power of the Federal Government" has been inadequate to meet expenditures in 5 out of every 6 years over the past three decades.

The effect of Federal aid would be to shift the power to direct educational policy increasingly from the people in the communities, the parents and taxpayers to the professional bureaucracy. This is not only contrary to our traditional American system, it is not conducive to improvement in the quality of education. Federal aid to education is not being asked by those constitutionally responsible for the schools: the States and the boards of education. The National School Boards Association, for some years, has refused to support Federal aid. State governors have, at their annual conferences, considered but never supported such legislation. In fact, the Joint Federal-State Action Committee of Governors and Federal Officials has twice recommended, in the last few years, that existing Federal programs in the field of vocational education be returned to the States.

In addition, permanent Federal aid to education would probably turn out to be extremely wasteful. Too often specific Federal grants takes the form of numerous categorical and earmarked programs, each with its own statutes, rules, and bureaucracy. The Federal standards and procedures established as a result of administrative compromise do not necessarily fit any single local or State situation across this vast and diverse land. This is no argument against specifying how Federal funds should be spent, but it is a forceful argument against an approach which may prove to be most wasteful-and thereby reduce the amount and quality of education we obtain for a given commitment of

resources.

The contention that the States need help in the marketing of bonds is without substance. New State and municipal bonds are presently being placed at an average 3.4 percent interest rate and some States are selling theirs at or below 3 percent. The Treasury finds it difficult to raise money at 4 percent and is presently forced to sell its bonds at a discount.

In many cases State and local governments could increase their financial capacities by modernizing and modifying debt limitations and prohibitions. Furthermore, they could explore the possibility of investing greater amounts of public pension and other trust funds in State and municipal bonds rather than in securities of the U.S. Treasury. The magnitude of this resource now being utilized in a few States-is indicated by the fact that State and local governments invested $11.6 billion in Federal securities between 1945 and 1958.

These and other figures throughout this paper are national totals or averages which do not always necessarily depict the situation in a particular State or community. But, of course, national totals are the sum of the several States; averages express the typical situation. They are more representative of the true situation than individual stories which may be rare or unusual and may have been selected to prove a case which otherwise could not be substantiated. It may-and has been-argued that some States are economically well off but that others do not have sufficient resources and need Federal aid. Sometimes it is asserted that low-income States exert a greater effort for their schools than high-income States. The case for equalization is of questionable validity-for several reasons:

(a) The difference or range in per capita income among States shrank substantially and dropped from about 1: 5 a quarter century ago to less than 1:3 in recent years;

(b) The number of children has been increasing rapidly in high-income States and little, if any, in low-income States; 58 percent of the national increase in school enrollment between 1955 and 1970 is projected to take place in the 12 wealthiest States, only 5 percent in the 12 States at the bottom of the income scale.

A recent report of the Bureau of the Census (P-25 No. 194) showed substantial gains in the number of children under 5 between 1950 and 1957 in the highincome States and losses in such States as Arkansas, Mississippi, Alabama, West Virginia, Kentucky, etc.

(c) The wealthier States may be spending a smaller percentage of their personal income on public schools because a larger percentage of their children attend private schools. Spending for public schools only is not an adequate measure of the people's educational effort.

(d) There is little difference in the State and local tax effort between highincome and low-income States. Also, the former pay a much larger percentage of their income in Federal taxes.

(e) State and local debt as related to personal income is somewhat higher in the high-income States than in the low-income States. Many of the latter have a considerable unused debt potential.

The Committee on Federal Responsibility in the Field of Education of the Commission on Intergovernmental Relations conducted the most thorough study of school finance and fiscal capacity in many years. It reported:

"We have not been able to find a State which cannot afford to make more money available to its schools or which is economically unable to support an adequate school system.

