in which the statement has been made that this $200,000,000 was really asked for the purpose of defeating any effort made to secure the other 50 per cent. As I understand it, unless you get this appropriation, you will really not have enough to take care of the December business?
General HINES. That is true, we will not have it.
I knew that would be the interpretation placed upon it, and I frankly said so, but I am confident that when they get this statement they will see the reasons for it. It will speak for itself. There would be no advantage in doing that. We have been making these payments rapidly, as you know, simply in order to get the work out of the way, and to get rid of the applications. When we find them stacked up either in the field or here, it interferes with the work. We felt that if there was anything in the proposition that these large loans to the veterans would better the conditions, we wanted to be helpful and get it into their hands. The reason it did not better conditions was because most of it was due before they got it, and it simply passed from the veterans to the merchants and from the merchants to the banks.
AMOUNT OF APPROPRIATIONS FOR VETERANS ADMINISTRATION 1932
AND ESTIMATED FOR 1933
Mr. WOODRUM. I would like to have shown in the record what amount is carried now in the present fiscal year for Veterans' Administration purposes, and also what amount is estimated for 1933.
General HINES. The amount estimated for 1933 is $1,072,064,527.
Mr. WOODRUM. How much increase is that over the appropriation for the present fiscal year?
Mr. MOORE. It will be slightly less in 1933 because of bringing in these deficiencies.
General Hines. The annual appropriations for 1932 were $945,439,878, and Congress also made a supplemental appropriation of $2,000,000 to administer the bonus in addition to that. That made the total amount appropriated for 1932 $947,439,878. Our estimates for appropriations for 1933 are $1,072,064,527.
The CHAIRMAN. I understood you to say that it would be slightly less if these deficiencies go through.
General HINES. We have not added these to figures above quoted for 1932.
The CHAIRMAN. But if you add these deficiencies?
General Hines. Yes, sir. If you appropriate what we have in this special deficiency and in the regular deficiencies, it would make the total amount for 1932 $1,127,933,312.
Mr. WOODRUM. What will be the deficiency next year?
Mr. WOODRUM. If you estimate this, you can do some prognosticating as to other years. There is no doubt about the fact that the cost of this veterans administration is mounting steadily. General Hines. It is increasing at a staggering rate and an alarming
In my judgment we ought to look at it that way. Mr. WOODRUM. In any further commitments it makes, Congress must certainly bear that fact in mind.
General Hines. I urged that in my report, and, also, in my recommendations to the President in which I suggested that in whatever he wished to say about it in his message, he should insist that we should not at this time extend this emergency relief until we can determine how far the present legislation will carry it. It seemed to me that this would be a good year to give time and study to the effect of existing legislation rather than in extending it.
I do know that there is a very expensive program proposed and it is going to be rather difficult to stop it. That is for the purpose of taking care of the widows and children of veterans who have died. You can not touch the World War group without running into hundreds of millions of dollars.
The Chairman. Assuming that no further legislation is passed which would cause an increase in the cost to the Treasury, would it cost more under the present legislation?
General Hines. Yes, sir; under the present legislation. We have not felt the full force of the present legislation yet.
The CHAIRMAN. Of course, there will necessarily be an increase in cost from the building of new hospitals under the present authorizations.
General Hines. Yes, sir; and not only that, but there will be an increase in the cost of the operations. We are staggering under a teriffic load in the hospitals.
The CHAIRMAN. You do not mean that there is an increase in the cost of any particular hospitals?
General HINES. No, sir; I mean in the total cost.
USE OF LOANS MADE TO VETERANS
General Hines. If you are interested, I can put in the record at this point a statement of what our studies showed as to what the boys did with their money,
The data on this was in the main collected from sources which might be claimed were favorable to the veterans, but it was called for in such form that it is felt that it presents a fairly accurate picture of the matter. It was especially desired to learn the relative per cent of veterans who made loans who were actually in need of such funds, either for the usual necessities of life due to unemployment, abnormal business conditions, or other adverse circumstances. In releasing the information, it is done for the purpose of accuracy with no desire to reach any conclusion other than what the figures actually show. A study of them will not result in all reaching the same conclusion, but it is felt that the administration bas dealt fairly and impartially with the question.
