For instance, the State of Oklahoma; the University of Oklahoma has no tuition charge for residents. They have a nonresident charge of $50 a semester. Under existing policy we could pay that institution if they charged $50 a month. But the attorney general in the State has ruled that they cannot charge this amount.

Senator CONNALLY. Did he base that on the idea that they would have to accept $50?

Mr. STIRLING. No, sir.

Senator CONNALLY. The attorney general ruled they could not accept that either?

Mr. STIRLING. If a veteran were a resident of the State of Oklahome they would charge the Veterans' Administration on the same basis as any other resident.

Senator CONNALLY. They are treating him like any other resident? Mr. STIRLING. That is right.

The State institutions feel that the Veterans' Administration policy is unfair. They believe that the State institutions should receive as much money as a private institution receives in that State.

Senator CONNALLY. Is Oklahoma making that claim?

Mr. STIRLING. Yes, sir.

Mr. ODOм. Mr. Chairman, I think I owe it to the committee to make a little more exact explanation than Mr. Stirling did about the legal aspects of this paragraph. I am sure that the members will recall that the recommendation of the President's committee, often referred to as the Osborn committee, was that the Federal Government should assume the extra cost of this program over and above what the State normally would have done for its boys anyway.

My opinion was, not that we couldn't pay them anything until they rendered extra services-that was under Public, 16-but rather that under Public, 346 in order to bring into effect and working operation that formula and that proviso which was just read, that the States would have to make some showing that they were not in a position to furnish the education and training to the veterans. In other words, that their State legislature hadn't provided for it.

Well, the States thought they could make that showing all right, because some of the State legislatures, assuming that the Federal Government was going to bear all of the expense of the educational program for veterans, limited their appropriations for the universities and colleges.

This affects mostly the institutions of higher learning, collegiate grade, and immediately subcollegiate grade, such as the junior colleges, and doesn't affect high schools, particularly, although some of the municipal schools are affected by this.

Well, it is difficult, very difficult, to say where the State program should leave off and the Federal program should begin.

Of course, you appreciate during the war years the colleges have lost approximately 50 percent, I am informed, of their enrollment. In other words, over the period of 4 years, a little more than 4 years, the States presumably have educated only approximately 50 percent as many people as they would have educated but for the war. That figure may not be exact.

However, that is not an exact saving to the States, because, as you well know, under the law of diminishing returns you cannot

decrease your working expenses as rapidly as your enrollment may decrease.

So, unquestionably there is a great point to be made for the institutions. But the joker in the whole thing is that by reason of the application of section 1505, that anything paid on account of a veteran shall be charged against any bonus, if he gets one, the attorneys general of the States quite generally have held, why, if this occurs, what you are doing would be to charge a citizen of this State $500 a year, if that is what it is, for his education, where the State law says you shall charge him nothing, or $50 a semester, or whatever it is, and the men have said, "I am a citizen; why should the Federal Government be paying and charging against my bonus more than I would have to pay if I were furnishing my own education?"

The CHAIRMAN. What have you done about that provision?

Mr. ODOм. We have not worked that out. We propose to work that out by amendment providing that anything we pay over and above the customary charge shall not be subject to the provisions of section 1505.

The CHAIRMAN. So that if a bonus or adjusted pay or compensation is subsequently paid, it wouldn't be taken out?

Mr. ODOм. That is right. That is, what we pay over and above the customary charges.

The CHAIRMAN. But you would still leave the deduction to cover the customary charge?

Mr. ODOм. That is right.

The CHAIRMAN. I remember the trouble we had with this provision in the Congress.

Mr. ODOм. It is almost impossible to operate, so far as the State schools are concerned, because I don't believe there is a State that the attorney general has held that they can collect. There are two States that have enacted statutes providing, in effect, that any veteran, whether or not a resident, would have free tuition in their schools, provided, however, that if the Federal Government pays that, the school shall charge whatever they can get from the Federal Government.

Senator CONNALLY. Take, for instance, Oklahoma. They have no tuition at all, but that is restricted to their own citizens. If a man lives out of the State, it is $50 a year.

Mr. ODOм. Yes, sir.

Senator CONNALLY. How does the law now operate in that case, and how would it operate under your proposal?

Mr. ODOм. The attorney general has ruled under their statute, they can charge nothing except as to a nonresident.

Senator CONNALLY. Now, under the present law what would be charged against that man's bonus?

Mr. ODOм. Nothing.

