those who suffered permanent disabilities from disease incurred during World War service this requirement was practically impossible to meet, as no one could say definitely the exact moment of the incurrence of the disease or prove that they were performing some military duty under orders from a superior officer. This strict application of the causative-factor requirement and the ambiguity of the term brought so much criticism that new instructions were issued by the Veterans' Administration on April 10, 1935.

Under the new instructions the use of the causative factor was dropped, and since that time the Veterans' Administration has used the requirement contained in section 10, Public, No. 2, "that the disease or injury or aggravation of disease or injury directly resulted from the performance of military or naval duty." The interpretation and the application of the act under the new instructions was practically as strict as under the causative-factor requirement. The emergency officer under these instructions is required by the Veterans' Administration to prove by a preponderance of evidence that but for the performance of duty his disability would not have reasonably been expected to have arisen. Although he may show by official Army and Navy Department records, or by acceptable affidavit, evidence that his disability did in fact arise during his service in line of duty, and that he was subjected to exposure and required to perform strenuous military duty, his case is still denied.

It is the contention of your committee that it is practically impossible for a person disabled by disease during World War service to prove by a preponderance of evidence that his disability would not have been incurred had he remained in civilian life. The requirement under this bill is that the officer's disability had its incurrence during active war service. Had he been in the Regular Army or Navy he would have been placed on the retired list instead of being discharged and placed on compensation.

Estimates submitted by the Veterans' Administration indicate that the disabilities of practically all those returned to the emergency officers' retired list were directly incurred in combat, or that the officer had considerable combat service. Many of the worst disabilities due to war service, such as tuberculosis, neuropsychiatric, and heart conditions were suffered by those not privileged to serve in combat. In the opinion of your committee, it would be an injustice to require combat incurrence or combat service in order to be returned to the retired list.

There is no new principle involved in this legislation. The principle of retirement for disabled emergency officers was established by the passage of the act of May 24, 1928, and continued under section 10, Public, No. 2.

Your committee believes that this bill should not be classed as new legislation, but as an interpretative amendment to the present law to carry out the intent of Congress when enacting section 10, Public, No. 2.

Attached hereto and made a part of the report is a letter from the Veterans' Administration.

VETERANS' ADMINISTRATION,

Hon. LISTER HILL,

Chairman, Committee on Military Affairs,

Washington, November 11, 1937.

House of Representatives, Washington, D. C.

MY DEAR MR. HILL. Further reference is made to the request of your committee for a report on H. R. 8176, Seventy-fifth Congress, a bill providing for continuing retirement pay, under certain conditions, of officers and former officers of the Army, Navy, and Marine Corps of the United States, other than officers of the Regular Army, Navy, or Marine Corps, who incurred physical disability, while in the service of the United States during the World War, and for other purposes. With the exception of the second proviso of section 1 (p. 2 of the bill, lines 12-18), the measure is identical with S. 423, Seventy-fifth Congress, which passed the Senate May 24, 1937, and was referred the following day to your committee. There is enclosed, for your convenience, copy of my report of June 28, 1937, to you relative to S. 423.

Section 1 of H. R. 8176 reads as follows:

"That notwithstanding the provisions of any law of the United States, any person who served as an officer of the Army, Navy, or Marine Corps of the United States during the World War, other than as an officer of the Regular Army, Navy, or Marine Corps during the World War, who made valid application for retirement under the provisions of Public Law Numbered 506, Seventieth Congress, enacted May 24, 1928 (U. S. C., Supp. VII, title 38, secs. 581 and 582), and who prior to the passage of this Act has been granted retirement with pay, shall be entitled to continue to receive retirement pay at the monthly rate paid him on March 19, 1933, if the disability for which he has been retired resulted from disease or injury or aggravation of a preexisting disease or injury incurred in such service in line of duty and directly resulting from the performance of duty: Provided, That such person entered active service between April 6, 1917, and November 11, 1918, and served as an officer prior to July 2, 1921: Provided further, That where the disability is now or hereafter determined to be directly incurred in or aggravated during active service, without benefit of any statutory or regulatory presumption of any kind, it will be considered to have directly resulted from performance of duty, unless otherwise shown by official record, or clear and unmistakable evidence.'

