U. S. CONGRESS. HOUSE. COMM. 
ON ARMED SERVICES 
REPORT OF INVESTIGATION OF 
PHYSICAL DISABILITY RETIREMENT [261] 
REPORT OF INVESTIGATION OF 
PHYSICAL DISABILITY RETIREMENT 
OP 
OFFICERS OF THE ARMY, NAVY, 
AND MARINE CORPS 
CONDUCTED BY 
THE LEGAL SUBCOMMITTEE 
COMMITTEE ON ARMED SERVICES 
HOUSE OF REPRESENTATIVES 
HON. CHARLES R. CLASON 
HON. WILLIAM B. HESS 
HON. LEROY JOHNSON 
HON. HARRY L. TOWE 
HON. WALTER NORBLAD 
HON. CHARLES H. ELSTON, Chairman 
HON. PAUL J. KILDAY 
HON. L. MENDEL RIVERS 
HON. LANSDALE G. SASSCER 
HON. PHILIP J. PHILBIN 
Robert W. Smart, Professional Staff Member 
UNITED STATES 
GOVERNMENT PRINTING OFFICE 
WASHINGTON : 1948 
70266 [No. 2G1] 
INVESTIGATION OF PHYSICAL DISABILITY RETIREMENT OF 
OFFICERS OF THE ARMY, NAVY, AND MARINE CORPS 
Section I. General 
The problems involved in retirement proceedings in the armed 
services, particularly physical disability retirements, have been under 
consideration by this committee for a considerable period of time. In 
June of 1947,the general subject of retirement was being considered 
by the Retirement Subcommittee of the House Armed Services Com- 
mittee. It was decided that a joint study of retirement problems of 
the armed services be conducted by the Departments, and that a 
report of the findings be submitted to the committee in January of 
1948. Pursuant to that decision, a committee of the Joint Army- 
Navy Personnel Board began a study of the subject and had completed 
its report by November 12. The report was under detailed considera- 
tion by the Departments, preparatory to its submission to the com- 
mittee, when the case of Maj. Gen. Bennett Meyers was brought to 
the attention of the public. In view of the public interest and indig- 
nation, which resulted from the Meyers case, it was considered advis- 
able to institute an immediate investigation of all officer disability 
retirements. The Legal Subcommittee of the House Armed Services 
Committee began the investigation on December 1, 1947. From 
December 1, 1947, until February 2, 1948, a detailed study was made 
of all pertinent laws and procedures governing disability retirement of 
officers; 2,741 questionnaires were forwarded to Army and Navy 
officers in the grade of colonel and captain, respectively, and above; in 
addition to the statistical data which was prepared by the committee, 
voluminous statistical data was prepared by the Army and Navy 
Departments and submitted to the committee. Much of this data is 
included in the printed hearings, but the following statistics are set out 
in order that there be a better understanding of the complexity of the 
problems involved: 
During the period 1940-47— 
(а) Approximately 19,000 officers served in the Regular officer 
corps of the Army, and 2,505 (13 percent) were retired for physical 
disability. 
(б) Approximately 900,000 non-Regular officers served in the Army, 
and 26,337 (3 percent) were retired for physical disability. 
(c) 21,990 officers served in the Regular Navy, and 1,694 (7.7 
percent) were retired for physical disability. 
(d) 355,955 non-Regular officers served in the Navy, of whom 3,722 
(1 percent) were retired for physical disability. 
(e) 6,245 officers served in the Regular Marine Corps, of whom 234 
(3.7 percent) were retired for physical disability. 
(J) 41,233 non-Regular officers served in the Marine Corps, of 
whom 806 (1.9 percent) were retired for physical disability. 
[6021 6022 
During the year 1945, 99 Army retiring boards and 4 Navy retiring 
boards were in operation. 
A combination of circumstances resulted in serious criticism of 
physical retirement procedures in the Army and the Navy, both from 
those who had been denied disability retirement and from the general 
public, which felt that there had been too much generosity in granting 
disability retirement. By the time public hearings were opened, on 
February 2, 1948, the combined criticisms from all sources were 
summarized as follows: (1) That inequities exist between the retire- 
ment system of the Army and that of the Navy; (2) that disability 
retirement has been granted in some cases as a direct result of fraud; 
(3) that both the Army and the Navy have been overly generous in 
granting disability retirement, with a resulting increased burden on 
the taxpayers; (4) that there has been an unlawful and calculated 
effort on the part of officers of the Regular Army to obtain disability 
retirement benefits; (5) that a definite pattern of discrimination has 
been practiced by the officers of the Regular Establishment against 
non-Regular officers, not only from the standpoint of the comparative 
manner in which disability retirement was granted, but also on the 
basis of collateral benefits which Regular officers receive and which 
non-Regular officers do not receive. The findings of this committee, 
with respect to these charges, will be specifically set out in section III 
of this report. Additional points which were raised during the course 
of the hearings will likewise be considered in section III. 
A total of 12 public hearings and 8 executive sessions have been 
held on this subject. In addition to the witnesses who were scheduled 
to testify at the outset of the hearings, the committee has at all times 
maintained a policy of scheduling any additional witnesses who could 
offer constructive testimony on the subject under consideration. No 
witness was denied an opportunity to appear before the committee 
unless the substance of his testimony had been covered by previous or 
scheduled witnesses. It is the considered opinion of this committee 
that an impartial and thorough inquiry into the subject of disability 
retirements in the armed forces has been conducted. 
Section II. Legislative History 
1. Army 
In August of 1861, within 2 weeks of the Battle of Bull Run, the 
first retirement act for Regular Army officers was enacted. Practically 
all field officers of the small Regular Army were at that time unfit to 
exercise command in the field, being of advanced age, diseased, and 
having infirmities. It was clear that something had to be done to 
remove such men so that the younger and more vigorous individuals 
who, in fact, exercised command could be advanced to appropriate 
rank. That law prescribed that “when any officer has become in- 
capable of performing the duties of his office, he shall be either retired 
from active duty or wholly retired by the President.” Reenacted 
in 1882, adding the manner of retirement, that law is still the law 
which authorizes retirement of Regular Army officers. The purpose 
of these enactments was not for the benefit of the individual, but to 
give the Nation a vital, fit, Regular officer corps. The standard for 
determination as to whether an officer should or should not retire 
for disability, therefore, has been “fitness for full military service.” 6023 
Retirement compensation is 75 percent of pay, less allowances, 
and varies from approximately 47 percent of the total pay of a second 
lieutenant to 57 percent of the total pay of officers with over 30 
years’ service. The original intent of the law was to provide com- 
pensation for officers who had chosen the military service as a career. 
The degree in which an officer may be disabled has no relation to the 
amount of compensation which may be realized. 
In 1862, shortly after the first retirement act was passed, the Con- 
gress enacted another act, wherein provision was made for pensions 
for volunteers disabled in the service. It is apparent that the original 
intent of the Congress was to treat disability compensation or pensions 
of volunteers as being different from retirement pay of the Regulars. 
Legislation similar to the 1862 act has been enacted during and after 
each w*ar, the most elaborate being that establishing the Veterans’ 
Administration. 
In 1928, the Congress enacted the Tyson-Fitzgerald bill, which 
provided that non-Regular officers disabled 30 percent should be 
placed on the emergency officers’ retired list at 75 percent of their 
pay. President Coolidge vetoed the bill on the basis that it dis- 
criminated against all enlisted men of World War I and all officers 
whose disability was less than 30 percent and that it compensated 
officers on the basis of rank rather than disability. The Congress 
overrode the veto on May 24, 1928, and the bill became law. For 
the first time, the system of pay set forth in the retirement law of 
the Regular services was used as a measurement for disability com- 
pensation, Since the number of officers involved was small, and the 
Veterans’ Administration administered the benefits, no serious 
problem was created. 
In 1939, a bill to increase the Air Corps, by calling 3,000 Reserve 
officers to extended active duty, was introduced. During House 
consideration of this measure, a proviso was added to cover retire- 
ment benefits for Reserve officers disabled while on active duty. 
