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In his letter to the President, Secretary McAdoo indicated that the bill had two purposes:

Its main purpose is to grant a reasonable government indemnity against the losses and risks incurred in the discharge of a patriotic duty to which the government has called and forced the citizens. It aims to accomplish these ends by granting a reasonable measure of indemnity against the risk of loss of support of the bread-winner, or of life and limb, or present insurability at ordinary rates.

But this was not all, for the Secretary declared, "It ought also to check any future attempts at service-pension legislation by enabling a man now to provide against impairment through old age, total disability, or death resulting from other causes."

In discussing the question of possible expense, Secretary McAdoo said:

It must be borne in mind that the government will not escape these expenditures if this plan of compensation and insurance should be rejected, for the pension plan would then be resorted to and the cost would likely exceed that of the proposed plan. At the same time the pension system would not provide the same benefits nor cover the subject in the same comprehensive, human, and equitable way. No provision is made in our pension laws for family allowances while the men are at the front, nor for rehabilitation, etc (8)

Plainly then one of the integral purposes of the act was to provide a substitute for disability pensions by means of a scientific system of compensation, and for service pensions by means of voluntary insurance issued at even lower than peace-time rates.

The opposition at the hearings and on the floor of Congress was directed chiefly against the insurance features of the bill. The House Committee voted to reduce the amount of insurance which the soldier could take out from $10,000 to $5,000, but upon the request of President Wilson the original amount was restored. When finally approved the one great change from the original bill consisted in the replacement of compensation graduated according to the army pay, with liberal minimum limits by a scale fixed irrespective of military rank.

An appropriation of $176,250,000 was made to meet the demands occasioned by the act. Of this, $141,000,000 was for family allowances, $12,150,000 for the compensation provision, $23,000,000 for the insurance fund, and $100,000 for administrative expenses (9)

The administration of the act was given, not to the Pension Bureau, as advocated by some, but to the War Risk Insurance Bureau. This Bureau had been created in September, 1914, to insure vessels and their cargoes, and its functions had been expanded by the act of June 12, 191 7, requiring the owners of all American merchant ships touching at American ports to insure all officers and men against loss of life and personal injury.

The various features of the bill are so arranged that they dovetail very effectively into one another. The allotment and allowance provisions protect the families of the men while in service; the compensation given for disability or death protects the soldier or his family after he has left service; while the insurance features permit the soldier or sailor to provide further protection against death or disability in addition to that afforded by the compensation clauses. These features will now be taken up in turn (10)