Mr. LUDLOW. Are they all in Government-owned installations or are they rented?

Dr. ANDERSON. All are Government-owned except the Neponsit Beach Hospital, which we rent from the city of New York. We have in addition to that, second-class relief stations located in Government buildings, and also we have additional third-class stations in operation in private physicians' offices in which they furnish part-time medical care. That is the extent of our over-all activity.

Mr. LUDLOW. Do you pay for the care of patients in other hospitals? Dr. ANDERSON. Yes; we will hospitalize some people in other Government and private institutions under certain circumstances. For example, a merchant seaman can be hospitalized in any place in the United States on an emergency basis, and the obligation is one of the Public Health Service.

Mr. LUDLOW. How much do you pay for rent for the Neponsit Beach Hospital?

Dr. ANDERSON. I think the total amount is $30,750.

Mr. LUDLOW. Was there not somé proposal to take it over?

Dr. ANDERSON. Not as yet, sir. We have expected that we would need to operate the Neponsit Beach Hospital for the next several years, possibly until some new tuberculosis facilities are built in the New York area.

Mr. TABER. I want to say this, Doctor, that you knew your stuff. Dr. Anderson. Thank you, sir.

Mr. TABER. Whether you have good news or not, you were able to supply us with information.

Dr. ANDERSON. I appreciate that.

DIVISION OF MENTAL HYGIENE

STATEMENT OF DR. ROBERT H. FELIX, CHIEF, DIVISION OF MENTAL HYGIENE, AND M. A. STEPHENS, BUDGET OFFICER, FEDERAL SECURITY AGENCY

NEED FOR ADDITIONAL PERSONNEL

Mr. LUDLOW. In the submission before us there is a request for $95,000 for hospitals and medical care covering 61.7 man-years of service. Is that additional personnel mainly to make up for the 40-hour week?

Dr. FELIX. It is exclusively for that, sir.

Mr. LUDLOW. How many positions are involved in this 61.7 manyears?

Dr. FELIX. One hundred and forty-two employees, broken down as follows-98 at the Public Health Service hospital at Fort Worth and 44 at the Public Health Service hospital at Lexington, Ky. Mr. LUDLOW. Those are narcotic hospitals?

Dr. FELIX. Not exclusively, but those are the two hospitals.

FUNCTION OF MENTAL HYGIENE DIVISION

Mr. LUDLOW. Aside from the operation of these hospitals, what is the general function of the Mental Hygiene Division?

Dr. FELIX. We conduct research in the field of mental health and drug addiction and also provide such assistance and advice as we are

able to the several States with regard to their State mental hospitals and regarding the general question of mental health within the borders of the State.

Mr. LUDLOw. What is the condition of the mental health of the people of the United States, broadly speaking is it improving or retrograding? Are there any new manifestations that would be of interest to us?

Dr. FELIX. It is hard to estimate the incidence of mental disease in the country because there are no data available as to the number of cases. We can only give information with regard to the number of cases in mental hospitals. Now that number does not represent the number of people who probably should be hospitalized. It is governed by the capacity of those hospitals, most of which are now filled to overcapacity. We know that there are many cases of personality disorders and mild neuroses which could and should be treated and which if treated would probably prevent the person from entering a mental hospital.

Mr. LUDLOW. You enter broadly into the field of drug addicts. Dr. FELIX. Yes, sir.

NUMBER OF PATIENTS AT LEXINGTON AND FORT WORTH HOSPITALS

Mr. LUDLOW. How many patients are at Lexington and Fort Worth?

Dr. FELIX. We have roughly 1,050 patients at Lexington and roughly 800 at Fort Worth. I say roughly because the population varies from day to day and by the time the reports reach us, we are several days behind the actual experience.

Mr. LUDLOW. If my memory is correct, those hospitals have been in operation only a relatively short time. I think that Lexington started first.

Dr. FELIX. In 1935, sir.

Mr. LUDLOW. When did Fort Worth open up?

Dr. FELIX. In 1938, sir.

DRUG ADDICTION

Mr. LUDLOW. What has been the result of those hospitals with respect to alleviating drug addiction?

