Mr. Chairman, these proposed pieces of legislation are attempts to spell out procedure, in my opinion, which will give to various private and proprietary schools their day in court, so to speak. I have been interested in this matter since the first of January in particular-and I would like to preface this remark by giving some reason for it. It was assumed, with a great deal of grounds, in the first part of this session of Congress that I was to be chairman of a subcommittee in the House handling this particular type of problem. No doubt for that reason I probably have received as many complaints from the various educational institutions all over the country as any one Member of the House. It would take probably 2 or 3 days for me to cite the various instances involving the many different schools, as they have brought their problems to me. So I shall not attempt to particularize these complaints, except to say that my files are voluminous on this subject. Before proceeding further I would like to say that it is not my intention here this afternoon to attempt in any way to publicly crucify Mr. Stirling, Mr. Monk, or any other particular individual employed. by the Veterans' Administration. I I have had many occasions to go into conference with Mr. Stirling, Mr. Monk, and his associates on these problems and others. I have found those gentlemen to be very cooperative, very understanding. also believe that I have found them in many instances to be poorly advised from their regional offices. I cannot make that a definite statement. I do not know how they are advised, but, in my opinion, the gentlemen in the central offices in a great many instances have been ill advised as to how this program is actually working out in the "grass roots" level, so to speak. I believe that there are two questions to be decided, basically, in this present controversy. First, under the law as enacted by Congress, to aid in the education and training of veterans, does the Veterans' Administration have the authority to demand and obtain contracts for tuition rates from schools founded after June 22, 1944? Second, does the Veterans' Administration exercise supervisory authority over schools in which veterans are being educated and trained? This second question is one that has caused most of the complaints to come to me. I will repeat the question: Does the Veterans' Administration exercise supervisory authority over schools in which veterans are being educated and trained? Now, the first question, relative to contracts, has already been challenged and taken to court by several schools. I would like to say, incidentally, to this question that is before the court at this time, that an analysis of the legal position of the Veterans' Administration, as contained in a December 1948 deposition by Mr. Stirling, the Deputy Administrator, shows that they rest their case, in my opinion, on rather slender grounds. Mr. Stirling was asked what legal authority the Veterans' Administration had for fixing the tuition rates, and it has been reported that he cited a telegram by Gen. Omar Bradley of September 1947 as one piece of authority. The second was the unwritten law. That is, that the power to negotiate contracts for training veterans was contained implicitly in the powers of his office as Administrator. Second, Public Law 268; and, third, Public Law 377. I shall not direct my remarks at too great length to the first two reasons I gave, but the third one I happen to be very familiar with. I believe the chairman will recall that we had some little argument last year over certain aspects of Public Law 377. It was known at that time as H. R. 2181. It came to be Public Law 377, relative to institutional on-the-farm training. I claim a great deal of knowledge concerning that particular law and that which went before its enactment, and I deny that in any part of that law is there given any degree of authority to the Veterans' Administration to actually supervise that training. The Senator might recall that in that law we set up certain basic standards and said in effect that, if those standards were met, tuition would be paid and subsistence would be paid. Later on, we got into a little further argument about just how much subsistence would be paid. But the point I am trying to make is that in that law, which is given as one of the reasons by Mr. Stirling, there was no authority given except to say that if training institutions met certain basic standards, as spelled out in that legislation, that tuition would be paid and subsistence would be paid. Now, Mr. Chairman, I do not lend personal credence to the report which I have at hand, but there has been recently conducted an investigation by one of the standing committees of the House into the way the Veterans' Administration is actually conducting their affairs, with particular reference to training institutions in the State of Mississippi. With the indulgence of the chairman, I would like to at this point insert this report into the record. Senator MORSE. It will be inserted in the record at this point. (The report above referred to is as follows:) EXHIBITS, VETERANS' ADMINISTRATION IN MISSISSIPPI A. Mississippi State Committee to Booker T. Washington Trade School: (1) Letter of January 17, 1949, suspending school. (2) Letter of February 11, 1949, lifting suspension. B. Copy of contract between the VA and Booker T. Washington Trade School (Con. V3023 V-216) signed by school and partly by VA. C. Copies of H. R. 2042 and S. 1150. D. VA Manual, extract M 7-5: (1) Blank form VA 7-1965. (2) Specimen letter and copies VA to veteran students of Booker T. Washington following the closure of the school. (3) Photographs of Booker T. Washington School during operation of school by R. W. Woullard (three views) (4) VA Forms 7-1965-copy of survey or study made at Booker T. Washington School, on May 4, 1949. (5) Copy of teletype Camp V. A. Jackson to Director Training Service, Washington, D. C., May 10, 1949. (6) VA Jackson to R. W. Woullard re school August 30, 1948. (7) VA Jackson, letters re 7-1965 survey of May 4, 1949, on Booker T. Washington School. (8) VA Jackson letters re visit to Booker T. Washington School on May (9) Analysis of Booker T. Washington School cost data by VA officials. (12) Figures by Payne on comparative costs of three shoe-repair trade (13) Letter, Alexander to R. W. Woullard