Mr. GUERNSEY. No, sir; nothing except our observation.

We do not presume to speak for all weekly premium life insurance nor the larger companies writing such life insurance which do not belong to this association. Nonetheless, it must be apparent that their business would be affected in proportion to ours. There is also reason to believe that were this proposal enacted, it would not be long before appeals would be made to further increase these benefits to compensate for increased costs of funerals, thereby putting in jeopardy life insurance in even higher amounts.

We are sincerely convinced that this public need is not only being met, but that every year a better job is being done. We feel that the public has demonstrated its wishes on this point by its large scale voluntary purchase of life insurance. We therefore see no realistic purpose for the inclusion of a lump-sum death benefit in H. R. 6000 and strongly urge that the provision be stricken from the bill.

It is contrary to the basic principles upon which the economy of this great country is founded for the Government to enter into a field where private enterprise has made such a contribution and for which it has so ably demonstrated its ability to adequately provide.

Gentlemen of the committee, I find it difficult to speak without emotion on this subject for in this plan I see so clearly a perfect example of the type of proposal which has brought so many nations of the world today to that position where they are dependent upon the United States of America, a free enterprise nation, for the essentials of life which their socialistic systems cannot provide.

Two years ago it was my privilege to visit 20 nations, where I sought and found the opportunity to talk to men and women of all stations in life-porters in hotels, waiters, drivers of busses, small merchants, business and professional men in the larger fields, American consuls and ambassadors, and governing officials of the countries in which I was a visitor, including mayors, governors, prime ministers, and presidents. I sought to learn without fear or favor what they thought of the governing policies of their country. Particularly did I seek this information in those countries where the so-called welfare state had made the greatest inroads, and I am thinking primarily of Australia and New Zealand, whose peoples in most respects are more like our own than those of other nations. With the exception of those who were forming or administering the socialistic policies of those nations, I found dissatisfaction, disillusionment, and in many places, discouragement. Many said to me, "A few years ago we said it can't happen here, but it did. The symptoms, the trends are identical in your country today. If you would keep your country what it is, you will go back to America and use your utmost effort to preserve and protect those things which have made your country great." That is why I am here today.

You are aware that in recent weeks the citizens of both Australia and New Zealand have rebelled against the impractical theories of dreamers and the wastefulness of bureaucratic administrations and replaced them with a government wherein there is a hope of equality and opportunity for all. To be sure, I am here to try to protect the interests of my own company and a large segment of our policy owners. I am here to fight for the life-insurance business as a whole, but above all, I am here in a conscientious and hopeful effort to try to do my

part to preserve those things which have made by country the admiration of all others, except those who have envy or malice in their hearts. We sincerely believe that the decision which is made in connection with H. R. 6000 will determine in large measure the extent to which individual responsibility and private initiative are subordinated in this country to Government control-or-call it what you will. We do know that the prosperity of this country under its present system should dictate a far wiser plan for its future than that conceived in this section of the bill. The proper action is to strike the lump-sum death benefit from this act.

The CHAIRMAN. Mr. Guernsey, we appreciate your appearance, sir. Are there questions?

Senator MYERS. I just wondered whether this gentleman appeared when the original social security bill was under consideration, 10 or more years ago.

Mr. GUERNSEY. No, Senator, I did not.

Senator MILLIKIN. I would like to ask Mr. Cohen, Mr. Chairman, whether he has any statistics on pauper burial.

Mr. COHEN (Wilbur J. Cohen, technical adviser to the Commissioner for Social Security). We have some statistics, Senator Millikin, from the public-assistance figures, as to those burials of people on the public-assistance rolls, with which we can supply you.

The CHAIRMAN. Anything that bears on this question, Mr. Cohen.

USE OF PUBLIC FUNDS FOR BURIAL OF NEEDY PERSONS

Public assistance agencies in the United States generally have policies that make it possible to provide for burial of needy persons. Some assistance agencies make payments directly to the undertaker or others for burial of an assistance recipient. It is common practice also to permit recipients of assistance to maintain cash or liquid asset reserves to meet the cost of such contingencies as last illness and burial. In many States, moreover, budgetary standards provide for including a sum for insurance premiums in determining the amount of the money payment to the recipient. Even if the cost of insurance premiums is not specifically taken into account in determining how much assistance a needy person is to receive, the recipient is free to use his money for this purpose if he wishes.

On the basis of reports received from 37 States, it is estimated that in the Nation in the fiscal year 1949, payments for burial from assistance funds, including funds appropriated for old-age assistance, aid to dependent children, aid to the blind, general assistance, and burial assistance, were about $5,500,000. Although there is some provision for meeting burial costs under each type of assistance, the problem is most acute in the program of old-age assistance. The table attached summarizes the provisions for burial in the State plans for old-age assistance.

As of January 1950, 28 of the 51 jurisdictions making payments to the needy aged had some plan for making payments for burial either to the undertaker directly or to others. Such payments are not subject to Federal participation. In some States amounts spent for burial of recipients are recovered from their estates wherever possible. In other States the recovery provision is not enforceable during the lifetime of a spouse or other dependent. All of the 28 States making payments for funeral expenses also permit recipients to maintain cash or liquid assets reserves which may, in some instances, include the cash surrender or loan value of insurance policies and which can be used to meet burial expenses or other contingencies such as the expense of last illness. In 23 States the maximum amount of the reserve that may be held is specified in the State plan: in the other States the amount is not indicated.