Representatives of the Reserve components, the American Legion, 
and the Veterans of Foreign Wars favored the measure. The War 
Department opposed its enactment on the basis that it was inequi- 
table to Regular officers, stating “there is not so good a case for the 
granting of retirement pay to officers, for example, of the grade of 
colonel, who, under the proviso, would be eligible, after 30 days’ 
active service, to retirement pay on the same basis as is accorded a 
Regular officer who has spent approximately 30 years in active service 
in attaining the same grade.” The act was passed on April 3, 1939, 
and provided that “all officers, warrant officers, and enlisted men of 
the Army of the United States other than officers of the Regular 
Arnry, if called or ordered into the active military service by the 
Federal Government for extended service in excess of 30 days, and 
who suffer disability or death in line of duty from disease or injury 
while so employed, shall be deemed to have been in the active mili- 
tary service during such period and shall be in all respects entitled 
to receive the same pensions, compensation, retirement pay and hos- 
pital benefits as are now or may hereafter be provided by law or 
regulation for officers and enlisted men of corresponding grades and 
length of service of the Regular Army.” This act had no real appli- 
cation to enlisted men because at that time there was no physical 6024 
disability retirement law for Regular Army enlisted men. The act 
established a different system of compensation for temporary officers 
for service-connected disabilities than the one in effect for enlisted 
men. The criteria for physical retirement for the non-Regular 
officer became the same as that for the Regular officer, “fitness for 
military service.” Realizing that the War Department would be 
faced with an increasingly difficult administrative problem, the 
President issued an Executive order in 1939, amended in 1940, which 
directed that all non-Regular officers who suffered a permanently 
incapacitating disability as an incident of service would be certified 
to the Veterans’ Administration for the administration of all benefits 
provided under the act of April 3, 1939. A comparative view of the 
administrative problem is shown in the following summaries. In 
the 25 years preceding 1940, including World War I, less than 3,000 
officers were retired. In the period 1940 to 1947, more than 900,000 
Regular and non-Regular Army officers served on active duty, and 
in excess of 28,000 of these officers were retired for physical disability, 
or certified to Veterans’ Administration for retirement compensation. 
The act of April 3, 1939, produced an unforeseen inequity. By 
1943, Regular, Reserve, and National Guard officers were practically 
all serving in temporary grades higher than their permanent rank. 
AUS officers had only one grade, the last one to which promoted. 
As a result, an AUS officer who became disabled while holding a higher 
temporary grade would be retired in this grade while the Regular 
officer who may have held the permanent grade of captain and the 
temporary grade of colonel had to be retired in his permanent grade 
of captain. To correct this obvious inequity, Public Law 101, 
Seventy-eighth Congress, was enacted. This act permitted retire-1 
ment for physical disability in a higher temporary rank, and it was 
provided that retired officers called to active duty should be retired 
in any higher temporary rank attained by them if they suffered a 
new disability which was incapacitating or a 30-percent permanent 
aggravation of a previous disability. The enactment of this law, 
was applicable to all officers of all components, regular and non- 
Regular. 
The final act which was material to this subject was the Revenue 
Act of 1942. Subsequent to the enactment of this act, it was held 
that retirement pay received because of physical disability was to be 
considered as a pension and, therefore, was not taxable. The War 
Department did not request this ruling. The officer personnel who 
had been retired for physical disability were merely the beneficiaries 
of the ruling. It should be pointed out that the officer beneficiaries 
of disability retirement pay of the armed services constitute a minor 
portion of the group who enjoy this exemption. Regardless of this 
fact, it has resulted in a motivation for an officer to seek retirement 
for physical disability, rather than for years of service, and has 
produced undesirable consequences which will be subsequently con- 
sidered in this report. 
2. Navy 
The laws governing the retirement of Regular Navy officers for 
physical disability have remained in force, almost without change, 
for the past 87 years. The act of August 3, 1861, provided that when- 
ever in the judgment of the President an officer is incapacitated to 6025 
perform the duties of his office, the President in his discretion may 
direct the Secretary of the Navy to refer the case to a retiring board 
of not more than nine and not less than five commissioned officers, 
two-fifths of whom shall be medical officers. The retiring boards 
are authorized to inquire into and determine the facts regarding the 
nature and occasion of the disability of any such officer, and to have 
the powers of a court martial and a court of inquiry, as may be 
necessary. It is further required that the retiring board determine 
whether or not an officer is incapacitated for active service, find and 
report the cause which, in its judgment, produced the incapacity, and 
whether such cause is an incident of the service. Final approval or 
disapproval of the proceedings and decision of the board is vested in 
the President. 
The amount of retired pay was prescribed in various manners until 
the act of July 15, 1870, which stated that it would be equal to 75 
percent of the sea pay of the rank held at the time of retirement. 
(Thus far the procedures governing the Army and the Navy are sub- 
stantially the same.) In those cases where the board finds that an 
officer’s incapacity has not resulted from an incident of the service, 
such officer shall, if said decision is approved by the President, be 
retired from active service on furlough pay or wholly retired from 
service with 1 year’s pay, as the President may determine. Furlough 
pay was eventually established as being the equivalent of one-half of 
active-duty pay. The term “wholly retired from the service” means 
a complete separation and the assumption of civilian status, -with 
none of the obligations required of those regularly retired. 
Except for the provisions contained in the Temporary Promotion 
Act of 1941, allowing retirement for physical disability in a temporary 
rank, those are the laws which continue to govern the retirement of 
Regular Navy and Marine Corps officers for physical incapacity. The 
law is clear on the point that full retirement requires that the inca- 
pacity must have been caused by an incident of the service. It has 
been consistently held that the incapacity must be of a permanent 
nature so as to unquestionably disqualify the officer for duty on the 
active list. The decision of a retiring board, when approved by the 
President, that an officer is incapacitated for active service, is final 
and conclusive. 
The acts of May 22, 1917, and July 1, 1918, provided that no 
Reserve or temporary officers would be eligible for retirement other 
than for physical disability incurred in line of duty. This remained 
the only statutory authority for the retirement of non-Regular officers 
until the act of June 4, 1920, when it was affirmatively provided that 
all Reserve and temporary officers who theretofore or thereafter in- 
curred physical disability in line of duty would be eligible for retire- 
ment under the same conditions as was provided by law for officers 
of the Regular Navy who incurred physical disability in line of duty. 
This was further amended by the act of July 12, 1921, so as to require 
that all applications for such retirement be filed not later than October 
1, 1921. The effect of these laws was to establish the right of the 
officers concerned to the same retirement pay, status, and benefits 
authorized for officers of the Regular Navy. These laws were later 
supplemented by the act of May 24, 1928, the Tyson-Fitzgerald bill, 
previously referred to in the discussion of the legislative history of 
Army retirement proceedings. 6026 
The Naval Reserve Act of 1925 provided that all commissioned and 
enlisted personnel of the Naval Reserve who were physically injured 
while on active duty, training duty, or travel to and from such duty, 
became entitled to benefits provided for the civilian employees of the 
United States. This principle was carried forward in the Revised 
Naval Reserve Act of 1938, and was extended to drills or other 
equivalent training duty. 
Subsequent to the national emergency declaration in 1939, the act 
of August 27, 1940, as amended, provided that, effective on September 
8, 1939, all personnel of the Naval and Marine Corps Reserve ordered 
into active duty by the Federal Government for extended military 
or naval service in excess of 30 days, who suffered disability or death 
in line of duty, would be accorded substantially the same benefits 
extended to Army personnel in the act of April 3, 1939. The Execu- 
tive orders issued by the President in 1939 and 1940, which vested 
jurisdiction over physically disabled non-Regular officer personnel of 
the Army in the Veterans’ Administration, were not applicable to 
Navy and Marine personnel. As a result, retired officer personnel of 
the Regular Army are placed on the retired list of the Army and paid 
from Army appropriations. Physically retired non-Regular officer 
personnel of the Army are certified to the Veterans’ Administration, 
which agency administers the benefits accorded by law. The feature 
presents a principal difference between Army and Navy procedure 
in the matter. Reserve officers in the Navy and Marine Corps 
found to be permanently incapacitated for active service, as a result 
of an incident of the service, have been retired and placed upon the 
retired list in the same manner as legally required for disabled officers 
of the Regular Navy and Marine Corps. They have the status of 
retired officers, remain subject to recall to active duty, and are paid 
from Regular Navy and Marine Corps appropriations. 
The Naval Reserve Act of 1938 provided that Reserve officers who 
became physically disqualified for active service could be transferred 
to the honorary retired list created by that act. While they did not 
receive any retired pay, such officers did occupy the status of retired 
officers. Thus to have transferred the disabled Reserve officers of 
World War II to the Veterans’ Administration would have denied 
them the benefits of a retired status provided by the 1938 law. It 
will also be recalled that the laws of 1917, 1918, and 1920 did specify 
that the non-Regular officers of the Navy and Marine Corps, disabled 
in line of duty in World War I, would be eligible for retirement under 
the same conditions provided for Regulars. Thus it will be seen that, 
regardless of the considerations involved, the approach of the Navy 
has been to accord equal treatment to all physically retired officers, 
Regulars and non-Regulars, while the Army has endeavored to pre- 
serve retirement and the corollary benefits thereto to officers of the 
Regular Establishment. 
