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SOLDIERS' ADJUSTED COMPENSATION.

MONDAY, MAY 29, 1922.

UNITED STATES SENATE, SUBCOMMITTEE OF COMMITTEE ON FINANCE, Washington, D. C.

The subcommittee met pursuant to call at 2.30 o'clock p. m., in the committee room, Capitol, Senator McLean of Connecticut presiding.

Present: Senators McLean (chairman), Curtis, Sutherland.

Present, also, Senator McNary, of Oregon, Congressmen Sinnott, of Oregon, Smith of Idaho, and White of Kansas.

Senator MCLEAN. Mr. Mondell, you are interested, I believe, in Title 8 of H. R. 10874, the bonus bill, so called, which reads as follows:

[H. R. 10874, Sixty-seventh Congress, second session.]

AN ACT To provide adjusted compensation for veterans of the World War, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SEC. 801. (a) There is hereby established a board to be known as the "National Veterans' Settlement Board" (hereinafter in this title called the "board") and to be composed of five members as follows:

(1) The Secretary of the Interior (hereinafter in this title called the "Secretary”), and

(2) Four members to be appointed by the President by and with the advice and consent of the Senate.

(b) No veteran retired for age or longevity of service from active service in the military or naval forces shall be eligible for appointment to, or remain eligible for membership upon, the board. Any vacancy in the office of an appointed member shall be filled in the same manner and under the same limitations as in the case of the original appointment.

(c) The Secretary shall be the executive and administrative officer to carry out the plans and purposes adopted by the board under the provisions of Title VII and of this title. The members of the board, except the Secretary, shall receive an annual salary of $7,500. Of the members appointed to the board in the first instance, one shall be appointed for a term of two years, one for three years, one for four years, and one for five years. Their successors shall hold office for terms of five years; except that any member appointed to fill a vacancy shall be appointed only for the unexpired term of the member whom he succeeds.

ESTABLISHMENT OF PROJECTS.

SEC. 892. The board is hereby authorized to establish veteran settlement projects (hereinafter in this title called "projects") for the reclamation and settlement of lands by means of irrigation, drainage, or other manner or method of development and improvement thereof, including the building of necessary public roads within the projects. Projects shall be selected by the board with a view to the development of one or more projects in each of the several States where the establishment of a project is feasible.

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SEC. 803. (a) The board may by gift, purchase, deed in trust, or otherwise acquire lands suitable for any project; but no project shall be finally selected, and no lands shall be acquired by purchase, unless the price and other conditions of acquisition have been submitted to and approved by (1) the governor of the State in which the lands are located, (2) as to price only, a land bank appraiser to be designated by the Federal Farm Loan Board, and (3) the board. If the governor of the State fails to signify his approval or disapproval within such time as the board by regulation shall determine, the land commissioner, or if there is in the State no official of such title, then the agency which under the laws of the State is authorized to perform the functions ordinarily exercised by a land commissioner, may act in lieu of the governor. (b) In case any project includes privately owned land, no construction work shall be commenced upon the project until the owners of all such land in the project have each conveyed or agreed to convey to the United States title to all land owned by him in excess of a farm unit as established for thejproject under the provisions of section

806.

(c) The Secretary (1) may withdraw from location, sale, settlement, entry, or other disposition and place under the control of the board such unappropriated public lands as he deems necessary for any project, and (2) shall restore to public entry lands. so withdrawn, if subsequently the board finds that such lands are not so required.

(d) The board may in its discretion contract with any irrigation or drainage district or other public corporation organized under the laws of the State in which the project is located to establish, develop, improve, and otherwise cooperate (in accordance with the provisions of this title) in the execution of, and the administration of the affairs of, any project comprising only the lands of such district or corporation.

COOPERATION WITH FEDERAL AND STATE AGENCIES.

SEC. 804. The board may, in executing the provisions of this title

(a) Make use of, cooperate with, and allot moneys appropriated for its use to, any existing agency of the Federal Government which agrees to act as the agent of the board. Such agency is hereby authorized, within the limits of the moneys allotted it and under the direction of the board, to perform work in connection with any project.

(b) Whenever a State provides funds to be expended by the board in the establishment, development, and improvement of any project within the State, the board may contract with the State, or any agency thereof designated by the governor, to cooperate with the board, to such extent as the board deems advisable, in the work in connection with the project. The board may further establish a branch office in the State to administer matters arising in connection with projects in the State.

