3. The Federal Government does pay an indirect tax-I want to emphasize this one point-to construct school buildings far removed from the areas which are called upon to provide educational facilities for the children of its employees. Through the procurement of the many and varied supplies, services, equipment, spare parts, and so forth necessary in the operation of such an industry, the tax item of cost to the supplying private sources is paid by the Federal Government. That some of this tax supports the local school where the private industry is located is shown by the following example:

The Oklahoma City Air Technical Service Command, located at Midwest City, Okla., purchases approximately $425,000 worth of electric current from the Oklahoma Gas & Electric Co. annually. The records of this company show that 21.5 cents of each revenue dollar is used to pay taxes. The plant which generates this current is located about 8 miles from Midwest City, Okla., and in another school district. It is assessed for $3,413,325, which is 65 percent of the total assessment of the school district. Thus, we find this private industry paying 65 percent of any building revenue levied in its district. This company has 143 employees at this plant and the school district has 419 pupils in average daily attendance.

Under the normal tax pattern this company can, and will-and I might say has if necessary, provide $290,000 for school buildings over a period of 5 years. That is within the tax pattern of Oklahoma. This amount would be $2,028 per employee or $692 per school child.

Senator Kerr mentioned what Oklahoma as a total would need to bring back its school system up to normal, so I say here a contribution of only 4.7 percent of that being made by this private industry to the school district in which it is located is requested by the Midwest City school district from the Federal Government, the owner of the industry located within its boundaries and employing 13,000 people. Government-owned property leased to private industry which is operated for profit on business supplied and paid for by the Federal Government is perhaps the most unjust condition perpetrated on a local school district. At Miamisburg, Ohio, the Federal Government provided the Mounds Laboratory at an approximate cost of $25,000,000, which is operated by the Monsanto Chemical Co., a private corporation. The children of the employees of this private corporation require educational services the same as those connected with other private industries of the city. Yet the principal property in this private operation is nontaxable. This is unfair to the other industrial taxpayers as well as to the children of the local school district. If this property were privately owned, the fiscal problem of this school district would not exist.

A glance at the following table will serve to emphasize and point out the impact experienced through increased attendance at the schools from which the superintendents come who are here to present testimony this morning.

You have listended for nearly 2 weeks to testimony from the experts of many of the organized professional groups of the Nation. Largely, that testimony has been of a technical and theoretical nature. The witnesses who will appear before you today are the men on the firing line, so to speak, in the representative school systems throughout the Nation which have been affected by war and defense activities. It is to these men that the children have come and continue to come

for enrollment in ever-increasing numbers. They cannot avoid the problem and are here seeking help toward its solution.

I have one other paragraph here that I want to add. A considerable amount of testimony has also been presented emphasizing the extreme problem which will come about when the school enrollment problems are increased by the advancing birth rate. We believe this testimony is accurate and that a serious problem involving a shortage of school buildings will prevail at that time.

Let us point out, however, and emphasize the fact that the schools administered by the school superintendents here today have already received an impact of pupils five times as large as that expected from this cause. That is analyzed in this fashion.

I think we can say we will have from 8 to 10 million more pupils in the next 5 or 6 years. We now have 25,000,000. That is 40 percent. This group of schools in this list have received an average impact of greater than 200 percent already. Now certainly then these schools. are justified in seeking help in solving this problem.

(The following table was submitted for the record:)

Attendance impact since last normal year (8 to 10 years)

Surely, a local school district cannot be expected to cope with the financial problem presented in providing school building for such an increase in scholastics as that revealed by this table. No fiscal pattern is designed to meet an increase of this magnitude even with a tax contribution comparable to the increase in scholastics. The result is obvious when such increase is accompanied by and results from taxexempt property.

There are over 300 other schools in similar condition to those shown in this table throughout the United States.

At the request of the Eightieth Congress, the Federal Works Agency, in cooperation with the United States Office of Education and the State educational authorities, conducted a survey to determine the extent of need for Federal assistance in meeting this peculiar problem. This survey was placed in the Congressional Record February 21 by Senator Magnuson and shows that 395 schools located in 37 States, the District of Columbia, and Alaska, have had a pupil increase in average daily attendance of 446,870 pupils -I use the approximation of a half million pupils for that figure or 46 percent above the last normal prewar years.

I might mention that that is the expected increase in a general fashion throughout the Nation, due to this increased birth rate. These schools have had an average equal to that already, and will of course not be exempt from the additional birth rate that is to follow.

Thus, we find nearly 11⁄2 million school children with inadequate school facilities as a direct result of various Federal activities. I feel certain that this impact is far in excess of that experienced by any like number of schools and cannot be financed by any general law or formula.

In Senator Kerr's statement, he mentioned 12 schools and 7 schools. I was particularly interested in just knowing the facts in Oklahoma, and I obtained those figures myself. In the 12 schools not affected, we had an increase in attendance in the last 8 years of less than 1 percent. In the 7 schools affected, there was an increase I believe of seventy-some percent, whatever the figure was that was given.

The needs of these schools is twofold: That of the regular construction experienced by all schools for a million pupils in normal attendance and the construction of complete new facilities for another half-millionpupil increase peculiar to these school districts. May I again remind you that these pupils have been out there all the time the same as all the schools throughout the Nation. They have a construction need, but then when you add 46 percent additional pupils, or a half million more pupils, you certainly aggravate or increase the problem in that particular group of schools.

Meeting these needs has been aggravated by below-normal tax bases and a reduced bond capacity because of expenditures for temporary facilities during the war at a time when the normal school district was retiring previous bond issues.

