charged to expense; in other words, membership is free. The man who undertakes the organization of a post is generally allowed his membership free. On associate members a commission of 25 per cent was allowed. This allowance had the earnest consideration of the council before its adoption and will be taken under advisement again this year, as will also any allowance on solicitations made personally on donations, either on appeals or otherwise. The exertions of the officers have resulted in the most cordial relations with the Government bureaus, so that you are always assured of a respectful hearing and have been able to obtain full allowance of all legal claims often where others have failed. Your assistance to the men in preparation of claims is invaluable, saving the men from the danger of falling into the hands of the horde of sharks who live on the men's lack of the technical method of procedure. Where the matter comes, as it sometimes must, to a difference of opinion as to the man's dues the bureau has great respect for your views and does not fail to give them consideration. The league has no relief fund to enable it to assist men in trouble. It has daily applications for deserving relief. I would suggest that this matter also receive the consideration of the council. Your accounts were not kept in strict bookkeepers' fashion, but your officer had faithfully recorded his transactions so that all receipts and expenses could be traced and located. I have recommended to your treasurer that he journalize his cash entries at the close of each month instead of posting each individual item as has been his custom heretofore; it will save him time and annoyance in tracing back entries. I will be glad to make in detail any further report you may require. I. W. HILLMAN. NATIONAL DISABLED SOLDIERS' LEAGUE, YEAR NOVEMBER 20, 1921, TO NOVEMBER TABLE 2.—Other expenditures not yearly operating, and resources used in meeting them Resources: Cash on hand Nov. 20, 1921. Cash in bank Nov. 20, 1921__ Outstanding checks caught in garnishment pro- Net operating cash__ Net revenue Emblem investment_. Accounts payable, emblems. Stationery on hand__ Expenditures: Satisfaction of garnishment- Accounts receivable_. Accounts receivable, emblems__. Furniture and fixtures_. Stationery, old Reduction of accounts payable, prior-- Balance, cash on hand Nov. 20, 1922-- $665.00 313. 23 665.00 1, 127.09 83.03 70.00 25.00 $1,970. 12 665.00 67.00 354.00 181.50 25.00 588.94 1, 881. 94 88.66 TABLE 3-Trial balance (opening of business November 20, 1922) Major SHAW. You have had occasion in your investigation of other organizations to make a study of financial statements and audits, have you not? Mr. BORDEN. Yes. Major SHAW. What was your impression gained from this state ment? Mr. BORDEN. The impression is that at that time the organization was not in a very good financial condition. In fact, the accountant practically admits that. They show here for a whole year they only had receipts of $13,000 and expenses of $12,000. A major item of expense was $2,400 for traveling expenses, which seemed to be a fairly large proportion. Major SHAW. Did you find in that letter any statement as to the relations of the National Disabled Soldiers' League with Government departments? Mr. BORDEN. No. Major SHAW. May I call that to your attention? The CHAIRMAN. Is counsel going to bring out the fact as to whether any money was spent for relief purposes for soldiers? They have put in a statement. Is there any money in there that was 71 expended for relief purposes for soldiers? They show receipts of $13,000 and expenditures of $12,000. Major SHAW. My recollection of this audit is that it does not. The CHAIRMAN. I wanted to know from their statement whether they show any expenditures for the relief of soldiers. Major SHAW. Mr. Aldrich suggests that you might care to hear this audit, and if you wish, I will read it very quickly. The CHAIRMAN. I think we ought to hear it. Major SHAW (reading): Mr. JOHN T. NOLAN, C. W. & W. HILLMAN, Washington, D. C. National Commander, National Disabled Soldiers' League, 66 Washington, D. C. DEAR SIR: Pursuant to your request I have made an examination of the accounts of the league, and append hereto three tables embodying the results. This examination was for the year ended November 19, 1922, the matters appertaining to the prior period having been examined by other accountants. The result of this examination was summarized in a journal entry on page 1 of the present journal. In his absence I am unable to determine the significance of the credit entry to reserve account and have transferred the amount, $1,732.67, to profit and loss account, together with the $1,011.88 and the accounts payable and the debit account "deficit" $1,920.22, first charging to the "accounts payable" all the items that were incurred prior to November 20, 1921. This on the very tenable ground that after the lapse of a year no further accounts will be presented which apply to this account. I will, however, state that owing to the rush to which you and the officers were subjected during the convention, it is possible that you will be called on for some overlooked items of expenses due to that cause. If this should be the case you will charge the payments to the profit-and-loss account of the year just expired. As you know, last year another organization usurped your name and got possession of your offices in the Southern Building and proceeded to have printing done and purchased supplies on your credit and by some technicality of the law a garnishment against your bank balance was sustained. This decision was not appealed by you as the "outlaw organization went out of business and it was decided that an appeal and the consequent publicity would injure the cause with the public. This not only tied up our bank balance but necessitated a further charge of $313.23 to our loss account to take care of outstanding checks. (See Table 2 of my report.) I have distributed your expense accounts in more detail than heretofore kept so that you can more readily answer inquiries as to the results of each activity of your league. (See Table 1.) While you have receipted bills for the bulk of your 'expenditures and the large majority of the rest are routine matters, yet your practice of filing needs attention. I would strongly recommend that every expenditure be given a number and the bill filed under that number receipted if paid in cash or the check number noted on it if check is used, and if not convenient to obtain a receipt at the time of the issue of the check. Should the expenditure be in the nature of an advance of expense money, which is inevitable in your case, then the amount should be charged to the individual and he render an account of its expenditure which can then be credited to him and debit made to the proper expense account. I fully appreciate the circumstances of your convention and its development beyond your preparations to handle the details and congratulate you and your men on the way they met the situation which was new to them. With this experience you will be able to have the next one well in hand. The above frank criticism of your receipts and their filing is not in the nature of