abled as a result of war service as there are children of veterans who died from service-connected causes. It appears that the cost, in all likelihood, may therefore approximate one-half of the amounts expected to be expended under the War Orphans' Educational Assistance Act under existing provision of law.

On the basis of the presumption that the cost of the War Orphans' Educational Assistance Act program would be increased by "one-half" if H. R. 5930 were to be enacted, it is estimated that the additional expenditures required in the next 5 years would probably not exceed $25 million. These estimates are predicated on the assumption that two-thirds of the children eligible under the proposal would avail themselves of training benefits and that they would train on the average for slightly less than 2 years. Administrative costs would probably amount to only a small percentage of the foregoing amount and would extend over a number of years.

Advice has been received from the Bureau of the Budget that there is no objection to the submission of this report to your committee and that the Bureau concurs in the foregoing views of the Veterans' Administration. Sincerely yours,

H. V. HIGLEY, Administrator.

DEPARTMENT OF JUSTICE,

OFFICE OF THE DEPUTY ATTORNEY GENERAL,
Washington, April 19, 1957.

Hon. OLIN E. TEAGUE,

Chairman, Committee on Veterans' Affairs,

House of Representatives, Washington, D. C.

DEAR MR. CHAIRMAN: This report is being made to furnish information in connection with your committee's consideration of H. R. 5930.

This bill would broaden the scope of the War Orphans' Educational Assistance Act of 1956 by providing education and training benefits to children of veterans who have service-connected disabilities of a permanent nature. The benefits would be financed from a newly created fund for children of disabled war veterans. The fund would be constituted by all sums to be covered into the Treasury in the future under section 39 of the Trading With the Enemy Act, as amended (50 U. S. C. App. 39), which provides in general that the proceeds of liquidation of German and Japanese assets vested as a consequence of World War II be covered into the Treasury. Immediately upon the enactment of H. R. 5930, the Attorney General would be required to transfer $100 million of the proceeds of vested property to the fund for children of disabled war veterans.

Under existing law (sec. 13 of the War Claims Act of 1948, as amended, 50 U. S. C. App. 2012) the sums covered into the Treasury under section 39 of the Trading With the Enemy Act are deposited in the war claims fund, which is dedicated to the compensation of American war damage claimants.

Attached for your information is a statement which Assistant Attorney General Dallas S. Townsend made before the House Committee on Interstate and Foreign Commerce on March 5, 1957.* You will note from page 5 of the statement that approximately $108 million of the $265 million of vested property still on hand is estimated to be free and clear of litigation, claims, or other obligations. It is anticipated that as litigation is ended, a substantial portion of the remainder of the vested assets will be added to the $108 million "free balance." The views of the Department of Justice with respect to the disposition of vested assets are reflected by the attached statement made by Assistant Attorney General Townsend before the Senate Judiciary Subcommittee on the Trading With the Enemy Act on April 5, 1957, supporting the program proposed by the administration. It is the recommendation of the administration that former owners of these assets who are individuals, as distinguished from business organizations, receive a return thereof up to a maximum of $10,000, and that the vested assets remaining after this partial return program be devoted to the compensation of American nationals who have unsatisfied World War II damage claims against former enemy countries.

The Bureau of the Budget has advised that there is no objection to the submission of this report.

Sincerely,

WILLIAM P. ROGERS, Deputy Attorney General.

*See p. 1579.

The CHAIRMAN. Mr. Leon M. Siler, the legislative officer of the Treasury Department, was advised of this hearing also, and no response has been received from him concerning an appearance.

I understand that Dr. George S. Long is going to be our first witness. Dr. LONG. Yes, sir.

The CHAIRMAN. Dr. Long, we will be glad to hear you.

STATEMENT OF HON. GEORGE S. LONG, REPRESENTATIVE IN CONGRESS FROM THE EIGHTH DISTRICT OF THE STATE OF LOUISIANA

Dr. LONG. Mr. Chairman and members of the subcommittee, I must confess that I am not too familiar with the bill. I have read it and have given it some thought, and I have discussed it with my friend Dorn, and I have made up my mind that it is good legislation, and I want to go along with the author in recommending this bill to the Congress.

That is about all I have to say. I cannot see why we should not feel that we are obligated to take care of a veteran's children, that we have been responsible for denying them the privilege of having their father to take care of them, and that he has made the sacrifice for the Government.

