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An analysis of the relationship between federal aid to education and economic growth

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An analysis of the relationship between federal aid to education and economic growth

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Content AN ANALYSIS OF THE RELATIONSHIP BETWEEN FEDERAL AID
TO EDUCATION AND ECONOMIC GROWTH
by
Don Baumgardner
A Thesis Presented to the
FACULTY OF THE GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
MASTER OF ARTS
(Economics)
August 1963
UM1 Number: EP44796
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UNIVERSITY OF SOUTHERN CALIFORNIA
G R A D U A T E S C H O O L.
U N IV E R S IT Y P A R K
L O S A N G E L E S 7 . C A L IF O R N IA
Ea &3V?
This thesis, written by
Don Baumgardner
under the direction of .Thesis Committee,
and approved by all its members, has been pre
sented to and accepted by the Dean of the
Graduate School, in partial fulfillment of re
quirements for the degree of
Master of Arts
Date 1 2 . 6 . 3 . ...
Dean
a^ESIS COMMITTEE ^
w .Uj«**.£(LA
Chairman
6-61— 2 M— HI
TABLE OF CONTENTS
CHAPTER PAGE
I. INTRODUCTION......... 1
The Problem........................... 1
Statement of the problem ••••••••• 1
Need to meet the problem ........ 4
Objectives in relation to the problem • . • 7
Delimitations of the problem............ 8
Definitions of Terms Used................. 9
Economic growth ........ ••«•••••• 9
Growth in output per capita ••••••• 10
Growth in total output.........«... 11
Education •••.. .............. •••• 13
Federal aid • ••••••••••••••• 13
Methodology ..................... 14
Organization of the Remainder of the Thesis • 14
II. EDUCATION AS AN INVESTMENT IN ECONOMIC GROWTH . 17
Development of Human Resources ••••••• 17
The quality of the labor force •••... 17
Health and productivity ................ 21
Specialization and efficiency . 23
The size of the labor force......... 24
Technology— the Human Element Still Supreme . 25
ii
CHAPTER PAGE
Research..........• •— 5—» . . —........... 28
Relationship between Levels of Educational
Achievement, Incomes and Productivity ... 29
The Need for Education in Underdeveloped
Areas ............• ............. 32
Correlation between literacy and economic
development • ............... 32
Correlation between educational develop
ment and per-capita income territorially 33
Population related to development ......... 34
Development of human quality ••••••• 36
Russia's Use of Education to Stimulate
Growth • •••••••••••••.••• 37
The Soviet educational system ....... 37
Economic growth in the U.S.S.R. ........ 39
Conclusions .••••••.••• ........ 41
American Economic Growth and Education . . . 42
Brainpower Is Our Scarcest Resource . • . . • 46
III. THE HISTORY OF FEDERAL AID TO EDUCATION .... 48
The Land Act of 1785 48
Early Federal Grants to States ••••••. 49
The Morrill Act of 1862 ......... 50
The Hatch Act of 1887 •••••••••••• 51
Nautical Education (Merchant Marine) .... 52
iii
CHAPTER PAGE
The Smith-Lever Act of 1914 • •••••••• 53
The Federal Vocational Education Act
(The Smith-Hughes Act of 1917) •••••• 54
The Servicemen*s Readjustment Act of 1944 • . 55
The National Defense Education Act of 1958 , 57
Other Federal Aid to Education .......... 61
Research • •••••••••.••••••• 62
Basic research.......................... 63
Research and development .............. 65
Summary....................... 66
IV. EFFECTS OF FEDERAL AID TO EDUCATION ON ECONOMIC
GROWTH................................... 68
Encouragement of Public Education 69
Agriculture and Economic Growth ••••••• 70
Vocational Training and Productivity • • • • 74
Effects of the GI B i l l .................... 75
The National Defense Education Act of 1958 . 77
Results of Research .............. • 79
Education as an Antidote to Unemployment • • 82
Summary .......... 83
V. THE NEED FOR INCREASED FEDERAL AID TO EDUCATION 84
The Need for Stimulating Economic Growth . . 84
Domestic requirements ..... ........ . 85
The cold war ........... 86
i v
CHAPTER PAGE
Problems of Our Educational System • • • • • 89
The rising costs of education ............ 91
Rising costs • ••••••••••••• 91
Reasons for rising costs .............. 91
Future needs .••••••••••••• 93
State and local problems in meeting
educational needs . 95
Differences in educational responsi
bilities • •••••••••••••• 96
Differences in economic ability • • • • • 98
Efforts to increase revenues ........ • 101
Willingness to pay • ••.••••••• 102
Deficiencies of our educational system • . 103
Illiteracy..............................103
Classroom shortage • •••••••••• 104
Teacher shortage • •••.•....•• 106
The drop-out problem • ••••••••• 108
Summary ..... .......................... 109
VI. PROPOSED FEDERAL AID TO EDUCATION.............. 112
Need for Federal Aid •••••••••••• 113
The National Education Improvement Act
of 1963 ................................ 115
The expansion of opportunities for indi
viduals in higher education ............ 116
v
CHAPTER PAGE
Expansion and improvement of higher
education •••••••••••••••• 117
Improvement of educational quality • • • • 119
Research in education ......... • . • 119
Teacher training • ••••••••••• 119
Strengthening public elementary and
secondary education • 120
Vocational and special education . . . . . 122
Continuing education ............. 123
Evaluation and Comments .................... 124
VII. OBSTACLES TO INCREASED FEDERAL AID TO EDUCATION 129
The Attitude of the Republicans toward
Federal Spending ..••••••••••• 131
The Contention that Federal Aid Leads to
Federal Control •••.•••••••••• 134
The Argument that Federal Aid Is Not Needed . 137
Opposition of the Richer States .•••••• 139
Fear that Federal Aid Will Stimulate
Integration............................. 141
Opposition of the Roman Catholic Hierarchy . 143
Summary •••••• ........................ 130
VIII. SUMMARY AND CONCLUSIONS................... . 152
Summary ••••••••••••••••••. 153
Conclusions ••••••••• .............. 166
BIBLIOGRAPHY............. ......................... 177
vi
CHAPTER I
INTRODUCTION
Our strength in combating communism derives mostly
from a healthy, growing economy. It supports our military
might, international relations, space program, foreign
trade, help to our allies and aid to underdeveloped coun
tries, Also, it maintains our morale by a rising standard
of living. And surely it must be demoralising to the
communists to see our economy growing stronger year after
year when they have been predicting its collapse for
decades. In addition, it demonstrates to underdeveloped
nations the advantages of a free economy. Our most power
ful weapon in the cold war is an economy which is growing
rapidly enough to continually stay well ahead of the Soviet
Union,
I. THE PROBLEM
Statement of the Problem
Our present federal aid to education is insufficient
to achieve a maximum increase in our rate of economic
growth in future years. Yet, President Kennedy*s school
1
2
aid plan, which would have gone a long way towards meeting
our educational needs, has twice been defeated in Congress,
Most of our states and localities are either unable or
unwilling to pay for adequate education. Thus, we are not
making an all-out effort in education and economic growth
even though this is essential to our survival.
Almost everyone is for adequate education— until it
comes to paying for it. Coombs puts it this way:
Only lately have significant numbers of able
economists and educators turned their attention to
probing the vital links between a nation's educa
tional effort and its economic and social advance
ment. Such relationships have long been assumed
to exist, but often the assumption was insuffi
ciently compelling to override more "practical"
considerations, such as money.
It is perhaps not unfair to say that in all our
countries we have tended to be schizophrenic about
education. We praise education's virtues and count
on it to help the new generation solve great prob
lems which the older generation has failed to solve.
But when it comes to spending more money for educa
tion, our deeds often fail to match our words. As
a result, our rapidly expanding educational needs—
quantitatively and qualitatively— have outstripped
our national educational efforts, leaving a serious
educational gap which now urgently requires closing.1
And Hano says:
Much of the public is unconcerned about the prob
lems of our educational system. Eight months after
Sputnik, voters rejected 33 per cent of all school
bond proposals. In June of 1962, voters in Los
Angeles County turned down three school bonds, and
school construction projects ground to a halt.
^Phillip H. Coombs, "Economic Growth and Investment
in Education," g. S. Department of State Bulletin. 43:822,
November 13, 1961,
3
Statewide, Californians defeated a $270-million
bond issue, much of it earmarked for furthering
California's superb junior college program.2
California is one of our richest states. The prob
lem becomes progressively more acute as we move to our
poorer states. Our citizens are either unwilling or unable
to pay for adequate education. Thus, the chronic shortage
of classrooms, facilities and teachers continues year after
year, decade after decade.
More and better education holds a key to more rapid
economic growth. Education is an investment in people. Itj
improves the quality of the labor force and leads to fuller,
utilization of human resources. Thus, increased productiv
ity results. Yet, it is reasonably certain the desired
results will not be forthcoming from state and local
levels. Federal aid to education has expanded in recent
years but not nearly enough. And the recent session of
Congress failed to approve an expansion of federal aid to
education.
The major obstacles to increased federal aid to
education are: (1) general opposition to any expansion of
our central government activities, financial or otherwise,
especially in an area traditionally reserved to the states;
(2) fear of increased federal control over education;
^Arnold Hano, ”U. S. Education Five Years after
Sputnik,” Pageant. November 1962, p. Ill*
4
(3) the contention that the states are adequately meeting
(or can meet) our educational needs and therefore federal
help is unnecessary; (4) the richer states do not want to
pay for education in the poorer states; (5) fear that
federal aid will stimulate integration; and (6) the
Catholic church does not want federal aid to go to public
schools unless Catholic schools get it also. From a prac
tical, political point of view, the opposition of the
Catholic hierarchy is the biggest stumbling block in the
path of expansion of federal aid to education.
These obstacles have not been overcome because
Congress and the public do not sufficiently realize the
inadequacies of our educational system; they lack an
awareness of the extent to which education promotes eco
nomic growth; and perhaps they do not fully comprehend the
urgent necessity for increasing our rate of economic
growth.
Need to Meet the Problem
We are at war with Russia; cold war is a matter of
degree. This struggle has been in progress for years and
probably will continue for many years to come.
Basically, this conflict is resolving itself into a
test of strength between two economic systems. When
Nikita Krushchev says he will bury us, he does not mean
with H bombs. He means the strength of the Russian economy
5
will eventually outstrip ours, and, In the process, other
nations will turn to communism, and the economy of the
United States will collapse.
Does this seem farfetched? Hot nearly as much as It
would have just a few years ago* In three short decades
Russia has risen from a backward, rural economy to become
the world's second great Industrial and military power.
Her estimated annual growth rate in real gross national
product during the 1950's was almost twice that of ours.
According to Professor Bach, our biggest economic
problem for years to come is likely to be this:
Can we win in the vast economic competition with
the communist world? Will the American economic
system, predominantly based on individual freedom
and private enterprise, be able to demonstrate its
superiority over Russia's communist system? Can we
produce enough to maintain our high standard of
living and pay the vast costs of modern defense
withoutincurring disruptive inflation or economic
collapse? Will we be able to step up our growth
rate to match the spectacular achievements of the
Russians over the past decade, or may the Russians
slow down as they reach industrial levels closer to
ours? Which system will win out among the billion
people still uncommitted in the cold war between
East and West?3
Shall we console ourselves with assurances that our
standard of living is still far higher than that of the
Russians, and in future years they may be unable to main
tain such a phenomenal rate of growth? Or shall we move
^George Leland Bach, Economics (Englewood Cliffs,
New Jersey: Prentice-Hall, Inc., 1960), p. 4.
6
strongly in the direction of trying to increase our own
rate of growth— not only to preserve our economic superi
ority over Russia but also to raise our standard of living
faster and reduce unemployment? Although we are a wealthy
nation, only a small percentage of Americans are satisfied
with their financial status; material wants still press
heavily oh most of us.
Sputnik, the first satellite successfully to orbit
the earth, dramatically aroused several questions: (1) Why
did we not have a space program, and if we did, why were we
behind the Russians? (2) How much technological superi
ority had we lost to the Soviet Union? (3) To what extent
were our respective educational systems responsible for
this humiliating development?
Russia is outstripping us in the production of tech
nological manpower. She continues to produce three times
as many engineers yearly as America. While enrollment at
Russian engineering schools is up, enrollment at American
undergraduate engineering schools has been going down every
year since 1958. The Bureau of Labor Statistics estimates
that an average of 31,000 engineering jobs will go begging
each year, right on up to 1970.
Former Secretary of Health, Education, and Wel
fare Abraham Ribicoff bleakly termed current
engineering-school enrollment "further evidence
that the balance of brainpower may tip— and tip
dangerously--against us if the nation does not soon
: . _ _ _ 7_ _
awake to the importance of education to the freedom
of the Western world*"4
Of course, engineering is only one type of educa
tion* Chapter II will show that, in the long run, more and
better education of all kinds is essential to increasing
our rate of economic growth.
"The question before the American^body economic is:
• 'A
'Will we grow fast enough to meet the economic needs of a
free but threatened society?*
Objectives in Relation to the Problem
The main objectives of this thesis are to establish
that an increase in federal aid to education will result
in an increase in our rate of economic growth, and that
additional federal aid to education is necessary and
should be provided.
To lay the groundwork,for the above conclusions, the
primary objectives are to show that.(l) improvement in the
quantity and quality of education lead to increased pro
ductivity; (2) the history of federal aid to education
indicates its contribution to economic development; (3) the
states cannot or will not adequately meet our educational
needs; therefore federal aid is necessary; (4) President
^Hano, loc. cit.
^Walter W. Heller, "Education and Economic Growth,”
NEA Journal. 50:9, October 1961.
8
Kennedy's school aid plan would go a long way towards meet-
ing our needs; and (5) the objections to more federal aid
are either Invalid or outweighed by Its advantages*
This thesis emphasizes education as an investment in
economic growth* It stresses the long-run effects of edu
cation on productivity* Its purpose is to develop the
theme that our future rate of economic growth depends in
large measure on how soon and how much and in what direc
tion we increase federal aid to education*
j
Delimitations of the Problem
Of course, there are many beneficial results from
education other than economic growth* Moreover, increasing
the quantity and improving the quality of education is only
one method of increasing the rate of economic development.