The first proviso of this section, as above quoted (lines 10-12, p. 2 of the bill), eliminates the requirement of the present law that the emergency officer must have been commissioned prior to November 11, 1918, or prior to April 1, 1920, if he served in Russia, and extends these dates to July 2, 1921. It would also permit of the payment of claims wherein the disability was incurred during a period of service which did not commence until after November 11, 1918.

The second proviso of the section would materially change the present definition of the phrase "directly resulting from the performance of duty." It would make direct incurrence in or aggravation during active service of a disability equivalent to one "directly resulting from the performance of duty" in those cases where such a finding is given without benefit of any statutory or regulatory presumption of any kind, unless a different conclusion would be warranted upon the basis of official record or clear and unmistakable evidence. As already suggested, the language of this proviso differs from the corresponding portion of S. 423. However, based upon experience and the continuity of uniform adjudication under established precedents, it is the opinion of those now charged with the adjudication of emergency officers' claims that notwithstanding the change in language, the effect of the proviso as contained in H. R. 8176 would be practically the same as the corresponding provision of S. 423.

With respect to the term "regulatory presumption," used in the second proviso of H. R. 8176, the several regulations heretofore issued regarding service connection for disabilities were based upon sound medical judgment. For this reason

it is believed that, in general, eligibility can be established under the proviso of the bill on a factual basis without benefit of regulation. However, it is probable that some, but not many, cases would be deniable by the inclusion of the word "regulatory" in the proviso, because the broad principles of these regulations, even though based upon sound medical judgment, might not cover all claims when adjudicated on an individual factual basis. In advance of actual adjudication, it would be impossible to estimate the number of cases that might be denied by reason of the word "regulatory" appearing in the proviso.

Section 2 of the bill reads as follows:

"Payment of emergency officers' retirement pay shall be effective from the date of enactment of this Act in all cases where entitlement thereto is authorized solely by the provisions of this Act."

Under the terms of this section benefits provided by the proposed act would be payable only from date of enactment except in a few cases where claims of former retired officers now pending on appeal may ultimately be decided in their favor. In these cases, in accordance with established procedure, payments would be authorized retroactively from the date the officer's name was removed from the list of retired emergency officers.

Section 3 of the bill would amend section 212 of Public, No. 212, Seventysecond Congress (5 U. S. C. 59a), so as to make it read as follows, the proposed amendment being in italic:

"SEC. 212. (a) After the date of the enactment of this Act, no person holding a civilian office or position, appointive or elective, under the United States Government or the municipal government of the District of Columbia or under any corporation, the majority of the stock of which is owned by the United States, shall be entitled, during the period of such incumbency, to retired pay from the United States for or on account of services as a commissioned officer in any of the services mentioned in th Pay Adjustment Act of 1922 (U. S. C., title 37), at a rate in excess of an amount which, when combined with the annual rate of compensation from such civilian office or position, makes the total rate from both sources more than $3,000; and when the retired pay amounts to or exceeds the rate of $3,000 per annum such person shall be entitled to the pay of the civilian office or position or the retired pay, whichever he may elect. As used in this section, the term 'retired pay' shall be construed to include credits for all service that lawfully may enter into the computation thereof.

"(b) This section shall not apply to any person whose retired pay plus civilian pay amounts to less than $3,000: Provided, That this section shall not apply to regular or emergency commissioned officers retired for disability incurred in combat with an enemy of the United States or for disabilities resulting from an explosion of an instrumentality of war in line of duty during an enlistment or employment as provided in Veterans Regulation Numbered 1 (a), part I, paragraph I."

