Economists know full well that money from plural sources-local, State and Federal-is essential for the proper development of the Nation's human resources. Every child should go as far in school as his abilities permit and this is possible only when Federal funds supplement State and local finance. The United States has a national economy. The income from our productive wealth must be taxed where it is and spent where the children are.

States that specialize in raw materials produce wealth that moves from the -State and can't be taxed substantially at the source by local and State government. Kansas is a good example. Most of our oil and gas, our minerals, our wheat and cattle leave the State as raw products. They grow in value and create great wealth in the commercial centers to the east. States heavy with financial, manufacturing, and commercial activities are enjoying the fruits of Kansas efforts. The wealth we produce gravitates largely to the financial centers. Only the Federal Government can tax the income of this wealth so that some can be used for the education of Kansas children.

In hundreds of ways the rural, raw-material producing States contribute to the national wealth without getting a tax return because the wealth leaves the 'States. Millions of Kansas dollars each year go outside the State through bank stock, insurance companies, railroads, farm machinery, and automobile purchases, public utilities, mail order houses, chain stores, etc.

A clear, but not isolated example, is that of fire insurance. Kansas has no fire insurance company so all premiums are sent to financial centers outside the State. Of every dollar Kansans pay in fire insurance, only 40 to 50 cents is paid back in fire losses. The profit is large. Kansas cannot tax this large fire insurance income, but other States and the Federal Government can. is a simple case of Kansas produces, and Kansas does not collect.

It

The American people in general increasingly have become aware of the problems of school support, as the postwar years presented them with increasing enrollments and expanded needs. Attention has been focused, however, upon the more heavily populated areas of our country where needs and pupil concentration appeared to be most critical.

In many rural areas the financial demands for keeping schools open and operating, for competing for teachers, for keeping up with developing curriculum, and for providing services to farm children and youth, have become so overwhelming that the American ideal of "equal educational opportunity for all" is becoming less of a reality every day.

Year after year, youth educated in rural farm areas move into villages, towns, and cities. They find their way into the trades, the professions, and the services, and become a part of the productive urban and suburban community.

The median money income for rural farm families in 1952 was $2,226, as compared with the median money income of $3,889 for all families in the United States. Over three-fourths of the rural farm families had less money income than the median for the remainder of the population.

The low cash income factor in rural farm areas, when coupled with the revenue-raising means existing in the various States, deprives many communities of the economic ability to provide even a minimum school offering.

As of the 1950 census about 23 percent of our total population was between the ages of 5 and 19. For the rural farm population about 42 percent was in this age group. Twenty percent of our total population 19 years of age and under is in farm homes while this age group in general comprises but 15.3 percent of the total U.S. population. The average size of the family unit for urban United States is 3.12, while the rural farm average size is 4.04. Thus, the family on the farm carries approximately a 25 percent larger pupil burden per adult citizen than other areas in our Nation.

Perhaps the dilemma of our rural schools has not been as dramatic as double and triple school shifts, overcrowded buildings, and teacher shortages which have so clearly highlighted the crisis in education in the populated centers but the rural school problem has been as real and as critical.

Nonethelss, today we recognize that no part of this Nation, no segment of our people, stands alone. The interrelation between rural and urban communities, the swift transportation, the extensive communication and the mobility of not only the rural, but the urban and suburban population as well, has made education everywhere a broad national concern.

The problems of education can only be met adequately if the Nation as a whole accepts a basic commitment to provide educational opportunity for all the Nation's children wherever they may live-in the cities, the towns, the villages, or on the farms.

Thank you for the privilege of submitting this statement.

Senator MURRAY. That concludes the hearing this morning. This concludes our hearings on proposed legislation for Federal aid to education.

The hearing record will remain open for a short time for the submission of additional statements.

The subcommittee will meet again at the call of the Chair. (Whereupon, the hearing was adjourned.)

APPENDIX

STATEMENT BY SENATOR JACOB JAVITS TO THE SUBCOMMITTEE ON EDUCATION OF THE COMMITTEE ON LABOR AND PUBLIC WELFARE

Mr. Chairman, on February 2, 1959, I introduced S. 863, the Education Assistance Act of 1959, to provide a 5-year program of Federal aid to States and localities for expanded school construction to eliminate the existing classroom shortage and for the purpose of increasing teachers' salaries with special provision for science and mathematics teaching. (See S. 863, p. 13.)

My bill is divided into four major sections providing authorizations over a 5-year period as follows:

Title I: Grants to be appropriated at the rate of $400 million annually to States on a dollar-for-dollar basis for school construction in communities under priorities established by State educational agencies;

Title II: Loan funds up to an aggregate of $750 million for the purchase of school construction bonds issued by communities unable to find markets for them at reasonable interest rates;

Title III: Federal advances not to exceed a total of $150 million to back the credit of State agencies issuing bonds to finance schools for local school districts; Title IV Grant expenditures to States starting at $100 million for fiscal 1960 and increasing $50 million a year to a maximum of $250 million annually for a 5-year program to supplement the salaries of qualified teachers; states may submit plans to include special salary supplementation for teachers of science and mathematics.