Senator CONNALLY. Nothing. Now, if he lived out of the State he would be charged the $50?

Mr. ODOм. Yes, sir; but under our regulation we would pay the State of Oklahoma $15 a month for instruction.

Senator CONNALLY. Why should you when they don't charge anything? Why shouldn't the soldier have the same privilege to attend the university as anyone else?

Mr. ОDOM. Senator, this is a broad question of governmental policy. I hope I can make myself clear. It is a little bit complicated. Obviously there are going to be more veterans go to school since the Federal Government is paying all expenses than would go to school if they had to do it on their own. I told you of that backlog over 4 years.

Have you any figures on it, Mr. Stirling?

Mr. STIRLING. Not with me.

Mr. ODOм. It might amount to quite a large number of boys and girls, too, who have not gone to school.

Senator CONNALLY. I hope it will amount to a large number.

Mr. ODOм. In addition to that backlog, Senator Connally, there will be some go who never would have gone anyway. Obviously you Members of Congress intended that the Federal Government should relieve the States of the extra burden caused by this Federal program.

Now, there are only two ways that my limited faculties permit me to see haw that can be done. One way would be to say, yes, regardless of the State statutes, we are going to pay you this. Of course, that is embarrassing. We would eliminate one feature of that if we would eliminate it, i. e. by not charging that against the veteran's presumptive, shall I say, bonus.

Senator CONNALLY. You would have a complaint, if you did that, from every veteran. A veteran would say, "Here I am being charged against my bonus $15 a month, and here is a man living beside me who doesn't pay anything."

Mr. ODOм. That is right, but it wouldn't cost him anything in the long run, so that would take the sting out that.

The only other way I can see, and we recommended this originally, and the members, particularly of the conference, will recall it, the Senate accepted our recommendation, namely that the Administrator of Veterans' Affairs be given legislative authority to contract with the institutions to care for this extra burden. The House struck that out and put in this proviso, which we have found, so far as the State schools are concerned, isn't workable.

Now, there is good reason for having that authority. If the boys were going to get their education there free, not to be charged, I mean, anything against their bonus at all in the State institutions, or in private institutions, like endowed institutions, which charge nothing, or a very small tuition rate, the nonpublic schools-by that I mean church schools and institutions operating for profit, as well as endowed institutions charging about what it costs them, or a little bit more than it costs them to furnish the educational training, they would say, "Why should you channel all of these veterans into the State schools and deprive us of getting our due share of students?"

Senator CONNALLY. Doesn't the veteran have a right to choose his school?

Mr. ODOM. Yes, but they say he would choose the State school because nothing there would be charged against his bonus.

Senator CONNALLY. He would anyway if there hadn't been any war, and everything were free there.

Mr. ODOм. I assume so. I was merely stating the arguments which the educational people have brought before us.

Senator CONNALLY. If he wants to go to a private school, and they charge him, I don't see why you wouldn't pay him the regular tuition and charge it up to him. What is your plan now?

Mr. ODOм. We propose here that we pay the cost of instruction and classroom material. That can be determined. There isn't any school that can't tell us what their cost of instruction and classroom material is. They can't tell us their actual cost, because they don't maintain figures on that. We propose that any institution may apply to the Administrator for an adjustment of fees, and the Administrator if he finds that the customary charges are insufficient to permit the institution to furnish education or training to eligible veterans-may I interrupt myself to say that the University of Oklahoma, one of their officials was in to see me in the past week, and he said "our enrollment which we will be permitted to take under our appropriation act will be filled up completely by February 1 of this year, and from that time we can't take any other students at all, veterans, or nonveterans."

Now, the only way they could do that would be to go to their State legislative bodies and get an additional appropriation, or come to the Veterans' Administration and make arrangements for us to take up that additional cost.

The bill reads:

may provide by agreement for the payment of fair and reasonable compensation as will not exceed the actual cost of teaching personnel and supplies for instruction, and not exceeding $500 for an ordinary school year, inclusive of all charges and supplies; and may in like manner readjust such payments from time to time in consideration of increased or decreased enrollment and available contributions to meet such costs, whether from public or private funds. No amount in excess of the customary fees shall be charged to the veteran under the provisions of section 1505, Public Law Numbered 346, Seventy-sixth Congress, June 22, 1944.

Senator LUCAS. That is on the theory that the Veterans' Administration would be given the power to contract direct with the schools? Mr. ODOм. Ör by agreement. We could do it by regulation. Senator LUCAS. But you would have to eliminate certain features of the law?