November 8, 1948, re school problems and a memo spelling out Alexander's duties and responsibilities as director of Booker T. Washington School. (14) Letter, VA to Woullard May 5, 1949 (photostat). Request for additional cost data on tools and Woullard's corporate holdings in any other schools. (15) Memorandum, chronological recapitulation, letters and petition of veteran students on Washington Technical School (District of Columbia) and its battle with VA. (16) Memorandum re H. R. 1966 and S. 1150, prepared by National (17) Letter to Congressman Dawson from A. H. Monk, Director of (19) Letters and records on Pike Trade School, Magnolia, Miss., v. VA. (21) Confidential papers and letters on other schools v. Veterans' Administration. These papers are not to be made part of open hearings or any public record. (22) Mississippi State Standards for Veterans Training. To: William L. Dawson, chairman. From: J. Robert Brown, investigator. Subject: Report on investigation of Veterans' Administration operations in the trade schools of Mississippi. From May 2, 1949, to May 20, 1949, a staff investigator toured the State of Mississippi, the area under the jurisdiction of the Jackson, Miss., office of the Veterans' Administration. Object: The object of this investigation was to determine how the Veterans' Administration was handling the trades and crafts education and training of veterans in the State of Mississippi. Cause: The cause of motive behind this investigation was the large number of complaints, vocal and written, received by Congressmen from veterans and school operators of Mississippi and because of some very specific complaints and urgent pleas for assistance from the former owner and operator of an automotive trade school, the Booker T. Washington School of Brookhaven, Miss. Scope: Schools were visited and inspected throughout the southern end of the State. Veterans in training, veterans who had been graduated from training schools, owners and operators of schools, Mississippi State officials, professional and businessmen, and the ubiquitous men in the street were interviewed on the topic of the trade and craft chools. They were also interviewed on what they knew of the relationship between the Veterans' Administration and the schools in their State. Voluminous and valuable information was obtained from those sources. The facts that they presented were verified and exhibits were gathered. Most of the narrative of the report is based on data obtained by the above methods and from those sources. The officials and some employees in the Jackson regional office of the Veterans' Administration were also interviewed and given every opportunity to present their side of the picture. Particular emphasis was placed in the investigation on the alleged abuses by the Veterans' Administration in enforcing its bitterly contested authority to exact contracts from private trade schools, or any school founded after June 1944. Equal importance was attached to the investigation of the encroachment and infringement by the Veterans' Administration on the supervisory functions and approval powers of the State educational approval officials. Those two aspects were stressed because the problems in the present controversy can be narrowed down to these two questions: (1) Under the law, as enacted by Congress, to aid in the education and training of veterans, does the Veterans' Administration have the authority to demand and obtain contracts for tuition rates from schools founded after June 22, 1944? (2) Does the Veterans' Administration exercise supervisory authority over schools in which veterans are being educated and trained? The first question has already been challenged and taken to court by several schools. An analysis of the legal position of Veterans' Administration as contained in a December 1948 deposition made by Harold V. Sterling, Deputy Administrator, shows that they rest their case on slender grounds. For when Sterling was asked what legal authority the Veterans' Administration had for fixing the tuition rates, he cited a telegram of Gen. Omar Bradley of September 1947 (exhibit 10). Sterling further stated that the authority for that telegram was based on: (a) The "unwritten law”—that is that the power to negotiate contracts for training veterans was contained implicitly in the powers of his office as Administrator. (b) Public Law 268. (c) Public Law 377. Sterling freely and frankly admitted that Public Law 346 is not applicable to any private educational institution. As a matter of fact Public Law 268 covers courses of 30 weeks or less-refresher or specialized courses. While Public Law 377 covers institutional-on-farm courses. Neither law seems applicable as an authority for contracts with private trade and craft schools. It is not properly a subject matter for the staff to pass on the legality of the Veterans' Administration's position but the passing observation that their legal position is weak and tenuous is too objective to be unobserved and noted. The second question, "Does the Veterans' Administration exercise supervisory authority over schools in which veterans are being educated or trained?", is quite properly a subject matter of this report. In fact the case of the Booker T. Washington School of Brookhaven, Miss. hinges largely on that question. In answer to that second question, it was the unanimous opinion of every individual interviewed in the State, exclusive of Veterans' Administration employees, that the Veterans' Administration does exercise direct and indirect supervision over the schools. The view is also held by those writing in to the committee, by the operators of the schools in most of the States of the Unionincluding the District of Columbia. Such a convergence of complaints, from so many different and independent sources, yet all pointing at one major fault, precludes the possibility of a localized case of maladministration or clash of personalities, or a Nation-wide conspiracy, and indicates by the convergence that there is merit in the lamentations for relief and protestation for help from Congress in the relationship between the schools and Veterans' Administration. STORY OF BOOKER T. WASHINGTON SCHOOL The story of the Booker T. Washington Automotive Trade School points up the controversy now being waged between the schools and the Veterans' Administration. It also brings out into