Dr. FELIX. We feel that the results have been quite encouraging. It must be remembered that the drug addict is an individual, who, because of his personality and emotional difficulties, is extremely hard to treat. However, a recent survey has shown that the preponderance of our patients at Lexington Hospital who had been there more than once had not been there more than twice. I say that because there are a few patients who come back and back and back until one begins to see their faces so often that they forget about those who do not come again.

Mr. LUDLOW. Is it your opinion as an expert that drug addicts are curable? If so, what percentage and under what conditions?

Dr. FELIX. Í believe that drug addiction is, broadly speaking, curable. There are many circumstances in an individual case which may complicate it. I would say that if we could have the addicts under care within the first 1 or 2 years after the onset of their addiction we could show not less than a 50-percent recovery rate.

Mr. LUDLOW. When you say recovery, do you mean permanent recovery?

Dr. FELIX. Yes, sir.

PREVALENCE IN THE UNITED STATES

Mr. LUDLOW. Would you say drug addiction is increasing or decreasing in the United States?

Dr. FELIX. At the present time it is lower than it has been in a great number of years. There are a number of factors operating there. One of them is the very excellent protection given our country by the Narcotics Bureau under Commissioner Anslinger. Another, of course, is that many of the areas in the world where opium is produced in quantities has been either devastated or turned to other uses as a result of the war. Another is that many of the avenues used to import illicit drugs-ships, for instance have found it much more profitable to carry legitimate cargoes in their bottoms at the present prevailing prices during the war.

We do feel that we have reached an irreducible minimum with our present facilities.

COMPARISON WITH OTHER COUNTRIES

Mr. LUDLOW. How would you say drug addiction in the United States compares with other major countries?

Dr. FELIX. I would be glad to give you my opinion. Other departments may have information that runs counter to it. I would say that our problem here compares very favorably with other countriesmuch better than many.

Mr. LUDLOW. Summing up here, you do not propose to take on any additional personnel? You simply propose to make up for the loss of the 40-hour workweek?

Dr. FELIX. Yes, sir. This is to provide in a 40-hour workweek what was formerly provided in a 48-hour workweek.

NUMBER OF EMPLOYEES

Mr. TABER. How many employees do you have altogether?

Dr. FELIX. Around 700.

Mr. TABER. How many additional positions are you going to have? Dr. FELIX. A hundred and forty-two.

Mr. STEPHENS. Mathematically that figures 20 percent.

Mr. LUDLOW. Thank you.

FRIDAY, MARCH 1, 1946.

OFFICE OF VOCATIONAL REHABILITATION

STATEMENTS OF MICHAEL J. SHORTLEY, DIRECTOR, OFFICE OF VOCATIONAL REHABILITATION; JOSEPH HUNT, CHIEF, ADMINISTRATIVE STANDARDS DIVISION; AND HERBERT W. BEASER, OFFICE OF THE GENERAL COUNSEL, FEDERAL SECURITY AGENCY

PAYMENTS TO STATES, 1946

Mr. LUDLOW. You represent the Office of Vocational Rehabilitation in the Federal Security Agency?

Mr. SHORTLEY. Yes.

Mr. LUDLOW. We have before us an estimate in House Document 436 for an additional amount for payment to States in 1946 in the sum of $3,435,000. There has been previously appropriated for that purpose in the fiscal year, 1946, $8,258,900.

The object of this estimate presently before us, as I understand it, is to meet the increased cost of the States for the vocational rehabilitation program.

Mr. SHORTLEY. To provide for the expansion of the program.

NEED FOR ADDITIONAL FUNDS

Mr. LUDLOW. Will you give us a general explanatory statement? Mr. SHORTLEY. The program is designed to provide services in order to make disabled people employable.

We make our grants to the States on a quarterly basis. For the fourth quarter the States need $3,760,841.

In addition to that there was $814,963 due to the States as a result of audit adjustments, and so forth, making a total of $4,575,804.

From that sum we can deduct $241,328 because of unexpended Federal funds in several of the State agencies, leaving a net of $4,334,476 due the States.