Also, the question of how to improve the quality of
education is partially unanswered and leads to considerable
I
controversy* Certainly, more classrooms to eliminate large
classes and better pay and working conditions for teachers
are a large part of the answer. But, when it comes to
techniques of teaching and new learning processes, there
is much less agreement*
In addition, using education for maximizing growth
to raise our standard of living faster is second in
importance only to winning the cold war*
Finally, economic growth is not the full story of
9
the cold war, which, of course, has its ideological,
political, diplomatic, military and religious aspects*
But all of these subjects are huge fields in them
selves, and, for the most part, lie outside the scope of
this thesis*
II. DEFINITIONS OF TEEMS USED
Economic Growth
The term ”economic growth" (often called economic
development) appears frequently in economic literature and
has come to be used widely in recent years. Thus, it
would seem that defining it would pose no particular prob
lem* Actually, however, "there is no traditionally estab
lished and clear cut notion as to what is meant by
economic development."^ The reason for this is that there
are many complex factors involved, such as difficulties in
measurement, redistribution of income, and human happiness*
Professor Youngson prefers to use the term "economic
progress" rather than "economic growth" because he is of
the opinion the latter term is bereft of welfare implica
tions* He thinks of "economic growth" merely as a statis
tical representation of physical growth and therefore feels'
6
Harvey Leibenstein, Economic Backwardness and
Economic Growth (New York: John Wiley and Sons, Inc.,
miy;p:t: —
1G
it avoids certain problems of human satisfactionThus,
definitions of economic growth by experts in this field
tend to be nebulous and uncertain, and no single defini
tion is entirely satisfactory.^
Probably the two most widely accepted concepts of
economic growth are, first, growth in the total output of
goods and services in the economy, and, second, growth in
output per capita (total output divided by total popula
tion) •
Growth in output per capita. Let us first consider
the second concept above (growth in output per capita, or
per person). Each individual's share depends on (1) the
amount of total production; (2) the number of persons
among whom it is divided (of course, if population grows
faster than total output, there will be no growth in out
put per capita); (3) the proportions of total production
of the economy which go to personal consumption, private
investment and government; and (4) how each person (or
family) fares in the way it is distributed (income differ
entials) .
In common terminology, growth in output per capita
7a. J. Youngson, Possibilities of Economic Progress
(London: Cambridge University Press, 1959), pp. 3-22.
^Gerald M. Meier and Robert E. Baldwin, Economic
Development (New York: John Wiley and Sons, Inc” 1957),
P. __________________ ________ ; ________________
11
is simply a gradually rising standard of living which
enables the average person to acquire more (or better)
goods and services, such as clothes, food, cars, movies
and life insurance. Of course, not everyone will share
equally in the increased production, and many people, for
example those on fixed incomes, will not share at all.
Also, an increasing output per capita does not promote a
better standard of living (at least in the short run) if
most of the increase goes into investment and military
outlays. To a large extent this is the case in Russia.
An additional factor is the number of hours worked. Two
people with identical incomes will not be equally well off
if one must work forty hours a week compared to the
other*s thirty hours a week.
Growth in total output. If it were not for the
cold war, our major goal would be to get more and better
goods and services into the hands of an increasing per
centage of our citizens. Therefore, we would be more
interested in increasing the growth in output per capita.
But it is our total production which basically determines
the strength of our major cold war weapons: military
might, space achievements, and aid to allies and under
developed countries. This theme is more dramatically
evidenced by the Soviet economy. No one doubts either
Russia's power as our antagonist, or the fact that her
12
output per capita compares very unfavorably with ours.
This seeming contradiction is explained mostly by her rapic.
growth in total production, as well as the large propor
tion of it she has devoted to investment and military and
space outlays*
Thus we return to our first concept of economic
growth, that is, growth in the total output of goods and
services in the economy* This requires an analysis of
gross national product (GNP)• This is a term we often see
and hear in the news* "Product” is any good or service
people are willing to pay for. "Gross” indicates the
inclusion of products which replace depreciating capital
goods* Gross national product is the total value of goods
and services produced in a given period (usually a year)
measured in current market prices.
To determine economic growth realistically over the
years, we must eliminate price fluctuations. Thus we con
vert gross national product into real gross national
product by using constant prices* Growth in the total
output of goods and services in the economy is then
measured by the annual percentage increase in real gross
national product.
This thesis is concerned with both concepts of
economic growth described above, but cold war considera
tions lend primary emphasis to the ”total output” concept.
13
Education
In this analysis, education Is broadly defined to
Include almost all forms of learning, whether they occur
In the classroom, on the job, or In the laboratory. This
study concerns Itself with all levels of education, for
example, from learning to read In an elementary school to
learning to cure cancer In a medical center.
The educational process Is regarded as the acquisi
tion of knowledge and skills combined with learning to put
them to productive use. Specifically, "education” in this
thesis means research and development, vocational training,
and all levels of formal instruction.
Federal Aid
The term "federal aid" is interpreted to mean help
to education from the central government. This help is
mostly financial and consists of direct subsidies to stu
dents, assistance to the states, and grants to educational
institutions and private corporations.
But an important part of aid from the federal
government is the direction it gives its funds to achieve
specific purposes. For example, the National Defense
Education Act of 1958 has resulted in an increase of stu
dents in the fields of mathematics, science, teaching and
modern foreign languages.
. _ 14
III. METHODOLOGY
The problem was explored through extensive reading
In pertinent areas In the fields of economies, education
and government. The following hypotheses resulted:
(1) Education promotes economic growth; therefore, federal
aid to education promotes economic growth. (2) Our need
for an increased rate of economic growth is very great and
the necessary educational effort cannot be expected from
the states and localities; therefore, federal aid to edu
cation should be increased.
To substantiate these hypotheses, they were divided
into their component parts, and the parts were arranged in
logical order. Each part was developed and analyzed, and
its validity was established through reasoning and to the
extent possible by statistics.
IV. ORGANIZATION OF THE REMAINDER
OF THE THESIS
The next three chapters develop the theme that
education promotes economic growth; therefore, federal aid
to education of the past has stimulated growth. The three
chapters following show the need for additional federal
aid to education, present the Administration's current
proposals to meet that need, and give an analysis of the
obstacles to increased federal aid. The final chapter
15
contains a summary and conclusions* Brief descriptions of
each chapter, arranged in logical sequence, are shown
below*
Chapter II, “Education as an Investment in Economic
Growth,” lays the foundation for the chapters that follow
by showing the cause-effect relationship between education
and economic growth. It establishes the fact that more
and better education lead to increased productivity*
Chapter III, “The History of Federal Aid to Educa
tion,” summarizes the many Congressional grants and acts
which have helped education ever since before the adoption
of the constitution*
Chapter IV, ''Effects of Federal Aid to Education on
Economic Growth,” shows in detail how past federal aid to
education has stimulated our country's economic develop
ment.
Chapter V, "The Heed for Increased Federal Aid to
Education,” briefly reiterates our educational needs caused
by our economic struggle with communism* Then it presents
evidence indicating it is reasonably certain those needs
will not be met without federal help.
Chapter VI, "Proposed Federal Aid to Education," is
devoted mainly to President Kennedy's school aid plan and
the extent to which it will achieve education and growth
results•
Chapter VII, "Obstacles to Increased Federal Aid to
16
Education,M analyzes the opposition to more help to educa
tion on the federal level.
* Chapter VIII presents the summary and conclusions.
I
J
CHAPTER II
EDUCATION AS AN INVESTMENT
IN ECONOMIC GROWTH
There can be no doubt that economic growth facili
tates education. Thus, economists have long treated
education simply as a consumer good, that is, they have
regarded it as a result of wealth.
But in recent years there has been an increasing
tendency to also regard education as a cause of wealth,
that is, as an investment in economic growth. It is this
latter aspect of education which will be considered in
this chapter.
I. DEVELOPMENT OF HUMAN RESOURCES
The Quality of the Labor Force
In the United States, education is regarded not
simply as a luxury which can be afforded after development
has occurred, but rather as an integral and essential part
of the development process itself.** The contribution of
**Dean Rusk, "Economic Growth and Investment in
Education," The Department of State Bulletin. 45:819-820,
November 13,1961.
17
18
the labor force to gross national product lies not only in
its size and in the number of hours it works, but also in
its quality* Yet, “it is only in the last few years that
there has been a revival of interest among economists in
the subject of human capital and its productivity, as dis
tinguished from labor and its utilization.“^ Schultz, in
one of several articles on the human element in economic
development, observes that the study of the investment in
man has long been neglected by modern economists and that
”the main stream of modern economics has bypassed under
taking any systematic analysis of human wealth.
Professor Groves indicates that at least half of
the increase in gross national product over recent years
is not accounted for by increases in inputs of labor and
tangible capital. He concludes that a new breakthrough in
the study of productivity has disclosed the fact that our
economy has kept growing, despite a reduction in per-
capita inputs of capital and labor, by augmented economic
efficiency:
The causes of increased economic efficiency are
only vaguely identified, but since they are not a
matter of the quantity of labor and capital, they
must be associated with the quality of those
^Walter Heller, “National Economy and Public Educa
tion Move Together.” School Life. 44:28. November-December
1.961.
^Theodore W. Schultz, “Investment in Man: An Econo
mist's View,” Social Service Review. 33:110, June 1959.
19
factors, which in turn seems probably a matter of
the quality of people who man and improve them.
This gives to human resources a new significance,
as it does also to education, which is our chief
instrumentality for discovering and developing
talent.4
It would seem that common sense would lead us to
the above conclusions even if we were not aware of the
fact that our increases in production have only partially
been accounted for by inputs of labor and capital. It
stands to reason that as the abilities of the labor force
are developed, they will not only become more productive
with existing resources, but will develop more and better
resources and methods of utilizing then. Also, it would
seem fairly obvious that "education is of enormous impor
tance both in creating skills and in guiding people, what
ever their talents, into their most productive roles.
An outstanding example of the human "quality"
factor is the superiority of American business management.
And it is generally conceded that a college degree is
almost a necessity for prospective executives. This is a
cogent acknowledgment of the contribution of education to
management efficiency.
Equally apparent is the necessity for the full
^Harold M. Groves, Education and Economic Growth
(Washington, D.C.: National Education Association, 1961),
pp. 29, 57 f.
^Ibid.. p. 23.
20
development of abilities in the creation of better scien
tists, teachers, engineers, doctors, inventors, mathe
maticians, researchers and so on. Perhaps not quite so
apparent is the growing need in our complex economy for
the acquisition and improvement of basic skills. For
example, one of the most fundamental of these skills is
the ability to communicate. The efficient talker,
listener, writer and reader has a definite competitive
advantage. And this applies in varying degrees to every
one whose work helps to provide the vast variety of goods
and services that make up our national product. But
probably it applies more to the growing proportion of our
labor force engaged in white collar work.
One of the most chronic and pervasive problems of
business organizations, especially the larger ones, is
communication. Countless firms hold letter writing classes
to teach experienced employees to write better letters.
Many companies have their people attend telephone schools
to develop techniques of listening and expression. Numer
ous employees are urged to attend "Toastmaster” meetings to
learn public speaking. Vast numbers of white collar work
ers are deluged with bulletins, letters, memos and other
written material which depend for proper absorption on
reading skill. The simple abilities to understand language
and to spell words add greatly to the efficiency of
millions of typists. One of the most common
21
characteristics of supervisors and executives, especially
the more successful ones, is their ability to express
themselves effectively. The development of basic and
essential skills (such as communication, understanding and
problem-solving) is best achieved by a broad diffusion of
high-quality education throughout the entire population.
Artisans--electricians, machinists, carpenters,
bricklayers, television repairmen, mechanics— often learn
the fundamentals of their work in secondary or trade
schools. The renowned productivity achievements of
American farmers and ranchers is due in part to the occu
pational training many of than have received in our high
schools and colleges.
It all adds up to a simple formula: Education
improves the quality of the labor force and this results
in substantially increased productivity (output per man-
hour of labor) not attributable to inputs of capital.
Health and Productivity
Poor health adversely affects performance, reduces
the number of hours on the job per worker, and decreases
the size of the labor force. For example, if you have a
cold but go to work, your efficiency and output suffer.
If you have a cold and stay home, your production for the
hours away from the job is lost. If you get virus-
pneumonia and die, the size of the labor force is reduced.
22
Aggregate statistics on this score are impressive:
In 1948 the Federal Security Administration
estimated that "every year 325,000 people die whom
we have the knowledge and the skill to save.
Every year, the nation loses 4.3 million man-years
of work through bad health. Every year, the nation
loses $27 billion in national wealth through sick
ness, and partial and total disability." In all,
the administration estimated total avoidable losses
at $27 billion plus $11 billion lost earning power
because of premature deaths.6
Education helps solve this problem in four major ways.
First, it helps through the broad dissemination of knowl
edge of good health rules: hygiene, proper diet, recrea
tion and so on, and periodic visits to doctors and
dentists. Second, higher levels of educational achievement
usually result in larger incomes which lead to fuller
utilization of professional health services. It is a
popular myth that the poor are healthier than the rich.
Actually, better mental and physical condition generally
go hand in hand with a rising income. Third, our educa
tional system develops the doctors, dentists, nurses and
technicians to meet our health needs. Fourth, research
results in medical progress in techniques, equipment and
discoveries such as antibiotics and polio vaccines. From
a cold dollars and cents point of view, consider the
stimulus to economic growth which would follow the
^Seymour E. Harris, The Economics of the Political
Parties (New York: The Macmillan Company, 1962), p. 265.
23
discovery of a cure for cancer or the common c o l d , 7
Specialization and Efficiency
Another aspect of the development of human resources
is the degree of specialization of occupation in our
society. This is a process that has been going on for
centuries, but it has been greatly intensified in recent
decades. "Manifestly, people acquire skills and know-how
to a higher degree when they concentrate upon single tasks
or single lines of endeavor.
An outstanding example of the accelerated trend
towards specialization in recent years is the medical pro
fession. The family doctor is fast giving way to the
heart specialist, pediatrician, internal specialist and
others. Only by dividing up tasks and developing highly
specialized human skills can an economy fully utilize the
basic production resources it has available.