fault finding, but to suggest to your officer in charge an easy but efficient way to avoid any future possible adverse criticism. In line with the above I would say that the officers of the league give their services gratuitously, depending for their living on their other activities. These men are disabled men themselves, and most of them are taking the training courses offered by the Government or are yet in hospital care and are devoting their spare time to the work of the league. This is the reason for my 36306-25-6 statement made above that advances are often necessary when they are called on to travel or to undertake work that requires expenditures in advance of receipts. When the league grows to larger proportions I would suggest that your executive council consider the question of an allowance for service. ..Please understand that this suggestion is on my own initiative and not even mentioned by any of the men in question. Allowance of 25 per cent is made for organization of local posts of the membership fees, the percentage depending on the circumstances of such organization. This allowance has been charged to " organization " expense. In cases of the organization of a post in a hospital, all membership dues are charged to expense; in other words, membership is free. The man who undertakes the organization of a post is generally allowed his membership free. On associate members a commission of 25 per cent is allowed. This allowance had the earnest consideration of the council before its adoption and will be taken under advisement again this year, as will also any allowance on solicitations made personally on donations, either on appeals or otherwise. The exertions of the officers have resulted in the most cordial relations with the Government bureaus, so that you are always assured of a respectful hearing and have been able to obtain full allowance of all legal claims, often where others have failed. Your assistance of the men in preparation of claims is invaluable, saving the men from the danger of falling into the hands of the horde of sharks who live on the men's lack of the technical method of procedure. Where the matter comes, as it sometimes must, to a difference of opinion as to the man's dues, the bureau has great respect for your views and does not fail to give them consideration. The league has no relief fund to enable it to assist men in trouble. It has daily applications for deserving relief. I would suggest that this matter also receive the consideration of the council. Your accounts were not kept in strict bookkeepers' fashion, but your officer has faithfully recorded his transactions so that all receipt and expenses could be traced and located. I have recommended to your treasurer that he journalize his cash entries at the close of each month, instead of posting each individual item, as has been his custom heretofore; it will save him time and annoyance in tracing back entries. I will be glad to make in detail any further report you may require. C. W. HILLMAN. Major SHAW. Then there are appended the financial statements. The CHAIRMAN. In that financial statement is there anything that indicates that they have given money for relief purposes? Major SHAW. In a hasty study of it, sir, I do not find that. Perhaps Mr. Siegal could point that out to you. Mr. SIEGAL. I have not seen it. I do not believe it does. I do not believe the relief started until the American Legion fund was exhausted in 1922. That only ends in 1922. The CHAIRMAN. There was $13,000 raised and no money was 'spent for relief purposes. Major SHAW. I find no statement of any such expenditure. However, I am not an accountant. The CHAIRMAN. Proceed. Major SHAW. Mr. Borden, you recall I called your attention to the statement, "the exertions of the officers have always resulted in most cordial relations with Government bureaus, so that you are always assured of a respectful hearing and have been able to obtain full allowance of all legal claims often where others have failed." Mr. BORDEN. I recall that statement very well, and it was one of the statements I endeavored to check up. Of course, in doing so I called at the Veterans' Bureau and talked to different officials over there and found that it did not correspond with the facts. Notwithstanding the statement that they were circulating of Colonel Forbes, that statement could not be verified, and in any event was apparently repudiated. That replies also to the statement of Colonel Ijams. Every one over there was at least suspicious, although at that time they were unable to obtain very much information about the league. Major SHAW. Have you ever been shown any books of the organization? Mr. BORDEN. No. Major SHAW. Assuming that the National Disabled Soldiers' League had been in active opposition to the bonus, is it likely that the chamber of commerce, if it had found that this organization were a worthy one, would have cooperated in some way in the campaign against the bonus with the National Disabled Soldiers' League? Mr. BORDEN. Of course, I can only give my opinion and state this, that the Chamber of Commerce of the United States has been glad to cooperate with other organizations at different times when other organizations have been working for the same end. I might say that the chambers, too, have cooperated with the American Legion in some matters; of course, not the bonus, but in the employment of disabled and discharged soldiers, etc., and helped form committees in various cities throughout the United States to take care of them, to see that they were properly employed and given relief in other ways. Major SHAW. Have you any letters and telegrams of complaint against the solicitation activities of the National Disabled Soldiers' League which have come to your attention? Mr. BORDEN. Yes; we have received quite a number. Major SHAW. What is the usual reply that you have made to such communications? Mr. BORDEN. We usually place before them the facts that we have been able to develop and that largely includes about everything that has been brought out before the committee here, as well as statements regarding the conventions held at Philadelphia, Boston, and Atlantic City, about which we were thoroughly informed by various people. Major SHAW. Were those reports of those conventions favorable to the league? Mr. BORDEN. Not at all. Major SHAW. They were unfavorable? Mr. BORDEN. Absolutely. Major SHAW. Were there any substantial favorable statements of fact made to your member chambers throughout the country of the National Disabled Soldiers' League, or were the facts furnished largely unfavorable to the league? Mr. BORDEN. I could not conceive anyone supporting the league on the basis of any report that we sent out. Major SHAW. I have no further questions, Mr. Chairman. The CHAIRMAN. Are there any questions by the committee? Mr. BLACK. Mr. Borden, that audit covered a period from November, 1921, to November, 1922. Did you endeavor to secure an audit for subsequent years, or have you endeavored to secure from Mr. Nolan or other officers of the National Disabled Soldiers' LeagueMr. BORDEN (interposing). Mr. Nolan offered voluntarily to furnish us with periodic financial statements, which he has never done. |