(c) Whenever a State provides not less than 25 per centum of the amount of the funds which are, in the opinion of the board, necessary to be expended by it in the establishment, development, and improvement of any project within the State, the board shall authorize the State, or any agency thereof designated by the governor, to undertake, subject to the general supervision of the board, (1) the selection, acquisition, and subdivision of lands for, and the improvement of farms within, any project, and (2) the development thereof after the project is open to settlement.

SEC. 805. So far as practicable, veterans shall be employed and their services utilized in the administrative and field work necessary to the establishment and development of any project by the board and all Federal agencies cooperating therewith. All contracts or other agreements of the board with any cooperating State or agency thereof shall contain a like stipulation. At the earliest practicable date each veteran so employed upon a project shall be allowed to select and shall be allotted, as hereinafter in this title provided, a farm unit upon which he may construct a dwelling and make other improvements.

ALLOTMENT AND SALE OF LANDS.

SEC. 806. (a) The board shall establish for each project or portion thereof (1) farm units of an acreage sufficient, in the opinion of the board, for cultivation by and the support of a family, and (2) farm worker's units of a small acreage sufficient, in the opinion of the board, for part-time cultivation by a farm worker's family.

(b) The board may set apart and reserve tracts within any project for use free from all charge for community and other public purposes, but the title to such lands shall remain in the United States. Whenever any such tract fails to be used for the purpose for which it was set apart and reserved, the board shall, after due notice and hearing, Such tract shall thereupon resume declare the tract forfeited to the United States.

its original status.

(c) The board may establish town sites within any project and develop and sell lots therein, to veterans and repatriates only, under such regulations and upon such terms as it shall prescribe.

SEC. 807. (a) When used in this title, the term "repatriate" includes (1) any citizen of the United States who has served with the military or naval forces of any nation allied against the German Government or its allies without loss of citizenship, and (2) any former citizen of the United States who has so served with loss of such citizenship but has since been repatriated; except that such term shall not include a veteran or any individual who was separated from such forces under other than honorable conditions.

(b) Whenever in the opinion of the board farm units or farm workers' units within any project are available for settlement, the board shall give public notice and description thereof, together with a statement of the construction charges and other conditions incident thereto, and shall mail individual notices to any veteran whose name has been certified to the board under the provisions of section 303. The board shall allot a farm unit or a farm workers' unit to any such veteran or repatriate who applies therefor in such manner as the board shall by regulation prescribe. As between applicants, preference in making allotments shall be given, first, to a veteran who has been employed upon and who has rendered substantial service in the development of any project; and, second, to a veteran or repatriate, who, in the opinion of the board, is least likely to fail in his enterprise or to cause the United States loss.

(c) The board shall allot farm units, farm workers' units, and town lots to veterans and repatriates only.

SEC. 808. (a) The cost of construction, including the purchase price of any lands acquired for the project, but excluding administrative expenses and the expenses of maintaining general offices and exercising general supervision over projects, shall be apportioned equitably among the farm units, farm workers' units, town lots, and other tracts within the project in proportion to the selling value of each unit, lot, or tract; and the total sale price of all lands within the project shall be fixed with a view of repaying the total of such construction cost of the project.

(b) Each allottee of a farm unit or farm worker's unit shall pay to the board such price as the board shall fix for the unit in pursuance of the provisions of subdivision (a) of this section; except that in case the allottee is a veteran there shall be deducted from such price the amount of his adjusted service credit.

(c) A veteran or repatriate may at his option, in lieu of payment in full at the time of entry, pay all balances due upon the purchase price for his unit upon an amortization plan by means of a fixed number of annual installments sufficient to cover (1) interest on the unpaid principal at the rate of 5 per cent per annum, and (2) such amount of the principal as will extinguish the debt within an agreed period not exceeding twenty-five years from the making of the contract of purchase. In the case of a veteran, the installments shall be so arranged that he will not be required to pay any installment until two years after the making of the contract of purchase. The board may in its discretion, whenever it is of the opinion that any emergency has caused default in the payment of any installment of the veteran or repatriate, postpone the payment of such installment until such date as it deems expedient. Such postponed payments shall continue to bear interest on the unpaid principal at the rate of 5 per cent per annum from the date of the contract of purchase. The board shall make such regulations as to residence upon, and use or cultivation of, units by a veteran or repatriate, as in the opinion of the board will carry out the purpose of making the unit his permanent home.