Mr. ODOм. Yes, sir.

General BRADLEY. Mr. Chairman, I would like to bring out this point, which indicates that some of these State schools may need help on this. In addition to the fact that they do not have appropriations, their classes were out of balance because of the large number coming back. They have a much larger freshman class, which means a shift of instructors, and a shift of laboratory arrangements, which adds an extra burden, and it is going to continue that way. Next year they will have to shift in the sophomore class. And so on all the way through. That is an added expense which the schools would normally not have to meet, and that is the reason we think it fair for the State institutions to get something from the Federal Government, although, as Senator Connally points out, if they had not been veterans, they would not have to pay anything. But we are faced with the fact that some of these States need help if they are going to carry out the education for the veterans in the way we think they are entitled. Mr. STIRLING. I have nothing more, Mr. Chairman.

Senator JOHNSON. Are there any other questions?

Mr. ODOм. There is one minor amendment, simply a question of bookkeeping, but we don't need to bother you with that.

Senator BUTLER. Several remarks have been made about it costing the veterans. That it would be charged up to his bonus. Can you explain that to me?

Mr. STIRLING. Section 1505 says:

In the event there shall hereafter be authorized any allowance in the nature of adjusted compensation, any benefits received by, or paid for, any veteran under this act shall be charged against and deducted from such adjusted compensation; and in the event a veteran has obtained a loan under the terms of this act, the agency disbursing such adjusted compensation shall first pay the unpaid balance and accrued interest due on such loan to the holder of the evidence of such indebtedness to the extent that the amount of adjusted compensation which may be payable will permit.

The CHAIRMAN. It is anticipating the possible enactment of a law hereafter.

Senator CONNALLY. But that law will govern rather than this one when passed.

Senator BUTLER. The person not a returned soldier is not charged, but the returned soldier would be charged.

The CHAIRMAN. Under the proposal offered by the Veterans' Bureau, it is my understanding he would not pay more than he would as a free student.

Senator BUTLER. In other words, it is not charged against his bonus. Mr. ODOм. That is our proposal.

Senator JOHNSON. Are there any other questions?

We will recess until tomorrow morning at 10 o'clock.

(Whereupon, at 12: 15 p. m., the committee recessed until tomorrow morning, Tuesday, October 9, 1945, at 10 a. m.)

(The following information was later received for the record:)

Hon. WALTER F. GEORGE,

Chairman, Committee on Finance,

United States Senate, Washington, D. C.

OCTOBER 6, 1945.

MY DEAR SENATOR GEORGE: Further reference is made to your letter dated May 9, 1945, requesting a report on S. 974, Seventy-ninth Congress, a bill to amend parts VII and VIII of Veterans Regulation No. 1 (a), as amended, to liberalize and clarify vocational rehabilitation and education and training laws administered by the Veterans' Administration, and for other purposes.

The purpose of the bill is to meet certain inadequacies pertaining to vocational rehabilitation, education and training benefits provided for veterans of World War II under Public Law 16, Seventy-eighth Congress, approved March 24, 1943, and title II of Public Law 346, Seventy-eighth Congress, approved June 22, 1944, and to establish a greater uniformity with reference to the system of benefits provided under each of these acts.

After careful study, it has been concluded that the bill should be amended to meet certain objectionable features and to clarify certain provisions. These proposed amendments are indicated in the copies of the bill enclosed herein in duplicate. The comments on the bill will be made on the assumption that the amendments proposed will meet with the approval of the committee and will indicate the effect of the bill if so amended.

Section 1 of the bill would amend paragraph I of part VII of Veterans Regulation No. 1 (a) to authorize training in excess of the period of 4 years when approved by the Administrator and extend the period after the war during which training under this part may be afforded, from 6 to 7 years. Under the present law, training may not be afforded for any period in excess of 4 years, and the training or apprenticeship required in certain professions or trades cannot be completed within that period. The extension of the period after the war during which training under this part may be taken, from 6 to 7 years will establish uniformity with the period now provided under part VIII of Veterans Regulation No. 1 (a), as amended, pursuant to the provisions of Public Law 346, Seventyeighth Congress.

Section 2 of the bill would amend section 4 of Public Law, as amended, to authorize disposition of returned books, supplies, or equipment which may not be released to a trainee or student because of fault on his part to complete his course of training or education. Experience has shown that there is no practical outlet