Allegation 
1. That inequities exist between the officer-retirement systems of 
the Army and the Navy.” 
(a) There can be no doubt that this allegation is true. By virtue 
of Public Law 305, Seventy-ninth Congress, Navy officers were au- 
thorized retirement in the highest grade satisfactorily held during the 
Section III. Findings 6027 
war after 20 years of service, provided 10 years of such service were 
served in a commissioned status. At the close of hostilities, both the 
Army and the Navy had large groups of officers in the higher tempor- 
ary-grade brackets, many of whom qualified for retirement under 
the provisions of Public Law 305. More than 600 Navy officers 
qualified and were retired in the highest grade satisfactorily held, but 
the same provisions were not applicable to Army officer personnel. 
With full justification, Army officers resented this inequity. It must 
be recognized that this inequity presented a motivation for Army 
officers to seek disability retirement which authorized retirement in 
the higher temporary grade, rather than be retired for reasons other 
than physical disability in a lower permanent grade. While physical 
retirement would achieve the desired equality in grade between Army 
and Navy officers, it would result in an additional inequity in favor of 
the Army officer, since his physical retirement pay would be tax- 
exempt while the nonphysical retirement pay of the Navy officer 
would not be exempt. Thus, the original inequity in favor of the 
Navy officer would, in effect, be reversed to favor the Army officer. 
In the absence of an admission, it would be practically impossible 
to prove that any Army physical retirements were abetted by respon- 
sible military personnel in order to accomplish this result; however, 
hundreds of officers were affected, and they would have been less than 
human if they had ignored the possibility of financial gain which would 
inure to them for the remainder of their lives. 
(6) An additional inequity has resulted from the enactment of 
Public Law 305. 
Assume that an Army captain and a senior lieutenant of the Navy 
had been retired for physical disability prior to the war and were re- 
called to active duty during the war; that the Army captain subse- 
quently attained the temporary grade of colonel and the Navy lieu- 
tenant the temporary grade of captain, and that neither of these 
officers suffered any additional disability by the date they were sepa- 
rated from active service and returned to the retired list. Under these 
circumstances, the temporary Army colonel would, in most cases, be 
returned to the Army retired list in the grade of captain, as pointed 
out in paragraph (a). Not only would the temporary Navy captain 
be returned to the retired list of the Navy in the grade of captain, but 
the increased increment of pay of a Navy captain as distinguished 
from that of a senior lieutenant would be merged with the original 
disability retirement pay and become totally tax-exempt, in spite of 
the fact that this increase in pay has no relation to the disability com- 
pensation he drew as a senior lieutenant. In addition to the resulting 
inequity between Army and Navy officers who come within this cate- 
gory, and such cases do exist, the intent of existing tax laws is thereby 
circumvented. The enactment of H. E. 2744 will not correct this 
defect; in fact it will compound it; however, the defect will be corrected 
if the recommendations of this committee relative to tax exemptions, 
contained in section IV, are adopted. 
Allegation 
2. “That disability retirement has been granted in some cases as a 
direct result of fraud.” 
An understanding of the disability-retirement procedures in the 
Army and Navy is necessary before this allegation can be intelligently 
considered. 
70266—48—No. 261 2 6028 
Army procedure provides for the evaluation of an officer’s physical 
condition by a medical disposition board composed of three medical 
officers. If the disposition board finds reasonable cause to believe 
that the officer is permanently incapacitated as a result of a disability 
incurred in line of duty, the officer is authorized to appear before an 
Army retiring board composed of three line officers and two medical 
officers. During the Army retiring board’s consideration of the case, 
at least one and possibly more medical officers appear before the board 
to present their findings and recommendations as to the officer’s 
physical condition. If the board finds that the officer is suffering from 
a disability which is permanent in nature, was incurred in line of duty, 
and is disqualifying for general military service, it recommends that 
the officer be retired for physical disability. The findings of the board 
are then transmitted to the Office of the Surgeon General where at 
least one medical officer, and perhaps more, review the findings of the 
retiring board. In practice, if the Surgeon General’s Office concurs in 
the findings of the retiring board, the officer is retired. In completing 
this process, a minimum of eight medical officers have passed upon the 
physical condition of subject officer and, in most cases, have unani- 
mously agreed in the findings. 
Navy retirement procedure is substantially the same, except that it 
provides additional safeguards. After a medical-survey board of the 
Navy, which is the equivalent of a medical disposition board in the 
Army, has arrived at the conclusion that an officer should appear 
before a Navy retiring board, the case must be processed by addi- 
tional agencies before being submitted to the retiring board. The 
transcript of the Medical-survey board is processed by the Bureau 
of Personnel, the Judge Advocate General’s Department, the Bureau 
of Medicine and Surgery, the Secretary of the Navy’s Advisory Board, 
and the Secretary of the Navy, the first five agencies including their 
recommendations by endorsement to the Secretary of the Navy. 
If the Secretary’s Office approves, the case is then submitted to a 
Navy retiring board. If the Navy retiring board authorizes retire- 
ment, the case is again reviewed by the Secretary and transmitted to 
the President for final action. As in the Army procedure, a minimum 
of eight Navy doctors have considered every case before retirement 
is authorized. 
It becomes immediately apparent that before a case of fraudulent 
retirement can be substantiated that the medical findings of some or 
all of the medical officers who evaluated the case must be proved to 
be fraudulent. The practical obstacles are so great that the chances 
of any such cases having been accomplished are extremely remote. 
The physical retirement of Maj. Gen. Bennett Meyers and the apparent 
ease with which other high-ranking Army and Navy officers have 
obtained physical retirement has prompted the general opinion that 
there are numerous cases of fraudulent retirement. While this 
committee cannot say that there have been no cases of fraudulent 
retirement, we can say that an impartial and diligent inquiry has 
thus far produced no evidence of fraud. In response to specific 
questions, during the course of our public hearings, the witnesses of 
the Department of the Army insist that there is no evidence of fraud 
in the Meyers case. In the absence of proof to the contrary, we 
must accept that conclusion. It is our opinion that the questionable 
cases which have been cited are the result of existing law, its inter- 
pretation and administration, and not the result of fraud. 6029 
Allegation 
3. “That both the Army and the Navy have been overly generous 
in granting disability retirement, with a resulting increased burden 
on the taxpayers.” 
Departmental witnesses who have appeared before the committee 
point out, in summarizing the testimony presented during the course 
of our public hearings, that no specific case was cited of a single 
officer, Regular or non-Regular, retired or receiving retirement pay, 
who did not have a disability unfitting him for military service under 
the law and regulations prepared to carry out those laws. The validity 
of this general statement cannot be disputed; however, the statement 
ingnores certain definite conclusions which must be drawn from the 
statistics which were submitted to the committee by the Department 
of the Army and the Department of the Navy. 
The comparative situation between Regular and non-Regular 
officers of the Army is presented in statistics which show that the aver- 
age age of a Regular officer retired for physical disability was 53 
years, and the average length of his service was 28 years. The aver- 
age age of the non-Regular officer receiving retirement pay was 35 
years, and his average length of active service was 2K years. (Similar 
results are obtained from statistical summaries covering physical 
disability retirements of Regular and non-Regular officers of the Navy 
and Marine Corps.) Approximately 89 percent of the Regular officers 
who were retired for physical disability during the period 1940-47 
held the grade of colonel or above, while less than 4 percent of the non- 
Regular officers held a comparable grade. The chief reason for this 
variation lies in the fact that most of the high-ranking Regulars had 
served in both World War I and World War II while most of the non- 
Regular officers were young men whose first active duty was during 
World War II. 
The statistics which have been available to this committee con- 
clusively show that most physical retirements result from diseases of 
deterioration, which diseases are admittedly more prevalent among 
older men. The cases which appear questionable to this committee 
are those involving the older officers who have served in a general- 
duty status for 30 years or more, or have reached the statutory re- 
tirement age. 
There can be no doubt that many of the older officers have suffered 
incapacitating disabilities late in their careers. We offer no criticism 
of physical retirement in such cases; however, when an officer has 
served in a full-duty status for a period of 30 years, or until he has 
reached the statutory age for retirement, has completed such service 
in a full-duty status and is then retired for physical disability, we 
cannot escape the conclusion that such retirement is improper. Navy 
witnesses have cited the case of a vice admiral who was denied physical 
retirement, even though he had suffered retirable disabilities in 1938. 
In spite of those disabilities this officer resisted physical retirement at 
that time, and by perseverance and good luck he was able to over- 
come his disability to such an extent that he was able to serve through- 
out the war. In addition to the injuries he suffered in 1938, this 
officer was also suffering from certain diseases of deterioration at the 
time he was retired after the war, and because these conditions were 
not of a life-shortening nature, he was not given physical retirement. 6030 
No doubt the Army can cite identical cases involving Army officers. 
