Mr. DICKINSON. When you spoke of having 100 men here, I took it for granted that you went from here.

Mr. BURNS. Yes. I had 80 from here, 105 from New Jersey, and 70 from the Regular Army.

Mr. DICKINSON. Were they Cavalry, Infantry, or Artillery?

Mr. BURNS. Artillery.

The CHAIRMAN. Is that all, captain?

did. not hear your But I shall read it What, in your judg

Mr. GREEN. Just one question. Captain, I testimony, being unfortunately called away. carefully. You may have covered this point. ment, would be the effect of a cash bonus upon the habits of the men with reference to thrift?

Mr. BURNS. A large percentage of them would put it in the bank or put it in real estate or some business that they were interested in. Those are the men who do not actually need it at the present time; I say, have no real need. The others would immediately begin to live high for a while. Now, I know men. I have studied men, and I have been successful with men-these same boys, if you could call them men.

Mr. GREEN. In the long run, if I understand you, you think that the cash bonus would not be beneficial to those who are now short of funds?

Mr. BURNS. It would not be beneficial to the country and would not be beneficial to the individuals receiving it, as a class.

The CHAIRMAN. Captain, in the Army what was your salary?

Mr. BURNS. My salary was $220 a month.

The CHAIRMAN. And you had certain allowances?

Mr. BURNS. Amounting to about $50.

The CHAIRMAN. How much did the private receive, Captain?
Mr. BURNS. A private received $33 overseas.

The CHAIRMAN. And no other allowance except his board?
Mr. BURNS. And clothing; that is all.

The CHAIRMAN. What is your occupation now, Captain?
Mr. BURNS. Patent attorney.

The CHAIRMAN. I do not want to be impudent

Mr. BURNS. That is all right.

The CHAIRMAN. What is your salary now?

Mr. BURNS. It depends upon whether the inventors are inventing or not. [Laughter.] Sometimes it is very good, and sometimes it is very small.

The CHAIRMAN. I thought you said you were in the employ of the Government.

Mr. BURNS. I was before the war. I was in the Patent Office before the war.

The CHAIRMAN. I misunderstood you. I thought you said you were in the employ of the Government. Captain, would you kindly

state what your income is per year?

Mr. BURNS. I have not been going long enough to be able to tell. I was making $2,340, with the bonus, in the Patent Office, and I expect to do about as well as that for the 12 months.

Mr. KITCHIN. But after that you expect to do better?

Mr. BURNS. After I get established.

The CHAIRMAN. I hope you do.

Mr. KITCHIN. You are going to get my patents.

Mr. LONGWORTH. You certainly are a good inventor. [Laughter.] The CHAIRMAN. You are speaking individually, for yourself, Captain, and I wanted to bring out the difference between your financial condition during the war and now as compared with the fellow that received a dollar a day or $33 a month.

Mr. BURNS. My wife saved $300 while I was in the service, and it went in the first few months after I got back in the Patent Office. The CHAIRMAN. Many of the boys were privates and their wives were $300 in debt when they came back.

He

Mr. BURNS. Yes; there were some hard cases. I had one man who was making $50 a week before he came in the service, and he had a wife who was about half invalid, and a child five years old and an aunt dependent upon him. The aunt ran the household. was drafted, and should have been exempted, but the local board in New Jersey refused to exempt him, and he was taken, and his family suffered great hardships all the time during the war.

The CHAIRMAN. In my home town, Captain, business men got together and subscribed a certain sum of money, to be paid by the month, and a treasurer was appointed to take care of the families who were in need, where the hsuband was abroad, and there were many of them, and much money was spent.

Mr. BURNS. But that man who was making $50 a week is back at his job, and he is probably getting $60 now. The point is whether $500 at the present time, not what it would have been a year ago, or a year and a half ago, when we first began to propose it, would have done, but it is whether it is justifiable at the present time.

The CHAIRMAN. Captain, the wages he is getting will not buy as much as his wages before the war.

Mr. BURNS. I know it.

The CHAIRMAN. Mr. Kitchin wants one gentleman to be called. Mr. KITCHIN. Mr. Halper, just a minute.

Mr. HALPER. Mr. Chairman and gentlemen of the committee, at the close of last night's session a statement was made by Marvin G. Sperry that was very injurious to my character, and I asked the chairman to request Mr. Sperry to bring proof of those statements the next day, so that I could refute them, if he could show proof of what he said was true.

Mr. KITCHIN. Are you a communist?

Mr. HALPER. No, sir.

Mr. KITCHIN. That is what he said you were, and you deny it? Mr. HALPER. He is here, and he ought to have the proof of it. I never say anything unless I can prove it.

The CHAIRMAN. Are you a socialist?

Mr. HALPER. No, sir. I do not vote at all, because I live in the District of Columbia.

The CHAIRMAN. You have asked Mr. Sperry to bring some proof and he said he would.

