Mr. MILLER. Yes; on cancellable policies.

Now, there is a third line on this chart which shows the death rates under the Metropolitan Life's industrial policies, which I have put in to show that the general trend in mortality during the depression was not unfavorable. There was some bad experience on policies for large amounts, but on the basic industrial insurance the experience went up a little in 1929 and then improved thereafter and has continued to improve to this date.

Experience under the Government life insurance has been cited here by Mr. Altmeyer, but the record does not contain substantial proof or demonstrations of his assertion that

to the extent that one is able to judge, the veterans' experience has been more favorable than the experience of private insurance carriers,

Moreover, I question the bearing which the veterans' experience has on the problem at hand, since the veterans comprise a select group not representative of our entire labor force.

I have developed this comparison further in the appendix to this

statement.

Charts A and B show that an assured disability income exerts a powerful influence on the behavior of the disabled person. In fact, there is reason to believe that, in many cases, a permanent disability benefit, by reducing or destroying the incentive to return to useful activity, has done the disabled individual more harm than good.

Senator MILLIKIN. Mr. Chairman, may I interrupt the witness, please?

What is the pronounced deviation between the experience with veterans and the experience generally with industrial groups?

Mr. MILLER. Comparing them over a period of years chronologically, the experiences seem to parallel each other.

Senator MILLIKIN. That is why I should perhaps put my question in a different way. Why is your experience with veterans different from your experience with a general industrial group?

Mr. MILLER. Briefly, the great bulk of the insurance on which the Government life-insurance statistics were compiled is the installmenttype benefit, similar to the third group, of Prudential policies, but for larger amounts. When the veteran received a disability benefit, he was using up part of the protection which he had bought for his family. That acts as a deterrent to the drawing of the benefits, and in the appendix I have shown another example where that is quite pronounced.

Secondly, the average payment under the veterans' insurance was about $25 per month, just about half the benefits proposed for the Government insurance, and considerably less than most of the insurance company experience.

Then, as to drawing conclusions from the veterans' experience with respect to what might be done under social-security benefits, the point I make there is that the veterans were a selected group. All had good-health backgrounds, and primarily they were younger men and men of better character. This group doesn't include many of the marginal individuals, who are apt to cause most of the difficulty under this type of insurance.

Senator MILLIKIN. Now, we had testimony, I think, yesterday, to the effect that the railroad retirement system has been successful as

far as disability insurance is concerned. Have you any comment on that?

Mr. MILLER. I have never seen any data published which could be suitably compared with our insurance company experience. I am un able to give a comment on that.

Senator MILLIKIN. And the gentleman appeared for a union in the garment-making industry, and the burden of his testimony was that they had had favorable experience. Have you by any chance seen that testimony?

Mr. MILLER. No; I have not had an opportunity to as yet.

In fact, there is reason to believe that in many cases a permanentdisability benefit, by reducing or destroying the incentive to return to useful activity, has done the disabled individual more harm than good.

Therefore, I would count the cost of the extra disability shown in chart A not just in claim dollars paid out by the insurance company, but in wasted lives and prolonged disability suffered by people who should have been making a greater effort to return to their jobs or to find a new role of activity.

Permanent-disability insurance is an old institution dating to the earlier days of the British Friendly Societies. Its inclusion in the social-security plans of foreign countries has been cited as a reason for our adoption of these benefits and as proof of the feasibility of doing so. In my opinion, these arguments lose their force when we find that typical prewar benefits of foreign plants were worth only a few dollars a week.

However, in considering the problem of the disabled, it seems to me that the history of past attempts at paying cash benefits is less significant than the great gains which have been made in the past few decades in elimination of disability by treatment on the one hand and by vocational rehabilitation on the other.

Senator MILLIKIN. Mr. Chairman, after we get through with all of the malingering and all of the temptation to prolong benefits which would not be prolonged had there been, perhaps an appropriate re habilitation, if we have genuine cases of total and permanent dis ability what we are going to do about them?

The CHAIRMAN. Would you care to comment on that, Mr. Miller? Mr. MILLER. Yes. I come to that a little later, and my point is that the most adaptable method is through assistance.

The CHAIRMAN. You agree with the previous witness, Mr. O'Connor, on that point?