Such action in even a limited number of cases constitutes an admission 
that physical-disability retirement under such circumstances, although 
authorized by existing law, is morally questionable. No inference is 
made that such cases were fraudulent or illegal in any respect, but it 
cannot be denied that many officers who had completed their service 
careers sought physical retirement in order to obtain the total tax 
exemption which is accorded disability-retirement pay. The Surgeon 
General of the Army frankly admits that efforts to obtain physical- 
disability retirement, in preference to other methods of retirement, 
have increased since the ruling by the Bureau of Internal Revenue 
(1943) that disability-retirement pay was considered to be a pension 
and, therefore, was tax-exempt. Our public hearings produced testi- 
mony which stated that Regular Army officers “padded the record 
and did all sorts of things,” in order to be physically retired. This 
was concluded to mean that Regular officers who had completed their 
service careers and were eligible for retirement would include every 
possible minor physical defect in their records which, accumulatively, 
would be sufficient to authorize physical-disability retirement. The 
same motivation, tax exemption, exists for naval officers in the same 
category, and an equivalent number of physical retirements have been 
granted under the same circumstances. 
To the extent herein indicated, it is our finding that the services 
have been generous in granting physical-disability retirement. So 
long as the present tax motivation exists, it is not anticipated, nor 
can it be expected that current procedure in this respect will be 
altered; therefore, it is incumbent upon the Congress to remove the 
motivation. Our recommendations in this respect are contained in 
section IV. 
Allegation 
4. “That there has been an unlawful and calculated effort on the 
part of officers of the Regular Army to obtain disability-retirement 
benefits.” 
On the basis of statistics, the great majority of officers of general or 
flag rank, who were physically retired, had completed 30 years of active 
service or had reached the statutory retirement age. Consequently, 
regardless of the manner in which these officers were retired, they were 
assured of retirement in some form. Two motivations existed which 
would prompt a desire to be physically retired rather than for age or 
length of service. Physical retirement authorized retirement in the 
highest temporary grade held, in addition to the total tax exemption 
of retirement pay, whereas the other types of retirement might result 
in the officer being reduced to a lower permanent grade and the pay 
would not be tax-exempt. In any event, these officers were assured 
retirement under one of the alternative methods, and regardless of the 
method they would have received the same retired pay as though they 
had been retired for physical disability. 
The non-Regular officer, whose average retirement age was 35, as 
contrasted to the average age of 53 for the Regulars, had much more 
to gain through physical retirement than the Regular. In addition to 
the total tax exemption, the average non-Regular officer who was 
granted disability retirement in the grade of captain or senior lieu- 
tenant would draw approximately $50,000 in retirement pay from the 
Government if he lived an additional 20 years. 6031 
Existing law specifically authorizes compensation on the basis of 75 
percent of the base and longevity pay of the grade in which retired, 
and it is not our intention to criticize those who have legitimately 
become the beneficiaries of the law. The sole object in enumerating 
the comparative emoluments to be gained through physical-disability 
retirement is to conclusively show that a stronger motivation exists 
for the non-Regular than the Regular in seeking disability retirement. 
The non-Regular officer facing a separation from service undoubtedly 
realized that there were no alternative methods by which he could be 
retired, and that he would either draw a large sum of money as a result 
of being physically retired or, if not so retired, would be separated 
from service without compensation. 
Allegation 
5. “That a definite pattern of discrimination has been practiced by 
officers of the Regular Establishment against non-Regular officers, not 
only from the standpoint of the comparative manner in which dis- 
ability retirement was granted but also on the basis of corollary 
benefits which Regular officers receive and which non-Regular officers 
of the Army do not receive.” 
(a) While we do not feel that non-Regular officers have been 
discriminated against in the degree charged, we do find that an element 
of discrimination does exist and should be corrected. We base our 
findings, in part, on the administrative procedures which were fol- 
lowed, particularly in the Surgeon General’s Office of the Army, in 
the review of retiring board proceedings. 
Before an officer’s case was presented to an Army Retiring Board, 
two separate procedures were followed, one for the Regular officer and 
another for the non-Regular officer. After the Regular officer had 
been processed by the medical disposition board, the case was reviewed 
in the Surgeon General’s Office before being presented to an Army 
retiring board. The non-Regular officer’s case, after having been 
approved by the medical disposition board, was forwarded directly to 
an Army retiring board. Army witnesses insist that the only reason 
for this difference in procedure was that the Regular officer was a 
career man and that he should not be accorded the right to appear 
before an Army retiring board unless the Surgeon General was satisfied 
that he had a retirable disability. The theory is both reasonable and 
commendable, however, the results are not as commendable as the 
theory. The committee received direct testimony on this subject 
from a former officer who served as a member of an Army retiring 
board for almost 1 year, and whose qualifications and integrity are 
unquestioned. This officer testified that it was the general feeling 
among the personnel of the Army retiring board that the recom- 
mendation of the Surgeon General, with reference to a Regular 
officer’s retirement, was considered as being tantamount to an order. 
In the Regular’s case, the Surgeon General recommended retirement 
before the case ever reached the retiring board. In the non-Regular 
officer’s case, the opinion of the Surgeon General was not expressed 
until after the Retiring Board reached its findings and recommenda- 
tions, which were then subject to the disapproval of the Surgeon 
General’s Office. 
It was inevitable that a feeling of suspicion and dissatisfaction 
would arise from the different methods in which Regulars and non- 6032 
Regulars were processed. It is our finding that the procedure should 
be standardized and all officers, Regular or non-Regular, be processed 
in exactly the same manner. 
(.b) The administrative procedures followed by the Surgeon 
General’s Office, after a case had been processed by an Army retiring 
board, prompts us to conclude that discrimination was practiced 
against the non-Regular officer. 
The statistics which the committee has obtained from its ques- 
tionnaires show that 30 percent of the non-Regulars as against 10 
percent of the Regulars appeared before two or more Army retiring 
boards before being retired or certified to the Veterans’ Administration 
for retirement pay. Undoubtedly, some of the discrepancies in the 
comparative percentages are due to the fact that the Surgeon General 
reviewed disposition board proceedings of the Regular before the 
Regular’s case was submitted to an Army retiring board; however, 
we cannot believe that this variation in administrative procedure is 
the sole cause for the variation in percentages. 
It is recognized that medicine is not an exact science, and that the 
physical standards prescribed by the Surgeon General’s Office were 
not uniformly interpreted or applied by the 99 Army retiring boards 
which were in operation during the peak load of physical-retirement 
cases. In view of the fact that ranking medical officers failed to agree 
on the interpretation of the physical standards, retiring boards can 
hardly be charged with incompetence in applying them. Granting 
the propriety of an initial disapproval by the Surgeon General in 
order to effect uniform standards, we cannot agree that the continuing 
disapproval of the Surgeon General of the same case for as many as 
four or five times is appropriate. Our only witness with previous 
retiring board experience stated that the repeated disapproval of an 
Army retiring board’s recommendation for retirement was ultimately 
construed to be an order to deny retirement. The end result was 
that one or two medical officers in the Surgeon General’s Office were 
permitted to overrule and nullify the findings of at least seven other 
medical officers who had either examined the subject officer or had 
personal knowledge of his case. Numerous cases have been presented 
to the committee which involve repeated disapprovals of the medical 
findings of an Army retiring board by the Surgeon General’s Office. 
At the close of hostilities, both the Army and the Navy were con- 
fronted with the enormous task of evaluating the physical condition 
of many thousands of officers. The 99 Army retiring boards processed 
more than 80,000 individual cases. A far greater number were denied 
Army retiring board consideration after being processed by medical 
disposition boards. Departmental witnesses stressed the fact that 
they were not faced with the necessity of making an immediate deter- 
mination as to the permanency of questionable disabilities of the 
Regular officers, but that such determination had to be made for all 
non-Regular officers who were being separated from the service. In 
processing such large numbers of cases, it was inevitable that some 
mistakes did occur, and both the Army and the Navy admit that 
many mistakes did occur. The best evidence that mistakes were 
committed lies in the fact that approximately 90 non-Regular Navy 
officers and 684 non-Regular Army officers have been physically 
retired by the review boards under section 302 of the Servicemen’s 
Readjustment Act of 1944. None of these officers would now be 6033 
drawing disability retirement benefits if their sole means of relief had 
been confined to Army and Navy retiring procedures. We cannot 
feel that all of these cases were purely mistakes in judgment. 
