Douglas depressed areas bill, of which I am coauthor. I have glanced through your statement. I am going to take it with me for more detailed study.

I want to commend you on the facts you have given, and particularly one that you have not quite reached yet, where you point out the benefits from the educational provisions of that GI bill of rights.

It might be of interest to you to know that 8 days ago there was introduced in the Senate of the United States a bill to extend the educational provisions of the GI bill of rights which terminated in January 1955, up as long as the draft exists, and it was coauthored by the distinguished Senator from Michigan, who is presiding this afternoon, along with over 25 of the Senators, coauthoring that bill, which will help some in the college area for the returning veterans. So I am glad to see your appraisal of that in your statement.

I regret that this other committee appearance forces me to leave. Governor WILLIAMS. Senator, naturally, I regret missing your company, but I want to say that if you have to go any place to testify in favor of that bill, I am very glad. I would like to add my amen to whatever you say in favor of it.

Senator YARBOROUGH. Thank you.

Representative BAILEY. Mr. Chairman, may I make a point of inquiry? Has Secretary Flemming of the Department of Health, Education, and Welfare testified on this matter?

Senator MCNAMARA. Yes, he has testified twice. He testified on the 17th and again yesterday.

Representative BAILEY. I am curious to know what the reaction of a Governor would be to a provision in that legislation. Are you familiar with the bill?

Governor WILLIAMS. I am in a way, sir.

Representative BAILEY. You are aware that their proposal is for a joining of the States on a 50-50 basis in districts that have reached their limitations in bonding capacity. When he testified before the House committee the other day, I asked him how seriously he was going to defend the Shylock provision in that proposal. I had in mind this provision. Let me give you an illustration of what I mean. There is a district, we will say, a school district, with $20 million of assessed valuation. They proposed to vote $300,000 in bonds to build school buildings. The bonds were to run for 25 years. If they were voted in 1960, they would expire in 1985. Now, they stick a little clause on there whereby they freeze one-half or 50 percent of the bonding capacity for that school district for a period of 10 years beyond the maturity of the bond.

In other words, from 1985 to 1995, they would still be collecting from that district 50 percent of their bonding capacity.

Now, here is what could happen. If a district had $20 million of assessed valuation when the bonds were voted, it is conceivable that something would happen during the 25 years of the life of that bond issue, where the value of that issue would increase to $100 million. The Government would actually collect more money back off the districts in some instances than what the Government paid in to support the original bond issue.

Senator MCNAMARA. That would be possible, yes.

Governor WILLIAMS. Congressman, in my regular testimony, I had planned to comment on this. But I think that you have made a better comment on the administration bill than I could hope to. I know that we in the State of Michigan, certainly, do not favor the administration bill. We do not think it is going to accomplish very much at all. As a matter of fact, it merely duplicates our own provision of putting the full faith and credit of the State behind the focal school districts and does not grant any of the money that we so badly need.

Senator MCNAMARA. I think that answers the question very well. Representative BAILEY. Yes. Thank you, Governor.

Senator MCNAMARA. It indicates that the bill will be of very little use to the State of Michigan.

Governor WILLIAMS. Might I point out-and I am sure this is well known to all of you that the White House Conference Report on how we can finance our schools, build and operate them, over 3 years ago, expressed the point of view that the people would like to have Federal aid to education. As a matter of fact, the report states that the participants approved by a ratio of 2 to 1 that the Federal Government should increase its financial participation in aid to education.

Gentlemen, I am well aware of many other great demands upon the Federal budget, and of the fears of some people that greater Federal expenditure will mean inflation. But if we look back over the years, America has demonstrated its capacity time and again to do what it should do. There were those who shouted from the housetops that we could not afford the expenditures necessary to meet the recession problem in the 1930's. We had to afford the astronomical cost of World War II, and we did it. In the postwar period we needed and spent billions more in foreign aid and for other purposes, with our expenditures today for defense alone running over $40 billion.

The timid among us have always found a reason why we could not afford the things we had to afford. Yet we have afforded them, and our country has grown and prospered, expanded enormously, and risen to the challenge of the times in every stage in our history.