Our schools have been part of the continuing trend
towards specialization. Not too many years ago a student
would have only one teacher who tried to teach all subjects
in the curriculum. Now, more and more teachers at all
^Sam Blum, "Why the Rich Don*t Get Sick and You Do,"
Pageant. November 1962, pp. 28-35.
®The Research and Policy Committee of the Committee
for Economic Development, Economic Growth in the United
States (New York: Committee for Economic Development.
156177 P. 25.
24
educational levels are confining themselves to one subject
area. A few decades ago occupational training was thought
to lie outside the sphere of formal education. But now,
typing, shorthand, mechanical drawing and all sorts of
shop courses are commonplace in our secondary schools.
To a certain extent, this trend at pre-college
levels is a reflection not only of the demands of our
economy, but also of the already existing specialization
of instruction and curriculum at university levels, ibid
the trend is continuing in our universities. The ”Open
End” television presentation of December 30, 1962 had as
its guests several educators from leading universities.
Two of them indicated serious consideration was being
given to allow their students to specialize in specific
areas of interest in the freshman and sophomore years
rather than confining them to the broad area of basic
courses traditionally required during the first two years
of college. For example, a pre-med student would be
allowed to take more medical courses and fewer of the
courses required of all students.
The Size of the labor Force
More workers increase total production: (1) The
large and increasing number of women in the labor force is
due mainly to the lure of increased family income. And
the amount they can add to family income depends a great
25
deal on their education. (2) The combination of compulsory
retirement at age sixty-five and a growing average life
span is causing greater production losses every year. It
appears that such things as diet and medical advances have
slowed down the aging process. Many 65-year-olds are will
ing and able to continue working. Yet they are compelled
to leave the labor force; thus, their education, talents
and experience no longer contribute to production. (3) The
unemployed comprise mostly the unskilled, less educated,
displaced and minority group workers. Education in its
broadest sense is needed to combat such problems as dis
crimination, high school Mdrop-outs,M vocational retraining
and labor mobility.
II. TECHNOLOGY— THE HUMAN ELEMENT
STILL SUPREME
Technology is the art of getting the most out of
available resources. Technological advance depends on
several factors: (1) research (advancing our frontiers of
knowledge) and conversion of the resulting new knowledge
into new or better goods and services; (2) inventions
(MAt bottom technological progress really reflects inven
tion for economic purposes. A study of the history of
economic growth in this country would find much of its
26
detail in the United States Patent Office . • (3)
improvements in transportation and communication; (4) en
gineering achievements; (5) improvements in the quality of
the labor force; (6) increased mobility of capital and
human resources; and (7) better business management: (a)
combining resources to achieve maximum productivity; and
(b) increasing efficiency through innovation, and new or
improved methods, procedures and techniques.
Technological advance has come arm-in-arm with
capital accumulation and to a large extent they are
inseparable. Therefore, it is difficult to measure with
any preciseness the contributions of each to economic
growth. Nevertheless, there is impressive evidence that
technological advance has played the major role. "Several
studies by distinguished economists have shown that tech
nology, much more than increases of capital, explains the
rising productivity of our economy--evident in much larger
rises of output than input of factors."^ For example:
By the early 1950's, capital investment per
capita had increased to about 300 per cent of
1869-79. But over the same period output per
capita rose to 400 per cent of the 1869-79 base.
Looked at another way, output per unit of capital
rose to only 134 per cent of 1869-79 over the
period, compared with a 450 per cent increase for
output per man-hour. The difference must be
^The Research and Policy Committee of the Commit
tee for Economic Development, o£. cit., pp. 25 f.
^Harris, op. cit., p. 217.
27
explained largely in terns of the improved.tech
nology that increased the average worker's output
beyond the increase directly attributable to more
capital goods .H
The family of electronics is an outstanding example
of dramatic technological advance which illustrates the
inseparable nature of technology and capital. Prominent
in the popular conception of technological advance is
elaborate equipment and machines. But "behind all
machines are men— men who invent and design them, men who
make them, men who decide to buy them and who plan their
use, men whose savings pay for them, men who work t h e m . ” ^-2
Thus, technological improvement is the work not so
much of amassed capital as of human beings. To grow, we
must concentrate our attention on the human factor.
Further, growth is increasingly the result of a deliber
ately purposeful investment in human beings. Galbraith
summarized this view as follows:
But in the unromantic fact, innovation has
become a highly organized enterprise. The extent
of the result is predictably related to the
quality and quantity of the resources being
applied to it. These resources are men and women.
Their quality and quantity, depend on the extent of
the investment in their education, training and
^George Leland Bach, Economics (Englewood Cliffs,
New Jersey: Prentice-Hall, Inc., i960), p. 39.
J-^The Research and Policy Committee of the Commit
tee for Economic Development, on. cit.. p. 23.
28
opportunity. They are the source of technological
change.i3
III. RESEARCH
Research is the base for advancing technology. As
science widens its frontiers, the knowledge gained is
applied progressively to industrial products and processes.
It shows up in a never-ending succession of new and better
products, new materials, new tools and machines, new tech
niques and new methods of organization.^ Television,
synthetic materials, jet engines, soil conditioners, atomic
power, electronic advances and use of solar power all were
born in the laboratory.
Spending on research and development in the United
States grew spectacularly from about $3 billion in fiscal
1950-51 to well over $15 billion in 1960-61. Close to
two thirds of the latter $15 billion was provided by the
federal government. ^ The realization that an enormous
amount of research can be carried on for profit is an
economic phenomenon of our time.
John Kenneth Galbraith, The Affluent Society
(Boston: Houghton Mifflin Company, 1958), p. 272.
•^The Research and Policy Committee of the Commit
tee for Economic Development, op. cit.. p. 25.
■*•%. S. Bureau of the Census, Statistical Abstract
of the United States: 1962 (Washington, D.C.: Government
Printing Office, 1962), p. 542.
29
But behind the research laboratories is our educa
tional system. Advanced education is the base on which
research and development rest. However, it is through mass
education that the discoveries of the laboratory are
applied in the production process. "Knowledge can be found
by the few, but it must be applied and distributed by the
many."
Groves poses a provocative question with regard to
education and research:
Some attention has been focused recently on the
especially remarkable progress in the field of
agriculture and to a lesser extent in the field of
medicine. There may be more than one explanation
of these stellar performances, but it is noteworthy
that each of these areas has been heavily saturated
with research effort, and the first also has a
unique record in the dissemination of knowledge.
Here for about a century there has been a steady
and accelerating advance in knowledge having appli
cation in agricultural production. Hew capital
goods have been created based upon such -knowledge,
and these have reduced the need for labor possessing
a low order of knowledge and skills. This in turn
has wide implications for the whole economy. Could
this experience be generalized?
IV. RELATIONSHIP BETWEEN LEVELS OF EDUCATIONAL
ACHIEVEMENT, INCOMES AND PRODUCTIVITY
Basic wage theory indicates that the average worker
is paid approximately what he is worth. That is, his con
tribution to production roughly determines his income.
l^Rusk, pp. cit., p. 820.
^Groves, o£. cit.. pp. 7 f.
30
Therefore, it follows logically that since higher levels
of educational achievement result in higher incomes, they
also result in greater productivity.
An indication of what education can contribute is
suggested by the fact that the average lifetime income of
our adult population without any education is $72,000; for
those who graduate from the elementary school, $145,000;
and for those who have gone through college, $333,000.
And those who are graduating from college today can look
forward to a lifetime income over what is available to the
high school graduate of about $200,000.*®
These figures are impressive even when discounted
by such factors as (1) the cost of education; (2) the loss
of income during the years of schooling; (3) the fact that
generally the more able people go on to college and
probably would earn above average even without the extra
7 *
schooling; and (4) the help received by many college
graduates because of their social and economic background*--
for example, the sons of executives, professional people,
or well-to-do influential parents are usually more apt to
get the higher paid jobs.
Such statistics as the above tend to stress the
direct, dollars-and-cents benefits of education to the
individual. But Groves is of the opinion that the indirect
*®Harris, op. cit.. pp. 217 f.
31
benefits of education to the economy are its major contri
bution. For example, the principal beneficiaries of inno
vation and research are not the innovators and researchers.
He thinks that studies which start with the individual and
the impetus which education gives to his earning power
ignore entirely the effect which his education may have on
everybody*s earning power. He points out that if all men
were equal in ability and were capable of absorbing a col
lege education and were to do so, there would be no "cash
value of an education,'* but it would not follow that edu
cation would be valueless economically. And he quotes
John K. Norton's summary of the effects of education on
personal income:
The general effects of education upon incomes,
then, seem to be an increase in many low incomes,
probably a relative decrease in some of the large
incomes, a consequent decrease in the extreme
variations of earned incomes, a higher average
income, and an increased total national income.19
Taking into consideration both the direct and
indirect benefits of education, income studies despite
their imperfections offer statistical evidence that
investment in education pays off handsomely not only in
terms of individual incomes and productivity but also in
terms of economic growth.
•^Groves, pp. cit.. pp. 34 ff.
V. THE NEED FOR EDUCATION IN
UNDERDEVELOPED AREAS
32
Correlation between Literacy
and Economic Development
Half of the world's adult population can neither
on
read nor write. Reading is a fairly new skill for most
of the people on this earth. Statistics for the year 1930
show that illiteracy, defined as lack of ability to read
and write one's name, applied to 70 per cent of the total
populations of the underdeveloped countries compared with
6 per cent in developed countries. In Africa, only one
person out of ten could even read and write his own name.23-
Workers who cannot read or write are seldom highly
productive. In underdeveloped countries new methods which
involve even the simplest changes--for example, crop rota
tion— often are thwarted by inadequate understanding on the
part of the illiterate natives. Their fundamental problem
is providing hoes and simple training in how to use them,
not comparatively complicated farm machinery.
They could benefit by taking a page out of the
history of the United States. Long before our mass
^Edgar Dale, Audio-Visual Methods in Teaching
(New York: Henry Holt and Company, Inc.,1959), p. 278.
23-Lyle W. Shannon, Under developed Areas (New York:
Harper and Brothers, 1957), p. 109.
33
accumulation of capital began, our government inaugurated
policies of land ownership, agricultural education and
development, and mass education which were basic causes of
our eventual emergence as a highly developed nation. As
our farmers and ranchers increased their efficiency, more
and more of them were freed for other work such as clerks,
*
businessmen, doctors, lawyers, white collar and govern
ment, all of which thrive on a background of mass educa
tion.
The need for education in underdeveloped areas was
clearly stated by Jaffe:
An industrialized economy needs people who can
read, write, and calculate, and who are imbued with -
a matter-of-fact point of view. Much of the task
of transforming a peasantry "living by ancestral
saws and long-tried rules of thumb'* into an urban
industrial people with a more or less scientific
outlook falls on the school system.22
Correlation between Educational Development
and Per-Capita Income Territorially
Norton submits the following evidence
^A. J. Jaffe, People. Jobs and Economic Develop
ment (Glencoe, Illinois: The Free Press, fiS9), p. 195.
2^ J o h n k. Norton, "Education Pays Compound Inter
est," NEA Journal. 47:557, November 1958.
34
Natural Educational Per-capita income
Nation resources development 1952-54
Brazil High low $ 230
United States High High 1,870
Denmark Low High 750
Mexico High Low 220
New Zealand High High 1,000
Columbia High Low 250
Switzerland low High 1,010
The same picture can be shown by comparisons among
areas in the United States: Connecticut in 1959-60, with
only limited natural resources, spent an estimated $430
per pupil in average daily attendance and ranked ninth in
school outlay. It ranked first in per-capita income with
$2,817 in 1958, Mississippi, which by.contrast is rich in
natural wealth, spent $209 per pupil in average daily
attendance and had a per-capita income of only $1,053,
It ranked forty-seventh in school outlay and forty-eighth
in income,24
Population Related to Development
All underdeveloped areas have high birth rates, and
those having large-scale public health programs also have
decreasing death rates. But the efforts to decrease death
^Groves, o£. cit,. p. 40.
35
rates are not being counterbalanced by comparable efforts
to reduce birth rates. Thus, the rate of population
growth has been increasing in many underdeveloped coun
tries.^
In most underdeveloped economies the crux of their
problem is overpopulation. When output increases, popula
tion seems to increase just as fast, so there is no
improvement in per-capita income:
Such expressions as the population growth that
"swallows up*’ increases in output in whole or in
part, such images as walking up a downward moving
escalator, and the virtually obligatory quotation
from Lewis Carroll: "Here it takes all the running
you can do, to keep in the same place,”— all
testify to the universal assumption that the exclu
sive effect of population growth is to frustrate
economic development.26
When population pressure brings about the spread of
birth control, development is f a v o r e d .27 birth con
trol programs are very difficult to introduce successfully
into illiterate populations. Therefore, the raising of
levels of education must play a large part in any program
for lowered birth rates.28 Jaffe reported that Puerto
Rican women with five years or less of schooling tended to
25
Jaffe, oj>. cit., p. 7.
26
Albert 0. Hirschman, The Strategy of Economic
Development (New Haven: Yale University Press, 1956),
p. 176.
27Ibid.. p. 182.
Jaffe, oj>. cit., p. 10.
36
bear twice as many children as those with ten years or
more of s c h o o l i n g .29 it £S apparent that education has a
pronounced effect on birth rates. Also, it is obvious
that population growth is a very important factor affect
ing the development of backward economies.
Development of Human Quality
Previous sections of this chapter have elaborated
upon the importance of improving the quality of the labor
force. In this respect, the primary need of most of the
people in underdeveloped areas is learning basic things,
such as reading and writing, and simple agricultural and
artisan skills. Probably this is what President Kennedy
had in mind when he said:
As our own history demonstrates so well, educa
tion is in the long run the chief means by which a
young nation can develop its economy, its political
and social institutions, and individual freedom and
opportunity. There is no better way of helping the
new nations of Latin America, Africa, and Asia in
their present pursuit of freedom and better living
conditions than by assisting them to develop their
human resources through education.30
29Ibid.. p. 183.