By investing under 1 percent of this year's proposed Federal budget for each of the next 5 years, under this bill more than $10 billion in Federal, State, and local expenditures for public education could be generated. We could construct new classrooms at the rate of 84,000 (at an average estimated cost of $40,000 per classroom) and thus eliminate the current backlog of 140,500 by the end of the program in 1964. Under present plans, 68,440 classrooms are to be built this year with 23 States reporting plans to build fewer classrooms than they did during 1957-58; however, the grand total is barely sufficient to meet the new classroom requirements of 65,300 for excess enrollment, to say nothing of the 75,200 new rooms needed to replace obsolete classrooms.

The Education Assistance Act of 1959 would supplement teachers' salaries and provide one-fourth of the amount required to raise their average pay 12 percent annually, the rate which should be sustained for 5 years if teaching salaries are to approach the median income in other professions.

Under title I of the proposed act allotting Federal funds to States on a matching dollar-for-dollar basis, New York and Texas could qualify for a maximum annual grant of $24.5 million, followed by Pennsylvania ($22.7 million), California ($22.6 million), Ohio ($18.6 million), Michigan ($16.6 million), Illinois ($16.4 million), North Carolina ($14.7 million), Georgia ($12.2 million), Alabama ($11 million), and Tennessee ($10.8 million). The remaining States could qualify for varying amounts of about $10 million or less with Delaware at the bottom of the list ($619, 000).

The formula used in my bill is similar, but not identical, to the one incorporated in the School Assistance Act of 1957 (H.R. 1) reported out by the House Committee on Education and Labor but defeated by a close vote in 1957. The Education Assistance Act of 1959 would allocate $400 million in grants among the States, half on the basis of relative school-age population and half on the basis of a "need" formula and takes into account each State's school-age population, financial ability, and actual expenditures to meet school needs. However, under the new method of calculating the school effort index, States which shut down schools to avoid obeying court orders to desegregate might receive reduced allotments. In figuring the index, States are not allowed to count moneys earmarked for school expenditures, but only that which is actually spent; in addi

tion, money paid in salaries to teachers who are still on the payroll although their schools may have been closed down cannot be credited as an actual expenditure on which Federal aid may be based. Where the school effort index falls below the national average, indicating that the State is not exerting sufficient effort, its original allotment will be lowered and the total reduction reassigned proportionately among other States.

Second to no other problem in severity is the shortage of qualified teachers even in the States with the highest average teaching salaries, according to the National Education Association. Although talented college graduates do enter the field in the fact of beginning salaries ranked 17th from the top of a list of professional salaries, how many can be persuaded to stay if at the end of 10 years, their pay increase averages only one-third that in the sales profession and less than half as much given accountants. This legislation proposes the expenditure of $950 million to supplement teachers' pay during the program in recognition of the fact that, to end half-day sessions, hire new teachers for the more than 1 million new pupils enrolling each year, and to raise salaries commensurate to that paid qualified personnel in other professions, we must increase total amounts paid teachers to $14 billion by 1965. Even though States and localities exert maximum effort, it appears most unlikely that they can maintain more than the status quo without outside help.

Alternate methods of financing new school construction are also included in the Education Assistance Act of 1959. Title II authorizes the Commissioner of Education to purchase up to a total of $750 million over a 5-year period in community school bonds to assist localities which cannot obtain financing from other sources on reasonable terms. School districts with low assessed valuations with unknown credit ratings and those subject to sudden shifts in population or industry are most likely to benefit under this provision.

To provide immediate school construction in rapidly expanding suburban areas, which are growing several times faster than the national population rate, title III would provide $150 million to share equally with the States the cost of establishing and maintaining a reserve fund equal to 1 year's payment of principal and interest on bond issues by State educational agencies to build schools. If this money is fully utilized, approximately $6 billion in such bonds could be issued.

Critics who would attack this act on the grounds that it could lead to Federal domination and control of public school education in this country are ignoring the successful record of Federal educational assistance programs which have operated in the past with no hidden strings attached. Federal aid to landgrant colleges dating back to 1862, the Aid to Federally Impacted Areas bill passed in 1950, and last year's Defense Education Act involved actual instruction of students as well as physical construction. They have not been attacked as instruments designed to snatch away control. The bill I am proposing specifically states that in its administration, the Federal Government shall not exercise any direction, supervision, or control over the personnel, curriculum, or program of instruction in any school or school system.

Its purpose is not to negate the fundamental responsibility of the States and localities for education; rather it recognizes that the national interest requires that Federal assistance be extended to them in handling their urgent school problems. If we do not finance a major national program along these lines, then we are sentencing growing millions of our children to study in obsolescent, overcrowded, and sometimes unsafe classrooms. Imposing such a severe educational handicap on the next generation which must meet the tremendous Communist challenges in science, technology, and almost every other field holds the gravest consequences for the future of our country and the free world.

I do not belabor here or dwell on the many arguments in support of a full program of Federal aid to education. This has been done, with ample supporting evidence, by many qualified witnesses who have already appeared before this committee and whose testimony we have heard. I do wish, however, in closing to urge favorable consideration of the approach offered by S. 863 as being both effective and practical. It contains features not included in other principal school aid legislation pending before this committee which merit our mature and considered deliberation.