SEC. 809. A patent or deed, as the case demands, shall immediately be issued to a purchaser who has paid the full price for his unit, and may be issued at any time more than five years after the date of purchase to any purchaser under the amortization plan who has met all payments then due from him to the board and has observed all conditions prescribed by regulations issued under the provisions of subdivision (c) of section 808. Each such patent or deed shall expressly reserve to the United States a prior lien on the land patented or deeded, superior to all other liens, claims, or demands whatsoever, for the repayment of all sums due or to become due to the board.

SEC. 810. (a) If the veteran dies after making application in accordance with the provisions of section 302 for land settlement aid and before having entered into a contract of purchase under section 808, the amount of his adjusted service credit shall be paid by the board to his estate, but no such payment shall be made if the veteran has beeв separated from the military or naval forces under other than honorable conditions or discharged therefrom on account of his alienage.

(b) If the veteran or repatriate dies, previous to the completion of his contract of purchase, the successor by law to his interest in the land, if a widow or heir at law,

may assume the contract of purchase. If the successor is other than a widow or heir at law, the balance due the board under the contract of purchase shall be due immediately and shall be paid the board within such time after the death of the veteran as the board shall by regulation prescribe.

SEC. 811. No lands within any project shall in any event become liable to the satisfaction of any debt contracted prior to the issue of the deed or patent therefor. No transfer, assignment, mortgage, or lease of the interest of any purchaser of a unit shall, unless approved by the board, be valid previous to the issue of the deed or patent for the land, or within five years after the date of purchase.

SEC. 812. Prior to the issue of a deed or patent, as the case may be, for any unit, lot, or tract within a project, such unit, lot, or tract shall be subject to taxation by any State, or political subdivision thereof, but only upon the appraised value of the owner's interest in the land and improvements thereon. If the owner fails to pay any such tax or assessment, the board is authorized to pay such tax or assessment and to include the amount of the payment, together with interest and penalties at the rate provided by law for delinquent taxes in the State in which the land is located, in the installments payable under the contract of purchase.

SEC. 813. Upon the default of any payment due to the board under, or upon the violation of, the provisions of subdivision (c) of section 808, or of section 810, 811, or 812, the interest of the purchaser in the unit shall revert to the United States free of all encumbrances, but subject to the right of the defaulting debtor, or any mortgagee, lien holder, judgment creditor, or subsequent purchaser, to redeem the land, within one year after the board gives notice of such default, by payment of all moneys due with interest at 8 per centum per annum from the date of default, and costs. The board, at its option, may cause the land to be sold at any time after such failure to redeem. From the proceeds of the sale the board shall retain all moneys due, with interest as provided, and costs. The balance of the proceeds, if any, shall be the property of the defaulting debtor or his assignee. In the case of sale after failure to redeem under this section, the board is authorized to bid in such land at not more than the amount in default, including interest and costs.

SEC. 814. In case a veteran has entered upon land reclaimed under the reclamation law, the board shall, upon application of the veteran, pay to the reclamation fund the amount of the adjusted service credit of the veteran, and the Secretary of the Interior shall thereupon credit such sum to the amount payable to the fund by the veteran.

RECEIPTS FROM PROJECTS.

SEC. 815. All moneys received by the board as payments in respect to lands within any project shall be covered into the Treasury of the United States as miscellaneous receipts: except that from such receipts shall be deducted the amounts required to make such repayment or reimbursement to any State or designated agency thereof, or to any district or other public corporation, as is necessary to carry into effect the provisions of subdivision (d) of section 803 and of subdivisions (b) and (c) of section

804.

APPLICABILITY OF RECLAMATION LAW.

SEC. 816. The board shall, so far as possible, in executing the provisions of this title, make use of existing agencies in the Department of the Interior and comply with the reclamation law in so far as such law is applicable and not inconsistent with the provisions of this title. Such reclamation law shall, for the purposes of this title, be deemed applicable to the reclamation of lands by drainage, or by any other manner or method, as well as to reclamation by irrigation. This section shall not be construed to give the board any control over the disposition of moneys in the reclamation fund.