The effect of this proposed amendment would be to include those officers retired on account of disabilities resulting from an explosion of an instrumentality of war in the same category as those whose retirement is based upon disability incurred in combat with an enemy of the United States. An exception pertaining to disabilities resulting from an explosion of an instrumentality of war in line of duty during an enlistment or employment, as provided in veterans' regulation No. 1 (a), as amended, part I, paragraph I, was contained in veterans' regulation No. 10, paragraph X, but this provision was canceled by Public, No. 357, Seventyfifth Congress, approved August 25, 1937, after the passage of S. 423 by the United States Senate. (See attached report.)

As suggested in my report on S. 423, since section 3 also applies to retired officers of the Regular Army and Navy, as well as emergency officers, it may be desired to obtain the views of the War and Navy Departments on this provision.

With regard to the matter of cost, it is estimated that approximately 3,194 emergency officers who are not now on the rolls would be entitled to retirement pay at an additional annual cost of approximately $3,696,000. In making this estimate the presumptive cases which were found at the time of the review are not included in those which would be entitled. This estimate may be considered a maximum, since, as previously suggested, there would probably be some cases which would be denied benefits of the proposed law by reason of the inclusion of the word "regulatory" in the second proviso of section Ï.

Section 2, as already indicated, provides that retirement pay shall be effective from the date of enactment of the proposed act in all cases where entitlement thereto is authorized solely by the provisions of the proposed act. It is understood that those cases now pending before the Board of Veterans' Appeals, if allowed, would be paid retroactively to July 1, 1933. Since this is being done under the present laws, these retroactive payments cannot be attributed to this bill.

Section 3 provides that section 212 of Public Law No. 212, Seventy-second Congress, shall be amended so that this section shall not apply to persons suffering from disabilities resulting from an explosion of an instrumentality of war in line of duty. A survey of the cases entitled to retirement pay which have been partially or completely suspended because of section 212 of Public Law No. 212 indicates that only one or two cases may be affected by this section, and therefore the cost can be considered negligible.

H. Repts., 75-3, vol. 1-8

With regard to the merits of sections 1 and 2 of the bill, it is believed that the provisions of the present law are sufficiently liberal with reference to the retirement of emergency officers and adequately provide for a group on account of whom Congress originally intended to extend this benefit. There were, as of October 1. 1937, 1,874 former emergency officers entitled to receive retirement pay under the provisions of existing law. The Veterans' Administration is aware of no cogent reason for the enlargement of the class now entitled to these benefits or for liberalization of the criteria now in effect.

It is the recommendation of the Veterans' Administration, therefore, that the proposed measure be not favorably acted upon by your committee.

Advice has been received from the Acting Director, Bureau of the Budget, that the proposed legislation would not be in accord with the program of the President. Very truly yours, FRANK T. HINES, Administrator.

O

NATIONAL HOUSING ACT AMENDMENTS OF 1937

DECEMBER 16, 1937.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. STEAGALL, from the Committee on Banking and Currency, submitted the following

REPORT

[To accompany H. R. 8730]

The Committee on Banking and Currency, to whom was referred the bill (H. R. 8730) to amend the National Housing Act, and for other purposes, report it back to the House without amendment and recommend that the bill do pass.

GENERAL STATEMENT

The bill (H. R. 8730) gives effect to the recommendation of the Administration that legislation be enacted at this session to stimulate the construction and financing of housing throughout the country, in view of the fact that in this branch of industry there exists the best field for bringing about general economic recovery through the medium of private capital and private endeavor.

The construction of housing facilities has not kept pace with either the needs or growth of the population or with recovery in other fields, and this fact has had a retarding effect on the recovery of all industry and trade. There is a definite shortage of housing in the country, particularly of houses which can be purchased or rented at a price within the means of families of moderate means.

With these general purposes in view the bill sets up a mechanism which will encourage private financing of new individual and multifamily houses under the insurance plan of the National Housing Act by liberalizing and broadening the act so as to extend its operations to transactions not now within its scope and to make the funds of individual and institutional investors more easily available for mortgage financing.

The Federal Housing Administration to date has insured mortgages under title II of the National Housing Act in excess of $1,000,000,000 with only 47 foreclosures, and has insured $640,000,000 of loans under