"The American people have built up, over the last century and a half, the greatest school system in the world under State and local responsibility. The public educational system has shown tremendous and consistent progress and proven flexible enough to meet new and greater challenges. We believe that it will continue to so do ***

"Schools have been a State and local responsibility by long-standing and firmly embedded tradition. They should so remain. * * * The general conclusion is that Federal aid is not necessary either for current operating expenses for public schools or for capital expenditures for new school facilities. Local communities and States are able to supply both in accordance with the will of their citizens."

To summarize, legislation like the Murray-Metcalf bills assumes:

1. That a thorough and objective study and analysis of school conditions has been made;

2. That this analysis reveals critical, emerging conditions with which the States and their communities cannot cope because of lack of resources; 3. That the Federal Government has resources not available to the States which should be used to correct the identified weaknesses in State school systems;

4. That the Federal Government can validly discriminate and should intervene in financing solutions to identified problems in education, without controlling or taking responsibility for the outcomes of such assistance. All of these assumptions, we submit, are untenable, if not contrary to fact. Studies of the supply and utilization of teachers indicate that an increasing and adequate number of our college youth has been and is being prepared to teach, but that inefficient organization or administration of schools combined with low certification standards do not require or utilize available college graduates; and that further the single salary schedules now dominating most school systems have discouraged the continuation in the profession of the more able teachers, especially men.

The one national survey of classroom conditions undertaken by the Office of Education has only resulted in incomplete and noncomparable returns from the States, the latter reports varying greatly in reliability as to method or conclusions reached. These reports tend to confirm, however, the conclusion that higher income States have had and will have the greatest classroom needs and that further Federal taxation in these States to redistribute moneys to lowincome States, as proposed in H.R. 22, would but compound the problem.

There is no evidence, however, that any State and its communities cannot support good schools, even though some are not utilizing their resources as fully or efficiently as others. The Murray-Metcalf bills would actually weaken motivation for greater efficiency in those States most needing it, through its redistribution of revenues from other States. Real improvements in the quality of education would thus be delayed rather than promoted, especially in the light of the local and State apathy often encouraged when increasing amounts of "free" money from Washington are known to be in the offing.

We conclude then with the contention that grant-in-aid legislation like the Murray-Metcalf proposal is not only unnecessary, but might slow down local and State action upon which needed improvements in the quality of education actually depend.

The national chamber will continue to urge business leadership and cooperation in such State and local action to build and maintain good school systems. We are convinced that this is the only means by which people in those communities and States can have the schools which they believe proper for their children.

How States would fare under Murray-Metcalf "school support" bill (8. 2 and H.R. 22) during 4th year of operation

Source of data: Col. 1, Congressional Record, Jan. 9, 1959; Cols. 2, 3, and 4 compiled by Chamber of Commerce of the United States.

Mr. WATSON. I would, from notes, like to highlight some of the areas of discussion here, and then if there are particular questions you would like to raise on some of the points or questions on some of the statements of fact, I can answer them.

I think there has been a tendency for some time on the part of certain groups in the country-let's say some of our professional education associations-to call attention disproportionately to the critical needs of education, to the neglect of emphasizing the tremendous accomplishments that that have been made and the increase in accomplishments that are being made in our educational situation. I think this was further stimulated by the excitement-legitimate

excitement-created over the Russian situation; the sputnik, to be precise. It being stated in some quarters that supposed superiority in that technological area, in Russia, was due to a superiority of educational system.

I think that some of our highest authorities have certainly questioned that statement, and I want to comment on it further. It probably has no relationship to the present educational system as such in Russia at all. Nor does our lagging, if there be a lag, relate to inadequacies in our educational program such as would be improved by bills that have been proposed up to this time.

I would like then, as I say, simply to put into the record-so that all areas of information are considered relative to the others--some of the facts as regards accomplishments that have been achieved; point out some of the areas of need; and point out also ways in which these needs can be met, we believe, from a local and State point of view.