sharp relief the actions of the Veterans' Administration as contrasted with the statutory obligations and limitations imposed on them by Congress. The Booker T. Washington Automotive Trade School of Brookhaven, Miss., opened on April 12 1948, and from that date to September 30, 1948, it operated on a working contract at the rate of $25 per month per trainee. In October 1949 a memorandum agreement was signed by Veterans' Administration and the school. In December 1948 a contract was approved by the central office, the branch office, and the regional office of Veterans' Administration. On cost data gathered by the school during its operations from April until September 30, 1948, the Veterans' Administration offered the school a rate of $39.68 per month per trainee. The school found the rate fair and reasonable and on December 23, 1948, R. W. Woullard and N. Woullard signed for the school and G. W. Fatherree signed for the Veterans' Administration. Their signatures were witnessed by M. M. Seamen, chief of contracts, and W. I. Thornton, also a Veterans' Administration employee. Then after all those formalities to make the contract binding, one T. B. Payne, Chief of Vocational Rehabilitation and Education Division of Veterans' Administration, belatedly decided he would not sign the contract. When questioned about this reluctance to sign the contract, Mr. Payne was not able to give any convincing reasons why he had not signed except some vague words about not being satisfied with the cost data, and a thinly veiled hint that he questioned the integrity and honesty of both Woullard and his accountant, B. A. Totten. The staff submits that this eleventh-hour scruple, discovered 3 months after the expiration of the short-term or working contract, which, in turn, had been in force over 5 months, and after the memorandum agreement-signed by Payne on October 1, 1948, is not indicative of good management nor good sense on the part of Payne and the Veterans' Administration he represents. If something were wrong either with the operation of the school, or with the cost data as presented to the Veterans' Administration by the school, then the regional office in general and one T. B. Payne, most particularly, were both seriously derelict in their duties in not so informing the branch office and the central office. The Veterans' Administration records are ominously silent on Payne's reasons for not signing the contract, and their records are significantly silent also on any documentation or evidence substantiating Payne's implied reasons for distrusting Woullard and Totten. It should be inserted here that an exhaustive check was made on both Rev. R. W. Woullard and B. A. Totten and both men were given the very highest recommendations and endorsement by every source that was interviewed. Payne's action forced Woullard to submit to further financial strain and embarrassment. For it must be clearly remembered that Woullard had not been paid one penny since September 30, 1948. On the morning of January 3, 1949, Payne and Fatherree, of Veterans' Administration, went to Brookhaven ostensibly to look at the financial records and cost data of the school. Actually Payne knew very well, and had known for several months that all the financial records of the school were kept in the office of the school's accountant, B. A. Totten-and his office is right in Jackson. Yet Payne in his written report, states that that was the prime reason why he went to the school. His secondary objective, to check the school records, was also blocked since the secretary of the school, who kept the records posted, was out sick that day. Payne and Fatherree then left the school but returned that night at 10:30. They then made a dramatic inspection of the school, loudly and vociferously condemning everything. After that display of histrionic fireworks, Payne convinced himself, and we quote him "there was no training program going on, and there was no possibility of a training program." Having convinced himself of that Payne then informed the operators, and Fatherree informed the students that they were being interrupted, that they should take their tools and go home. The same information was given to the day students the following morning, January 4, 1949. Thus a school that had been in operation for almost 9 months, fully approved by the Mississippi State approval committee, was closed dramatically, without one hour of warning, and with not the slightest shred of legality by T. B. Payne of the Jackson Regional Office of the Veterans' Administration. Having taken the lion by the tail, Mr. Payne and other Veterans' Administration officials informed the State committee of their actions. As a result the State committee on January 17, 1949, suspended its approval of the school, pending an investigation. It should be noted that after the State officials made their own investigation, the suspension was lifted and the school was again placed on the approved list. (See exhibits A and A-1.) By the time the school's suspension was lifted, February 11, 1949, all the students had scattered, Woullard had no more money and the Veterans' Administration gave no indication when they would pay him for the period of September 30, 1948, to January 3, 1949. As a result of Veterans' Administration action and the protracted delay, Woullard was forced to seek the help of friends and persuade them to buy the school from him. To prevent complete bankruptcy, Woullard has extended his credit to the breaking point and is forced to stand by impatiently and watch his life savings being eaten up. All this is happening because of the debts he assumed in opening and operating the school. The high lights of this investigation brought about by observation, interview, and analyses of records, letters, and reports, brings out the following objective evidence on the Veterans' Administration's high-handed and unbridled tactics. 1. They closed down schools abruptly, dramatically, and illegally without the consent, approval, or any advance notice to the school or the State approval committee. Examples: (a) The Booker T. Washington School: (b) Pike School, Magnolia, Miss. 2. They force schools to buy equipment and tools over and above those required by the State committee. This additional cost is not absorbed by the school but passed on, through the Veterans' Administration to the taxpayers. |