A detailed listing of the contents of this report, by The Secretary's THE FEDERAL GOVERNMENT's activities in health, education, and welfare are both a product and an instrument of modern American society. As a product, these activities have evolved from the development of a vast virgin land into a highly complex, industrial society. As an instrument, they are used as the modern means of furthering individual independence and dignity and of advancing national strength and vigor. The economic and social development of America is dated, of course, from the first settlements in the New World. As in other societies, America progressed through the social unit of the "community." As a sparsely settled wilderness, the people's strength and means of progress lay in the frontier stockades and settlements, which were forever pushed onward until the land was conquered. Political independence, growth, and change gave new dimensions to the community. States, as political entities, were formed as extensions of their communities' interests. And the National Government, as a political entity of the whole, was created to represent the national interest of all the individual communities. Time has not diminished the contribution to life today of our earliest communities, nor has it erased the hard core meaning and strength today of the individual American community. In one form or another-sometimes in almost indiscernable shape, sometimes in clear outline and principle-today's public activities in health, education, and welfare had their origins in the earliest settlements and colonial period of America. In some of the earliest settlements, where famine was a major hazard, a portion of the crops was set aside in a community storehouse for those in need during winter food shortages. Epidemics of communicable diseases were treated in many communities as a community responsibility, and "boards of quarantine" were established at ports to prevent the importation of disease from abroad. The earliest educational endeavors in America, from the "grammar” school in New England to the "old field" school in the South, contained the germ of the principle of "free" instruction for all children as a community responsibility. As the American economy developed, as our population grew, as the social aspects of life changed, so development, growth, and change have been necessary and desirable in our public activities in health, education, and welfare. In these activities, as in other fields, growth and change have been the orderly expectation of life in America. The America we know today, in all its aspects, has been most influenced by a historical fact marked by the year 1776. For our freedom as a people, as exercised through our democratic processes, has been the synthesizing and catalytic agent which has given our Nation its particular form, including our concepts and endeavors in public health, education, and welfare. Our independence as a people had hardly been won and the Federal Union formed before the national interest in education was demonstrated. In 1785 the first Federal grant of any nature was initiated by reserving land for establishing public schools in the Northwest Territory. A few years later, in 1798, the Federal Government established the Marine Hospital Service for the care of American seamen. This hospital service was the forerunner of the Public Health Service. A form of social security can be identified as far back as 1857, when the first municipal pension fund was established, providing disability and death benefits for New York City police. A few years later the first State gave formal recognition to the common nature of the problem of needy people and the common responsibility of all its communities in this problem. This was marked in 1863 by the founding in Massachusetts of the first State board of charities in America. These were a few of the early stirrings in health, education, and welfare, which were to grow and change to serve the needs of a people and nation as they grew and changed. A hundred years ago our population was about 23 million. At the end of calendar year 1954 it was nearly 164 million. A hundred years ago the value of all goods produced and services performed by the American people in one year was less than $10 billion. For 1954 it was about $357 billion. A hundred years ago the number of people employed in America was less than 8 million. At the end of 1954, the total was well over 60 million. These few comparisons of population, value of the national product, and employment-indicate growth in only its broadest and simplest form. But they imply a great deal more. Along with sheer growth has come social change the way in which we live our daily lives. What are some of the implications, in today's terms, of these social changes in relation to the Nation's health, education, and welfare? And, more specifically, in the fact of today's needs, what were some of the accomplishments in Federal activities in these fields during the brief span covered by this report, from July 1953 through June 1954? The Department and Its Work The Department of Health, Education, and Welfare is sometimes referred to as the "Department of Human Resources." The activities of the Department touch the life of every man, woman, and child in America. It is true that all Federal activities have a direct or indirect bearing on the lives of all Americans. But health, education, and welfare are intimate elements of the daily lives of all people. The Department comprises five major units: The Public Health Service, Social Security Administration, Office of Education, Food and Drug Administration, and Office of Vocational Rehabilitation. It is through the activities of these units that the Department, in carrying out the laws of Congress, seeks to advance the health of the Nation, further the education of each succeeding generation, and strengthen the welfare, or security, of certain individuals and, hence, of all Americans. It is noteworthy that the great bulk of the Department's work is carried on in partnership with the States and communities. Nearly all the programs for which the Department has Federal responsibility are actually operated by the States. One measure of the extent to which this is true is found in the amount of money spent by the Department in administering wholly Federal activities as against the amount allocated States for operating State programs to which the Federal Government makes financial contributions. For the fiscal year 1954, Congress appropriated $1.9 billion to the Department for all its activities, except for the self-supporting system of Federal old-age and survivors insurance. This amount was 2.8 percent of the total funds spent by the National Government. About 93 cents of each dollar appropriated by Congress to the Department was passed on by the Department to the States, communities, and institutions, primarily for their use in providing the various cash benefits and services in which the Federal Government and the |