^Francis P. Miller, *'The Role of the Department of
State in Educational and Cultural Affairs,** The Department
of State Bulletin. 45:811, November 13, 1961.
37
VI. RUSSIA'S USE OF EDUCATION TO
STIMULATE GROWTH
The Soviet Educational System
The Soviet Union has placed heavy emphasis on edu-
cation in the process of raising itself to a world indus
trial and military power. The percentage of nonagricul-
tural employment in Russia devoted to education is two and
a half times as high as in the United States.31 Also,
there is a close correlation between an individual's edu
cational achievement and his economic rewards. The
graduate of a trade school will not do as well with his
job salarywise as the graduate of a technical school. And
the person who gets up to the technical institute will do
far better than any of those. The young men and women who
get to the university seem to have top p r i o r i t y .32
The Russians study their manpower needs in industry,
then adopt appropriate educational programs to meet those
needs. In 1958 this resulted in a shift away from empha
sis on higher education toward more emphasis on vocational
training. Their objective is to train every individual as
much as possible for production proficiency in terms of
31-Henry H. Villard, "Investing in Education and
Research," American Economic Review. 50:378, May 1960.
32**xhe Truth about Soviet Education," U. S. News &
World Report. 49:66, July 4, 1960.
38
his native ability and the needs of society. They try to
supplement school training with productive work experi
ence. The Russians regard vocational and technical
education as a means of providing the skilled manpower
that will enable them to turn out both capital and con
sumer goods, and thus surpass America.33
An important feature of the Soviet educational
system is the great attention given to guidance. Compre
hensive examinations and scholastic achievement determine
to a great degree the type and levels of education avail
able to a youth. To channel their students into manpower
shortage areas they rely mainly on economic motivating
devices, such as (1) higher stipends for training in
needed areas, plus even greater financial allowances for
the better students; and (2) higher wages and better
housing allotments for workers in the shortage occupa
tions • 3^
At the higher educational levels the Soviet Union
has concentrated its efforts in the fields of physical and
natural sciences and engineering. For example, in 1956
about half of its graduations were in these fields com
pared with about a quarter in the United States. There
fore, even though total graduations in Russia were
33Ibid.. pp. 66 ff
34Ibid.
39
somewhat fewer than in the United States, their level of
graduations in the scientific fields and engineering was
significantly greater.^5
Economic Growth in the U.S.S.R.
Experts on economic growth stress at great length
the obstacles to accurate measurement; they especially
emphasize the complexities involved in attempting to
measure Soviet growth in comparison with ours. But they
all agree that Russia's own growth figures show an upward
bias--especially prior to 1950--and are considerably
exaggerated. Therefore, several American economists have
made independent and thorough statistical analyses of
their own in attempts to more accurately appraise economic
growth in the U.S.S.R. For the period 1928-50, Professor
Hodgman calculates the Soviet industrial growth rate to be
something like 8.9 per cent per year.36 Jasny and Shimkin
arrive at somewhat lower figures.3? A comparable figure
for the United States is slightly over 3 per cent.'*®
3->The Legislative Reference Service of the Library
of Congress, Soviet Economic Growth: A Comparison with the
United States {Washington. D.C.: Government Printing
Office, 1957), p. 91.
^Donald r. Hodgman, Soviet Industrial Production
1928-1951 (Cambridge: Harvard University Press, 1954),
p. 9l.
37
Robert W. Campbell, Soviet Economic Power
(Cambridge: Houghton Mifflin Company, I960), p. 48.
^ Ibid., pp. 49 f.
40
But these over-all averages conceal great varia
tions, and bring up the problem of selecting a “represen
tative” period characterizing the growth of industry in
each country. Soviet growth for 1928-37 was 15.7 per cent.
Russia's output was sharply curtailed during World War II,
but in the first five years after the war, reconstruction
enabled them to reach an industrial growth rate of almost
20 per cent. On the other hand, American industrial
growth rates for 1939-44 were 16.6 per cent, and for
1929-39, 0 per cent. Perhaps the most relevant period to
consider is the time since 1950. The Shimkin index for
1950-55 shows an average annual Soviet growth rate of 10.6
per cent, but it may be higher because the official Soviet
index for this period is 13.1 per cent, and it is felt that-
the Russian figures have become more reliable than they
were prior to 1950. For the period 1946-57 the industrial
rate of growth in the United States was 4*3 per cent per
annum.39
The above section has considered only industrial
output. When we turn to growth of the total output of the
economy, measurement problems multiply. Nevertheless, it
has been estimated that during the first half of the
1950's the U.S.S.R.*s annual growth in real gross national
product was about 7 per cent, compared with 4 per cent for
39ibid.$ pp. 48 ff
41
the United States.^® The fact that the Soviet GNP growth
rate Is much lower than their Industrial growth rate Is
largely accounted for by the negligible growth of the
agricultural sector of their economy
These figures are impressive even when considered
In light of the following factors: (1) As the U.S.S.R.
comes closer to our total output, they may find It more
difficult to maintain their present high growth rate.
(2) The standard of living of the Russian people suffers
as a result of heavy capital Investment and huge military
outlays. (3) The Soviet system does not permit the free
dom of choice which we enjoy in this country.
Conclusions
Despite the complex problems inherent in attempting
to measure Russia's growth rate compared with ours, and
the varied results of independent investigations, two
facts emerge clearly: (1) The Soviet Union has achieved,
to a remarkable extent, the rapid economic growth which
has always been its goal. (2) Soviet growth has been pro
ceeding at a much faster pace than that of the United
States•
^The Legislative Reference Service of the Library
of Congress, ojj. cit., pp. 135 f.
^Campbell, op. cit., p. 51.
42
The Russians have been deliberately engaging in
large-scale educational efforts for the purpose of
increasing growth rates. It is impossible to measure
precisely the part played by education in the U.S.S.R.'s
amazing ascendance to industrial and military prominence.
But it is reasonable to conclude it has played a.very
important role. And the Russian experience demonstrates
that education can be used to stimulate specific areas of
the economy as well as over-all growth.
VII. AMERICAN ECONOMIC GROWTH AND EDUCATION
The American economy is far more productive than
that of any nation which ever existed on this planet. In
only two hundred years it has transformed a wilderness
into the world's richest and most powerful nation. The
United States economy has produced spectacular results by
any standards. Although we have only 6 per cent of the
world's population, our economy accounts for about one
third of the world's total industrial production. ^ Our
real gross national product is probably well over twice
that of our nearest competitor, the U.S.S.R.^ And on a
^Gerhard Colm and Theodore Geiger, The Economy of
the American People (Washington, D.C.: National Planning
Association, 1961), p. 9.
^The Legislative Reference Service of the Library
of Congress, op. cit.. p. 134.
43
per capita basis the United States leads by a very wide
44
margin.^*
Education occupies a prominent position on the list
of factors responsible for the amazing success of our
profit-motivated economic system. From the very beginning
we emphasized a strong attachment to the educational
process. Agriculture calls for particular notice because
the educational help given it from our early history has
enabled an immense historical shift of labor to more pro
ductive uses. This will be elaborated upon in the next
two chapters. Also noteworthy is the fact that in 1956
almost one third of our civilian labor force consisted of
women--22 million out of 68 million.This revolutionary
change in the composition of the labor force represents a
tremendous addition to our productive capacity. And, as
previously analyzed in this chapter, development of human
resources, technology and research, all of which depend
mainly on education, are outstanding explanations of
growth. American superiority in all of the areas described
heretofore has contributed heavily to our fantastic produc
tivity achievements.
In recent years, attempts have been made to measure
^Colm and Geiger, op. cit., p. 34.
^The Committee for Economic Development, oj>. cit..
p. 19.
44
the contribution of education to our economic growth.
However, because the factors involved overlap, no exact
measurement of the contribution of any particular factor
is possible. For example, we can roughly measure our
natural resources but that does not tell us exactly how
much they have to do with growth; it is what people do with
their natural resources that counts. Some nations are
rich in natural resources but live at poverty levels.
Also, consider the accumulation of tangible capital goods
which depends on many things, such as who develops and
uses than, savings decisions, research and technology, all
of which depend in turn largely on the quality of the
labor and managerial force.
Nevertheless, such reports as the following, al
though not statistically precise, give a reliable indica
tion of the substantial role played by education in the
production process. Theodore Schultz, who has done much
of the pioneer work on the relationship between education
and economic growth, concluded that the increase in educa
tion per person of the labor force that occurred between
1929 and 1957 explains between 36 and 70 per cent of the
otherwise unexplained increase in earnings per laborer.46
Harris presents a similar conclusion when he states
^Heller, Comments by Eugene P. McLoone, o p. cit.«
p. 33.
45
that one of the striking features of our economic develop
ment since 1900 is that investment in education has risen
several times as much relatively as in physical capital.
"And this relative rise in our investments in education
has contributed to our very rapid increase of output in
the last sixty y e a r s .”^7
Groves points out that the spurt in productivity
which occurred following World War I correlates reasonably
well (allowing for some lag) with improvement in levels of
education. He offers an array of figures to support his
contention: In 1900 only one person in fifty stayed in
school beyond the age of fifteen; the number who finish
high school now is about 60 per cent. College enrollment
nearly doubled between 1910 and 1920. The growth in the
number of bachelor's and first professional degrees in
each of the natural sciences between 1901-1905 and 1946-
1950 was about eight-fold. The illiteracy rate fell off
nearly half between 1890 and 1910. The number of graduate
students tripled between 1900 and 1920, tripled again
during the 1930's, and more than doubled during each of
the succeeding decades. "T. W. Schultz has calculated
that whereas the investment in high-school and college
education in 1900 constituted only four per cent of that
in physical capital, the ratio in 1956 was about 28 per
^Harris, op. cit.. p. 217.
46
cent.M^®
According to Rusk, the Kennedy administration
believes that educational systems and institutions make
possible such increases in productivity that they merit
support through loans and credits as a form of investment,
not only through grants as a form of expenditure:
We see clearly that a country’s richest assets
are not its factories, its roads, its bridges, but
its people. We will do our share in aiding the
development of this human capital, for this is the
richest natural resource of all. . . . History
indeed shows us that it is people, not things, that
ultimately count.49
VIII. BRAINPOWER IS OUR SCARCEST RESOURCE
The contribution of one great scientist to human
welfare may be greater than that of a million more ordi
nary workers. Such achievements of modern science as
atomic power, electronics and antibiotics are worth the
labor of countless people. Our advances in technology
depend mostly on brainpower.
Industrial progress is dependent as never before on
science. But an idea in the mind of a physicist or a dis
covery in the laboratory by a chemist are only a start—
for them to result in any benefit to the consumer requires
the work of many people with diverse talents and
AQ
Groves, op. cit.. p. 42.
^Rusk, ©£. cit.. p. 822.
47
educational backgrounds. The greatest gift of nature to
man is man himself and his ability to discover and utilize
materials that previous generations did not appreciate.-*®
Thus, progress depends on people; and the function of
developing their abilities to the utmost is that of our
educational system at all levels.
This chapter is very well summarized in the words
of Groves:
Historically, the view has prevailed for many
years that growth is primarily a matter of amassing
more tangible capital. Especially since World War
II, economists are discovering that growth may be
mainly a matter of developing human talent and that
it can be deliberately fostered by judicious but
generous allocation of resources for this p u r p o s e .
Some critics consider this discovery of major,
perhaps revolutionary, importance. Obviously, it
could have profound implications for education.
From being a fairly respectable member of the
family of items called consumption goods on which
the nation spends its income, education is elevated
in the eyes of many economists to the even more
respectable capital-goods category on which the
nation's future depends.51
Groves, op. cit*. p. 16
51Ibid., p* 7.
CHAPTER III
THE HISTORY OF FEDERAL AID TO EDUCATION
This chapter outlines the major legislation since
the beginnings of our country providing for Federal aid
to education* Its purposes are to (1) lay the groundwork
for the chapters which follow; and (2) dispel the preva
lent impression that Federal aid to education is something
new.
I. THE LAND ACT OF 1785
Federal government support of education in the
territories and later in the states began as early as
1785. In that year an ordinance adopted by the Congress
of the Confederation (of the original thirteen colonies)
for the disposal of public lands in the Western Territory
reserved one of the thirty-six equal lots comprising each
township for the endowment of schools within that township.
In 1787, in an ordinance providing for the govern
ment of the Northwest Territory, the Congress made the
clear declaration of policy that, "religion, morality, and
knowledge being necessary to good government and the
48
49
happiness of mankind, schools and the means of education
shall forever be encouraged.
In organizing the territories, Congress established
a school system which was taken over by each new state
upon its admission. Thus the Federal government was the
founder of the publie-school systems of a large number of
the states.
II. EARLY FEDERAL GRANTS TO STATES
In 1802 Congress took definite action in continua
tion of the general policy in support of education
initiated by the Land Act of 1785. When Ohio was admitted
to the Union in 1802, Congress began setting aside lands
for school support at the time of admission of a state.
As each new state formed from the public domain was ad
mitted, the grants of sections in townships for schools
were continued. Also, new states received lands for the
endowment of academies and universities:
Early grants by the Congress to the 30 public-
land States for common schools aggregated an area
about 10 times as large as the State of Maryland.
In addition the Congress granted these States other
lands used by many in whole or in part for the sup
port of schools, amounting to over 76 million
acres.2
^Charles A. Quattlebaum, Federal Education Policies.
Programs and Proposals (Washington, D.C.: Government
Printing Office, 19&0), p. 7.
2Ibid.. p. 9.
50
Since 1803 Federal lands have occasionally been
granted to specifically designated educational institu
tions. Also, certain monetary grants were made to states
which were frequently used to support education.
All of the previously described land and monetary
grants were for education in general (except for the few
grants to specific institutions). Congress did not define
the kind of education to be provided nor attempt to influ
ence the services of the school systems and educational
institutions supported in the states.
III. THE MORRILL ACT OF 1862
With this Act, Congress initiated a policy of giv
ing aid to the states for higher education in certain
specified fields.
The Act provided a grant of Federal lands or land
scrip to each state in the amount of 30,000 acres for each
Senator and Representative in Congress from that state.
