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EMERGENCY APPROPRIATION, 1932

HEARING

BEFORE THE

SUBCOMMITTEE OF HOUSE COMMITTEE

ON APPROPRIATIONS

CONSISTING OF

MESSRS. JOSEPH W. BYRNS (CHAIRMAN), JAMES P. BUCHANAN, EDWARD T. TAYLOR, WILLIAM A. AYRES, WILLIAM W. ARNOLD, ROSS A, COLLINS, WILLIAM R. WOOD, EDWARD H. WASON, FRANK MURPHY, AND GUY U. HARDY

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COMMITTEE ON APPROPRIATIONS

HOUSE OF REPRESENTATIVES

SEVENTY-SECOND CONGRESS

JOSEPH W. BYRN8, Tennessee, Chairman JAMES P. BUCHANAN, Texas.

WILLIAM R. WOOD, Indiana. EDWARD T. TAYLOR, Colorado.

EDWARD H. WASON, New Hampshire. WILLIAM B. OLIVER, Alabama.

GEORGE HOLDEN TINKHAM, Massachusetts ANTHONY J. GRIFFIN, New York.

BURTON L. FRENCH, Idaho. JOHN N. SANDLIN, Louisiana.

MILTON W. SHREVE, Pennsylvania. WILLIAM A. AYRES, Kansas.

FRANK MURPHY, Ohio. ROSS A. COLLINS, Mississippi.

JOHN W. SUMMERS, Washington. WILLIAM W. HASTINGS, Oklahoma.

HENRY E. BARBOUR, California. WILLIAM C. WRIGHT, Georgia.

GUY U. HARDY, Colorado. CLARENCE CANNON, Missouri.

JOHN TABER, New York. CLIFTON A. WOODRUM, Virginia.

MAURICE H. THATCHER, Kentucky, WILLIAM W. ARNOLD, Illinois.

FRANK CLAGUE, Minnesota. JOHN J. BOYLAN, New York,

ROBERT G. SIMMONS, Nebraska.
TILMAN B. PARKS, Arkansas.

WILLIAM P. HOLADAY, Illinois.
CHARLES L. ABERNETHY, North Carolina.
LEWIS W. DOUGLAS, Arizona.
LOUIS LUDLOW, Indiana.
WILLIAM J. GRANFIELD, Massachusetts.
THOMAS L. BLANTON, Texas,
MICHAEL J. HART, Michigan.

MARCELLUS C. SHEILD, Clerk

VETERANS ADMINISTRATION EMERGENCY APPROPRIA:

TION, 1932

HEARINGS CONDUCTED BY THE SUBCOMMITTEE, MESSRS. JOSEPH W. BYRNS (CHAIRMAN), JAMES P. BUCHANAN, EDWARD T. TAYLOR, WILLIAM A. AYRES, WILLIAM W. ARNOLD, ROSS A. COLLINS, WILLIAM R. WOOD, EDWARD H. WASON, FRANK MURPHY, AND GUY U. HARDY, OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, IN CHARGE OF DEFICIENCY APPROPRIATIONS

TUESDAY, DECEMBER 15, 1931.

VETERANS' ADMINISTRATION

STATEMENTS OF BRIG. GEN. FRANK T. HINES, ADMINISTRATOR

OF VETERANS' AFFAIRS; HAROLD W. BREINING, ASSISTANT ADMINISTRATOR, FINANCE AND INSURANCE; AND SAMUEL M. MOORE, JR., BUDGET OFFICER AND CHIEF OF STATISTICS

ADJUSTED SERVICE CERTIFICATE FUND

The CHAIRMAN. General, we have before us an estimate for $200,000,000 for adjusted service certificate fund. I wish you would explain the necessity for this estimate, and, if you will, I wish you would go back and explain just how your fund was created and from what fund you have been making your loans so far.

General Hines. Mr. Chairman and gentlemen of the committee, if you will permit me first to make this statement, in order to make your record concise, I will then be able to give you the history.

The CHAIRMAN. Yes.

General Hines. I am called before you to-day with reference to the item of $203,925,000 submitted as a special deficiency bill for the veterans' administration. This amount includes $200,000,000 to supplement the adjusted-service certificate fund, and $3,925,000 to supplement the appropriation “Adjusted service and dependent pay." In addition to these supplemental appropriations, request is also made for authority to obligate the remaining balance of the construction program authorized by the various construction acts for hospital and domiciliary facilities, recently approved.

The circumstances making necessary the submission of these supplemental estimates and requested authority will be taken up separately and, with your permission, Mr. Chairman, I will proceed with a general statement explaining each of these items in detail in the order mentioned. If I may have this privilege I suggest that a more orderly record will be obtained and valuable time of the committee will be saved, and upon completing my general statement I will then be in a better position to answer any inquiries that the committee may care to ask.

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.

Adjusted-service ceritficates are issued in the form of paid-up 20year 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. Section 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 adjusted-service 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 adjustedservice 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.

APPROPRIATIONS MADE, 1925-1932 In accordance with the above provisions, the following appropriations have been made during the fiscal years 1925 to 1932, inclusive: $100, 000, 000

$112, 000,000 1926 120, 000, 000

112, 000, 000 1927. 116, 000, 000

'112, 000, 000 1928.

112, 000, 000
112, 000, 000

Total,

896, 000, 000

1925.

1930.
1931
1932

1929..

1 Available March 4, 1931.

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