If there is a risk of inflation resulting from expenditures by the Federal Government for education, the risk to America of an inadequately educated people is far greater.

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Opponents of Federal aid to education also use the argument that financing by the Federal Government will substitute national for State control of our schools. This argument has been demonstrated to be false time and again. I shall mention only two examples in which Federal financing of education have proven of immense benefit to the country without raising any question of Federal control of education. The first example is Federal financing of our land grant colleges. A more recent illustration is the GI bill of rights.

In the 12 years after the war, the Federal Government spent $142 billion for education under the GI bill of rights. I say spent, but in reality this was one of America's great investments, an investment which will pay benefits years into the future. These benefits are not only intangible, important as those intangibles are, they are reflected in cash, in greater income to the GI's, in greater taxes from their higher income, and in greater productivity for the Nation. No issue of Federal control has ever arisen in this great program.

The American people, as usual, are ahead of their leaders. They are overwhelmingly anxious to have the Federal Government provide necessary aid to education. The Survey Research Center of the University of Michigan took a countrywide poll on the following proposition:

If cities and towns around the country need help to build more schools, the Government in Washington ought to give them the money they need.

Representative BAILEY. Governor, having in mind the pet argument of the U.S. Chamber of Commerce and the National Association of Manufacturers and the Farm Bureau against Federal participation, on the ground of Federal interference in the affairs of the schools, we are not setting any precedent in the legislation that is being considered or being proposed. Let me remind you that back in 1886, during the second administration of Andy Jackson as President of the United States, the Congress found itself with a $47 million surplus in the U.S. Treasury. They passed the qualifying legislation and made the appropriation and made distribution of that $47 million to the 38 States that were then members of the Union for the purpose of building school classrooms, and all 38 of the States. took it and spent it, and they did not destroy the American Constitution or the American way of life, and we are still going ahead just like we always did.

Now, let me also call attention to the effect of the impact of school legislation approved 10 years ago, in 1950. People of this country talk about setting a precedent. Well, we constructed $1,100,000 in school districts during the past 9 years. We are not setting any precedent. We are already in business.

Governor WILLIAMS. Congressman, I am glad you were looking to our country's history, because if I remember correctly, the Northwest ordinance that set up the part of the country I come from also included a grant of land in each of the sections that the country opened up for schools. So the Federal Government has been in the school business from the very beginning. I think that almost every_act that has been passed has been one that gave local autonomy. Certainly this act does, in a very fine way. It not only has it in the introductory section, but there is a specific section, as you know, which points directly to Federal officials and says to them not to get in the way of the operations of the States.

So I think we have a good situation here.

Let me just conclude the matter of the survey research center's survey, because 77 percent of those polled agreed that the Federal Government should take action; 15 percent disagreed; and 8 percent were unsure. The people are not concerned with outworn shilboleths about Federal intervention in State education.

I might point out that Michigan has just made a special poll of 200 of its citizens, and while it has not yet been announced, I do know that a majority of those polled were for Federal aid if it was without Federal controls, and this bill certainly provides against them.

In this connection, Mr. Robert Hutchins, president of the Fund for the Republic, had some telling remarks to make in a speech before the Amalgamated Clothing Workers on January 21, 1959:

The notion that the sole concern of a free society is the limitation of governmental authority and that that government is best which governs least is cer

tainly archaic. Our object today should not be to weaken government in competition with other centers of power, but rather to strengthen it as the agency charged with the responsibility for the common good. That government is best which governs best.

So far as I know, no one denies the critical situation of American education. Only a few days ago, on February 24, the Carnegie Corp. issued its annual report in which it said that schools and colleges had to swim upstream "against the interests of a public that thinks everything else more urgent." I suspect that delicacy and diplomacy might have prompted the writers of the report to speak of our financial problem in terms of the lack of "public" interest rather than in terms. of the failure of the Federal Government to assume the responsibility in this field which is so essential.

There are very few who would contend that the States can solve this problem without Federal help. The great danger is that apathy, inertia, and lack of leadership will result in inaction or hopelessly inadequate action.