Thus, New York received 990,000 acres, while the smallest
state received 90,000 acres.^ Scrip was given to the
states which did not have sufficient Federal lands to make
up their allotments.
All funds obtained from the sales of these grants
o
J. Weston Walch, Federal Aid to Education
(Portland, Maine: The Author, 1961), p. 13.
51
were to be used for the endowment and support of colleges
having as their primary object "to teach such branches of
learning as are related to agriculture and the mechanic
arts, in such manner as the legislatures of the States may
respectively prescribe.1 1 ^
Laws were later enacted providing for continuing
annual appropriations to these institutions, commonly
called the land-grant colleges and universities. There
are now sixty-eight such institutions. The Federal funds
for their support are administered by the Department of
Health, Education, and Welfare.
The Federal grants for these institutions have
markedly influenced the course of higher education in the
United States, both by contributing significantly to its
expansion and by stimulating state support of education in
agriculture, engineering, and the natural sciences.^
IV. THE HATCH ACT OF 1887
With the passage of this Act, Congress began grant
ing funds to the states for. ^practical" research. An
agricultural experiment station was established at each
land-grant college. Each college was to receive an annual
grant of $15,000 for the support of its station.
4
Quattlebaum, op. cit,., p. 19.
5Ibid.. p. 19.
52
But later Acts required that the states match
Federal appropriations in order to be eligible for these
funds. The total of such Federal grants has grown,
Congress by Congress. ”In 1957-1958, this area alone
accounted for nearly $23.5 million of federal money.
The Department of Agriculture administers the funds for
the experiment stations.
The Hatch Act was significant in two respects:
(1) It initiated the granting of Federal funds for
research. (2) It provided the first program for actual
money subsidy of state education.
V. NAUTICAL EDUCATION (MERCHANT MARINE)
Another Federal program for the promotion of voca
tional education of civilians (not in government employ)
was the establishment of schools to graduate Merchant
Marine men with the degree of bachelor of science.
In 1874 an Act of Congress established nautical
schools at six designated ports. In 1911 the Congress
provided that the number be increased to ten. The
Congress also provided that a state or locality would
receive Federal funds for such schools equal to the amount
appropriated by the state or local government. This
inaugurated the principle of matching funds for the
^Walch, oj>. cit.. p. 13.
support of education.^
VI. THE SMITH-LEVER ACT OF 1914
This Act included the "matching funds" principle
described above. Under the Act, no state could receive
aid which did not match the Federal funds provided for it,
dollar for dollar.
Its major innovation was Federal government super
vision of the way the states and their local governments
spent the money given them.
The Act provided a country-wide system of county
agents to go from farm to farm in their districts showing
the farmers the best and latest practices in handling all
kinds of farm work. It was to be carried out under the
joint supervision of the Department of Agriculture and the
state agricultural colleges.
"Since the Federal Department of Agriculture has
control of the Federal funds, it has in every instance
dominated in the control of the county agents."** A large
bureau has grown up in the Department of Agriculture for
the detailed work of supervising the county agents.
^Quattlebaum, op. cit.. p. 20.
®Walch, o£. cit., p. 14.
~54
VII • THE FEDERAL VOCATIONAL EDUCATION ACT
(THE SMITH-HUGHES ACT OF 1917)
The passage of this Act marked the initiation of a
new Federal policy in education. Previously, the Federal
government had fostered agricultural and industrial educa
tion conducted in or through the land-grant colleges.
Now the stimulus to vocational education was extended to
the public schools and other educational institutions giv
ing instruction below college grade. The Act provided for
the appropriation of Federal funds not only for industrial
courses in public schools, but also for the professional
training of teachers of such subjects.^
Patterned after the Smith-Lever Act, this new law
included the “matching funds1 1 provision, and extended
Federal aid only to those schools whose vocational classes
came up to the standards outlined in the Act itself, and
to additional standards established by the Federal Board
for Vocational Education. The Office of Education has a
staff of agents who visit each state regularly to observe
the manner in which Federal minimum standards under the
law are being met.*-®
^Quattlebaum, op. cit., p. 21.
l^Walch, op. cit.. pp. 14 f.
55
VIII. THE SERVICEMEN'S READJUSTMENT ACT
OF 1944
More popularly known as the "61 Bill of Rights,"
this Act began a program of educational benefits for
_ veterans which has been the most extensive venture into
government aid for students in our history. The 61 Bill
was a new concept in veterans' legislation in that (1)
eligibility for the benefits depended exclusively on
length of military service; and (2) it gave the returning
serviceman not a cash bonus, but some intangible capital,
which, if he had the ability and the inclination to use
it, could increase his future earning capacity.
Veterans of wars prior to World War II had received
substantial benefits from the Federal government in cash
and in land, and disabled veterans had received hospital
care and special pensions. After World War I an extensive
vocational rehabilitation program for disabled veterans
was undertaken, partly in Federal hospitals and partly in
regular schools, colleges and universities. However,
nothing was done to train or educate those who had emerged
from the war uninjured.
In contrast, practically all veterans were eligible
•^Alice M. Rivlin, The Role of the Federal Govern
ment in Financing Higher Education (Washington. D.C.: The
Brookings Institution, 1961), pp. 66 f.
56
for educational benefits under the 61 Bill. Each veteran
who had served more than ninety days could pursue a course
of education or training which he had elected for a period
of time not in excess of one year plus the number of
months he was in the service, but not in excess of forty-*
eight months. He was free to choose his own course and
could enter any school or training establishment which had
been approved by the appropriate approving agency of the
state in which such school or training establishment was
located. *-2
World War IX and the Korean Conflict resulted in
four basic pieces of legislation covering educational
benefits for veterans:
1. Public Law 16 (78th Congress) provided voca
tional rehabilitation and training for disabled
veterans of World War II.
2. Public Law 894 (81st Congress) extended
similar benefits to disabled veterans of the Korean
War.
3. Public Law 346 (78th Congress), as amended,
provided educational and training allowances for
all World War II veterans for periods up to 48
months, depending on length of service.
4. Public Law 440 (82nd Congress) extended
similar benefits to Korean veterans for periods up
to 36 months.*3
Benefits included payment of tuition, fees and
^Quattlebamn, on. cit., p. 25.
•^Rivlin, o£. cit.. p. 65*
57
books pitas a modest subsistence allowance which varied
with the number of dependents. These benefits could be
applied to all kinds and levels of education; for example,
they could be used to finish high school, to learn radio
repair, or to do graduate work in philosophy.
IX. THE NATIONAL DEFENSE EDUCATION ACT
OF 1958
The launching of Sputnik, the first man-made satel
lite, by the Russians in 1957 caused an intensified inter
est in education in the United States. This led to the
passage of the National Defense Education Act, which
represents a major change in the attitude of Congress
towards Federal aid to education. The statement of
national education policy which appears in Title I of this
law is sufficiently significant to reproduce in full:
The Congress hereby finds and declares that the
security of the Nation requires the fullest devel
opment of the mental resources and technical skills
of its young men and women. The present emergency
demands that additional and more adequate educa
tional opportunities be made available. The defense
of the Nation depends upon the mastery of modem
techniques developed from complex scientific princi
ples. It depends as well upon the discovery and
development of new principles, new techniques, and
new knowledge.
We must increase our efforts to identify and
educate more of the talent of our Nation. This
requires programs that will give assurance that no
student of ability will be denied an opportunity
for higher education because of financial need;
will correct as rapidly as possible the existing
imbalances in our educational programs which have
58
led to an Insufficient proportion of our population
educated in science, mathematics, and modern foreign
languages and trained in technology.
The Congress reaffirms the principle and declares
that the States and local communities have and must
retain control over and primary responsibility for
public education. The national interest requires,
however, that the Federal Government give assistance
to education for programs which are important to our
defense.
To meet the present educational emergency requires
additional effort at all levels of government. It is
therefore the purpose of this Act to provide substan
tial assistance in various forms to individuals, and
to the States and their subdivisions, in order to
insure trained manpower of sufficient quality and
quantity to meet the national defense needs of the
United States ,3-4
Thus, for the first time, Congress expressed a
Federal interest in general education, at the elementary
and secondary levels as well as in higher education. The
Act authorized over $1 billion in Federal aid for a dozen
separate programs, with the single purpose that every
young person, from the day he first entered school, should
have an opportunity to develop his gifts to the fullest.
It concerned itself with the finding and encouraging of
talent, with the improving of the ways and means of teach
ing and with the furthering of knowledge itself. **In the
swinging sweep of its 10 titles it touches--and returns to
touch again--every level of education, public and private,
^Ibid., pp. 17 f.
59 “
from the elementary school through the graduate.
Title II of the Act provides for loans to worthy
and needy college students. For the fiscal years 1959
through 1962 a total appropriation of $295.million was
authorized.^
Title III authorizes grants and loans for providing
local schools with laboratory and other special equipment
in science, mathematics and modern foreign language teach
ing. Title IV aims to provide more college teachers
through Federal fellowships for increasing the number of
students in graduate programs. Title V authorizes grants
to high schools for improvement in their guidance, coun
seling and testing services to aid them in finding and
guiding their abler students.^
The goal of Title VI is to eliminate the shortage
of good language teachers and thus strengthen foreign
language teaching at all levels. Title VII concerns it
self with research and experimentation in more effective
utilization of television, radio, motion pictures and
related media for educational purposes. Title VIII, Area
150. S. Department of Health, Education, and Wel
fare, Office of Education, Guide to the National Defense
Education Act of 1958 (Washington, D.C.: Government Print
ing Office, 1959), p. 1.
^ Ibid.. p. 4.
•^Walch, op. cit.. p. 18.
60
Vocational Education Programs, aims to train highly
skilled technicians in recognized occupations requiring
scientific knowledge in fields necessary for the national
defense. Its purpose is to alleviate the shortage of
highly skilled men and women who are needed to help turn
the notes and drawings of scientists and engineers into
workable products and processes. Title IX authorizes the
National Science Foundation to establish a Science
Information Service and a Science Information Council for
the purpose of providing the scientist with information he
needs, quickly and effectively. Title X aims to improve
and strengthen the adequacy and reliability of educational
statistics provided by state and local reports and records,
and the methods and techniques for collecting and proces
sing educational data and disseminating information about
the condition and progress of education in the state.
The Act is administered, at the Federal level, by
the Office of Education (except for Title IX)• It must be
borne in mind that authorizations are merely permission to
appropriate; it takes appropriations to make money avail
able. For example, of the $183 million authorized by the
Act for the fiscal year ending June 30, 1959, Congress
appropriated only $115.3 million. This is mostly
explained by the time it took the states and institutions
^Office of Education, op. cit.. pp. 16 ff.
61
of higher education, as well as the Office of Education, to
19
meet the prerequisites of the Act.
X. OTHER FEDERAL AID TO EDUCATION
Each of the Acts considered thus far represented a
significant change in the attitude of Congress toward
Federal aid to education. However, additional Federal aid
has resulted from temporary conditions such as depression
and war.
In the 1930's several relief or anti-depression
measures aided school construction and repair, helped
unemployed teachers and provided vocational training for
needy youths. During World War II the Federal government's
own educational programs covered all levels from teaching
illiterates to read and write to providing advanced college
training for many servicemen. Also Congress appropriated
funds for defense training of school students and defense
workers. The Korean Conflict brought about Public laws 815
and 874 which provided for grants to school districts
adversely affected by Federal activities.^®
Recessions in recent years and a continuing unem
ployment problem, especially "displaced worker" joblessness
due to automation, have resulted in passage of The Man
^ Ibid.. pp. 2 f.
2®Walch, o p . cit., p. 16.____
62
Power Training Act by the 87th Congress. This Act author
izes the Secretary of Labor to conduct studies on automa
tion, occupational training, and labor mobility which will
provide a survey of the manpower requirements and resources
of the nation, and to develop effective methods to bring
about a solution of our unemployment problem. It also
provides for a program of on-the-job training and voca
tional training on a ‘’ matching funds” basis.
XI. RESEARCH
Research is usually divided into two main cate
gories s (1) basic research; and (2) research (or applied
research) and development. Basic research is fundamental
scientific investigation aimed at the increase of knowl
edge. In applied research, knowledge is applied to a
practical objective. Development is the designing and
testing of new products, processes, methods, or materials.
However, the classification of particular projects into the
latter three areas is often arbitrary as it is difficult to
draw sharp lines between them. Although acquisition of new
knowledge is part of the definition of basic research, it
usually requires additional new knowledge to apply and
develop the results of basic research.
63
Basic Research
Federal government spending on basic research in -
fiscal 1963 will total $1.5 billion* This compares with
$1.1 billion in 1962 and $745 million in 1961.21
Research has been likened to oil exploration, which
has its dry holes* This is especially true of basic
research, which sometimes turns up no new knowledge at all,
or else knowledge which has no practical application. Even
when worthwhile discoveries are made, the direct product is
information**-not new products or processes. Applied
research and development must then carry on the work.
Therefore it is not surprising, especially in view of the
Federal government's responsibility for defense, that the
great bulk of funds for basic research comes from govern
ment rather than industry. In fiscal 1961 the sources of
funds for basic research were the Federal government--$745
million, industry— $313 million, colleges and universi
ties— $161 million, and other non-profit institutions— $83
million.22
Most of the actual performance of basic research is
done by a relatively small number of universities and
2^"Research Briefs: Federal Spending on R & D Takes
Jump, with Big Stress on Fundamental Work,” Business Week.
December 29, 1962, p. 42.
22U. S. Bureau of the Census, Statistical Abstract
of the United States: 1962 (Washington, D.C.: Government
Printing Office, 1962), p. 542.
64
technical schools with strong graduate departments in the
natural sciences* However, industry and the Federal gov
ernment carry on a considerable amount of basic research
themselves•
There are many who contend that the importance of
basic research is.greatly underestimated. Vaccines for
polio and other diseases originated in the laboratory.
Basic theorizing and experimentation by Fermi and others
led to the development of atomic power. The rational
explanation of certain phenomena of physics by Einstein in
the early 19G0*s eventually brought about television.
The above paragraphs strongly suggest that Federal
funds for basic research should be greatly increased. But
then we would need more adequate research facilities and
sufficient numbers of qualified researchers and assistants.