In fairness to the Department of the Army, we wish to point out 
that many former non-Regular officers who had been separated from 
service were recalled to active duty and immediately placed in a 
patient status on full duty pay while further attempts were made to 
evaluate the officers’ physical condition. This practice has been 
followed since August of 1946, however, by virtue of a ruling of the 
Comptroller General, it must cease on April 30, 1948. We also wish 
to point out that the Navy took similar action more than 2 years ago 
when it established the Secretary of the Navy’s Retirement Advisory 
Board. By this means, any officer on active or inactive duty, and 
regardless of the cause of his separation, can receive a full hearing if 
he believes he is entitled to a disability retirement. Non-Regular 
officers of both the Army and the Navy were the beneficiaries of this 
action, and both the Army and Navy Departments are to be com- 
mended for it. 
(c) Army and Navy witnesses have testified that most of the medi- 
cal officers were non-Regulars, rather than Regulars, and that there 
is neither proof nor reason to assume that they discriminated against 
other non-Regular officers. It is true that most medical officers 
were non-Regulars, but it is equally true that they were the subordi- 
nates of Regular officers who determined policy, standards, and 
procedure. Nothing more than an inference can be drawn from 
this fact, but it assumes greater validity when coupled with other 
factors. 
The Army strongly opposed the enactment of the act of April 3, 
1939, which gave non-Regular Army officers the same physical retire- 
ment benefits as those already authorized for Regular officers. (The 
act of August 27, 1940, created the same provisions for the Navy.) 
In view of the fact that the act discriminated against enlisted men, 
disregarded length of service and degree of disability in the computa- 
tion of benefits, and created the medically impossible responsibility 
of making a speedy determination of every non-Regular officer’s 
disability, Army opposition to the legislation is understandable. 
In addition to the difficulties which the act created, a rather wide- 
spread resentment arose among Regular officers. We cannot deter- 
mine the extent of this feeling or the degree to which it may have 
affected non-Regular officers. However, we are convinced of its 
existence. 
Some pertinent evidence on this point was obtained from records 
of the Army Air Forces. On November 19, 1945, AAF letter 25-77, 
which established a new AAF policy on certain medical matters, was 
directed at various echelons of command in the Army Air Forces. 
Shortly thereafter a conference was held in the Air Surgeon’s office 
“to indoctrinate the chiefs of the several services and members of the 
disposition board into the new medical policy.” The complete report 
of that conference was introduced into evidence and is included in 
the printed hearings of our investigation. Its authenticity is ad- 
mitted. The report stated, in part: 
Current War Department policy concerning physical reclassification is based 
on a career basis rather than a strict adherence to qualification for military duty. 
By career we men simply this—that members of the Regular Establishment will 6034 
be qualified or disqualified for active service according to the physical standards 
required for further military duty. On the other hand, officers of the civilian 
components of the Army will be considered on the basis of whether or not they 
have any physical defects which would interfere with civilian status. 
We have no proof that any non-Regular officers were denied physical 
retirement as a result of this new statement of policy, but the report 
established a policy which was clearly in violation of existing law. 
We completely reject the explanation of Army witnesses who 
attempted to justify the action. Was this document indicative of 
prejudicial thinking by the policymakers of the Army? Does it 
prove that Regulars attempted to circumvent the law because of their 
resentment of non-Regulars? Frankly, we do not know whether 
the action was the result of inadvertence or prejudice, but it w *s so 
improper that we take this opportunity to condemn it. 
{d) The final point which is considered pertinent to the question of 
discrimination concerns hospitalization, PX, and commissary benefits. 
At the present time all retired naval officers, both regular and non- 
Regular, are accorded these privileges. As to Army officer personnel, 
only the retired Regular officers receive them. It was inevitable 
that the non-Regular officer of the Army who had been retired for 
physical disability should seek equality with the non-Regular officer of 
the Navy. 
The beginning of this problem can be traced to the enactment of 
the act of April 3, 1939, and the subsequent Executive orders which 
transferred non-Regular Army officers to the Veterans’ Administra- 
tion for the administration of retirement benefits, but failed to transfer 
non-Regular officers of the Navy in the same manner. Since a 
retired non-Regular Navy officer is transferred to the retired list of 
the Navy, is paid from naval appropriations and receives the same bene- 
fits as the Regular Navy officer, it is understandable that the feeling 
should arise among the disabled non-Regular officers of the Army that 
they were being discriminated against by the Regulars. Our recom- 
mendations, in this respect, relative to naval personnel are contained 
in section IV. On April 28, 1939, less than a month after the passage 
of the act of April 3, 1939, Executive Order No. 8099 vested all 
“duties, powers, and functions incident to the administration and 
payment of the benefits provided by the statute (act of April 3, 1939) 
in the Veterans’ Administration.” The act of September 26, 1941, 
extended exactly the same benefits as those provided in the act of 
April 3, 1939, to Reserve officers who were ordered to active duty for 
periods in excess of 30 days on or after February 28, 1925, except 
for service with the Civilian Conservation Corps. The act further 
provided that the functions “incident to the administration and 
payment of the benefits so provided are vested in the Veterans’ 
Administration.” The language of the various acts has repeatedly 
distinguished between Regular personnel and non-Regular personnel, 
Regular personnel being designated as “retired” while non-Regular 
personnel are referred to as receiving “retirement pay.” 
Witnesses who have requested that the non-Regular officer be 
accorded the same benefits as the Regular officer, and that the Regular 
Army Establishment administer these benefits, have stressed the 
point that they do not expect the Army to add any additional facilities 
or personnel in order to extend hospital benefits to the non-Regulars 
and their dependents, nor do they expect that post exchange and 6035 
commissary privileges will be extended to non-Regulars except on 
an inventory available basis. 
If it is proper to extend these benefits to the non-Regular officer 
personnel of the Army, it is equally proper that they be extended to 
the disabled enlisted men who are drawing disability compensation 
from the Veterans’ Administration. The most recently available 
figures show a total of 22,736 officers and warrant officers on the retired 
lists of the Army and Navy. All personnel in this group receive 
equal hospitalization, post exchange, and commissary privileges. 
Approximately 26,400 non-Regular Army officers of World War II 
are receiving retirement pay from Veterans’ Administration and, in 
addition, more than 1% million enlisted men are receiving disability 
compensation from the Veterans’ Administration. So far as the 
disabled non-Regular Army officers are concerned, we are convinced 
that the law does not place the burden on the Regular Army Estab- 
lishment of extending the benefits to those persons. 
It is inconceivable that any benefit, other than psychological, 
would accrue to the more than 1% million persons in question. We are 
of the opinion that an extension of the benefits in the manner requested 
would be an idle gesture, since it is evident that no benefits would 
accrue to the affected persons without a corresponding increase in 
existing facilities. We consider it to be the duty of the Congress 
to prevent rather than create competition between service facilities 
and private business. 
There is no doubt that an inequity exists between the physically 
disabled non-Regular officers of the Army and the Navy, however, 
it is an entirely different matter to term this inequity a discrimination 
which is being practiced by the Regular Army against non-Regular 
Army officers. We conclude that the Army has properly interpreted 
and executed existing law so far as the extension of corollary retire- 
ment benefits is concerned. As previously pointed out, the act of 
April 3, 1939, was silent as to who should administer the benefits of 
the act, but the subsequent Executive order on April 28, 1939, clearly 
placed this duty upon the Veterans’ Administration. The Act of 
August 27, 1940, which extended the same benefits to non-Regulars 
of the Navy, was likewise silent as to who should administer the 
benefits, and no Executive order was issued relieving the N avy of the 
administrative responsibility. Therefore, we find no basis which 
would justify a criticism of the Navy interpretation which placed this 
responsibility upon the Navy rather than the Veterans’ Administra- 
tion. 
Allegation 
6. “That physical retirement in a terminal leave promotion grade 
was improper.” 
Since terminal-leave promotions have been discontinued, this 
matter presents no problem for future consideration. Therefore, our 
consideraton of the subject is confined to the propriety of granting 
terminal-leave promotions in the first instance. 
After the close of hostilities, it was recognized that many Army 
officers, particularly non-Regular Army officers, had served on active 
duty for extended periods of time without a promotion. It was also 
recognized that many of these officers had efficiency ratings of excel- 
lent or above, and that this period of excellent performance was 6036 
deserving of recognition. Pursuant to the requests of numerous organ- 
izations, and to his own desire to recognize the meritorious service of 
non-Regular officers, General Marshall, then Chief of Staff, authorized 
the creation of terminal-leave promotions. In October of 1945, a 
War Department directive was issued which authorized the promotion 
to the next higher grade of those officers who had served for a specified 
period of time without a promotion and with an efficiency index of 
excellent or above. Those non-Regular Army officers who came 
within this category were promoted to the next higher grade when they 
entered a terminal-leave status. The terminal-leave period varied 
according to the amount of accumulated leave in each individual 
case; however, in each case the officer drew the full pay and allow- 
ances of the terminal-leave promotion grade until the expiration of the 
terminal-leave period. While the primary object of this directive 
was to accord recognition for the meritorious services of non-Regular 
officers, the Regular officers who were being separated from service 
were not long in asserting their claims for terminal-leave promotions. 
