take unto ourselves any of the administrative educational duties and responsibilities that are coincident with this, and prior to the construction phase, but wish to confine ourselves, as the Congress I think intended that we should, to a construction service agency. Senator HILL. Well, your statement interests me very much. Certainly you are one department not casting out for more power, reaching out into a field where it was not intended you should reach, and I say this: I not only commend you on it, but I find that many of our departments are not nearly so guilty of that kind of thing as many are led to believe.

It is very easy, you know, to make accusations and insinuations. without having to prove them. Now you have demonstrated here this morning that you wish to remain right in the construction field, the field that your agency was set up to operate in.

I have quite a few questions in my mind. You made a very interesting statement here. However, I imagine that most of these questions will be answered by these other two gentlemen here with you; and, therefore, I think I will hold those questions. I find there are lots of times when if one will just be patient, the other fellow will answer his questions for him.

Mr. LARSON. That has been my experience too, Senator. These statements which I have referred to are somewhat lengthy, but I think they do furnish a lot of information, and in connection with what you have said, I have analyzed these statements in light of the policy which I have tried to lay down here as the head of the agency, which I think you thoroughly understand.

I do not wish, nor do these gentlemen who will read these statements wish, that some of these details give answers to arguments previously made, perhaps contrary to this concept of ours, as being a crusade to take unto ourselves more operational functions and that sort of thing. We know you will bear in mind what I have said: that we want to remain a construction agency.

Senator HILL. All right. Now do you suggest that we hear Mr. Elliott next?

Mr. LARSON. Yes.

Senator HILL. All right, Mr. Elliott, will you proceed.

STATEMENT OF MAXWELL ELLIOTT, ACTING GENERAL COUNSEL, FEDERAL WORKS AGENCY

Mr. ELLIOTT. Senator, in view of your last question of Mr. Larson, I would like to reverse the order of my statement a little bit.

Senator HILL. You just proceed in your own way, any way you see fit to present this matter.

Mr. ELLIOTT. I will go to the last page of the prepared statement, rather than start at the beginning. That is, this matter of the cooperative relatiohship between the functional agency and the construction agency.

As Mr. Larson said, it is our concept that we are a construction agency and that it would not be in the public interest for us to expand into other functions.

At the same time we feel that there is an advantage in economy and a deficiency to the Government in having a service construction agency of this kind that can serve several programs on a continuing basis

rather than having each agency have its own little construction bureau which it builds up for a program, and then has to be dissipated.

That came up, Senator, you may recall, about 31⁄2 years ago in the Seventy-ninth Congress before the then Committee on Education and Labor, of which you were a member, and perhaps you will recall the veterans' education-facilities program where the Commissioner of Education made determination of need for the colleges, and after he had determined the need for the colleges by reason of the impact of veterans' education program, then the Federal Works Agency went in. Senator HILL. It was only after the other agency had made the determination of the needs.

Mr. ELLIOTT. That is correct, Senator, and I might say that was a pattern established by this committee at that time because the orginal bill as introduced did not provide for that, and this committee amended it to make it so provide, and its unanimous report stated:

During the hearings, the Federal Works Administrator suggested that the United States Office of Education be designated to investigate and ascertain the needs. That Office has many years of experience in the educational field and close relationship with the institutions themselves. Under these circumstances, your committee feels that the responsibility for making the findings of need should be vested in the Commissioner of Education. On the other hand, the Federal Works Agency is preeminent in the field of construction. Your committee is confident that the Office of Education and the Federal Works Agency, working in close cooperation and each exerting its special skills, will do a better job than either would do alone.

Now, at the end of the year perhaps as you will recall, the committee made a year-end report which was a summary of action on legislation before that committee during the Seventy-ninth Congress.

Senator HILL. Yes.

Mr. ELLIOTT. That also was a unanimous report of the committee, and on this question the committee summary said as follows:

The committee considered both bills in executive session and reported out S. 2085 with changes. Perhaps the most important change was a provision placing the responsibility for the determination of an existing or impending shortage of educational facilities at educational institutions on the United States Commissioner of Education, rather than on the Federal Works Administrator. This arrangement, it may be noted, is one that has sometimes been advocated as applicable to programs of construction of particular kinds in which some agency of Government has a special interest; the responsibility for determining the specific need for construction and other relevant responsibilities may well be placed on one agency having specialized knowledge of this particular field while at the same time the responsibility for the performance of construction activities is placed upon the agency organized and equipped to assume construction responsibilities.

