In considering the use of government hospital beds at present reported vacant, it is of course entirely impracticable to attempt to accomplish the complete filling up of all government hospitals. As you all realize, this is due to a number of reasons, chief of which are (1) the administrative necessity at all hospitals of maintaining a surplus of beds amounting to from ten to fifteen percent of capacity to allow flexibility in case of epidemic or sudden emergency; and to permit unhampered the routine admission and discharge of patients, (2) the location of vacant beds away from the points of greatest demand, and (3) the fact that the vacant beds available are not of the type required at points where the Bureau needs them. From an analysis of this whole situation it is believed that we have sufficient beds available for the care of general cases with the exception of two or three areas of the country, such as Memphis, Tennessee, and in the metropolitan district of New York. Some provision must be made to care for cases of a general nature because facilities at these points are totally inadequate. In New York, the existing facilities must be given up by June 1922. However, the number of general medical and surgical cases requiring treatment will steadily diminish and contract hospitals in many instances would ultimately be able to care for their needs. On the other hand, the Bureau must make provision for the care of tuberculosis and neuro-psychiatric cases for many years to come. The general medical and surgical cases are a type which justify the use of contract institutions more than the other classes referred to, by reason of the comparatively short length of time that treatment is indicated: emergency conditions which require immediate hospitalization where the patient may be; and the disinclination on the part of claimants to be far from home, especially when a surgical procedure is indicated. The hospital program of the Veterans’ Bureau is meant to provide approximately 20,500 permanent beds for the treatment of tuberculosis and mental cases. It is estimated that between the present time and the end of 1923 the Veterans’ Bureau will lose the use of approximately 5,400 beds because the hospitals will have to be abandoned by reason of expiration of lease, temporary nature of the structure, or for other cogent reason.