And these, in turn, depend, in the long run, on a stronger
educational system at all levels. It is unlikely that-a
student will eventually become a researcher or an assistant
to a researcher if he drops out of high school, or does not
go on to college, or drops out of college, or does not go
on to graduate work. Also, he will be inhibited from
attaining such positions by financial strain, unavailabil
ity of courses in certain;subjects> lack of guidance and
motivation, inadequate facilities or equipment, and lack of
quality instruction.
65
Research and Development
In fiscal.1963. the Federal government will contract
for $14.7 billion worth of research and development. This
compares with $11.2 billion in 1962 and $9.2 billion in
1961.
It is estimated that. $4.5 billion.will go for
research, $8.5 billion for development, $1.6 billion for
new or improved laboratory facilities, and $100 million
for scientific and technical information.
About 65 per cent of the $14.7 billion is expected
to go to industry, 12 per cent to educational institutions,
and 4 per cent to other non-profit organizations and
foreign research centers. Thus, over four fifths will be
spent to support work done outside government laboratories.
Six of the twenty-seven reporting agencies will
account for more than 92 per cent of the total research
and development contract awards in fiscal 1963:^
In millions
of dollars
Department of Defense
NASA (the civilian space agency)
Atomic Energy Commission
Department of Health, Education, and Welfare
Agriculture Department
National Science Foundation
$7,371
2,821
1,144
703
171
160
^"Research Briefs . . »,M loc. cit.
66
XII. SUMMARY
Federal aid to education is one of the oldest types
of legislation in our history. It founded the public-
school systems of most of our states, and it has grown
steadily, ever since 1785, both in diversity and volume.
The changing attitude of Congress, over the years,
toward federal aid to education is especially significant.
The Early Land Grants were for education in general.
Congress did not attempt to influence the states with re
gard to the kind of education and school systems they
provided.
The Morrill Act of 1962 initiated a policy of
giving aid to the states for higher education in certain
specified fields, in this case agriculture and the
mechanic arts.
In 1874. when establishing nautical education, an
Act of Congress inaugurated the principle of matching
funds. This extremely important innovation has at least
doubled the effects of federal aid ever since.
With the passage of The Hatch Act of 1887. which
established agricultural experiment stations at each land-
grant college, Congress (1) initiated the granting of
federal funds for research; and (2) provided the first
program for actual money subsidy of state education.
The major innovation of The Smith-Lever Act of 1914
67
was federal government supervision of the way the states
and their local governments spent the money given them.
It provided Department of Agriculture control over county
agents who helped farmers through regular visits.
The Federal Vocational Education Act (The Smith-
Hughes Act of 1917) marked the initiation of a policy of
extending federal stimulus to vocational education to
schools below the college level.
The Servicemen1s Readjustment Act of 1944. the
famous GI Bill of Rights. began an educational program of
unprecedented scope for veterans of World War II and later
extended it to Korean War veterans.
With the passage of The National Defense Education
Act of 1958. Congress, for the first time, expressed a
federal interest in general education, at the elementary
and secondary levels as well as in higher education.
Finally, as indicated in the previous section, the
federal government in recent years has invested staggering
slims in research.
The impact on our economy of all this federal aid
to education will be considered in the next chapter.
CHAPTER XV
EFFECTS OF FEDERAL AID TO EDUCATION
ON ECONOMIC GROWTH
The General Welfare Clause in the Constitution led
the Supreme Court to declare that Congress may levy taxes
and make appropriations for anything which promotes the
general welfare of our people. Certainly education
promotes the general welfare more fully than almost any
activity government undertakesThis chapter will indi
cate the effects federal aid to education has had on our
economic welfare.
The broad historical outline presented in the pre
vious chapter reveals that federal aid to education ,
originated prior to the Constitution and has grown to be
far more extensive than is generally realized. This
naturally poses the question, "How successful has it been?”
The answer is strongly affirmative, as will be demonstrated
in this chapter. Implicit in this question is one of the
main questions of later chapters, "To what extent can
^J. Weston Walch, Federal Aid to Education
(Portland, Maine: The Author, 19&1), p. 12.
68
69
additional federal aid to education be justified on the
basis of past performance?”
I. ENCOURAGEMENT OF PUBLIC EDUCATION
During the colonial period in America and for some
time after the adoption of the Constitution, education was
almost universally regarded as chiefly a parental and
church responsibility. In those days a nationwide system
of public educational institutions was only a distant hope
of a few statesmen and reformers. Most of the men who
framed the Constitution looked upon education as a function
of the family and the church; they were the products of the
old aristocratic doctrine of education which considered it
to be mainly for the leaders and people who could afford
it.^ in some of the original colonies there were even a
q
few "pauper” schools for children of the poor.
This is the main reason the Constitution does not
include any specific provision for the administration of
education. Because the power to establish and maintain
schools is not mentioned in the Constitution, it is gener
ally regarded as one reserved for the states by the tenth
amendment (which provides that powers not delegated to the
^Charles A. Quattlebaum, Federal Educational Poli-
cies. Programs and Proposals (Washington. D.C.: Government
Printing Office" I960), pp. 7 f.
3waleh. op. clt., p. 11.____________________________
70
federal government are reserved to the states). But in
recent years there has been increasing contention that the
general welfare clause assigned the federal government not
simply the right but actually the duty to promote educa
tion.^
Considered in the broad perspective outlined above,
it is apparent that public education in this country had to
start from almost nowhere, and its beginnings were shaky
and uncertain. Thus, the early land grants described in
Chapter III were of incalculable benefit in giving impetus
to the founding, and encouragement to the growth, of state
school systems.
The early land grants were the sparks that over a
long period of time ignited a trend toward mass education.
They were a strong stimulus to a more rapid rise in the
average level of national educational achievement. As was
suggested in Chapter II, education promotes economic
growth; The logical conclusion is that even the earliest
federal aid to education helped considerably over the long
run in the economic development of our country.
II. AGRICULTURE AND ECONOMIC GROWTH
If for some reason we were forced to turn back the
clock in agriculture to the beginning of the nineteenth
^Quattlebaum, on. cit.. p. 8.
71
century when nine out of ten workers labored to provide the
nation with food (compared with one out of sixteen now), an
incredibly massive migration of workers from their present
pursuits to agriculture would be required,** Total employ**
ment at the end of 1962 was over 67 million. Of this
total, only 4.1 million was farm employment Thus, in
order to conform to the nine out of ten ratio, over 56
million of our 63 million non-farm workers would have to
discontinue their present production of goods and services,
and, instead, turn to farm employment! The effects on our
economy and standard of living would be devastating.
This dramatically illustrates not only the amazing
degree of efficiency of American agriculture, but, more
important, the tremendous impact of this efficiency on
economic growth.
And the potentialities for releasing more labor from
the farm still loom large. Many farms are engaged in sub
sistence agriculture. In 1959 it was reported that 57 per
cent of the total farms, with 24 per cent of the acreage,
accounted for only 8 per cent of the sales of farm
productsFrom December 1961 to December 1962, farm.
^Harold M. Groves, Education and Economic Growth
(Washington, D.C.: National Education Association, 1961),
p. 19.
^Business Outlook: Farm Jobs at New Low,1 1 Business
Week. January 19, 1963, p. 19.
7Groves, loc. cit.
72
employment dropped about 350,000.®
The anatomy of American agricultural achievement
might be described as a chemical revolution on top of a
biological revolution on top of an engineering revolution.
Livestock have been improved by new feeds which include
antibiotics and enzymes. Impoverished or deficient soil
has been restored by using chemicals. Bugs, weeds and
livestock diseases are being successfully combated with
liquids, powders and airplanes. Also contributing to the
abundance of agricultural production are improved seed
strains, remarkable gains in fertilizer production and
efficiency, and irrigation. From 193G to 1950 the amount
of cropland did not change much, but the over-all utiliza
tion of implements and machinery about doubled, and pur
chases of fertilizers multiplied about three times.
MCotton production has jumped in two decades from an aver
age of 235 pounds per acre to 409 pounds; corn from 27.7
bushels to 51.7 bushels; peanuts from 762 pounds to 1205
pounds; and burley tobacco from 833 pounds to 1567
pounds • '*9
This fabulous achievement is accounted for by Groves
in the following manner:
^’’ Business Outlook . • .," loc. cit.
^Groves, oj>. cit., p. 20.
73
A plausible hypothesis is that here we had a
politically favored area upon which were bestowed
almost unlimited funds, both for research (experi
ment stations in agricultural colleges) and the
dissemination of the results (county agents)•
Legislation beginning with the Morrill Act in 1962
set up agricultural colleges, experiment stations,
and extension services, and they have developed
into a system that is the envy of the world. All
of this had its opponents, and there were those who
deplored the intrusion of so-called ”cow colleges*’
into the liberal arts tradition. Agricultural ser
vices have been obliged to operate with a rural
population, many of the young and more intelligent
of whom were being lost to the cities. Neverthe
less they lifted the business of farming out of
folklore and into scientific agriculture.10
It must be added that many non-farm workers, such
as farm machinery producers, biologists, inventors, chem
ists and educators, made major contributions.
Our huge educational investment in agricultural
development over the past hundred years or so has paid
fantastic dividends in economic growth.
But it is noteworthy that agriculture is a striking
exception to the generalization that individual incomes
are indicative of contribution to production. The edu
cators, researchers and farmers have not profited from
cheap and abundant food, at least not nearly to the same
extent as consumers. In other words, the value of educa
tion cannot be judged solely by what it does to the net
income of those educated. The indirect contributions of
education to the economy may be the major consideration.
10Ibid
74
III. VOCATIONAL TRAINING AND PRODUCTIVITY
In 1917, with the passage of the Smith-Hughes Act,
the federal government took the lead in encouraging voca
tional training in schools below the college level. It
initiated a program designed for any and all persons, from
young people still in school to those of almost any age,
who wished to learn some trade or vocation. Although the
classes conducted under this program may be either full
time or part-time, and held either in the day or in the
evening, to a considerable extent they are part of the day
time, high school program.
The Act, as now administered, authorizes vocational
education grants to the states in the following fields:
(1) agriculture, (2) home economics, (3) trades and indus
try, (4) the distributive occupations (such as salesmanship
and clerking), (5) practical nursing, and (6) the fishing
industry. Also, as indicated in Chapter III, a previous
Act provided funds for the training of personnel for the
merchant marine.
It stands to reason that the more knowledgable and
skilled a worker is in his particular vocational endeavor,
and the earlier in life he acquires this education and
training, the greater will be his lifetime contribution to
production. This is especially true of the student who
learns at least the fundamentals of his future trade while
75
still in high school. And it is true, although perhaps to
a lesser extent, of the worker whose attendance at evening
vocational classes leads to better performance in his
present work or to a new and better job. Also, such
classes often enable an unemployed person to get work.
Vocational education has thrived under the impetus
of federal grants. In recent years the number of students
taking advantage of aided vocational programs has run
above three million per year. The state and local govern-
ments are now outmatching the federal appropriations in
the ratio of four or five to one.**- Thus the economic
benefits of vocational education are not only obvious and
direct, but are of considerable proportions.
For more than 50 years some congressional lead
ers have contended that, since the efficiency of
each individual worker adds up to the strength of
the Nation, the Federal Government has a responsi
bility in the financing of vocational education.
Each fight to maintain or increase Federal appro
priations for the program appears to have resulted
in strengthening the Federal policy of providing
grants-in-aid to the States for this purpose.12
IV. EFFECTS OF THE GI BILL
Close to 11 million former servicemen have already
taken advantage of the programs, and some are still
■^Hfelch, op. cit.. p. 15.
l^Quattlebaum, o p. cit.. p. 22.
76
io
eligible to do so. Only about a third of the total
number have used their benefits to attend institutions of
higher education. More than 25 per cent availed themselves
of apprentice, on-the-job and on-the-farm training. The
remainder went to schools below the college level.^
Certainly, many of these veterans would not have
furthered their education had there been no 61 Bill.
Furthermore, the 11 million figure given above merely
indicates the number who entered training. Undoubtedly,
federal assistance enabled many to continue their education
beyond the point where they otherwise would have dropped
out. In other words, some veterans would have gone to
school with no GI Bill, but would have been forced to dis
continue due to financial pressure.
The immediate impact on the colleges of returning
veterans of World War II was reflected in male enrollment
which jumped from 928,000 in 1945-46 to 1,836,000 in 1947-
48. Almost all of the increase was accounted for by ex-
servicemen. This influx created a need for more instruc
tors, classrooms and housing. Some help came from the
government in the form of gifts and sales to the colleges
*■%. S. Bureau of the Census, Statistical Abstract
of the United States: 1962 (Washington, D.C.: Government
Printing Office, 1962), p. 269.
*^Alice M. Rivlin* The Role of the Federal Govern-
ment in Financing Higher Education (Washington. D.C.: The
Brookings Institution,' 1961), p.”57. J
77
of pre-fabricated,barracks and other surplus military
buildings and equipment. * • * > Thus, an increase of college
teachers, buildings and equipment resulted.
The short-run effect of the GI Bill was to help
avoid a flooding of the labor market by returning veterans.
But far more important was the long-run effect, which re
sulted in a considerable upgrading of the quality of a
large segment of the labor force. And this in turn, to
repeat the these of Chapter II, caused, and is still caus
ing, a stimulus to economic growth.
V. THE NATIONAL DEFENSE EDUCATION ACT OF 1958
Under The National Defense Education Act of 1958
the federal government has already expended more than a
billion dollars in direct subsidies to students, in grants
to educational institutions, and in assistance to various
states.^ The states have matched the federal funds
dollar for dollarAlthough the full impact of this
spending has not yet been felt, one of the notable results
has been an increase of students in the fields of
15Ibid.. p. 69.
^Arnold Hano, MU. S. Education Five Years after
Sputnik,n Pageant. November 1962, p. 112#
!7u. S. Department of Health, Education, and Wel
fare, Office of Education, Guide to the National Defense
Education Act of 1958 (Washington, D.C.: Government Print
ing Office, 1959), p.' 2.__________________________________
78
mathematics, science, modern foreign languages and teach*
ing. Also, in fiscal 1960 the National Defense Education
Act made it possible to carry out 47,946 different projects
in science, mathematics and languages in our schools.