The program had progressed to such an extent that it was not con- 
sidered advisable to withdraw terminal-leave promotions and, in 
order to attain equality, terminal-leave promotions were extended to 
the Regular officers under the same conditions as they had previously 
been extended to the non-Regulars. 
It is apparent that no responsible agency in the War Department 
had considered the effect of this directive on the status of an AUS 
officer who received a terminal-leave promotion and was subsequently 
found to be physically disabled. It was inevitable that such cases 
would arise and that a legal determination would have to be made as 
to whether the retired or retirement pay of the officer would be based 
upon his terminal-leave promotion grade or on the grade in which he 
last served on active duty. When this question was submitted to the 
Judge Advocate General of the Army, it was held that an AUS officer 
had only one grade, which was the last grade to which he had been 
promoted. Since this included the terminal-leave promotion grade, 
it was nded that an officer who was physically retired while serving 
in a terminal-leave promotion grade should have his retired or retire- 
ment pay computed on the basis of his terminal-leave grade. As a 
result, the retirement pay of many officers is based on the base pay 
of a grade in which they served no active duty. 
It has been determined from committee questionnaires that 69 
Regular officers and 236 non-Regular officers, all in the grade of 
colonel or above, who are drawing retired or retirement pay, have 
attained their present grade as a result of a terminal-leave promotion. 
It is certain that a far larger number of terminal-leave promotions 
occurred in the grades below that of colonel. 
Many of these officers might have been promoted had they been 
subject to the same group-promotion system which governs Navy 
promotions, but this theory is so conjectural that the committee has 
no basis upon which to predicate a logical finding. It cannot be 
denied that there was legal justification for the opinion of the Judge 
Advocate General’s Department which approved this procedure; how- 
ever, we feel that there was an equal legal justification for ruling that 
physical retirement in a terminal leave promotion grade was not 
authorized, and we are certain that such a ruling would have been in 
conformity with the intent of General Marshall’s original directive. 6037 
The imponderables which are presented by this situation prevent 
us from finding that the increment of terminal-leave pay should now 
be withdrawn from retired or retirement pay; however, we would be 
remiss if we failed to point out our disagreement with the legal inter- 
pretation of the directive which has permitted this situation to arise. 
Section IV. Recommendations 
1. Proposed amendments to the Servicemen's Readjustment Act of 1944, 
as amended (Public Law 346, 78th Cong.) 
(a) Section 302 of the above-stated act directed the Secretary of 
War, the Secretary of the Navy, and the Secretary of the Treasury to 
establish— 
boards, of review coraponsed of five commissioned officers, two of whom must be 
from the Medical Corps of the Army or Navy, or from the Public Health Service, 
as the case may be. 
It is— 
the duty of any such board to review, at the request of any officer retired or 
released to inactive service, without pay, for physical disability, pursuant to the 
decision of a retiring board, the findings and decision of such retiring board. 
Pursuant to the act the boards were established, but were limited 
to one for each of the departments and all were located in Washington, 
D. C. This limitation on the number and location of the boards 
resulted in both physical and financial hardships to many disabled 
officers who elected to appear in person before the review board. In 
spite of these hardships, by March 1, 1948, approximately 90 Navy 
officers and 684 Army officers, who had been denied physical retire- 
ment through prescribed Army or Navy procedure, were authorized 
such retirement by the review boards. 
Witnesses have paid tribute to the fairness with which the review 
boards have functioned, but have been most critical of the juris- 
dictional restrictions which the act imposes. Unless an officer is 
separated from service with a disability but without compensation, 
he is denied an appeal to the review board. This has resulted in the 
denial of an appeal to many officers who were denied retirement in 
spite of a disability. 
Therefore, we recommend that section 302 of the Servicemen’s 
Readjustment Act of 1944, as amended, be further amended to 
provide: 
(1) That it shall be the duty of any such board to review, at the request of any 
officer or former officer separated from active service, whose physical condition 
has been considered by a retiring board or a board of medical survey, the findings, 
recommendations, and decisions of such retiring board or board of survey, or such 
other cases as may be referred to such board by the head of the department con- 
cerned: Provided, That such board shall not review the case of any person who 
was separated from the service under other than honorable conditions. 
(b) The procedure followed by the review board of the Navy under 
section 302 has been criticized. In our opinion, the criticism is well- 
founded. 
Under the initial retirement proceedings of the Navy, an officer’s 
physical condition is first evaluated by a board of medical survey. 
The case is then processed by the Bureau of Personnel, the Judge 
Advocate General of the Navy, the Bureau of Medicine and Surgery, 
the Secretary’s Advisory Board and the Secretary of the Navy, before 6038 
reaching a Navy retiring board. If an officer is denied retirement after 
this thorough screening, it is more than likely that one or more of the 
agencies which intervened in the case after it left the Medical survey 
board and before it reached the Navy retiring board had expressed 
an adverse opinion on the case. While it may be entirely proper that 
each of these departments be permitted to express an opinion during 
the initial proceedings as to the advisability of retiring an officer, we 
see no merit in permitting the same agencies to intervene in the re- 
tirement proceedings being conducted by the board of review under 
section 302. Under existing administrative procedure in the Navy, 
the same agencies which participated in some degree in the denial of 
retirement in the first instance are permitted to express their opinion 
on the same case on review. Such procedure violates, in spirit at 
least, the very reason for the creation of disability review boards and 
constitutes an improper intrusion upon the rights of an officer who 
seeks relief from the disability review board. 
Under Army procedure, an officer who desires to appeal his case to 
the Secretary of the Army’s Disability Review Board files his applica- 
tion with the Adjutant General. The application is processed in 
that office, in order to determine whether or not the case meets the 
jurisdictional requirements necessary to confer jurisdiction upon the 
Review Board. All cases which meet these requirements are then 
transferred to the Secretary’s Review Board, which proceeds to hear 
the cases in proper order without the intrusion of a single agency 
which had participated in the initial denial of retirement. We hold 
that the Army procedure is the more desirable. 
Therefore, we recommend that current administrative procedure in 
the Navy Department, in the furtherance of section 302 of the Service- 
men’s Readjustment Act, be altered in such manner as to conform to 
the procedure followed by the Department of the Army. 
2. Authority of the Surgeons General—Army and Navy 
The evidence is conclusive that the Surgeons General have re- 
peatedly disagreed with the medical findings of retiring boards, as 
many as four or five times in some cases. The physical standards 
prescribed for physical retirement were not uniformly interpreted, 
nor applied, by the 99 Army retiring boards, nor by the 4 naval 
retiring boards which were in operation during the peak load of physi- 
cal retirement cases. The task which confronted the Surgeons General 
and the retiring boards in this respect is admitted to have been ex- 
tremely difficult. With due allowance for this fact, we consider that 
the administration of these standards left much to be desired. The 
Surgeons General approved some cases for retirement and denied 
others which involved exactly the same type of disability. This was 
not a failure of the law; it was an administrative failure. 
It is conceded that the Surgeons General should be accorded the 
power of review to insure standardization and to disapprove the 
original medical findings of a retiring board. It is further conceded 
that the Surgeons General should be accorded a second review, if 
necessary, in order to express a continuing disapproval of the medical 
findings of the retiring board. In our opinion, additional disapproval 
of the medical findings by the Surgeons General should not be per- 
mitted. Since the Surgeon General of the Navy is already limited to 
one endorsement on a retiring board case, the following recommenda- 
tion is not applicable to current Navy procedure. 6039 
We recommend that, if the Surgeons General shall twice disapprove 
the medical findings of a retiring board on the same case, the case shall 
then be certified to the Secretary of the Army, or Air, as the case may 
be, whose decision on the matter shall be final. 
3. Hospital benefits, post exchange and commissary privileges 
The extension of hospital benefits and post exchange, ship’s store, 
and commissary privileges to non-Regular officers, warrant officers, 
and enlisted men ot the Army, Navy, and Marine Corps presented no 
problems prior to 1939. The act of April 3, 1939, provided in perti- 
nent part: 
That all officers, warrant officers, and enlisted men of the Army of the United 
States, other than officers and enlisted men of the Regular Army, if called or 
ordered into active military service by the Federal Government for extended 
military service in excess of 30 days, other than for service with the Civilian Con- 
servation Corps, and who suffer disability or death in line of duty from disease or 
injury while so employed shall be deemed to have been in the active military serv- 
ice during such period and shall be in all respects entitled to receive the same 
pensions, compensation, retirement pay, and hospital benefits as are now or may 
hereafter be provided by law or regulation for officers and enlisted men of corre- 
sponding grades and length of service of the Regular Army, including for their 
dependents the benefits of the Act of December 17, 1919 (41 Stat. 367), as amended. 
