then this program of school-building aid might be continued or even expanded.

But, in any case, I think a limited program of this character is far preferable to the launching of a program calling for annual Federal contributions for school purposes which localities will rely on and will expect regardless of the future state of the National Treasury.

Senator HUMPHREY. Thank you, Senator Robertson.

I would like to ask you this question: Why is it that you have selected as the referral agency to the Reconstruction Finance Corporation, the Secretary of Commerce, that is, for notifying the RFC as to the number, for example, of school children, thereby qualifying for the loan or the grant?

Senator ROBERTSON. Because the Bureau of the Census is under the Secretary of Commerce and he is the official agency to report on the number of school children.

Senator HUMPHREY. I just wanted that for the record.

You have no direct connection in your bill either with the Federal Works Agency which would under ordinary circumstances have some control over public building, nor do you refer to the Office of Education; is that correct?

Senator ROBERTSON. That is correct. We utilize the present lending ability of the RFC. The RFC under existing law can make a loan to any school unit, but it would charge them 4 percent as they do on commercial loans. By giving the money at 2 percent or less. the RFC has accumulated a profit of between $800,000,000 and $900,000,000. We are going to draw on that profit to the extent of $300,000,000 and in that way we do not have to have an appropriation, and we do not increase the budget or the deficit for the coming fiscal year.

We are trying to hold it as near to the PWA plan for constructing schools as we can. The major differences are that under PWA they got 45 percent grant and we give them a 50 percent grant.

Senator HUMPHREY. Yes.

Senator ROBERTSON. Under PWA, plans had to be approved by a Federal agency, but ever since you have had public schools the States have been building their own schools, and I am not one to suggest that they do not know how to do it or what they prefer to have.

And so my plan is merely to make the money available to them, 50 percent in a loan, 50 percent in a grant, and they can then use that money for the units, within the State, which need the help the most, and where the housing situation is the most critical.

As I said in my opening statement, accumulated demand for housing is from 8 to 10 billion dollars. The Federal Government cannot possibly meet that at one time or even in a long period of time. But we can help the situation some by starting a program and then if we have, as I said, a good break on the budget picture, and the time arises where public works may be needed to sustain our economy that will be helpful. Everybody knows we cannot carry an interest charge of more than $5,000,000,000, six or seven billion dollars for veterans, $15,000,000,000 for defense, and $5,000,000,000 for international cooperation unless we have an economy on a relatively high plateau. Again I say if it is necessary to sustain our economy in the period of unemployment this gives a very fine field for public works of a durable character, of an essential character, which can be carried out at a

minimum of administrative expense to the Government. The administrative expense to the Government would be nominal. You would file the application from your State agency, they would check on the validity of the bonds if it is to be a loan, and otherwise they just send a check for the grant and call it a day. I do not know how to make a loan program and a grant program or any public works more simple

than that.

Senator HUMPHREY. You would not have any further check-back to see whether or not the grant was adequately expended?

Senator ROBERTSON. It would not have a thing to do with whether it was adequately expended or not. The States have 50 percent of their own money in there and I think that is sufficient safeguard to make sure they are not going to throw it away.

Senator HUMPHREY. We have had experience, Senator, with Federal moneys being expended on public construction wherein the construction was not exactly up to standard. I recall an experience when I I was a student at the Louisiana State University where the Federal Government was making an examination of all the buildings down there at that particular time, wherein electrical wire, the superstructure, and the foundation of these buildings was below the specifications that had been drawn up. There was apparently what one might call difficulty in construction of those buildings.

Senator ROBERTSON. There is no doubt but that we have furnished through public works the finest training school for our contractors this Nation has ever known. And in my opinion there is not a responsible contractor in any State who has not been educated. He first had the advantage of an education in our WPA and then PWA construction program. He then had the education in our Home Owners Loan Program, appraising and repairing. He had the education in the FHA, and that has been a wonderful education where they apply for a loan and the construction plans have to be approved before they can get the loan.

Senator HUMPHREY. Yes.

Senator ROBERTSON. Then those that got in on the war contracts, of course, were all under Government supervision, and so for the past 15 years we have been educating the mechanics, the draftsmen, and contractors of this Nation in what are sound construction principles. And I do not know of a State that does not have a pretty good construction unit for its public buildings anyway.