Such a result would be an ominous commentary on the vigor of our democracy. Failure to act effectively will be the same as a decision to undermine our system of universal education. That must not happen!

Fortunately there are leaders in the field of education-a number of them members of this subcommittee, and including Senator Murray and Senator McNamara-who have introduced bills which would provide substantial Federal aid to the States. Congressman Metcalf, who introduced the companion House bill to Senate Resolution 2, is also a leader in the fight for better education.

As I understand it, the Murray-Metcalf bill would provide for graduated grants to the States, beginning with a grant of approximately $1 billion in the 1960 fiscal year, rising to $4.7 billion in fiscal 1963. This would be roughly equivalent to $25 per school-age child in the first year, increasing to $100 in 1963. As far back as 1955 in a speech before the Maryland State Teachers Association in Baltimore, Md., I called attention to the need of an all-out Federal program of assistance for education. So I am sure that it will come as no surprise to members of this subcommittee that I support the Murray-Metcalf bill. My only objection to it is that it does not go far enough.

Under the bill, Michigan's allotment over the 4-year period would amount to about $518 million. This will be only about one-half of the increased cost due to additional children coming into the school system.

The provisions for administration are realistic and sensible. One very desirable feature is the flexibility which it provides in the use of funds either for school construction or for teachers' salaries, the proportion to be determined by the State education agency. It specifically eliminates Federal controls in a way which should set at rest any fear of Federal control over State educational policy. It requires States to maintain their own educational effort at a rate at least equal to the average effort over the Nation.

The Murray-Metcalf bill is a happy contrast with the administration's bill (H.R. 4268).

The administration bill makes a fund of $110 million available to Michigan for a period of from 20 to 30 years. These funds would

not be provided as a grant, but as a fund available to guarantee the bonds of school districts which require assistance in meeting their debt obligations for school building construction. Under the bill, the local districts must commit their tax revenues for 10 years beyond the maturity date of the bonds. In the event that the tax efforts of the community fall short of raising the required revenue, the Federal Government would make up one-half the deficit.

The administration bill, of course, does not begin to touch the immense problem we face in financing education. As a matter of fact, our similar bonding provisions under State law provide for guarantees up to $100 million for bonds of school districts which, of course, lie only within our State.

And, Mr. Congressman, we do not require the school districts to keep the taxes going for another 10 years, as the administration bill does here.

Once more, such small assistance as the administration bill might provide would be deferred for so long that I cannot believe anyone can seriously consider it to be an effective answer to our problem.

It comes to my attention, Mr. Chairman, that the Secretary of Health, Education, and Welfare made some remarks about the operation of our State program and indicated that it was a loan program. I am not sure of this, but this is what was reported to me. And I just want to make it certain that our program is not a loan program, but a guaranteed program. And actually, the State has not had to pay out $100 million. It has only paid out a few thousands of dollars to back up those schools which otherwise would have been in default.

My only objection to the Murray-Metcalf bill, as I have said, is that it does not go far enough. It would go a long way to keep up with our continuing problem; but it does not bite into the accumulated backlog of classrooms and shortage of teachers needed to provide a proper level of education. For this reason, I would hope that Senator McNamara's bill would be simultaneously acted upon by the Congress.

This is a short-term bill which calls for emergency action in the middle of an emergency. It provides $2 billion in a 2-year period for school construction. It would wipe out an important part of the backlog with which the Nation is faced.

Only emergency action of this kind can help to bring us up to date. With the McNamara bill, and the Murray-Metcalf bill, we could have some hope of keeping abreast of our educational needs. This is the kind of frontal attack we require.

I would just like to interject here that for our own State, the aid of the Murray-Metcalf bill, as I have indicated, would go a long way toward helping us keep up with this increased school population. Even then, we would have to raise as much additional money as the Murray-Metcalf bill would be giving us; but even then we would not get at the root of the problem-these 11,000 classrooms short.

And, Senator McNamara, this is where your construction bill would fit into the picture, because with your construction bill we could get at this backlog, and the situation that you saw, Mr. Congressman, of children on half-day classes, could be overcome; and so would overcrowding, if we could get this construction bill along with the bill for operation and construction, if necessary.