during the fiscal year 1939 a total of 83,828 term insurance and 1,418 automatic insurance death awards will terminate. This accounts to a large extent for the drastic reduction in estimated expenditures for 1939. The peak load has been reached and expenditures should decline further from year to year in the absence of subsequent liberalizing amendatory legislation.

Summarizing the actual and estimated expenditures during the fiscal years 1937, 1938. and 1939 by major purposes the following tabulation clearly illustrates the trend of payments and the basis for formulation of the 1939 estimate:

In brief explanation of the major purposes shown in the foregoing tabulation, it may be stated that "Disability awards" are the monthly disbursements made directly to those veterans who became permanently and totally disabled while carrying this form of insurance, and such monthly payments are determined on the basis of $5.75 per month for each $1,000 of such insurance carried at the time the disability was incurred.

"Death awards" are the monthly disbursements to beneficiaries of deceased veterans, determined at the rate of $5.75 per month for each $1,000 of such insurance carried and in force at the time of death. "Lump sum payments (compromise or litigation)" is an expenditure resulting from a compromise effected between the veteran or his legal representative and the Government concerning the amount payable on a claim for insurance benefits where the veteran has alleged permanent and total disability during the period in which his war-risk insurance policy was in force. The first report on claims of this type was received in February 1934 under the authority of the act of June 16, 1933 (Public, No. 78, 73d Cong.). As of June 30, 1936, the Department of Justice had effected compromises in 467 cases. During the fiscal years 1936 and 1937 the rate of lump-sum payments per 1,000 active disability awards for term insurance approximated 1.2. Applying this rate to the estimated number of active disability awards for the fiscal years 1938 and 1939, it is indicated that 184 and 180 lump-sum disability awards will be paid, respectively. The average disbursement for lump-sum disability awards during the above period was $3,861.12. This average has been used for the purpose of this estimate for the fiscal years 1938 and 1939.

"Lump-sum payments (beneficiaries)" are those disbursements made to the estates of deceased veterans for the commuted value of the remaining installments upon the death of the named or recipient beneficiary. Upon the death of the named or recipient beneficiary it is provided that the remaining unpaid installments due under the contract of insurance shall be commuted to exclude unearned interest to date and paid in a lump sum to the estate of the deceased veteran

for distribution under the law of the estate of residence of the veteran at the time of his death.

"Transfers to Government life insurance trust fund" are those payments made from this appropriation to the trust fund specified to meet obligations sustained by that fund incident to the extra hazards of military or naval service of persons so engaged while protected by Government life policies.

"Refunds" represent the disbursements made in returning to the veteran any premiums paid by him through dates which are later found to be subsequent to actual proof of permanent and total disability which matured the policy.

The attention of the committee is now directed to chart No. 2 under the title "Military and naval insurance" in the books before you. That statement shows the actual disbursements for the fiscal years 1931 through 1937 and the estimated disbursements for the fiscal years 1938 and 1939 by months, number of beneficiaries, and types of payments. With your permission I will insert the statement in the record at this point.

ADJUSTED SERVICE AND DEPENDENT PAY

Mr. WOODRUM. Your next item is "Adjusted service and dependent pay," as follows:

Adjusted service and dependent pay: For payment of adjusted-service credits of not more than $50 each and the quarterly installments due to dependents of deceased veterans, as provided in the Act of May 19, 1924, as amended (38 U. S. C. 631-632, 661-670; U. S. C., Supp. I, secs. 662-664), $250,000, to be immediately available and to remain available until expended.

General HINES. The next item of appropriation is "Adjusted service and dependent pay," for which an appropriation in the amount of $250,000 is requested for 1939. This appropriation covers payments of the amounts due under the World War Adjusted Compensation Act in cases where such benefits are not covered by the issuance of an adjustedservice certificate. Sections 401, 601, 603, and 608 of the act specify the types of payments to be made from this appropriation.

The amounts appropriated under this title are continuing appropriations and there remained available as of June 30, 1937, an unexpended balance of $283,507. This balance together with the $2,000,000 appropriated for 1938 makes a total of $2,283,507 available as of the beginning of the fiscal year 1938.

Due to the uncertainty concerning the number of new claims of this nature to be received, it has been difficult to estimate with any degree of accuracy the amount required under this appropriation for a fiscal year. The Congress recognizing this fact, created this account as a continuing appropriation. In some years rather substantial balances have remained and have made it unnecessary to request an appropriation for the succeeding fiscal year. In other cases funds have been depleted so as to require the submission of supplemental estimates and on two occasions it has been necessary to request authority from the Comptroller General to expend moneys from the adjusted-service certificate fund temporarily until the Congress could act upon supplemental estimates. In the interest of holding appropriations for the fiscal year 1939 to an absolute minimum, the appropriation requested for the fiscal year 1939 has been reduced to the amount of $250,000. To illustrate the fluctuations the following tabulation summarizes expenditures under this appropriation comparatively for the fiscal years 1931 through 1937, with estimated disbursements for the fiscal years 1938 and 1939:

From this tabulation it will be noted that actual awards during the fiscal year 1937 were almost 100 percent greater than awards during the fiscal year 1936, and more than three times greater than the number of awards during the fiscal year 1935. This estimate of $250,000 for 1939 anticipates the filing of no more claims from dependents for amounts involving $50 or more, subsequent to October 1937.

With your permission I will insert a table in the record at this point which summarizes the estimate, showing actual and anticipated monthly expenditures by type of claim from July 1, 1937, through June 30, 1939.

Adjusted-service and dependent pay

[Estimated requirements for the fiscal years 1938 and 1939 (if no new dependents' claims of $50 or over are filed subsequent to Oct. 30, 1937)]

However, for the information of the committee I now invite attention to table No. 3 under the title "Adjusted service and dependent pay" in the books before you, which shows the extension of existing trends through the fiscal years 1938 and 1939. Should these trends continue, it will be necessary to submit a supplemental estimate at a later date.