One of the features of the Act is vocational train
ing for defense. This is a sizable addition to the voca
tional education previously described. For example, for
fiscal year 1960, $15 million of federal funds were author
ized and $7 million appropriated. The objective is to
train more technicians in all areas of scientific develop
ment. Actually, there is an even greater shortage of
technicians than of the engineers, scientists and chemists
they are needed to assist. Reports from states during the
first year of the Act pointed toward the future development
of rigorous and intensive high-standard training programs
to help meet the growing demand
Another portion of the Act deals with guidance,
counseling and testing. Its aim is to reduce wastage of
human resources. The method is to advise students on what
courses are best suited to them, encourage them to achieve
the educational level they are capable of, and guide them
to areas of the economy which can best utilize their
talents and educational background. In a very basic sense
i
*-®Hano, loc. cit.
IQ
Office of Education, oj>. cit., pp. 20 ff.
79
this may be the most important provision in this legisla
tion, even though its total benefits may be the least
measurable.
Other features such as science information service,
improving state educational statistical services, and
research into the use of communications media for educa
tional purposes meet definite needs.
Ail in all, it can safely be predicted that over a
period of time the effects of The National Defense Educa
tion Act will represent a significant contribution to
economic growth. This is especially true because it was
designed to meet specific needs and to overcome specific
manpower shortages.
VI. RESULTS OF RESEARCH
The phenomenal growth in the last decade of spending
on research entitles it to be called our newest major
industry. But, unlike most other industries, it often
takes years before the results of investment in research
becomes manifest. There is usually a considerable lapse
of time between the initiation of research, a discovery in
the laboratory, and its eventual development to the point
of being economically beneficial. Since the heaviest
spending on research has been in very recent years, the
greatest benefits are probably yet to come. A brief look
at the results of past research should substantiate this__
80
prediction•
Agriculture, the pace-setter in the productivity
contest, has been heavily saturated with research effort
for the past seventy-five years. Here we have an example
not only of the lagged effect of research, but, also, of
the tremendous rewards which investment in research can
pay.
The field of medicine is another area abounding with
evidence of the value of research. The past generation has
seen such important discoveries as sulfa drugs, penicillin,
cortisone, antibiotics and polio vaccines. Medical prog
ress has brought about a decline in the death rate; also,
it has reduced the time lost from work due to such diseases
as typhoid and pneumonia. Thus, several billion dollars
per year have been added to our national income.2®
The bulk of government research spending is in the
military area. But this often results in important non
military by-products such as radar, atomic power, large
digital computers, hospital equipment for treating cancer
and almost all aviation developments. Also, indirect bene
fits accrue in that the knowledge and skills obtained in
the pursuit of military research can often be used to
increase efficiency in the production of goods for civilian
use.
20
_______* Groves, o p. cit.. p. 21.__________________________
81
Other examples of research developments are automa
tion, the family of electronics, synthetics, plastics and
new metals • In many cases it would be impossible to
measure exactly the extent to which federal funds were a
factor.
Business Week recently reported that companies would
get a tax break on spending for research and development in
fiscal 1964 in the form of a special new tax credit for
company expenditures on new equipment and facilities for
research. President Kennedy's primary objective in asking
for this new tax credit was to strengthen research spending
in such industries as building, transportation, and educa
tion as distinguished from defense and space research
efforts. The President's economic advisers believe that
research is the catalyst that stimulates increased busi-
21
ness. A
Research has brought about a scientific revolution
which promises to outdo the Industrial Revolution in its
effects on economic growth. One of the salient features
of the scientific revolution is its heavy dependence on
education.
^"Research Briefs,*' Business Week. January 12,
1963, p. 86.
82
VII. EDUCATION AS AN ANTIDOTE TO UNEMPLOYMENT
Unemployment at the end of 1962 was about 5.5 per
22
cent of the labor force. The unemployed comprised mainly
the unskilled, blue • ’collared, non-white, technologically
displaced and high school drop-outs. This problem is
accentuated by the following trends:
1. The shift from blue- to white-collar jobs. The
proportion of workers in the goods-producing industries
fell from 51 per cent in 1947 to 42 per cent in 1962.
2. The shift from unskilled to skilled jobs.
Technological changes have tended to upgrade jobs within
the blue-collar segment where it did not abolish than.
3. The shift from farm to non-agricultural jobs.
Farm employment dropped more than three million between
1947 and 1962.
4. The occupations that are growing fastest--the
professional and technical specialties--require a great
deal of training.
5. More young people are entering the labor market
as a result of the high birth rates of the 1940's.
The substance of the above is that the average level
of educational achievement required for employment is
22»BUS£ness Outlook: Farm Jobs at New Low,” p. 19.
23”coming: A Crisis for Young Workers,” Business
Week, February 16, 1963, p. 2 7 . _______________________
83
steadily rising. Although federal aid to research and to
agriculture accelerate the above trends, it could hardly
be argued that we should combat unemployment by inhibiting
progress. Federal aid to education helps raise the aver
age level of educational achievement and in this respect
is an antidote to unemployment. Perhaps this is especially
true of such programs as vocational training, job retrain
ing, and The National Defense Education Act provisions for
guidance and counseling and for giving financial assistance
to students to enable than to continue their education.
This leads to the question, "Is the amount of federal aid
to education sufficient?”
VIII. SUMMARY
This chapter has elaborated on the theme that since
education promotes economic growth, federal aid to educa
tion does also. It reveals that federal aid to education
has been both extensive and successful. And it poses a
question for future chapters, ”If federal aid brings
federal control (as is so greatly feared in many quarters),
why is it that hardly anyone is even aware of the consider
able amount of past and present federal aid?”
The following chapter will explore the need for
additional federal aid to education.
CHAPTER V
THE NEED FOR INCREASED FEDERAL AID
TO EDUCATION
The preceding three chapters have established that
federal aid to education stimulates economic development.
The present chapter will justify additional federal aid to
education by showing that (1) we must increase our rate of
economic growth; and (2) educational efforts at the state
and local levels have been and probably will continue to
be inadequate.
I. THE NEED FOR STIMULATING ECONOMIC GROWTH
The purpose of this section is to indicate the
extent of our economic growth requirements. We have shown
previously that federal aid promotes education, and that
education is a major cause of growth. Therefore, in order
to determine the degree to which increased federal aid is
necessary, we must know our economic growth needs, and then
relate them to expected state and local educational
efforts.
84
85
Domestic Requirements
The superlatives used to describe the achievements
of the American economy, along with such currently popular
terms as ’’ the affluent society," tend to obscure its weak
nesses and to minimize the large areas where considerable
I improvement is still necessary.
Roosevelt* s famous reference to one third of the
nation being ill-clothed, ill-housed and ill-fed should
remind us that although this percentage has been reduced,
tens of millions of our citizens still suffer from sub
standard living conditions* Thirteen per cent of all
American families had personal incomes of less than $2,000
in 1960.■** Also, much of the huge middle-class is hard-
pressed financially. One indication of this is the tre
mendous increase in "credit buying** in recent years. Most
people lack the funds to pay cash for all the things they
want, so they resort to credit financing. But even these
partial payments often put a strain on family budgets. In
other words, our needs and desires for goods and services
still far outrun effective demand. The affluent portion
of our society, though growing, is still a small minority.
Unemployment is currently running over 6 per cent,
and, as indicated in Chapter IV, there are long-run
^"Gerhard Colm. and Theodore Geiger, The Economy of
the American People (Washington, D.C.: National Planning
Association, 1961), p. 14. ____
86
pressures tending to push that percentage higher. Our tax
burdens remain heavy; yet many government services, for
example, highways and schools, are still inadequate.
Improvement in all of the above areas depends
mainly on growth of production rather than on redistribu
tion of the product. Thus, even if we were not involved
I in competition with the communist world, it would still be
|
necessary to greatly increase our efforts to promote eco
nomic growth •
The Cold War
Considerations of national survival must take
precedence over concern about standards of living. The
significance and threat of Soviet economic growth to us
lies in the strength it gives them militarily, and, proba
bly more important, in the power it gives the U.S.S.R. to
extend its influence throughout the rest of the world.
In 1928, at the beginning of the Soviet drive for
industrialization, Russia's population was four times
larger than that of Great Britain, but her industrial
output was only one fourth as great. Today, the Soviet
Union surpasses all the former industrial giants of
Western Europe and is rapidly gaining on the United
States.2 This has not happened by accident. For over
2Robert W. Campbell, Soviet Economic Power
(Cambridge: Houghton Mifflin Company, 1960), pp. 1 f.
87
thirty years the primary obsession of the Soviet leaders,
and to a considerable extent the Russian population, has
been the attainment of rapid economic growth. They see
themselves engaged in a heroic struggle to overtake and
surpass the capitalistic countries in the shortest possible
time.J
The Russians hold as an article of faith that
their economic system represents the wave of the
future, that, it is a "progressive” economic system
that will in time everywhere supplant the outmoded,
historically doomed capitalist system. This faith
implies a certain hostility toward us, as indicated
in Krushchev's boast that he expects to bury the
capitalist system, and that our grandchildren will
live under Soviet socialism .4-
Most Americans probably are not fully cognizant either of
the economic nature of the Soviet objective or of the
extent to which they have been achieving it.
Our military rivalry with the U.S.S.R., especially
the nuclear and space aspects, has been well publicized.
But the rapid industrialization which enabled Russia to
attain military strength comparable to ours seldom is men
tioned. This military competition is a tremendous drain
on the economies of both countries. Yet, unilateral dis
armament is out of the question. As long as the Soviet
Union refuses to agree to reliable disarmament terms, we
must continue to spend astronomical amounts for defense.
^Xbid., pp. 26 f.
4Ibid.. p. 2.
88
Here, then, is our most obvious need for an increased rate
of economic growth.
The success of economic development in the U.S.S.R.
has enabled it to carry on an ever-mounting economic
offensive in the areas of trade, economic aid and technical
assistance. In sixteen underdeveloped countries, Soviet
deliveries in the past few years have been close to half
as much as ours.-> In addition to establishing economic
ties, the Russians propagandize to the effect that the
only way for the poverty-ridden countries to overcome
their economic backwardness is to emulate the achievements
of the Soviet system. Their objective is to bring the
underdeveloped nations into the communist sphere and even
tually extend the Soviet economic system throughout the
world. This would leave us isolated in the midst of a
hostile world. In this atomic era an extended military
stalemate seems likely. Therefore, the development of
underdeveloped countries probably will be an area of in
tense competition between the United States and the
U.S.S.R. for many years in the future:
Underdeveloped areas containing either vast
natural resources needed by major world powers,
millions of potential workers or soldiers, or
having strategic locations from a military
5Ibid.. p. 5.
89
viewpoint, will be of particular interest from a
standpoint of their importance in world affairs.6
To win this competition and to counter the Soviet
economic strategy of the cold war, we must develop new and
better programs for aiding backward economies to develop.
Perhaps the current Administration's "Alliance for Prog-
j ress" plan for South America is a step in this direction.
t
To support such programs, and also to set a better example
of economic efficiency than Russia for underdeveloped
countries to emulate, a basic requirement is that we maxi
mize our efforts to achieve a higher growth rate.
II. PROBLEMS OF OUR EDUCATIONAL SYSTEM
In the richest nation in the world, and especially
in a democracy, it would seem that the ideal situation
would be one in which a youngster's educational opportuni
ties did not depend on what part of the country he
happened to be in or on his economic or social background,
but, rather, on his ability. Of course, such an ideal
situation is not 100 per cent achievable. But it is easy
to see why we have not come anywhere near it, when we
consider both the range of educational needs, and the
financial abilities to meet those needs, in various parts
of the country. And even if by some miracle the latter
£
Lyle W. Shannon, Underdeveloped Areas (New York:
Harper and Brothers, 1957), p. 1.
90
two factors were equalized so that every community had
exactly the same educational needs and financial ability
to meet them as every other community, we still would find
wide differences in the educational services actually made
available.
The reason is that although in this hypothetical
situation the needs are equalized everywhere, opinions as
to what their needs are will vary considerably among fifty
states, thousands of local school boards, and millions of
voters. Moreover, the largest stumbling blocks may be
willingness to pay. As indicated in Chapter 1, almost
everyone is for education--until it comes to paying for it
then our deeds often fail to match our words. And this is
true of taxpayers as well as legislators and school boards.
Perhaps part of the explanation lies in the fact that our
total tax burdens are heavy. Yet, we cannot express our
resentment toward over-all high taxes as effectively as we
can toward taxes for education. For example, we can vote
against school bonds, but we cannot vote against higher
income taxes or sales taxes. Thus, the opposition of many
people to greater school expenditures may reflect their
opposition to the size of their total tax burdens. Other
factors are rapidly rising educational costs, and the
resistance of property owners to higher property taxes
(which provide over half of total school support)• But
the major factor probably is inadequate realization of the
91
extent of our need for greater educational efforts. Thus,
shortages and deficiencies persist decade after decade and
we never seem able to afford sufficient funds for educa
tion.
The Rising Costs of Education
Rising costs. The National Education Association
estimates that the United States will spend $19,543,692,000
on its public schools this year.^ This does not include
about $5 billion for higher education and over $6 billion
for private schools.®
The $19.5 billion for public schools compares with
$213 million in 1900, $2.3 billion in 1929-30, $5.84 bil
lion in 1949-50, and $10.95 billion in 1955-56.9 Public
school expenditures as a percentage of 6NP were 2.12 in
1949-50, 2.66 in 1955-56, and 3.05 in 1958-59; an esti
mated percentage for 1969-70 is 3.57.^®
Reasons for rising costs. There are several rea
sons why expenditures for public school education have
risen to such a great extent since 1900. An important one
^•'Numbers Game," Newsweek. February 4, 1963,
p. 56.
O
°Seymour E. Harris, More Resources for Education
(New York: Harper and Brothers, i960), p. 4.
9Ibid.. p. 12.
*-°Ibid.. p. 6.