Our next grant to the States is due on April 1, and we have in the Federal Treasury now a total of $887,915, so the grant funds needed by April 1 amount to $3,435,000.

PROGRAM OF SERVICES FOR THE DISABLED

Mr. LUDLOW. I think you might give us for the record a statement of the law under which this activity operates.

Mr. SHORTLY. The program is operated under Public Law 113 Seventy-eighth Congress. It provides for the operation of a program of services for the disabled by the State boards of vocational education and State agencies for the blind in those instances where the State law charges the agencies for the blind with responsibility to provide services to the blind in those particular States. We are dealing with 82 different State agencies.

Last year there were rehabilitated into employment a total of 41,925 disabled persons. Prior to their rehabilitation these individuals were receiving, including charitable contributions, an amount of $24 a month. After rehabilitation when these services were provided and they were placed in employment by the State agencies, the average monthly earnings of these individuals, numbering 42,000, was $147 a month. Seven and nine-tenths percent of them were unemployed at the time they were referred to the State agencies for rehabilitation services; 18 percent had never worked in their lives. Over two-fifths of them had from one to eight dependents.

It is pictured graphically in the chart here [indicating] the chart shows on the basis of pay rolls, by months, what these rehabilitated individuals were receiving.

Mr. LUDLOW. You think the program has been effective?

Mr. SHORTLEY. Yes, sir; very effective, particularly because of its economic value.

Mr. LUDLOW. With the change in the war and economic conditions, what would be the prospects for these persons?

Mr. SHORTLEY. These rehabilitated people are placed in employment at the going wage, and they are checked by a professional worker to make certain that they can do the job to which they are assigned. Mr. LUDLOW. What is the average cost of rehabilitation per individual?

Mr. SHORTLEY. The cost runs between $100 and $300 a year. But this cost occurs only once in the lifetime of the client, whereas from $300 to $500 is the annual cost of maintaining him in idleness when he doesn't get rehabilitation services.

Mr. LUDLOW. What is the situation in reference to the rise and fall of the quarterly allotments as shown on page 62 of the justifications? Mr. SHORTLEY. The last quarter is always heavier than earlier quarters because a large number of tuition and other payments are made in the last quarter of the year.

Mr. LUDLOW. That causes the fluctuating picture?

Mr. SHORTLEY. Yes. In the early part of the year, when the process of rehabilitation begins negotiations are entered into, but many payments are not made until later in the year, and at the end of the year the accounts are all settled.

Mr. LUDLOW. Do you know what percentage of grants paid to States goes to salaries and office expenses?

Mr. SHORTLEY. The total amount for administrative expenses is limited by congressional act to 15 percent. For 1946, the administrative expenses will be 6.9 percent. That is lower than it was last year.

EXTENT OF CONTROL OVER PROGRAM

Mr. LUDLOW. This activity has been expanding tremendously. To what extent is the control in your hands?

Mr. SHORTLEY. It is a State program operated on the basis of plans that the States must submit to us and have approved. Then, in addition to that, through our regional offices and through our staff in the Washington office, we keep in touch with operations by reviewing selected case records and reviewing State organization and administrative practices.

Mr. LUDLOW. I understand that, but how much control do you have over expansion?

Mr. HUNT. We require them to submit to us 6 months' budget estimates. We review these to see that the costs are in line and on the basis of these estimates so reviewed and analyzed we make those quarterly allotments. We check up every quarter with respect to the funds still on hand and the bills outstanding before we make the quarterly allotments.

Mr. LUDLOW. You do, then, have a certain latitude of control? If the program is not going as you think it should go, you do have a latitude with reference to the placement of Federal grants?

Mr. HUNT. Yes, sir.

Mr. LUDLOW. Are you attempting to exercise any control with the idea of keeping costs down and channeling the Federal funds into direct benefits?

Mr. HUNT. Yes; we keep a check at all times on the percentages of money that are being placed into service for the clients and of all of the money spent in the program over $4,000,000 of State money this year we find the administrative expenses are now down to 6.8