I see no reason why we should not take care of the children. For that reason, I am in favor of the bill.

The CHAIRMAN. Are there any questions?

Mrs. DWYER. No, Mr. Chairman, I have no questions.

Mr. WHITENER. I have no questions at this time.

Mr. DORN. Thank you, sir.

The CHAIRMAN. Thank you for coming, Dr. Long.

The next witnesses we have this morning are from the Veterans' Administration. Mr. Daley, will you identify yourself and those accompanying you for the record.

STATEMENT OF T. F. DALEY, ASSOCIATE GENERAL COUNSEL FOR LEGISLATION, VETERANS' ADMINISTRATION, ACCOMPANIED BY SAM H. COILE, DIRECTOR OF VOCATIONAL AND REHABILITATION SERVICE, VETERANS' ADMINISTRATION; AND A. T. BRONOUGH, LEGISLATIVE ATTORNEY, VETERANS' ADMINISTRATION

Mr. DALEY. Mr. Chairman, with your permission, I will present the report of the Administrator of Veterans' Affairs to the committee. The CHAIRMAN. Go right ahead. We are glad to have you. Mr. DALEY. This proposal, H. R. 5930, would extend educational assistance to the children of persons who have a total disability which is permanent in nature resulting from a disease or injury incurred or aggravated in line of duty in active service in the Armed Forces during World War I, World War II, or the Korean conflict on the same terms as it is now provided the children of persons who died from injuries or disease so caused.

The benefit proposed to be extended would take the form of a monetary educational assistance allowance while pursuing a program of education or special restorative training in those cases where a manifest

93450-57- -2

physical or mental disability handicaps such a child in the pursuit of a program of education.

The bill would be a direct amendment of the War Orphans' Educational Assistance Act, and, hence, the educational assistance would be afforded in accordance with the terms of the act.

Section 4 of the bill, however, provides a novel method of financing the program in that a fund for children of disabled war veterans would be established on the books of the Treasury, to consist of an initial deposit of $100 million from property vested in

sir.

Mr. DORN. Pardon me, Mr. Daley. What method did you call that? Mr. DALEY. It provides a novel method of financing the program,

Mr. DORN. Thank you.

Mr. DALEY. Section 4 of the bill, however, provides a novel method of financing the program in that a fund for children of disabled war veterans would be established on the books of the Treasury, to consist of an initial deposit of $100 million from property vested in or transferred to the Attorney General under the Trading With the Enemy Act, to be augmented by all sums covered into the Treasury under section 39 of that act after the date of enactment of the bill.

It is assumed that the committee will look to the Attorney General and the Secretary of the Treasury for information and comments. with respect to this method of financing the proposed benefit.

The War Orphans' Educational Assistance Act of 1956 was a recent expansion of what had theretofore been regarded as the proper scope of the Federal obligation in assisting dependents of deceased war

veterans.

Previously, the Government sought to fulfill its obligations in this regard through a well-established program of monetary benefits in the form of death compensation. While under veterans' laws a person is regarded as ceasing to be a child on attaining the age of 18 years, death compensation is continued for children between the ages of 18 and 21 who are attending approved schools.

With respect to persons disabled as the result of their military service, the Government has, with limited exceptions, sought to provide assistance through a system of periodic monetary payments rather than attempting to provide necessary aid in kind.

The amount of the disability compensation is generally geared to the degree of disablement. However, veterans whose service-connected disabilities are rated not less than 50 percent are entitled under Public Law 877, 80th Congress, as amended, to additional compensation where they have dependents, including wife, children, and dependent parents.

Like death compensation, additional compensation under Public Law 877 is ordinarily only payable on account of an unmarried child under 18 years of age. However, special provision is made for the continuation of such additional compensation for children between the ages of 18 and 21 who are attending school.

H. R. 5930 would depart from this principle and would afford children of permanently and totally disabled veterans assistance in obtaining an education through a specific program.

Moreover, the quantum of the benefit under the War Orphans' Educational Assistance Act is very substantially greater than the amounts now available to such children through the continuation during school

attendance of the additional compensation payable under Public Law 877.

For example, Public Law 877 provides for additional compensation of $14 a month in the case of a severely disabled veteran with one child but no wife, and an increase of $35 per month in the case of such a veteran with three or more children but no wife.

That, of course, refers to the additional allowance and not to the basic allowance.