Since there were no provisions of law at that time which authorized 
the physical retirement of enlisted men of the Regular Army, the 
provisions of the above-quoted act extended no benefits to non- 
Regular enlisted men of the Army. However, non-Regular officers 
and warrant officers of the Army receive very substantial benefits 
under the act, and they construed the language of the act to include 
equal post exchange and commissary privileges, even though those 
privileges were not specifically enumerated. Both the Army and the 
President foresaw the creation of serious problems for the Army if 
the Army were forced to assume the administration of the benefits 
of the act. As a result, Executive Order No. 8099 was issued on 
April 28, 1939, and, as amended, provides in pertinent part: 
Whereas the act is silent as to what agency shall administer the benefits pro- 
vided thereby; and 
Whereas it is deemed appropriate and desirable that such administration be 
placed in the Veterans’ Administration: 
Now, therefore, by virtue of the authority vested in me as President of the 
United States, and by the act of July 3, 1930 (ch. 863, 46 Stat. 1016), the duties, 
powers, and functions incident to the administration and payment of the benefits 
provided by the statute as above set out are hereby vested in the Veterans’ 
Administration; Provided, That in the administration of the retirement-pay 
provisions of the said statute, the determination of all questions of eligibility for 
the benefits thereof, including all questions of law and fact relating to such eligi- 
bility, shall be made by the Secretary of War, or by someone designated by him 
in the War Department, in the manner, and in accordance with the standards, 
provided by law, or regulations for Regular Army personnel. 
Thus the act of April 3, 1939, created equal physical retirement 
benefits for Regular and non-Regular Army officers, but subsequent 
Executive orders relieved the Army of the responsibility of adminis- 
tering the benefits to non-Regular officers and warrant officers and 
placed that responsibility upon the Veterans’ Administration. 
On August 27, 1940, a similar enactment extended the same bene- 
fits to all officers, nurses, warrant officers, and enlisted men of the 
United States Naval Reserve or United States Marine Corps Reserve. 
A reading of the two acts discloses that the language is identical in 
all material respects. In spite of this fact, no Executive order was 
issued transferring the responsibility for administering the benefits of 
the act from the Navy to the Veterans’ Administration. On the con- 6040 
trary, the Judge Advocate General of the Navy ruled that the non- 
Regular naval personnel referred to in the act were authorized to 
receive not only the same hospital benefits, but the same commissary 
and ship’s store privileges which were already enjoyed by Regular 
Navy personnel. 
We fail to understand the completely divergent interpretation of 
two laws which are identical in language. Perhaps it is true that 
the number of retired personnel on the retired list of the Navy in 
1940 was so small that it was possible for the Navy to administer 
the benefits with little additional effort. However, the intervention 
of a war has completely altered this situation. As of today there are 
approximately 23,000 officers, warrant officers, and enlisted men on 
the retired lists of the Army and Navy. Approximately 13,000 of 
this number are on the retired list of the Navy. The Navy cannot 
justify the extension of the privileges in question on the basis of the 
comparative numbers involved. 
The Department of the Army and the Department of Air are pres- 
ently operating 162 sales commissaries in the United States which are 
handling a total of 259,858 individual accounts. These accounts are 
limited to active duty and retired Regular personnel and a limited 
number of civilian employees. The Navy is operating 38 sales com- 
missaries within the continental limits which handle a total of 109,598 
individual accounts. These accounts represent not only active-duty 
personnel but retired Regulars and non-Regulars, both officers and 
enlisted men. We doubt that many of them know it, but under cur- 
rent Navy regulations all honorably discharged officers and the 1 % 
million enlisted men of the Army who are being cared for and are 
receiving medical treatment from the Veterans’ Administration are 
authorized to receive services from Navy ship’s service stores. Of 
course this service is extended on an inventory available basis, and it 
is inconceivable that any appreciable number benefit by the provisions. 
We subscribe to the theory that hospitalization benefits, post ex- 
change, ship’s service store, and commissary privileges were originally 
created for the convenience of active-duty personnel who were not 
conveniently located to similar public facilities. These service facili- 
ties have been so greatly increased that they may now properly be 
termed “big business.” 
The decision of the Comptroller General, dated October 19, 1943, 
(23 Comp. Gen., pp. 284-286) stated: 
* * * retired pay together with any longevity increase therein is paid to 
retired officers of the Regular Army as current compensation or pay for their con- 
tinued service as officers after retirement and only while they remain in service 
(U. S. v. Tyler, 105 U. S. 244), whereas the retirement pay authorized by section 
5 of the act of April 3, 1939, for officers of the Army of the United States, other 
than officers of the Regular Army, who suffer disability while employed in the 
active military service of the Federal Government, is not conditioned on their 
remaining in the service but is more in the nature of a pension predicated on the 
disability without regard to whether they remain in the service and without re- 
lation to any such subsequent services * * * .” 
While this decision refers to Army personnel only, we subscribe to 
the differentiation which is made between Regulars and non-Regulars, 
and are of the opinion that it should equally apply to naval personnel. 
We do not criticize the attitude of the navy in extending these priv- 
ileges to non-Regulars. On the contrary, we commend the Navy in 
attempting to obtain equality of treatment for all Naval personnel. 6041 
However, we consider that the time has arrived to face the fact that 
ships’ stores, post exchanges, and commissaries are engaged in business 
on a scale that was never anticipated. It is also a fact that hospital 
facilities and medical personnel of the Army and Navy are taxed to 
capacity. 
Having concluded that the administration of the corollary benefits 
of retirement by the Army and Navy should be limited to career 
personnel of those respective services, we recommend that, by exec- 
utive order or statute, if necessary, all non-Regular naval personnel 
who shall qualify for physical retirement be certified to tha Veterans’ 
Administration for the administration of the benefits which are now 
or may hereafter be provided by law or regulation. 
f. Tax exemption 
The total tax exemption now accorded disability retirement pay 
presents a motivation for an officer to seek physical retirement in 
preference to retirement for age or length of service. We consider any 
system of military retirement which places a premium on the retire- 
ment of a Regular officer before he has completed his military career, 
as prescribed by statute, to be basically wrong. 
Prior to the interpretation of the Internal Revenue Act of 1942, 
which interpretation exempted retired or retirement pay from income 
tax, Regular officers resisted retirement and made every effort to com- 
plete their service careers. Since no tax exemption existed prior to 
1943, no officer who entered service before that time relied upon the 
tax exemption as a reason for chossing a military career, and we 
doubt that more than a negligible number of non-regular officers were 
even aware of the tax-exemption ruling until their hospitalization prior 
to physical retirement. We must conclude that tax-exemption of 
physical retirement pay was not an incentive for entrance into military 
service. In our opinion, the exemption constitutes an improper 
departure from the fundamental principles of our system of taxation. 
In the past one group of physically disabled officers has been 
extended special consideration. That group consists of those officers 
who have become disabled as a result of wounds suffered in combat 
with an enemy of the United States or as a result of the explosion of an 
instrumentality of war. This committee has not explored this question 
sufficiently to enable it to make any positive recommendations, how- 
ever, we do recognize that the appropriate Congressional committees 
and the Congress should give full consideration to this matter. 
Therefore, we recommend that the present tax exemption of 
disability retirement pay of Regular and non-Regular officers of the 
Military Establishment, with the possible exception above noted, 
be removed. 
5. Reexamination of officers who have been physically retired or approved 
for retirement pay 
Public criticism of physical retirements has become so intense 
that a serious reflection has been cast upon the integrity of the military 
services. There have been specific charges of fraud, inequities and 
discrimination and a general charge that disability retirements in 
the armed forces constituted a racket. We have considered each of 
these charges in this report, and have pointed out that there is no 
method under existing law which permits us to prove or disprove 
the existence of fraudulent retirement cases. In view of the serious 6042 
charges which have been made, we consider it imperative that affirma- 
tive action be taken in order to make a positive determination of the 
facts. There appears to be only one possible course and that is a 
re-examination of those who have been physically retired or authorized 
retirement pay. A reexamination of every person in this category 
would entail a needless waste of time and money. The great majority 
of physical retirement cases are obviously permanently disabling. In 
addition, there are many whose disabilities were incurred in combat, 
and we oppose any alteration in their retired or retirement status; 
It is also recognized that the great majority ol physical retirements 
were granted after 1943, and that the tax exemption which we have 
criticized was authorized in 1943. 