Senator HILL. That is a good statement.

Mr. ELLIOTT. If I can then go back to the beginning rather than take too much of your time, I will just high light a little bit, sir. Senator HILL. All right, sir.

Mr. ELLIOTT. As Mr. Larson has stated, the staff of the Federal Works Agency, and particularly the Bureau of Community Facilities, a constituent of the Agency, has devoted a great deal of time and thought to the problem of Federal assistance for the construction of educational facilities. Commencing in 1933, the Public Works Administration (PWA) financed wholly or partially the construction by local school districts of 12,700 school buildings, including over 59,600 classrooms, with a normal student capacity of 2,385,000 pupils.

Senator HILL. Let me ask you a question there, not to get away from your line of thought. You have been with the Public Works Administration for some time; have you not?

Mr. ELLIOTT. Yes, sir; I have.

Senator HILL. Now this is a question that is entirely out of line with what you are testifying to, but it has come up here in connection with the hospital construction program.

As I recall under the original PWA program, we made a grant, a gift, of 33% percent of the cost of an individual project, and then we afterward raised that 33% percent for projects up to 45 percent; is that not true?

Mr. ELLIOTT. Yes, sir; the first was 30 percent of labor and materials on the project.

Senator HILL. 30 percent instead of 33%.

Mr. ELLIOTT. That is 30 percent of labor and materials only.
Senator HILL. Labor and materials only? I see.

Mr. ELLIOTT. Yes.

Senator HILL. Then it was extended from 30 to 45 percent?
Mr. ELLIOTT. Of the gross.

Senator HILL. 45 percent of the gross?

Mr. ELLIOTT. Yes.

Senator HILL. Which, of course, was much more favorable.
Mr. ELLIOTT. That is correct.

Senator HILL. All right. Then, when we went up to the 45 percent, though, we did not go back and make any further grants to these projects that had been built under the 30 percent proposition. Did we go back or did we not?

Mr. ELLIOTT. No; we did not.

Senator HILL. We did not go back. Well, now in your construction programs do you know of any instance where we have gone back, retracted, where we have been making grants, say, on a certain basis and then have decided to make that basis more liberal?

Mr. ELLIOTT. I cannot recall any instance of that, sir. Mr. Seward may know the answer to that. I will ask him if he recalls such a situation.

Mr. PERE F. SEWARD. Senator, in connection with that, I think I can say that there have been none. In the beginning the limits as set for grants were statutory, sir. Then they were in the legislation, and any project approved under that legislation had a statutory provision limiting the amount of grants, and in successive programs that grant was changed, as you say, from 30 percent at first of labor and materials, which of course excluded the cost of site and so forth, and then was later amended, Senator, to include the total cost, the gross cost of the project.

Senator HILL. 45 percent of the total cost?

Mr. SEWARD. Yes, sir.

Senator HILL. There was no doubt considerable pressure at that time from some of these orders of projects that had been built under the 30 percent of the grant, to make it retroactive, was there not?

Mr. SEWARD. Yes, sir. I was with the Public Works Administration when it was created in 1933. I have been there ever since. I know personally of a lot of pressure that was brought to reconsider these projects that had been approved and even had been completed, to have them under the 45 percent.

Senator HILL. I take it that many of these projects that had been built under the 30 percent proposal had to go and borrow money from the RFC.

Mr. SEWARD. It was loaned in many cases to the Public Works Administration, and we took those bonds and in the main they were turned over to RFC for disposal.

Senator HILL. There was undoubtedly that pressure?

Mr. SEWARD. Yes, sir; there was.

Senator HILL. The reason I raise this question is that a subcommittee of which I happen to be a chairman is considering amendments to the Hospital Survey and Construction Act, and one of the amendments to that act that we are considering is an amendment which does not change at all the over-all allotment to the particular State, but which does make more favorable in certain States the Federal grant on an individual project in that State; and naturally those who have built projects or are building projects or have had the applications approved under existing law are saying, "Well, now if you are going to make this Federal participation more favorable for the future, we want it also to come back and be made more favorable to us," the same proposition exactly, I take it, that you had when you changed your Federal grant under your PWA.