In terms of quantitative figures, the progress in education in this country, I believe, is phenomenal. Forty-five million people participate in full-time education, or a fourth of the Nation as a whole. Ninety-nine percent of children 6 to 15 years of age, and 80 percent of 16- and 17-year-olds are in school. A third of our high school graduates enter college. Two-thirds of those who enter graduate from college. A million and a half high school diplomas and half a million college degrees are awarded each year.

These are records-just in quantitative terms now, not reflecting on the quality-that cannot be matched by any other country. They are figures that I do not believe there is any likelihood any other country is going to match in the foreseeable future.

We certainly recognize there are shortcomings. The chamber does not wish to give the impression that it is unaware of these shortcomings. It has for years been pointing out, through local chambers, the need for improvement of education. But I think there is an important point as to how these improvements are to be made and the methods we use. And we are concerned that perhaps some of the methods proposed might actually defeat the very purpose of improving education, in the final analysis.

It seems to us that there are probably three reasons why there is such a strong interest at the moment in providing Federal assistance to education:

(1) This is oversimplifying it, but it may be that there are some people who feel that Federal moneys are more readily available. I would not say they say Federal moneys come free, but perhaps there is an implication that it is easier to get Federal moneys than it is to get State moneys in one's own community.

(2) There are some people who, certainly seriously and honestly, believe that education as a whole is a national problem, that it not a community or local problem as such, and there are national issues that can be settled only on a national basis.

(3) I think also that a good bit of the emphasis that has come on this has derived from some amount of misinformation as to the facts and perhaps a distortion of the facts-I will not say intentionally, but distortion of the facts regarding what our present situation actually is.

So I would like, Mr. Chairman, just briefly, again for background information, to cite four areas that have come in for considerable discussion. One is the general investment which we have put into education in this country-both relative to other countries and relative to the progress that has been made in the increase of it over the years; second, in the area of the teacher shortage, so-called shortage which we hear so much about, and that, in turn, relating to the need for adequate teachers' salaries and recognition; third, the facts as related to the so-called classroom shortage-what the facts are as best we can analyze them from available information. And I might say any information that is available to the Office of Education or others who quote these figures is available to the chamber of commerce, and has been analyzed in like manner.

Finally, some comments as to the State and local fiscal capacity, because that seems to be another area of interest-the feeling that the States or localities generally cannot financially meet their obligations and, therefore, they have to have Federal assistance.

I would like simply to review some basic facts in these areas, and then draw for you some conclusions and perhaps some recommendations, if you wish.

The total investment in this country in financing education has been nothing short of phenomenal. In 1890 or thereabouts the percentage of gross national product spent for education was about 1.1 percent. Today for public education alone it is 3.7 percent of GNP and 4.6 percent of national income. If you consider private education, which is a part of our provision for education, it would be 5.6 percent of national income. A phenomenal increase, relatively, in the amount of moneys in terms of gross national product and national income being spent on education today as compared to what was spent 50 years ago.

We spend a total of $20 billion annually today. How does that compare particularly with some other countries that we have heard comparisons made with? Let's take Russia for example.

You have heard in testimony presented to you that Russia is spending 13 percent on education. That is 13 percent of their budget, not of their gross national product.

We have to make comparisons, then, by what their "budget" means. When we boil it down, as best we can figure it out, the Russians probably are spending the equivalent of about 45 percent of their gross national product on education as compared to 4.6 percent here-and they include in their expenditures movies, television and everything else that is in the area of public propaganda in that figure. They are spending, as best the estimate can be made in terms of American dollars, roughly $7.9 billion as contrasted to $20 billion in this country.

Mr. BAILEY. How firm, Dr. Watson, are those figures? How dependable are they? How do you go about getting information out of Russia?

Mr. WATSON. We know they cannot be very dependable, Mr. Chairman, but they are based on the same type of information available to other people, some of which has to come from reports of Russian journals themselves and so on. We simply want to clarify the fact that there is no valid available information today to indicate that the Russians are spending more money on education relative to their