In Virginia we have a State architect, and we have a board that passes on all these plans. No community in Virginia can build a new school without the approval of the State board of education, and I assume every State bas some control, whether they put the money up or do not, because all the States do help the localities in some way or other.

So I do not anticipate any difficulty in getting effective buildings because we do not have a flock of Federal inspectors running around and saying, "What are these plans?" And, "I am going to be back in 10 days to see if it is put in right."

I am trying to eliminate all unnecessary expense and put this responsibility squarely up to the States because I am satisfied that they are competent to meet it and willing to meet it, and thereby keep the overhead expense of this down to a nominal sum, largely just a matter of writing checks.

Senator HUMPHREY. Thank you very much.

Senator ROBERTSON. Thank you.

Senator HUMPHREY. Our next witness is our distinguished colleague, Senator Magnuson. We will be glad to hear from you, Senator.

STATEMENT OF HON. WARREN G. MAGNUSON, A UNITED STATES SENATOR FROM THE STATE OF WASHINGTON

Senator MAGNUSON. Thank you, Mr. Chairman.

Senator HUMPHREY. Your bill is what?

Senator MAGNUSON. S. 287, which is somewhat in the nature now of an amendment.

But, Mr. Chairman, you have before you a number of bills proposing Federal aid to States for construction of school facilities. Among them is a bill introduced by the Chairman, Senator Humphrey; one sponsored by Senator Neely, nine other Senators and myself, S. 287; and S. 834, which I introduced with the cosponsorship of seven of my colleagues. Each proposes that the Federal Government recognize in a financial way the responsibility it has to the school children of the Nation-children who are, and will be, citizens of the States in which they live and also citizens of the United States.

Historically and constitutionally, education is the prime responsibility of the States. All of the bills before you recognize this fact. At the same time, however, the Federal Government has a legitimate interest in the educational opportunity afforded all its citizens. In my judgment, it has a responsibility to implement this interest as the need arises. It can legitimately do so by rendering financial assistance, if at the same time proper safeguards are adopted against encroachment upon this special prerogative of the respective States.

From the classrooms of today will come our workers, our legislators and leaders of tomorrow. Learning can take place under adverse physical surroundings. I doubt that anyone will contend, however, that the clock should be turned back to that day when the ideal classroom consisted of Mark Hopkins on one end of the log and his student on the other. Today, America is going to school. From this fact we, as a Nation, derive our greatest source of strength. From this fact, also, is created the problem confronted by school districts throughout the country-a problem which many are unable to solve and will be unable to solve without Federal assistance.

As a cosponsor of S. 287, I naturally believe the principles it incorporates and the pattern of Federal aid it proposes represent the framework within which Federal aid should be extended. This bill proposes a first year's appropriation of $150,000,000. Of this amount, $5,000,000 would be allocated to the States as an encouragement for making an inventory of their school construction needs; $145,000,000 would be allotted to the States for actual school construction.

In my judgment, it is wise to provide for an inventory of needs. Various estimates of need on a Nation-wide basis have been made. These range from $7,000,000,000 to $10,000,000,000. The States and the Nation should know as accurately as possible the size and the magnitude of the problem we confront. The survey will provide this answer.

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While we are getting this answer, however, I see no reason for delay in enactment of legislation authorizing appropriations for actual construction. I am certain that every State knows, now, the school districts within its boundaries where the need is most critical. These, of course, would be special cases.

S. 287 provides that these most critical needs be met first out of whatever construction funds are allotted under this bill.

S. 287 places Federal responsibility for this program in the United States Office of Education. It directs that Office to work through State departments of education and prohibits Federal interference with State plans and programs.

With this general endorsement of S. 287, I wish now to direct the committee's attention to the amendment which I introduced on May 6 for Senators Neely, Morse, Kerr, Chavez, Downey, Taylor, McFarland, Aiken, Kilgore, Hill, and myself. This amendment is designed to meet a special problem wherein the Federal responsibility is clearly domonstrable-a problem which has been created, or seriously aggravated, by activities of the Federal Government itself. I think I am safe in saying all the organizations and Senators who support S. 287 also support this amendment. By wording and intent, it is in harmony with the principles and pattern of the bill itself.