EFFECTIVE DATE.

SEC. 817. Sections 802 to 816, both inclusive, shall take effect on January 1, 1923. Senator MCLEAN. You may proceed.

STATEMENT OF HON. FRANK W. MONDELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WYOMING.

Mr. MONDELL. Mr. Chairman and gentlemen, I wish to thank you for the opportunity of appearing before you to urge the adoption of a reclamation land settlement, and farm-home development provision on the adjusted compensation bill, or, as it is known, the bonus bill.

The very earliest proposal of aid and assistance to the returning soldier, not only the soldier who may have been somewhat injured, but the soldier who came home well and hearty, was along the line of assistance to enable him to secure a home on the land. Many of those men are without any considerable means, and we all know that it is difficult for a man starting without some savings to acquire ownership and proprietorship of an improved, developed farm home.

Our people from the very beginning of our history, or our young people at least, have, in large measure, obtained their homes on farms by going upon the raw lands and developing them. By so doing they have been enabled by their own efforts and their own labor to add to the lands the improvements necessary to make them productive. They have, by reason of their productive residence upon the lands and the improvements made upon the lands and in the community by themselves and their neighbors, become the beneficiaries of the increasing increment of value that came with development; and by securing lands in their more or less raw state and aiding in their development, men have been able to secure valuable farm homes who would have found it difficult to secure such homes had they, without previous savings, attempted to secure them through purchase.

Our returning soldiers, from the very beginning of the Government, have turned their faces toward the farms, toward the new lands, the raw lands.

It was the soldiers of the Revolutionary War who very largely blazed the way, or at least broadened the trails and roads across the Alleghenies, who settled the country along the Ohio. It was the soldiers of the Civil War who largely settled and developed the prairie States.

We have reached a point now where those opportunities no longer exist. The area of free lands or cheap lands that can be made productive by merely turning the sod is practically exhausted. The returning soldier of the World War looking to a farm home must either become a renter, must, as some few of them have, avail himself of very limited opportunities now offered under irrigation development and on the unirrigated lands of the West, or he must begin an uphill effort to secure a home by purchasing a farm already partly developed. It is very difficult for him to do that, or even to attempt to do it, without some considerable means; and if he does attempt it without considerable savings he is very likely to fail in his efforts.

In view of this changed situation, some of us who have had to do with new settlement and development and pioneering the land for a great many years began immediately after the close of the war and the signing of the armistice to consult together with a view to working out some plan whereby we might, in a measure, give to the returning soldier of the World War something like the opportunities that the returning soldiers of other wars have had.

With that object in view there were quite a number of meetings held in the office of the Secretary of the Interior, Hon. Franklin K. Lane, and elsewhere, and out of those meetings came a bill which was introduced during the Sixty-sixth Congress as H. R. 487, to provide employment and rural homes for those who served with the military and naval forces, through the reclamation of land. It came to be known as the soldier settlement act and was sometimes referred to as the Lane-Mondell bill.

That bill laid down a broad and comprehensive plan of land development applicable to practically all sections of the Union. Under that bill the lands that were to be reclaimed for the benefit of the soldier and by the soldiers in the far west would be reclaimed by irrigation reclamation; in the South and Northwest-some sections of the Northwest-by a combination of drainage, clearing, and leveling; in the States where certain areas have never been fully developed and others once developed have been more or less abandoned, by the orderly development and improvement of areas that have never been fully and completely developed for agricultural purposes, or for one reason or another may have been partly or wholly abandoned.

The plan or thought was the establishment throughout the country, for the purpose of furnishing homes for the soldiers, of conditions under which communities of soldiers would have a common interest, a common purpose, in the improvement and development of a considerable area of land to be divided into farms, each to secure such farm area as might be suited to his capacity as a farmer and might please his fancy as a land

owner.

We have seen in the West the wonderful benefits of community development. I do not mean of communal development, but development through individual effort where everyone in the community has a common stake in making the community and the areas of the community productive. The community spirit is established, whereas a single individual going among well-to-do farmers on a tract of land which is not in its original state as alluring as the surrounding acreage, is likely to become discouraged by reason of the fact that he is doing pioneering work while all his neighbors are operating on developed properties. Where, however, everybody in the