It was indicated that the various managers obtained the data on which their estimates were based through contacts with the veterans personally and by questionnaires, from representatives of veterans' organizations, veterans' welfare boards, and commissions, the American Red Cross, financial institutions, business organizations, automobile dealers, business and merchandising firms, and other similar organizations.
At the time the study was completed, loans had been made in the amount of $804,435,325, to approximately 2,000,000 veterans. An analysis of the estimates of the various managers indicating the conditions prevailing in the territory over which they have jurisdiction when combined indicates that for the country as a whole the funds obtained through loans were used as follows:
First, the average per cent of veterans obtaining loan for personal and family needs was 65 per cent.
Second, the per cent of veterans who used funds secured for investment purposes was 20 per cent.
Third, the per cent of veterans who used funds secured for the purchase of automobiles and purposes undetermined was 8 per cent.
Fourth, the per cent of veterans who utilized funds in such a way as to receive no practical benefits therefrom was 7 per cent.
I will put it in another way. It may be stated in this manner, first, that $281,552,364, or 35 per cent of the total amount, was loaned to approximately 700,000 veterans who used such funds for investments, deposits in savings accounts, purchase of automobiles, and for purposes resulting in no practical benefit to themselves or their dependents. It may be said that the analysis does not reveal that there was any great need impelling this group of veterans to obtain the funds.
Second, it may be said that $265,463,657, or 33 per cent of the total, was loaned to approximately 660,000 veterans who used the funds primarily for personal and family necessities but who either were not unemployed or considered to be in necessitous circumstances.
Third, it showed that $257,419,304, or 32 per cent of the total amount, was loaned to approximately 640,000 veterans who were considered to be in actual need of such funds for personal and family necessities due to unemployment or other adverse circumstances.
To summarize the studies made by the various managers of the field stations reveals that less than one-third of the veterans who obtained loans were actually in need of financial assistance to provide for personal and family necessities, and that this group of veterans obtained loans amounting to approximately $257,000,000. The remainder of the total amount loaned, or approximately $547,000,000, was obtained by approximately two-thirds of the veterans. The study, however, does indicate that this group, numbering 1,300,000, with the exception of approximately 140,000, or 7 per cent of the total number obtaining loans, used their funds to good advantage, but that the information does not indicate that real need for such funds, because of unemployment or exceptionally adverse circumstances, was present.
In other words, 65 per cent of them did not fwaste their money but of that group a large number could have deerred borrowing, so, far as real necessities went. The number that threw their money away, or wasted it, represents a very small percentage. This shows that if the option is given them many men will borrow who do not have to borrow. It was for that reason that I was a strong advocate of the factor of need in the administration of the loan.
The CHAIRMAN. What did they borrow it for? Did they use it in business, or in making investments? General Hines. They used it for all sorts of things. Some of it is
. charged here to the purchase of automobiles, and I have no doubt that many of them purchased automobiles to help them in their business. It is a very difficult thing to reach a conclusion on this thing, but this was the best that we were able to get. I think it is safe to say that this comes from sources that were favorable to the veterans. I do not believe that the picture is unfair to the veterans.
Mr. WOODRUM. You say that 65 per cent of them did not throw their money away. In the 35 per cent that is left, do you include the ones that borrowed for investments?
General HINES. No, sir; we include them in the 65 per cent. Thirty-two per cent of the money was loaned to approximately 640,000 veterans that we felt were in actual need and had to borrow because of real family necessities. If you had put in the factor of need in the loans, we feel that the loans to that group would have been granted, because they were in real and urgent need.
Mr. WOODRUM. Would that have been administratively possible?
General HINES. I think so. I think if the law had been written in that way, it would have helped us a great deal in carrying it out.