Therefore, we recommend: 
(a) That all Regular and non-Regular military personnel who 
were physically retired or granted disability retirement from 
January 1, 1944, to January 1, 1948, be examined by the respec- 
tive service of which they were a member. 
(b) That all persons whose disability is obviously permanent 
in nature, or who have suffered their disability as a result of 
combat with an enemy of the United States, or through the 
explosion of an instrumentality ot war, be exempted from such 
reexamination. 
(c) That all retired Regular officers who shall have recovered 
from their disability, as determined by a reexamination, shall be 
returned to the active list in their last active-duty grade. 
(d) That the retirement certification of all non-Regular officers 
who shall have recovered from their disability, as determined by 
a reexamination, be withdrawn. 
(e) That all examinations contemplated under this recommen- 
dation be conducted by a panel or group which shall include equal 
numbers of both Regular and non-Regular medical personnel. 
6. Suggested changes in existing military retirement law 
At the close of hostilities it was necessary to demobilize approxi- 
mately 1,000,000 non-Regular officers and warrant officers. Many 
of those officers were already in hospitals as a result of disabilities, 
and many others were placed in hospitals as a result of physical de- 
fects which were discovered during a physical examination at a sepa- 
ration center. Approximately 100,000 Army, Navy and Marine 
officers were in this category. Since these officers were returning to 
civilian life, it was necessary for the Retiring Boards and medical 
personnel to evaluate their physical conditions as quickly as circum- 
stances would permit. If it could be determined that an officer was 
permanently incapacitated as a result of an injury incurred in line of 
duty, the officer was retired or certified to the Veterans Administra- 
tion for retirement pay. Cases involving amputation, gunshot 
wounds and other similar disabilities presented no difficulty in this 
respect. They were obviously permanently disabling. Many other 
cases involving diseases of deterioration and other similar disabilities 
defied solution by the best medical authorities within any reasonable 
period of time. It is our opinion that the latter group of cases has 
been chiefly responsible for the numerous charges of discrimination 
between non-Regulars and Regulars and the public charge that mili- 
tary retirements constituted a racket. 6043 
The necessity for a speedy determination of the permanency of a 
Regular officer’s disability presented no problem. If there was any 
question as to permanency, the Regular was further hospitalized, 
placed on a temporary limited duty status or returned to a full duty 
status. If not retired, he was always available for further evaluation 
of his physical condition. If he subsequently recovered, he was re- 
stored to a full duty status. If his questionable disability could 
subsequently be determined to be permanent in nature, he was retired. 
No one has been able to explain to our satisfaction the meaning of 
the words “reasonable time.” Some medical authorities state that 
1 year is a reasonable time. Others specify different periods. In 
general, an attempt was made to make a determination of permanency 
within 1 year, but many cases have been hospitalized for periods as 
long as 3 years, after which it was still impossible to determine 
whether or not the disability was permanent in nature. Consider 
•the case of an officer who has suffered a nerve injury with a resulting 
loss of 3 inches of a given nerve. Nerve specialists have said that the 
nerve will usually regenerate itself at the rate of 1 inch per year, but 
that there is always the chance that the regeneration may not occur 
or be complete. Should a retiring board or the Surgeon General of 
the Army or the Navy find that an officer suffering from this type of 
disability is permanently disabled, after he has been hospitalized for 
1 year? Since the best medical authorities frankly state that they 
cannot make such a determination, it is an idle gesture for us to admit 
that we are unqualified to express an opinion. The act of April 3, 
1939, resulted in this medically impossible requirement, and we con- 
sider it imperative that the requirement for determining permanency 
of a given disability within a limited period of time be removed. 
We do not agree with those who conclude that active duty service 
creates a contractual relationship between the Government and an 
officer, which guarantees that existing law governing physical retire- 
ment will not be altered. The military retirement system is a non- 
contributory system and, in our opinion, confers no vested rights upon 
its prospective beneficiaries. We consider it within the authority of 
the Congress to alter existing retirement laws in any manner it deems 
advisable. However, aside from the purely legal aspects of the 
question, we cannot ignore the moral obligation which the Congress 
has accepted by the enactment of existing laws. Most physically 
disabled officers, particularly the younger non-Regulars, whose aver- 
age age is 35, have acquired homes, increased their families and have 
incurred other substantial long-term obligations on the assumption 
that their retirement pay would not be interrupted. We recognize 
the moral obligation and, except for removing the present income 
tax exemption, would not disturb the retired or retirement pay of 
those who have been legitimately retired or granted retirement pay. 
This conclusion does not preclude a recognition of the fact that present 
retirement laws are inadequate in some respects. Two possible 
solutions are suggested: (1) A modification of existing law, or (2) the 
creation of a new retirement system which restricts retirement to 
career personnel and compensates disabilities of noncareer personnel 
on a percentage-of-disability basis. 
(a) With reference to the first plan, we recommend that the Retire- 
ment Subcommittee of the House Armed Services Committee con- 
sider the following proposals; 6044 
(1) That fitness for military duty be considered as the cri- 
terion for determining eligibility for physical disability retire- 
ment. 
(2) That compensation for physical retirement continue to be 
75 percent of base and longevity pay. 
(3) That there be no change in existing procedure in those 
cases involving a disability which is obviously permanently 
disabling. 
(4) That those officers whose disability continues to be ques- 
tionable as to degree or permanency after maximum hospitaliza- 
tion be conditionally retired for a maximum period of 5 years. 
(5) That those officers conditionally retired be placed in one 
of several categories, according to the nature of their disability, 
which category shall determine the frequency of reexamination 
during the period of conditional retirement. 
(6) That any officer who shall continue to be unfit for general, 
military service at the expiration of the conditional retirement 
period be presumed to be permanently disabled and placed on the 
retired list or certified to the Veterans’ Administration, as the case 
may be. 
(7) That any Regular officer who shall recover from his disa- 
bility within the prescribed period be returned to active duty 
m the same grade in which conditionally retired, but with a loss 
of longevity and seniority credit equal to the period of conditional 
retirement. 
(8) That the conditional retirement of any non-Regular officer 
who shall recover from his disability within the prescribed period 
be terminated. 
(9) That reexamination contemplated under this proposal be 
conducted by the medical personnel of the service of which the 
conditionally retired officer is a member. 
(10) That no officer who has completed 30 years of active 
commissioned service or has attained the statutory retirement age, 
and has completed such service in a full duty status, be retired 
for physical disability. 
The chief accomplishment of these modifications of existing law 
would be to insure that all physical disability retirements were 
legitimate. 
Modification of existing law in accordance with paragraph (a) would 
not answer additional criticisms which have been made against the 
existing physical retirement system: 
(1) It results in a serious discrimination against enlisted men. 
(2) No provision is made for the reexamination of officers who 
have been retired or certified for retirement pay—once retired, 
always retired. As a consequence, those who may have re- 
covered continue to draw full retirement benefits. 
(3) The degree of disability has no relation to the amount 
of compensation. Therefore, an officer whose sole disability is a 
hearing deficiency draws the same amount of money as an officer, 
of the same grade and length of service, who has lost both legs. 
(b) In view of these serious criticisms, we recommend that the 
Retirement Subcommittee of the House Armed Services Committee 6045 
give full consideration to the establishment of a career system of 
retirement which would—■ 
(1) Establish, by statute, the number of years necessary to 
constitute a military career. 
(2) Equalize the rights to physical disability retirement as 
between Army and Navy enlisted personnel. 
(3) Authorize longevity credit to non-Regular officers and 
enlisted men for inactive duty service. 
(4) Authorize retirement, physical or otherwise, for all officers 
and enlisted men whose length of service equaled or exceeded 
such statutory requirement. 
(5) Direct that all other officers and enlisted men, Regulars 
and non-Regulars alike, who become incapacitated for general 
military service before completing sufficient service to meet the 
statutory requirements for retirement, be certified to the Vet- 
erans’ Administration and compensated for percentage-of- 
disability, on such basis as the Congress may determine. 
Our findings and recommendations do not preclude the existence of 
other deficiencies and abuses under existing law nor other possible 
solutions. Our primary responsibility has been to investigate, not 
legislate, but we would be derelict in the discharge of our responsibility 
if we were merely to enumerate the deficiencies and abuses which we 
have found without offering the possible solutions which have sug- 
gested themselves during our 4f£ months study of the subject. 
In the final analysis any proper system of military retirement must 
accomplish justice and equity for both the beneficiaries of the system 
and those who must underwrite its cost. We conclude that the present 
system does neither. Accordingly, we submit the foregoing report.