All of the 23 States that do not make vendor payments for burial permit the recipient to maintain a reserve which may sometimes include the cash-surrender cr loan value of insurance policies, and may in all probability be used for burial. Thirty-three of the fifty-one State jurisdictions have provisions in their oldage assistance plans for including an amount for insurance premiums in de

termining the size of the recipient's cash assistance payment. Seven States specify the amount to be allowed for this purpose and nine States, the maximum amount. In other States the amount included is probably the amount actually paid by the recipient, within specified limits.

Although the plans of 18 States do not specifically include an amount for insurance in determining the recipient's needs, the item may be covered by other budgeted items such as "Miscellaneous expense." Among the 18 States with no specific provision for budgeting the cost of insurance payments are seven with average assistance payments above the national average. It cannot be concluded that in the absence of a specific provision for budgeting this item recipients are unable to pay insurance premiums out of their current income.

Old-age assistance: Provisions for burial in State plans

The CHAIRMAN. In connection with that question also, Mr. Cohen, let me make the request that you supply us, if you have it, any data which would indicate how many people have been retired under the Assistance Act at 65 that were originally in the self-employed class or were wage earners, salary earners.

Mr. COHEN. Yes.

In reply to the question that you raise now and Senator Millikin raised yesterday, we are making a study which will indicate what the different types of employment were of people who are on the assistance rolls now; so that we will have the information as to whether they were farmers or self-employed or whether they were covered under the insurance system.

The CHAIRMAN. We will appreciate that information.
Are there any further questions?

Senator KERR. I would like to ask just one question, Mr. Chairman.
The CHAIRMAN. Yes, Senator.

Senator KERR. On page 5 of your statement, Mr. Guernsey, you say that

Last year in the State of Virginia there was paid out on 24,369 weekly premium life policies death benefits amounting to $4,334,000.

If you could give us the total number of deaths in the State of Virginia that year, then we would know the percentage of those dying who had these policies, would we not?

Mr. GUERNSEY. You are correct. I do not have that figure.

The CHAIRMAN. Could you supply that, Mr. Guernsey?
Mr. GUERNSEY. I would be happy to do that.

The CHAIRMAN. I suppose from some of the insurance companies, their records, you might get it.

Senator MYERS. I might add, Mr. Chairman, that we could then view the statement in the proper perspective; namely, that "the conspicuous absence of a social problem to be solved in this instance points to the unnecessary inclusion of the proposed lump-sum death benefit in this bill." There may not be a social problem, but merely because there were policies in effect for every one person in Virginia does not indicate that every person had a policy. They may have had a number of policies. And Senator Kerr's question was as to what percentage of the population was covered by insurance.

Mr. GUERNSEY. I think your point is very well taken.

Senator MYERS. Then, of course, we can much better determine whether a social problem exists.

Senator MILLIKIN. I suggest, Mr. Chairman, in addition to the policy, there are many people who do not have policies who are financially able to provide for funerals. So there is still an open gap there as to whether there is a social problem.

The CHAIRMAN. Mr. Turpin, you are experienced in this field, as I happen to know. Could you give us any idea about how many policies of this character are held by the citizens of Georgia, which has a population almost equal to the Virginia population?

Mr. TURPIN. I can give you figures from my own company, which is a Georgia company, and which has been in the industrial insurance business in Georgia for 40 years, and with which operations I intimately am personally familiar.

The CHAIRMAN. Yes, sir.

Mr. TURPIN. We have over 200,000 policies in force in the State of Georgia, on over 200,000 different persons, of the industrial type, which, under Georgia law, is a policy with a death benefit not exceeding $500, and in which the premiums are paid either weekly or monthly. And coming to the specific question which the Senator asked with respect to deaths and funerals, let me mention the case of Bibb County, from which I come, and which Senator George knows intimately. It contains Macon, a-for us-large industrial city, with 40 percent Negro population. When I was a boy, which was longer ago than I like to think, the city of Macon maintained a potter's field. Macon has no potter's field today, and so far as I have been able to learn has not had a single pauper burial, white or colored, in the last 15 years. And the industrial insurance companies, of which mine is one of the largest in that field, though one of the very small companies, has buried those people. We are taking care of that need, sir, certainly in the South. I am not prepared to testify about the industrial cities of the North. But we are taking care of the funeral expenses of the working and poorer classes of people.

Senator BREWSTER. This would be true, would it not, that practically all of these would be for people in the lower-income brackets? Mr. GUERNSEY. That is correct.

Senator BREWSTER. So that if we had the figure as to the number of people with moderate incomes, in the one-, two-, and three-thousand-dollar class, that would be the fairest comparison to determine how adequately they were covered. The social problem would not arise with people with incomes above those amounts, would it, to any degree?

Mr. GUERNSEY. I think you are correct, sir, but there is one interesting fact that I think would surprise you gentlemen. It has been very pleasing to us and interesting to find that men who have become successful in after life, who received their first taste of life insurance on the little 25-cent or 50-cent policy, and now may perhaps have a million dollars in life insurance, are still retaining those initial policies, perhaps for a sentimental purpose. It would not be significant, but it is interesting to those in the life-insurance business.

Senator MARTIN. I would like to suggest this, Mr. Chairman: Using the Commonwealth of Virginia as an example, there are so many policies there. Does that include fraternal policies? There are a great number of fraternal insurance policies in the Northern States which provide a funeral benefit.

Mr. GUERNSEY. If they come under this classification it would include them.