The records actually show that a great many school districts, and we have given it in testimony here that we could not build school buildings during the war. We could not build school buildings much during the depression. What was happending in the over-all picture? Bond issues previously voted were being retired, leaving the fiscal economy from a bond viewpoint on the average perhaps in the best position it has ever been in, but what was happening in the other schools? They were spending all their resources to meet this need, and came out of the war with practically 100-percent bonded indebtedness after having voted each year during the period of time excessive taxes for building. That is the difference between the two.

In saying this I am not minimizing the general problem. We have a general problem. We agree with all the testimony, that we have a peculiar and a most difficult problem.

The fact that it has been necessary to carry on all of this construction during the period of advanced costs, has resulted in less facilities per dollar than that obtained by the normal school district. According to the survey referred to above, the local school districts have spent $169,000,000 since the war impact to meet this building need and the Federal Government has provided assistance in the amount of approximately $36,000,000. There is an additional construction need of $348,000,000, for which the local districts have, and are willing to use. There again I want to mention this.

The entire philosophy of this group of schools is that we are willing to expend every dime within the legal limits of our capacity under the fiscal laws before we apply for any help to finish that job, to a normal facility.

They are willing to use $212,000,000, leaving a shortage of $136,000,000 in providing adequate school facilities for this million and a half children. Thus we find that, from the last normal year to a completed job, the local districts will provide 69 percent of the cost and the Federal Government 31 percent, even though 84 percent of the increase in attendance is a direct result of Federal activity.

In other words, I say that to defend the school district representatives here this morning from any charge that we are wanting the Federal Government to assume a normal local district function even in financing school buildings.

After viewing this federally caused problem, the effort which the school districts have made and the further effort which they are willing to make toward its solution, and after considering the urgent need with which these schools are faced in meeting the school building need for a million and a half school children it is hoped that this committee will make an early and favorable report on legislation to meet this problem. A number of bills have been proposed and are being considered by this committee which provide different methods of meeting this need. We believe it is for the Congress to determine the policy to be followed and we favor any plan which meets these emergency needs in an economical manner and in the shortest possible time consistent with the orderly development of a long-range school-construction program.

Senator MORSE. Mr. Rose, we are very appreciative of your statement for the record, and I want to thank you on behalf of the committee.

Mr. ROSE. Thank you.

Senator MORSE. Mr. Walter Stebbins, superintendent of schools, Dayton, Ohio.

STATEMENT OF WALTER E. STEBBINS, SUPERVISING PRINCIPAL, MAD RIVER TOWNSHIP SCHOOLS, MONTGOMERY COUNTY, DAYTON, OHIO

Mr. STEBBINS. Mr. Chairman, members of the committee, it is gratifying to know that the members of this Senate subcommittee and its highly esteemed acting chairman, the Senator from Oregon, Senator Humphrey, and others, have directed their efforts these past 2 weeks to a consideration of one of the most pressing needs confronting our Nation today-that of making possible for every American boy and girl a good American education. No little part of that gigantic problem is the boundless need for school facilities.

As administrative head of the schools of Mad River Township, adjoining Wright Field at Dayton, Ohio, I have been confronted for several years with a number of serious problems common to other districts located in war and defense areas in some 39 States. For the school superintendents administering the school programs in these communities, this is a significant hour. To them, through the institution of these hearings a new day in American justice has been born. Our Government has been extremely charitable in many parts of the world, and one legislator recently, and in a serious tone, remarked that it is regrettable that these schools are not in Europe. He stated that if they were he was certain the Congress would not object to helping

them. This charitable attitude of the Congress is not to be condemned, however, for in reality both charity and justice are measures of greatness which determine our right to exist.

In the matter of legislation designed to provide financial assistance for school-building construction, both charity and justice are involved. The general need for school-building construction as set forth in various bills before this committee, calls for the application of a charitable attitude on the part of the Federal Government, and while we would in no way attempt to minimize the great and pressing need for the construction of classrooms and other facilities in thousands of communities throughout the Nation whose poverty has no particular relation to any war or defense activities, we must, however, point out and emphasize that in some 400 districts scattered widely across the land, there is a direct responsibility on the part of the Federal Government. Here, there is a moral obligation and a debt to pay, for these districts have actually, in a sense, been robbed of their wealth and their well-being, and in addition, they have been burdened with hordes of school children as a direct result of Federal activities. Here then we move over from the realm of charity to the realm of justice. In support of these principles of justice and fair play, the following remarks and supporting data are directed:

Nearly one and a half million school children have, to some degree, and by various implications, been deprived of their rightful heritage of an adequate education by the undoing influence of these Federal activities. In many cases only a fence separates the community from the Federal property. On the one side of the fence at a wellknown air establishment there are golf links and a swimming pool, and beautiful homes for the officers who work there. On the other side of the fence there is a poverty-stricken school system where 800 children are consigned to half-day sessions, and other hundreds of the school population are housed in churches, basements, and storage rooms which are poorly heated and poorly lighted. What these communities want and have a right to expect is a "new deal" and a 'square deal" on their side of the fence.

These disrupted and impoverished communities constitute war casualties as definitely as does the loss of military personnel or great national leaders.

While the chamber of commerce of a large city may exert pressure to bring in a Federal installation for the sole purpose of helping industry and business in that city, the local community beyond the borders of the city where the installation is located is pauperized from that time on.

Mr. Rose, whose testimony was just heard, pointed out four conditions which prevail in these areas as a result of Federal activities. These conditions have created problems of such magnitude that even by exerting a maximum effort the local school districts cannot approach a satisfactory solution. Restated, these conditions are:

1. The location within or adjacent to a school district of federally owned, nontaxable industrial or military property.

2. An unprecedented increase in school attendance resulting from the need for employees at these industries.

3. Federally owned public housing, trailer settlements, and lowcost privately owned homes to provide living quarters for these employees, and which makes little or no contribution toward financing needed school-building construction.