AMENDMENTS TO THE SERVICEMEN'S READJUSTMENT

ACT OF 1944

TUESDAY, OCTOBER 9, 1945

UNITED STATES SENATE,

SUBCOMMITTEE ON VETERANS' LEGISLATION

OF THE COMMITTEE ON FINANCE,

Washington, D. C.

The subcommittee met at 10 a. m., pursuant to adjournment, in room 312, Senate Office Building, Senator Edwin C. Johnson (chairman of the subcommittee) presiding.

Present: Senators Johnson (chairman of the subcommittee), George (chairman of the full committee), Walsh, Connally, Gerry, Guffey, Radcliffe, Lucas, La Follette, Vandenberg, Taft, Butler, Millikin, Brewster, and Hawkes.

Senator JOHNSON. The subcommittee hearing will come to order. We will be glad to have as many members of the whole committee remain as may find its convenient to do so, as this is a very important

matter.

This morning we are going to hear from Mr. Collins, of the Veterans' Administration. He is going to talk about the financial aspects of the bill, the loan provisions, and that is a matter that I know the whole committee will be tremendously interested in knowing about. So, Mr. Collins, if you will come up, please.

STATEMENT OF MAURICE COLLINS, DIRECTOR, FINANCE SERVICE, VETERANS' ADMINISTRATION, ACCOMPANIED BY EDWARD E. ODOM, SOLICITOR, AND FRANCIS X. PAVESICH, CHIEF, LOAN GUARANTY DIVISION, VETERANS' ADMINISTRATION

Mr. ODOм. Mr. Chairman, would it be permissible to bring up two minor points that were not covered yesterday?

Senator JOHNSON. Yes; certainly.

Mr. ODOм. Yesterday you had before you House bill 3627, which is a reprint of S. 974, with Veterans' Administration amendments. There is one thing that we should bring to your attention on the first page of that bill, beginning in line 7, reading as follows:

That no course of training in excess of a period of four years shall be approved except with the approval of the Administrator * *

*

That amendment has been requested by a number of labor organizations and others, because there are a number-and by that, I mean

1 H. R. 3749, S. 742, S. 866. S. 487, S. 781, S. 826, S. 850, S. 974, S. 1031, S. 1324, S. 738, S. 795, S. 1202, S. 291, S. 1176.

a considerable number of apprenticeship courses which are more than 4 years in length; and, of course, some professional courses are more than 4 years in length. The question will be whether the Congress will want to give that authority to the Administrator, to approve these courses.

Senator JOHNSON. Where does that language appear?

Mr. ODOм. Page 1, line 7. The added language is, "except with the approval of the Administrator."

Senator LUCAS. What is the number of that bill?

Mr. ОDOм. H. R. 3627.

Senator LUCAS. I don't seem to have a copy of that bill before me. Mr. ODOм. May I pass you one?

Senator JOHNSON. Mr. Odom, to clear up one point in regard to this bill, does H. R. 3627, as it is before us, now represent the recommendations of the Veterans' Bureau?

Mr. ODOм. It does; absolutely. Every recommendation we have made with respect to amendments to the educational provisions of Public 16 and Public 346 are contained in H. R. 3627, which you have before you.

Senator JOHNSON. That is fine. I am glad to know that.

Mr. ODOм. Senator Johnson, we also are preparing a committee print of that, so that when the committee decides to take it up, you will have a print of the present law with the amendments shown, so you can readily see what they are. We will have both of them for you when you take them up.

Senator JOHNSON. That will be appreciated.

Mr. ODOм. Are there any questions on that whole thing?

There is one other thing I want to bring to your attention before we take up the loan provisions.

Senator JOHNSON. Go ahead.

Mr. ODOм. We have no recommendation on this, but we have been requested to bring it to your attention.

If you will recall the present Readjustment Act, section 1503, which you will find on page 19 of the printed act, says:

A discharge or release from active service under conditions other than dishonorable, shall be a prerequisite to entitlement to veterans' benefits provided by this act, or Public Law Numbered 2, Seventy-third Congress, as amended.

Likewise, coming now to the point at issue, on page 5, title II, the same language is used, and it is used also in title III. Those terms mean that a man must be separated from active service. It is done by discharge, and it is done by his being ordered to inactive duty, or by way of retirement.

Now, there are a number of officers; in fact, the greater majority of the officers today are being not released immediately but are being put on terminal leave. An officer, or enlisted man, so far as that is concerned, any service person who is on terminal leave, is still in active service. So these officers or service persons who are now on terminal leave cannot take advantage of the educational provisions of the act or of the loan provisions. They are not finally discharged or separated from the service. They get full pay and are entitled to all benefits. If anything should happen to them, it would be considered service connected.

The question has come up: Would the Congress want to provide, by special amendment to any of these bills pending, that notwithstanding the fact that they were on terminal leave they would be entitled to the loan provisions or educational provisions?