Contrasted with these amounts, the War Orphans' Educational Assistance Act provides for payments of as much as $110 per month on account of each eligible child pursuing a program of education.

The hearings before the House Committee on Veterans' Affairs on March 15 and 19, 1956, on H. R. 9824, 84th Congress, and other bills to provide educational assistance to the children of persons who died during World War II and the Korean conflict, included consideration of a bill, H. R. 9392, to extend such a benefit to the children of persons permanently and totally disabled as the result of service during those periods.

Moreover, the printed record of the hearing shows that some discussion took place with respect to the question of including this lastmentioned category of children within the class of beneficiaries eligible under the bill which became the War Orphans' Educational Assistance Act.

H. R. 9824, both as reported by the committee and as enacted as the War Orphans' Educational Assistance Act of 1956, however, confined the new benefit to children of deceased war veterans.

The bill, therefore, poses an important question of national policy concerning the proper scope of the Government's obligation to children of disabled veterans and the extent that the Government should, or, for that matter, is able to, extend its bounty beyond the area of the obligations which have been traditionally recognized.

As heretofore noted, compensation for disabled living veterans has generally been predicated upon the concept that the rate of compensation should chiefly reflect the degree of disablement, although the additional amounts provided by Public Law 877 afford a differential based on dependency.

The committee will undoubtedly consider in its review of the proposal contained in H. R. 5930 that affording a specific benefit of this nature for the designated beneficiaries will undoubtedly create pressure for similar treatment for the survivors or dependents of other groups, as, for example, for the children of servicemen who were severely disabled as a result of their service, but who are not rated totally and permanently disabled.

Gradual extension of educational assistance to new classes of beneficiaries conceivably could lead to the eventual proposal that children of any disabled veteran be provided education under the War Orphans' Educational Assistance Act, no matter how slight his disability was. While such a result might seem to be farfetched, each intermediate step would not seem unreasonable since the equities distinguishing any group provided the benefit from some excluded group would be so blurred that any line of demarcation would be more or less arbitrary. The precedential aspects of the measure are, therefore, probably of equal or greater importance in this instance than the immediate effect of the bill.

It should be noted that the criteria, "total disability, permanent in nature," will require adjudication on an individual basis. While under the 1925 rating schedule disabilities of veterans were rated either on a temporary or a permanent basis, in the subsequent 1933 and 1945 rating schedule disability is evaluated on average impairment of earning capacity, and no differentiation is made between permanent and temporary disabilities.

Hence, it would be necessary to make a determination in the case of each application from a child of a totally disabled veteran whether there existed permanency of such condition.

As a purely technical comment, Mr. Chairman, attention is invited to the fact that the phrase "education and training allowances," lines 3 and 4, page 3, should be "educational assistance allowances," to conform with the nomenclature of the War Orphans' Educational Assistance Act.

Further, it would appear that the word "total" should be inserted after the phrase "service-connected" in line 12 on page 2 and in line 6 on page 3.

In view of the foregoing observations and comments, particularly the precedential aspects, the Veterans' Administration is unable to recommend favorable consideration of H. R. 5930 by your committee.

It is extremely difficult to make a precise estimate of the cost which might accrue under the proposal since information concerning the proportion of the totally disabled whose disabilities would be deemed to be permanent in nature is not available at this time.

Also, children of veterans who are not now rated totally disabled may become eligible at such time as their parent is rated totally disabled, and many children as yet unborn will also become eligible for training at some time in the future.

On the rolls of the Veterans' Administration there are approximately one-half as many children of veterans rated totally disabled as a result of war service as there are children of veterans who died from service-connected causes.

It appears that the cost, in all likelihood, may therefore approximate one-half of the amounts expected to be expended under the War Orphans' Educational Assistance Act under existing provisions of law.

On the basis of the presumption that the cost of the War Orphans' Educational Assistance Act program would be increased by "onehalf" if H. R. 5930 were to be enacted, it is estimated that the additional expenditures required in the next 5 years would probably not exceed $25 million.

These estimates are predicated on the assumption that two-thirds of the children eligible under the proposal would avail themselves of training benefits and that they would train on the average for slightly less than 2 years.

Administrative costs would probably amount to only a small percentage of the foregoing amount and would extend over a number of years.

Mr. Chairman, we have received advice from the Bureau of the Budget that there is no objection to the submission of this report to your committee, and that the Bureau of the Budget concurs in the foregoing views of the Veterans' Administration.