Mr. MILLER. Yes. I would like to develop that a little further. Two of the most important steps ever taken by Congress in promoting social welfare were the passage of the Vocational Rehabilitation Acts of 1920 and 1943.

The opportunities in rehabilitation have been well put by Mr. Shortley, Director of the Office of Vocational Rehabilitation, whom I quote, in part:

Most disabled persons can work efficiently if prepared for jobs compatible with their physical condition, aptitudes, and abilities. A man with a leg amputation can do anything at a bench or desk that an able-bodied man of equal skill can do. A man with an arm amputation may be a competent salesman, draftsman, or lawyer-to mention but a few occupations open to him. The deaf person is handicapped only in communication and not in the skilled use of mind and hands. Tuberculosis ex-patients and persons with heart defects are limited only in per

forming heavy manual labor and not in the duties of lighter skilled vocations In fact, nearly every disabled person has far more vocational assets than are lost through his impairments, and it is only needed to develop his remaining skills and capacities, through physical restoration and vocational training, to the point of economic usefulness.

Mr. Oscar Ewing has said:

Our disabled civilians generally are capable of becoming self-sustaining and contributing citizens of their communities

Senator MILLIKIN. Mr. Chairman?
The CHAIRMAN. Senator Millikin.

Senator MILLIKIN. First of all, I think the testimony we have had here on rehabilitation is very impressive. I wonder if we do not imply too much, let us call it, will power in the average citizen, in some of our arguments, here. I know a lady who is a painter and suffered a stroke when she was 65, on her whole right side. She learned to be a painter with her left hand and was a better painter with her left hand than she had been with her right hand. But there is not one person in a million who has that kind of guts, that kind of spizzerinctum, that kind of will power.

I am wondering if we are not attributing perfectionism to a field where it does not always exist.

Mr. MILLER. I think it is undoubtedly true that that will power varies greatly among individuals. There are not many Helen Kellers or Robert Louis Stevensons

Senator MILLIKIN. Exactly.

Senator KERR. What percent does the record show to be the effective rehabilitation among the disabled to whom the opportunity for it has been made available?

Mr. MILLER. That I believe was brought out in the annual report of the Office of Vocatioinal Rehabilitation.

Senator KERR. I am sure it is. I think it might be well to mention it at this particular point, if you know.

Mr. MILLER. I do not recall precisely. It seems to me that in the latest report something over 100,000 cases were referred, in the year. And in the fiscal year 1949, there were 58,000 successful rehabilitations, and there were about 11,000 more rehabilitations that had been completed, but the people were more or less on trial. I recall those latter two figures rather definntely. I am not sure of the first figure of total referrals.

Senator KERR. Are there figures available to indicate that they believe that 80 percent of those who have the opportunity can be effectively rehabilitated?

Mr. MILLER. There is such a statement on record. I read it just the other day. It was given before a House committee. I have that in my brief case and would be glad to look at it in a moment and give you the reference.

The proponents of disability benefits "as a matter of right" point out that the proposed law requires termination of benefits upon refusal without good cause to accept rehabilitation services. Unquestionably, the Administrator can, under threat of termination of benefits, force the disability pensioner to register at a rehabilitation center. But forcing a man into a rehabilitation center will not assure his rehabilitation any more than forcing a man to attend church will guarantee his conversion. His heart must be in the project. If his mind is fixed on the security of his disability pension payable so long as rehabilita

tion is not successful, his doubts as to the outcome of the program and as to his future self-sufficiency will erect a psychological barrier to its success. When you hold out a reward for failure, can you expect success? If the attempt at rehabilitation fails, after the disabled person has passively gone through the motions of compliance with instructions, it will be very difficult for the Administrator to remove him or her from the disability roll. Furthermore, because of the human tendency to follow the line of least resistance, not only the patient but also the administrative official or worker in charge may be less impelled to strive for rehabilitation with a disability pension available as a matter of right.