The CHAIRMAN. Are they on terminal leave for a specified period? Mr. ODOм. Yes.

Senator JOHNSON. What do you recommend?

Mr. ODOм. We have made no recommendations.
The CHAIRMAN. They are still drawing pay?
Mr. ODOм. Yes, sir; and have all of the benefits.

Senator BREWSTER. What objection would there be to that suggestion?

Mr. ОDOM. I can see no objection to it.

There is another problem as to medical officers coming back to work for us. They know how desperately we need help. Some come and work for nothing while drawing terminal-leave pay.

The Senate passed a bill, S. 1036, about 10 days ago, I think, which will take care of that situation, permitting them to draw their regular pay while they are also in receipt of terminal-leave pay.

Senator BREWSTER. You mean they get two pays?

Mr. ODOм. Yes, sir.

The CHAIRMAN. Until they get a job, they get two pays?

Mr. ODOM. When they get a job. That will take care of the people that want to come back, and we need them. We have 600 doctors that will be given terminal leave in the next 6 months, and we can't spare 600 doctors.

Senator BREWSTER. He is not permitted to take outside employment?
Mr. ОDOм. That is correct.

Senator MILLIKIN. What is the theory of the terminal leave?
Mr. ODOм. It is leave they didn't use.

Senator MILLIKIN. Can they be called back into service?

Mr. ODOM. It could be done, but I suppose under the present conditions will not be.

Senator MILLIKIN. Does the military suggest that the terminal leave does have that recapture possibility?

Mr. ODOм. There is no question it does have.

The CHAIRMAN. He is still on duty?

Senator BREWSTER. Would there be any objection to a lump sum instead of terminal leave?

Mr. ODOм. We recommend that, sir. In other words, what we recommend-when I say "we" I mean the Veterans' Administration. The Army and the Navy has had a joint board working on this for some months, and I understand their report will be available soonI am informed that I was incorrect in saying they cannot take a job on the outside. They are permitted to.

Senator BREWSTER. While on leave?

Mr. ODOM. Yes.

Senator LUCAS. That applies only to officers?

Mr. ODOм. At the present time, I am informed that only officers get terminal leave. There is a bill pending to grant it to all.

Senator BUTLER. Is the terminal leave supposed to be of a temporary nature?

Mr. ODOM. Yes. It amounts to whatever leave they did not take while in the service. The Congress provided that any civil employee going into the armed forces could draw what leave he had not used up, could draw that pay in a lump sum.

Senator LUCAS. Does this terminal leave come about through legislation, or is that a rule of the War Department?

Mr. ODOM. I think it is by regulatory procedure in the Army. Senator LUCAS. Why shouldn't the noncommissioned officer have terminal leave if an officer is entitled to it?

Mr. ODOм. I don't know. I understand they do not make any record of the leave taken by enlisted personnel during the war.

Senator LUCAS. It seems to me to be a rank discrimination. Senator MILLIKIN. Do you know of any military objection to doing away with this terminal leave, and making an adjustment on a lump-sum basis?

Mr. ODOм. Senator Millikin; I can only say this. As I said, this joint board has been working on the question, and I am informed they are not reporting favorably on the pending bills to do that because it would extend it to all the enlisted men, and that would cost, they say, from two to three billion dollars, but an amendment is coming forward with respect to the lump-sum payment.

I am not privileged to tell you what that will be. It doesn't come within my jurisdiction.

Senator LUCAS. I am interested in the GI.

The CHAIRMAN. The only question here is whether the GI, or any man in the armed forces who comes under the GI bill is entitled to benefits.

Mr. ODOм. Yes, sir.

The CHAIRMAN. Whether he shall take those benefits immediately, if he is on terminal leave, or whether he has to wait until that period is out before he can start. That is the only issue we have.

Mr. ODOм. Yes, sir.

Senator JOHNSON. I think we understand the issue.

Mr. ODOM. If you like, I would be glad to get further information on the other bill. But the thing that is pressing is as to whether these officers may take immediate advantage of the educational or loan provisions. Some of them having gone on terminal leave, have gone back to their old jobs.

I recall a professor who went back to the faculty and wanted to get a house. He wanted a loan guaranty for that purpose, and we couldn't issue it to him.

Mr. Chairman, if there is no more on that, Mr. Collins is prepared to take up the loan provisions. We have copied the present title III verbatim with a committee print of the amendments and if the secretary will pass those around, I am sure you will find that more convenient than trying to follow the discussion in the printed bill.

We also have copies of the written statement which may be passed around.

Mr. Chairman, Mr. Collins is the Assistant Administrator in charge. of finance, and under his jurisdiction falls the loan guaranty provisions. And I would like to introduce to the chairman and to the committee, Mr. Pavesich who is the head of the Loan Guaranty Division. Senator JOHNSON. Go right ahead, Mr. Collins.