The CHAIRMAN. How extensive were those investigations?
General Hines. We had all of our field officers, and we hi 54 regional offices throughout the United States, to contact as many veterans as they could when they came in to make loans. Then we sent out sets of questionnaires to large groups of veterans asking them to tell us of their need for the money. The whole thing was voluntary. Then we contacted business agencies, automobile agencies, banks, and so forth. The report is quite detailed and elaborate.
Mr. Hardy. I think it is a remarkable showing of intelligence on the part of the veterans. After having read things about these loans a few weeks ago, it is surprising to find that only 7 per cent are supposed to have wasted their money. There was a feeling that a great deal of it would be wasted.
General Hines. I know of no other study that has been made. We used the American Legion wherever possible to make independent studies, feeling that they owed it to their membership in view of the claims that were made. I doubt, however, whether they were successful in tabulating their information. At least, I have been unable to get any from them.
HOSPITAL AND DOMICILIARY FACILITIES AND SERVICES
As of July 1, 1931, there remained of the appropriations previously made for the construction of additional hospital and domiciliary facilities an unobligated balance of $12,469,976. In addition to this amount a total of $17,877,000 remained as an unappropriated authorization under the following acts of Congress: Act June 21, 1930 (46 Stat., pp. 792-793)
$1,000,000 Act July 3, 1930 (46 Stat., p. 852)
1, 000, 000 Act Mar. 4, 1931 (46 Stat., p. 1550)
15, 877, 000 Total, unappropriated authorization..
17, 877, 000 This unappropriated authorization is the amount which is now requested to be made immediately available for obligation in order that the progress of the present program of construction will not be impeded.
In connection with the balance of the appropriation remaining as of July 1, 1931, it may be stated that to date contracts have been awarded totaling $5,835,000, leaving at present an unobligated balance of $6,634,976. However, the Federal Board of Hospitalization has recommended, and the President has approved subsequent to July 1, 1931, additional projects totaling $13,440,000, or an amount in excess of the present balance in the appropriation approximating $6,805,000. At the rate which these approved projects are now being handled with reference to preparation of plans and specifications, advertising, and awards, the following obligations would be incurred monthly: 1931-December..
$3, 010,000 1932—January
2, 370, 000 February
1, 655, 000 March.
1, 330, 000 April.
2, 800, 000 May
2, 275, 000 The above data would indicate that, considering only those projects already approved, sufficient funds are available to permit of contract awards only through February 15, 1932. With this condition existing, it is necessary to request authority for obligation in excess of present appropriations amounting to approximately $6,805,000. However, in consideration of the present rapid progress being made in the construction program and the urgent need for additional hospital and domiciliary facilities, attention is invited to the following statement showing the obligations incurred since July 1, 1931: 1931—July
$1, 370, 000 August.
275, 000 September
1, 105, 000 October..
1, 185, 000 November
1, 900, 000 Total...
5, 835, 000 In addition to this actual obligation, the projects approved by the President, as previously stated, amount to $13,440,000. The combined total of these figures equal $19,275,000, representing the total projects approved and contracts awarded since July 1, 1931. This entire amount can be obligated by May, 1932, as shown heretofore, and during this period of 11 months the average amount which could be obligated and placed under contract would approximate an average of $1,750,000 monthly. Applying this average rate of obligation to the total unappropriated authorization subsequent to May, 1932, the entire sum may be obligated prior to December 31. 1932.
The following statement summarizes the above facts and statements with reference to the construction program:
Unobligated balance of appropriation July 1, 1931..--- $12, 469, 976
$1, 370, 000
275, 000 September
1, 105, 000 October
1, 185, 000 November
1, 900, 000
5, 835, 000
6, 634, 976
Unobligated balance of appropriation Dec. 1, 1931.-.-
$3,010, 000 January, 1932
2, 370, 000
5, 380, 000
Estimated unobligated balance of Appropriation,
Feb. 1, 1932
1, 254, 976