Mr. Chairman, that would be an extension of my comments on Senator Millikin's point about will power. The will power of the individual varies, but I think we strengthen it if we don't give him this crutch of a disability pension to lean upon. He should have something to rely upon, but not

Senator MILLIIN. As a practical matter, let us assume that we turned tihs over to the field of assistance rather than insurance, where the States would share in the cost. In the end you have got to, if you are going to terminate the thing in cases where there can be rehabilitation, devise pressures to get the man to take the rehabilitation and to pursue it seriously. Now, how are you going to do that? For example, an operation might make a man rehabilitated. When you start pressuring people to take operations and to go into various forms of medical treatment and things of that kind, you are in a somewhat dangerous field. If he was not permanently disabled, you may render him permanently disabled.

Mr. MILLER. I think that is very true. And it seems to me that that could come up more often on the insurance side, or at least as often on the insurance side as the assistance side.

Senator MILLIKIN. Take it on either side. What I am trying to get is the practical picture of how we induce these people in good faith to undertake a rehabilitation program. They know on the insurance side or they know on the public assistance side, that as long as they are permanently disabled they are going to continue to get the benefits. Take it, therefore, on either side. How do you overcome that?

Mr. MILLER. I feel, Senator Millikin, that in dealing with people on any basis you can accomplish more by incentives than compulsion. We certainly find that to be true in the fields of private business, and I think it is true in all of our social endeavors.

Senator MILLIKIN. Now, just how would you apply that in this kind of a situation that we are discussing?

Mr. MILLER. I think one thing that is necessary, and I was going to allude to it briefly later, is a great deal more publicity on this

program.

Senator MILLIKIN. Now, here is a fellow who is full of aches and pains. He thinks he has those aches and pains. We have had medical testimony to the effect that they may be entirely imaginary. They may be something that he just thinks he has. In any event, from the standpoint of objective tests the accuracy of those aches and pains cannot be determined. Now, how are we going to work on that fellow so that he will forget his aches and pains?

Mr. MILLER. I think a great deal can be done through publicity of this program and getting people interested in it locally.

Senator MILLIKIN. An ache and a pain that you imagine is just the same as an ache and a pain that you do not have to imagine. I mean, if you are really imagining it, really feeling it, it does not make much difference whether you can demonstrate it objectively or not. I am eliminating, now, the faker type and perhaps getting over into the neurotic field.

Mr. MILLER. Yes. That is the big problem. I feel if the rehabilitation program could be made generally as successful as it appears to be in a few States, people in this country, seeing others restored through rehabilitation, would be inspired to go through the services themselves.

Senator MILLIKIN. Is the answer that as a matter of fact rehabilitation programs are working and that they are fixing people up so that they can resume a place in economic life? Is that the answer?

Mr. MILLER. They are working, as far as I can find. And I want to bring out some figures shortly to show, however, that they are working to a very varying degree in different parts of the country. And it is that that leads me to feel that there is a great deal of promise that has not been achieved in this field.

Senator MILLIKIN. We had a young man here one time in connection with a veterans hearing that had an artificial hand. Why, he could do things with that hand that would almost shame a person who had a good hand. But again, that is probably 1 out of 10,000. I mean, he had put his mind on that. He could turn the page of a book, and he could do all sorts of things with that artificial hand. Well, he certainly had rehabilitated himself.

Mr. MILLER. Yes.

Senator MILLIKIN. Because there were quite a few things that he could not do before. I read not long ago in the paper where some fellow won a dancing prize with one artificial limb. But those things

are rare.

Mr. MILLER. My feeling on this, Mr. Chairman, is that a case such as Senator Millikin cites is the type of inspiration that these other people need. If they can see right in their own community scores of cases where people who were absolutely down and out have been rehabilitated, they will get the inspiration and the will and the hope to go through with the program. There is the old saying, "Nothing succeeds like success." I think if we got this ball rolling, the results would be amazing.

Senator KERR. I take it that it is your thesis that as long as a man knows he has an insurance policy that is going to be in effect as long as he is disabled, that is an incentive to continue disability?

Mr. MILLER. That is it exactly.

Senator KERR. And that if he does not have that and his only means of help is through a means test whereby he gets temporary assistance, that is a spur to him to relieve himself of that situation?

Mr. MILLER. Yes. I talked recently with a man who had considerable experience with a rehabilitation program at the Prudential Insurance Co. some 10 years or more ago, when they were suffering very heavy losses from this disability. He proposed to the head of his claim division that they start telling these people that "we will continue. your benefits for so long, if you will try to rehabilitate yourself, and if