Let me review briefly evidence and circumstances which contributed to the introduction of this amendment. Toward the end of the second session of the Eightieth Congress, the House Public Works Committee requested the Federal Works Agency to conduct a Nation-wide survey to determine the extent to which Federal activity in particular school districts has created or seriously contributed to the inadequacy of school facilities. During the recess FWA, in cooperation with the United States Office of Education and State departments of public instruction, conducted such a survey. Tabulation of results show that there are approximately 395 school districts in the Nation seriously overburdened by Federal activity within or near their boundaries.

It was further determined that the estimated cost of needed facilities on the part of these 395 schools totals approximately $350,000,000. As nearly as could be estimated $171,000,000 of this cost is legitimately attributable to Federal activities. FWA estimated from the facts at hand that the school districts themselves could raise approximately $212,000,000, leaving a balance of $136,000,000 which would have to be obtained from outside sources.

I might say that $212,000,000 is the maximum amount they could raise within their tax limitations and to which they apparently the majority of them, are perfectly willing to extend themselves insofar as they possibly could constitution-wise and law-wise within their own States.

I might say in passing that the validity of this survey has been questioned by a number of people. I have done some personal checking on the facts and am convinced that the survey does present, if not an accurate picture, at least a workable indication of the impact. of Federal activities upon those school districts in the States which responded to FWA's request for information.

Based on the facts developed by the survey and on requests of many affected districts in the State of Washington, I introduced S. 834.

For similar reasons Senators Kerr, Chavez, Downey, Taylor, Morse, McFarland, and Hill joined me in sponsoring that bill. I suppose there are many other Senators involved, too.

After the bill was introduced, individuals and organizations supporting S. 287 came to me with constructive criticisms of the pattern of Federal aid incorporated in S. 834, which was designed only to take care of the special district problems.

They expressed the conviction that this emergency program should be synchronized with long-range Federal-aid legislation. I and other cosponsors came to the conclusion that we could and should bring this phase of Federal responsibility into harmony with permanent legislation which you now have before you. I believe we have accomplished this objective in the amendment to S. 287, about which I am now speaking. In other words, the people in the local areas, the State superintendents of public instruction, and those responsible for education at the State level were somewhat fearful that should this emergency bill pass with its pattern that it might set a precedent for Federal aid for future long-range school-aid programs. We think that has been taken care of by this amendment to S. 287.

The amendment provides that in the first fiscal year $65,000,000 of the funds which become available under the act shall be set aside for use by the Commissioner of Education in assisting school districts overburdened by Federal activity. The remainder of the funds appropriated in the first year would be available for allotment to the States under the regular formula provided in the bill. The Commissioner would use the $65,000,000 for grants to school districts where he determines that the Federal Government itself is wholly or partially responsible for the acute shortage of school facilities. The amount of the grant in each case would be proportionate to the Federal responsibility

as determined by the Commissioner in cooperation with the State agency responsible for administering or supervising public elementary and secondary_school education, the responsible officials of school districts involved, and the Federal department or establishment whose activities created or aggravated the shortage of school facilities.

S. 287-I am speaking of the substitute introduced on May 6requires that State allotments made for the first fiscal year in which funds become available shall be limited to critical projects. Therefore, those funds remaining after the $65,000,000 is deducted, will be allocated to the States on a formula basis, and the States would use these moneys to meet problems in those school districts where need is most critical. I have no doubt that the States themselves will find that some, if not all, of the "critical projects" are in school districts where activity of the Federal Government is heaviest. The combination, therefore, of my amendment and the provision of the bill itself, which I have referred to, will insure that most of the first year's funds appropriated under S. 287 will be utilized to construct facilities in those school districts where Federal responsibility is most clearly demonstrable.

Since the Federal Government is extending, under the bill and amendment, financial aid to the States for school construction, I think it reasonable to require that maximum attention be given to school districts where the Federal Government itself has the greatest responsibility. As the initial emergencies are met, the program envisioned by S. 287 would begin to operate on a straight formula basis.