(Thereupon, at 4.45 o'clock p. m., the committee adjourned until to-morrow, Friday, Mar. 5, 1920, at 10 o'clock a. m.)

PART 4.

SOLDIERS' ADJUSTED COMPENSATION.

COMMITTEE ON WAYS AND MEANS,
HOUSE OF REPRESENTATIVES,
Washington, D. C., March 5, 1920.

The committee assembled at 10.30 o'clock a. m., Hon. Joseph W. Fordney (chairman) presiding.

The CHAIRMAN. Mr. Maxwell, who made a statement yesterday, desires to complete his statement.

STATEMENT OF MR. GEORGE H. MAXWELL- Resumed.

Mr. MAXWELL. A question was asked yesterday by Mr. Treadway, as to how many soldiers would be taken care of by the FletcherSmith bill, as we call it; and I got so far in my answer as to say that nobody could tell how many soldiers would want farms, because it would depend upon the industrial conditions of the country; because, if times were good, not so many would want them as if times were bad; and if times were bad a great many would want farms.

But I did not conclude my answer, which should cover this further point, that any bill that provides a fixed appropriation, or the investment of a certain sum of money, will exhaust the investment and provide for just so many men and no more. The difficulty with the Lane-Mondell soldier settlement bill is that it will provide for just so many men; it will provide $500,000,000 to take care of, say, 200,000 men. When that appropriation is exhausted, you must have another $500,000,000 to take care of another 200,000 men.

The difference between that bill and this Fletcher-Smith bill, and that is the one essential feature that must inevitably be adopted before this plan of general reclamation can be carried out in the country, is that it provides a self-perpetuating system-an automatically self-perpetuating system. Suppose under this FletcherSmith bill you invest $500,000,000. If there is an active demand for the land, your investment keeps coming back, and keeps coming back again and again, automatically and rapidly, so that the original investment may in 10 years' time be invested ten times over, if there is an active demand for the land.

I see that Mr. Treadway has just come in, so I will repeat myself somewhat.

Mr. Treadway, I was asked by you yesterday to state the number of men that this bill will take care of. I did not get to this point in my answer yesterday.

To my mind, the most important feature of this Fletcher-Smith bill is that it provides an automatically self-expanding plan. In other words, if there is an active demand for land, every single project as it is completed results in the enlargement of the bond issue covering the underlying securities. Every time a project is completed its entire cost is promptly returned to the original construction

fund. That money comes right back and may be reinvested, and comes back again and may be reinvested. So that this plan is automatically self-expanding, as the necessity for homes increases; whereas a hard and fast plan for investing so much money, particularly if it includes, as it must, $5,000 for each soldier, if you are going to give him a home and tools and equipment and everything of that kind, would take an appalling amount of money. This plan, working in harmony with the general conditions of the country underlying reclamation, provides an automatically expanding system, whereby you can take care of a million men under the same original investment that you would need to take care of 200,000 under the other plan.

As soon as the Fletcher-Smith plan is in full operation, the bonds of the reclamation district will have been deposited with the Federal Farm Loan Board; and as soon as the lands under the project are of sufficient value the Federal Farm Loan Board will issue United States collateral bonds to cover the entire cost of construction, which collateral bonds will be based upon an underlying security of the reclamation district bonds, just like the farm loan bank securities are issued on the underlying security of the farm mortgages. In that way the money comes back for reinvestment in new projects, and it will keep on coming back indefinitely into the future. Every completed project in its turn will provide funds for another new project to be constructed.

I believe that the more the committee studies the conditions and the various plans, the more you will come to the conclusion that you will have to adopt some such automatically self-expanding plan as this. That, in my judgment, is the strongest feature of this bill which was discussed yesterday. In other words, it takes care of just as many soldiers as want the benefits of the act, because it expands itself; whereas if you have a bill like the Lane-Mondell bill, with a fixed amount for investment, when that is expended you have to come back to Congress and duplicate it, and then come back to Congress and duplicate it again.

I thank you very much for your attention.

Mr. GARNER. This statement that you have made this morning will not prevent you from filing with the committee, as I understand it, such further argument as you may desire to present in support of the Smith bill?

Mr. MAXWELL. Yes; I will do that, and I will also answer in the record the question of the chairman as to the community groups, which I did not get an opportunity to answer yesterday.

Mr. GARNER. Yes; I want to read that.

(The statement subsequently submitted by Mr. Maxwell is as follows:)

SUMMARY AND SUPPLEMENTAL STATEMENT OF GEORGE H. MAXWELL.

In the consideration of the problem of additional compensation for soldiers, the first question involved is the benefit of the soldier. Whether a cash bonus is the method of compensation which will in the long run be of the greatest benefit to the ex-service men is a very grave question indeed, looking at the matter solely from the point of view of the ex-service men.

I contend that a cash bonus is not the method of compensation that is for the best interest of the soldiers, and that it will prove a great public misfortune, a misfortune to the soldier even more than to the people at large, and to the nation, if that system of compensation is adopted.