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2 Lynck vs. United States. comes here from the Seventh Circuit, the insured died May 15, 1929. In each case, the United States demurred to the petition on the ground that the court was without jurisdiction to entertain the suit, because the consent of the United States to be sued had been withdrawn by the Act of March 20, 1933, ¢. 3, 48 Stat. 9, com- only called the Eeonomy Act. The plaintiffs duly claimed that the Act deprived them of prop- erty without due process of law in violation of the Fifth Amend- ment. The district courts overruled the objection; sustained the _demurrers and dismissed the complaints. Their judgments were affirmed by the cireuit courts of appeals. 67 F. (2d) 490; 68 F. (2d) 442. The only question requiring serious consideration re- lates to the construction and effect to be given to the clause of § 17 of the Economy Act upon which the Government relies; for the character and incidents of War Risk Insurance and the applicable rules of constitutional law have been settled by decisions of this Court. The clause in question is: “) . . all laws granting or pertaining to , yearly renewable term insurance are hereby repealed . First. War Risk Insurance policies are contracts of the United States. As consideration for the Government’s obligation, the in- sured paid prescribed monthly premiums. White v. United States, 270 U. 8. 175, 180. True, these contracts, unlike others, were not entered inte by the United States for a business purpose. The policies granted insurance against death or total disability with- out medical examination, at net premium rates based on the Ameri- ean Experience Table of Mortality, and three and one-half per cent interest, the United States bearing both the whole expense of administration and the excess mortality and disability cost re- sulting from the hazards of war. In order to effect a benevolent purpose heavy burdens were assumed by the Government.’ But 2The disbursements to June 30, 1933, for term and automatic insurance (the latter provided for those who were permanently and totally disabled or who died within 120 days after entrance into the service and before making appli- cation for term insurance) exceeded the premium receipta by $1,166,939,057. Administrator of Veterans’ Affaira, Report for Year 1933, p. 28. The annual cost of administration was estimated at $1,744,038.56. Report of United States Veterans’ Bureau for 1922, p. 465, War Risk Insurance waa devised in the hope that it would, in large measure, avoid the neceamty of granting _pensions. Term insurance was issued at a very low premium rate. Over 4,684,000 persons applied before the armistice to the amount of about Lynch vs. United States. 3 the policies, although not entered into for gain, are legal obliga- tions of the same dignity as other contracts of the United States and possess the same legal incidents. War Risk Insurance, while resembling in benevolent purpose pensions, compensation allowances, hospital and other privileges accorded to former members of the army and navy or their de- pendents, differs from them fundamentally in legal incidents. Pen- sions, compensation allowances and privileges are gratuities. They involve no agreement of parties; and the grant of them creates no vested right. The benefits conferred by gratuities may be redis- tributed or withdrawn at any time in the discretion of Congress. United States v. Teller, 107 U. S. 64, 68; Frisbie v. United States, 157 U. S. 160, 166; United States v. Cook, 257 U. 8. 523, 527. On the other hand War Risk policies, being contracts are pronerty pole) Delng contracts, property and create vested rights. The terms of these contracts are to be found in part in the policy, m part in the statutes under which they are issued and the regulations promulgated thereunder. In order to promote efficiency in administration and justice in the distribution of War Risk Insurance benefits, the Administra- tion was given power to prescribe the form of policies and to make wagwalati Mh few nencanthed mens regulations, L1né corm pr eser ibed pr ovided that the policy should be subject to all amendments to the original Act, to all regulations then in force or thereafter adopted. Within certain limits of appli- eation this form was deemed authorized by the Act, United States vy. White, 270 U. 8. 175, 180, and, as held in that case, one whose vested rights were not thereby disturbed could not complain of subsequent legislation affecting the terms of the policy. Such legis- lation has been frequent.’ Moreover, from time to time, privileges $40,060,000,000 for War Risk term insurance; but over 75 per cent of the men who carried term insurance while in the service never paid a promium after the war. See Report of Bureau of War Risk Insuranee for 1920, pp. 5, 7, 41; Report of United States Veterans’ Bureau for 1922, p, 456; for 1925, p, 268. SExtension of class of beneficiaries: Acts of June 25, 1918, c. 104, $2, 40 Stat. 609; Dee, 24, 1919, ¢, 16, 942, 3, 4, 13, 41 Stat. 371, 375; Aug. 9, 1921, ©, 57, § 23, 42 Stat. 147, 155; May 29, 1928, c. 875, § 13, 45 Stat. 964, 967, Upheld: White v. United States, 270 U, 8, 175. Payment where beneficiary dies before exhaustion of policy: e. g., Dec. 24, 1919, ¢. 16, §§ 15, 16, 41 Stat. 371, 376; Aug. 9, 1921, ¢. 57, § 26, 42 Stat. 147,156; June 7, 1924, c. 320, $ 26, 43 Stat. 607, 614. Payment where beneficiary incompetent: e. g., Dec. 24, 1919, «. 16, $5, 41 Stat. 371; Mar. 2, 1923, c. 173, §1, 42 Stat. 1374; July 2, 1926, ¢. 723, § 2, 44 Stat. 790, 791.