Mr. SEWARD. That is right, sir.

Senator HILL. Well, I did not mean to interrupt you. You can see that that is somewhat of a warm question around here at the present time, this thing of going back.

Mr. ELLIOTT. There is always that kind of pressure, sir.
Senator HILL. Always, certainly.

Mr. ELLIOTT. I do not know even outside of our programs where the Congress has done that in any instances.

Senator HILL. Well, I do not know either. I am thinking of the road program, which you gentlemen will recall. For years and years and years we made Federal grants for highways, but no provision for any part of that highway within the city limits. We went right up to the city limits, and that is where the Federal participation stopped.

The highway might go on for miles and miles in a city, which means down some city street or boulevard, but there were no Federal funds for anything within the city limits. A few years ago we changed that policy and we now make certain grants for these streets or boulevards within the cities where they are part and parcel of the highways, but we did not go back and act retroactively.

Mr. ELLIOTT. I think the theory of that, sir-and a sound theorywhich the Congress has adopted, is that this Federal participation is intended to stimulate the construction of new things which are needed for the public good, and if they have already been done, it is a hand-out and not a public stimulus.

Senator HILL. And not to go back to pay off public debts. That is right. All right, suppose you proceed then, Mr. Elliott.

Mr. ELLIOTT. All right, sir.

The PWA, as you probably know very well, financed wholly or partially the construction by local school districts of some 12,700 school buildings which included over 59,600 classrooms, with a student capacity of 2,385,000 pupils. This was made available directly to the local public school officials through loans and grants to the individual school districts.

Under the WPA during the same period, 5,900 school buildings were constructed. There were 2,170 additions to existing structures, and over 31,000 school buildings were renovated or modernized by the local school districts with this WPA Federal assistance in financing.

Senator HILL. If I may be excused there, I would like to ask a question. I wonder today where we would be if we had not done this work under the PWA and WPA. They made great contributions. I know what they did in my State of Alabama. They certainly helped our school system down there very greatly.

Mr. ELLIOTT. It certainly has proved of benefit, sir, because not too long after the close of those programs we got into the war period land construction and renovation were deferred, and have been deferred, and if we did not have that to start with, we would be in an awfully bad way.

Starting in the summer of 1942 and continuing to VJ-day in August 1945, there were built an additional 1,150 schools under the war public works program which was administered by the Federal Works Agency. That was under title 2 of the Lanham Act, as you will recall. Most of these schools were constructed by local communities as nonFederal projects with the Federal Government making grants to help finance the construction. A smaller number of projects under the war public works program were constructed as Federal projects.

I might interpolate there and say the reason for that was, where they went out practically in the wilderness and constructed a big new war plant, there was not

Senator HILL. In other words, there was not any local governmental agency to do the job?

Mr. ELLIOTT. That is correct.

Senator HILL. You did it because there was not any local agency to do the job?

Mr. ELLIOTT. We only did it where there was a vacuum to be filled, but if there was a local school district, it was done by that local school district.

Senator HILL. Yes.

Mr. ELLIOTT. And of course on such projects the entire cost of construction was assumed by the Federal Government, since the local school districts had only a minor interest in this provision.

Most of the facilities so constructed have now been disposed of through sale to the local interests, with an average recovery of about 16 percent of the construction costs. These three programs combined constitute the only appreciable provision of educational facilities made available to the elementary and secondary institutions of education since the early depression years, and the only sizable program of Federal assistance for this purpose ever given.

Mr. Seward, who will follow me as a witness, will advise you how the construction of public school facilities has been deferred during the depression and wartime years to the detriment of the total educational plant of the Nation.

He will also discuss, as other witnesses have probably discussed before him, the heavy load which the accelerated birth rate is placing upon the educational facilities of the Nation. Even including the Federal Works Agency school construction programs, which I have mentioned, the total volume of school construction constituted only a little over one-half of the normal amount which would be antici