92
is the increase in enrollment:
Public school enrollment increased by 49 per cent
in the thirteen years from 1946 to 1959, Enrollment
in the public schools was 24,6 million in 1948, It
was 34 million in the fall of 1938. It will be 36
million in the 1960-61 school year, 40 million in
1963-64, and 42 million in 1966-67.
In addition, because children are staying in
school longer, high school enrollment is rising at
an even faster rate than total enrollment. It was
6.8 million last year and will be 10.8 million by
1965. Only 11 per cent of the young people between
14 and 17 were enrolled in high school at the turn
of the century. In 1957, 70 per cent of this age
group was in high school, today 83 per cent are in
high school, and the percentage continues to
increase.11
A second reason for the rise in education costs is
the increase in the average daily attendance which rose by
161 per cent from 1900 to 1956, as compared to a rise of
enrollment of only 100 per cent. A third factor is the
increase in the number of days in the school term from 132
in 1870 to 178 in 1956. A fourth factor is the rise of
prices and the increased productivity of the nation.
These are reflected in an increase of average annual
instructional salaries per instructional staff member of
twelve times from 1900 to 1956. Prices rose about three
times, so the real gain of salaries was about 200 per cent.
These salary gains reflected not only the rising standards
of the economy, but also to some extent the lengthening of
i: lf. J* Seidner, Federal Support for Education
(Washington, D.C.: The Public Affairs Institute, 1959),
pp. 5 f.
93
the school term and deviations of movements in teachers*
salaries from the national trend. A fifth reason for the
increase of expenditures is the increase of capital costs.
A sixth factor is the additional functions undertaken by
the schools, such as health, food, vocational studies,
counseling, athletics, and so on. The costs of such
auxiliary services rose from 7 per cent of all school
expenditures in 1930 to 11 per cent in 1958, A seventh
factor is the increasing proportion of high school students
described previously; secondary schools are more expensive
than elementary schools. In 1958-59 the average instruc
tional costs per pupil (salaries) was $153 in elementary
schools and $243 in secondary schools.
Future needs. The greatly increased birth rate
which came with World War II continues and shows no sign
of abating. Between 1946 and 1958 the school age popula
tion (5 to 17, inclusive) increased by 46.2 per cent while
the total population increased by 23.1 per cent. It is
estimated that the school age population will grow by
another 60 per cent by 1980.
In addition, children are staying in school longer.
As indicated heretofore, high school enrollment is rising
at a faster rate than total enrollment. College
12
Harris, oj>. cit., pp. 14 ff.
94
attendance is increasing rapidly; in 1946 only 17.5 per
cent of the population between eighteen and twenty-one
years of age was attending college, but by 1952 it was 27
per cent and by 1959, 40 per cent.'*- ' *
Higher quality preparatory education is needed for
the increasing percentage of students going on to college,
to supply the manpower demands of an increasingly complex
and technical economy, and to cope with rapidly growing
knowledge applied to solving increasingly intricate prob
lems. To improve the quality of education we must obtain
an adequate number of classrooms and of qualified teach
ers; also, we need to modernize and upgrade equipment,
teaching methods and services. Adequate remuneration for
teachers will be the most costly item.
The preceding paragraphs have been oriented to our
public school system. However, they apply similarly to
institutions of higher learning. The number of college
and university students will probably double in the next
decade and the cost of educating them will increase by at
least 25 per cent. This means that resources devoted to
higher education will have to increase by more than 10 per
cent per year. In face of these rising demands, private
colleges and universities as a group have found themselves
in an increasingly precarious financial position. Low
13
"'Seidner, op. cit., pp. 5 f.
95
interest rates have kept endowment earnings down, and high
income and estate taxes have cut into the private fortunes
which once came as bequests to private institutions.
Thus, private colleges have been forced to raise student
fees.^
There is no doubt that future educational needs,
both quantity-wise and quality-wise, will require an
increasing percentage of GNP. And this percentage will be
influenced by the extent to which we give serious consid
eration to our needs for economic growth. Of course,
there have been varying estimates of our future educa
tional needs and costs. But the major area of controversy
is the extent to which the federal government should
divert funds for educational purposes.
State and Local Problems in
Meeting Educational Needs
An outstanding characteristic of the American
school system is its extreme decentralization. There are
close to 37,000 school boards in the United States, each
with largely autonomous control. Critics contend that the
greatest single obstacle to a renovation of our education
stems from the fact that control, financing and direction
Alice M. Rivlin, The Role of the Federal Govern
ment in Financing Higher Education ( ’ Washington, D.C.: The
Brookings Institution, 1961), p, 6,
96
of education are in the hands of too many boards of
education •
As a result of this decentralization, the major
contribution of finance for the public schools comes from
the local government, which, even today, provides close to
i
i
60 per cent, whereas state government provides somewhat j
i
less than 40 per cent, and the federal government provides [
only 3 or 4 per cent to the total cost of public school I
education•^
Differences in educational responsibilities* One
important reason for the inadequate school opportunities
in some areas is that low-income states generally labor
under the handicap of having relatively more children*
There are fifty-one school-age children per one hundred
adults in the twelve top income states as compared with
sixty-nine in the twelve lowest income states.^ The
state with the heaviest educational load in this respect
has almost twice as many school-age children in each 1,000
of population as the state with the fewest children* The
15
Harold M. Groves, Education and Economic Growth
(Washington, D.C.: National Education Association, l96l),
p* 47*
^Harris, op. cit., p. 49*
17
Roger A. Freeman, Federal Aid to Education— Boon
or Bane? (Washington, D.C.; American Enterprise Associa-
tion, Inc*, 1955), p* 27.
97
states with the largest number of school-age children in
relation to adults tend to be concentrated in the areas
that are largely rural and agricultural, particularly in
the South.^ Obviously, such states must make great
financial efforts in order to provide a given level of
1
j schooling for all of their children.
i
However, there have been two trends since World War
II, which, depending on the extent to which they continue
in the future, will affect the balance of educational
responsibilities among the states. First, the birth rate
has been increasing much faster in the high-income states
than in the low-income states. Second, there has been a
vast migration from the poorer regions to the wealthier
sections of the country. As a result of these trends, and
also of the fact that the federal government relieves low-
income states of a greater share of their public welfare
burden (thus enabling them to devote more of their funds
to education), school conditions have been improving rela
tively faster in the low-income states But this
shifting of educational burdens leads to another problem:
The mobility of the nation's population is such
that no part of the country can afford to neglect
educational deficiencies in other sections. The
18
National Education Association. The Facts--On
Federal Aid for Schools (Washington, D.C.T National Educa
tion Association, 1943), p. 3.
■^Freeman, op. cit., p. 28.
98
quality of each state's education is affected by
the quality of education in other states. Each
year nearly 35 million people change residence,
over five million crossing states lines. Every
five years 15 per cent of the school-age population
moves from one state to another.20
For example, the constant strain on California's educa
tional system is due in part to the continuously large
influx of population from other states, plus the fact that
most of the new arrivals come from states or localities
which have lower educational standards.
Differences in economic ability. Per-capita income
in the twelve richest states is almost twice that of the
twelve poorest states. Moreover, the latter have the
larger proportions of school-age children; therefore, the
twelve richest states have about two and a half times the
resources behind expenditures per pupil in average daily
21
attendance. Of course, there is an even greater vari
ance among the localities in their economic capacity to
finance schools. Thousands of school districts have all
but exhausted their sources in attempting to keep pace
with school needs.^2
Sources of funds. The major financial contribu
tions for the public schools come from the local
^Seidner, op. cit., p. 16.
21
Harris, op. cit., p. 56.
^Seidner, op. cit., p. 15f
99
governments, which depend almost wholly on the property
tax; roughly half of the total cost of schools is financed
by the property t a x , 2 ^ But the property tax responds
slowly to rising prices and incomes; since early in the
century its relative yield has declined about 75 per cent.
This fact combined with the greatly increased percentage
of total taxes going to the federal government accounts in
large measure for the recurrent school financial crises.
Another result is that state governments have raised their
contributions to local governments to 40 per cent of the
total costs of schools.2^ State governments derive most
of their funds from income taxes and regressive sales
taxes•
The general property tax has certain weaknesses and
limitations. It tends to be an inequitable and inflexible
tax which responds slowly to economic growth. For example,
in the New York metropolitan area a 1939 assessed valua
tion of $9,500 had risen, on the average, to $13,889 by
the late 1950*s. However, if the valuation had responded
to the composite price index, it would have risen to
$20,520; to the cost of education index, $24,130; to per
capita disposable income, $29,735,25 Moreover, assessment
^Harris, 2E* cit.. p. 49,
2^Ibid.. p, 74.
25Ibid., p. 52.
100
of property Is not uniform; there are extreme variations
between states and among localities in valuation of
property for taxation* Also, the property tax often cor-
relates poorly with income and ability to pay* In addi
tion, many local.governments are excessively hampered by
unrealistic debt and tax ceilings* Finally, local govern-
j
ments are frequently under pressure to restrain taxes in
order to keep or expand their industries* All these dis
advantages led Professor Groves to the conclusion that a
local flat-rate income tax as support for education makes
more sense than the property tax:
The combination of local property tax financing
for education and the use of other sources for
other public needs such as highways and welfare is
likely to produce distortionary effects* Resistance
to property tax increases is high both because of
the local character of the tax and because of its
regressive incidence on old people and poor house
holders* The opportunity cost of taxes is entitled
to consideration; in the case of the property tax
people properly resent good schools at the expense
of housing already below a minimum standard of
amenities* The unequal development of federal aid
for various services aggravates the distortion*
The federal government diverts state appropriations
away from education by offering matching grants for
highways, hospitals, welfare, and other services.26
Increasingly, the state governments have had to
take on added responsibility in financing public schools
and they now provide about 40 per cent of the public school
budget* The states have significant tax advantages over
^Groves, op* cit*. p. 52*
101
the localities, mainly In that they can effectively apply
Income and sales taxes* But about one third of all states
do not have an income tax and one third do not have a
corporation income tax, and approximately one third have
no general sales tax.^7 Sales taxes are not based on
ability to pay and therefore unfairly burden the lower-
income groups. Also, competition for the location of
industry inhibits state taxation. Another factor is that
the federal government's grant and aid programs encourage
the states to spend more money on social security, relief,
highways, and the like, and less money on education. Many
states fail to provide adequate aid to local school dis
tricts, and often the aid is not provided in the most
effective manner— for example, an excessive use of the
flat grant rather than contributions based on need.^8
Efforts to increase revenues. Most of the states
and local governments have made a considerable effort to
increase revenues. As a result, state and local revenues
have risen more than 130 per cent since 1948. Roughly 35
per cent of all money spent by states and comnunities goes
for education, a far greater share than that allotted for
any other governmental function. At least half of all
^Harris, 92* cit.. p. 54.
28Ibid.
102
state assistance to localities is used for schools. School
district tax rates have risen at a rapid pace. Many dis
tricts are committed to such an extent on school construc
tion bonds that no revenue is left to raise teachers'
salaries or make other improvements. Per capita expendi
tures for public schools by state and local governments
rose 140 per cent in the period 1949-59. From 1948 to
1956, the federal debt rose less than 10 per cent while
state and local debt rose 182 per cent. Yet despite all
this, the percentage of all taxes— federal, state and
local— being used for education is less than it was-fifty
years ago. It is evident that the tax base of state and
local governments is insufficient to allow them to cope
with their educational problems
Willingness to pay. The sharp increases in school
taxes since World War II, added to an already high total
tax burden, have made the public more and more reluctant to
part with its school tax dollar. This is understandable,
especially in view of the shortcomings of property and
sales taxes described previously. Also, the public proba
bly is not fully aware of the degree of need for school
funds:
In a questionnaire sent by the House General
Education Subcommittee to state governors, responses
29seidner, op, cit.. pp. 15 f.
103
demonstrated that without federal help, and even
with Increased effort, states barely will succeed
in maintaining the status quo. The governors*
responses also indicated wide taxpayer resistance
to increased school taxes. It may be stated
parenthetically that while there is evidence of
widespread resistance to additional school taxes,
public opinion polls have shown consistently a
heavy majority to be in favor of federal aid to
education•30
t
| Although finances are probably the major reason for
I taxpayer resistance, another important factor is the rela
tively lower opinion of the importance of education held by
some of the legislators and public. For example, in 1954
New York and Illinois paid their teachers on the average
26 per cent and 27 per cent, respectively, more than they
paid state government employees, while Arkansas and
Mississippi paid their school teachers 27 per cent and 21
per cent less than state government employees. Obviously,
the residents of those states have the same fiscal capacity
for school teachers as for state government employees. The
difference in salaries expresses a judgment on relative
values; education is not rated as highly in some states as
in others.^1
Deficiencies of Our Educational System
Illiteracy. More than one million registrants were
found to be educationally deficient during World War II.
30Ibid.. p. 16.
31
Freeman, op. cit., p..17*
104
Over 659,000 of then were rejected. These men were
capable of achieving literacy. The Army succeeded in
teaching reading, writing and arithmetic to 85 per cent of
the 300,000 illiterates inducted after June 1, 1943.
Eleven of the twelve states with the highest percentage of
rejection for educational deficiency were in the South, in
the states with heavy educational loads and relatively low
economic ability. Although educational deficiencies among
Negro registrants was disproportionately high, for white
registrants alone the range was from 1.3 per cent of
rejections in Washington to 22.7 per cent in Texas.32
Census statistics for 1959 show an illiteracy rate
among non-whites of 7.5 per cent as compared with about
1.6 per cent for the white population. In 1957, 20.1 per
cent of male whites twenty-five years of age and older had
completed less than eight years of elementary education;
the corresponding figure for non-whites was 53.5 per
c e n t . 3 3 The above figures reveal inadequacy of educational
opportunity.
Classroom shortage. The reasons for classroom
shortage are the failure to build during the war and
depression periods, the large rise in school population,
32
“' National Education Association, op. cit.. pp. 18 £»
33croves, op. cit.. p. 47.
105
the shifts of population, and, most important, the finan
cial problems described in earlier sections of this
chapter. In the past eight years various estimates of
shortages of classrooms have ranged anywhere from 140,000
to 600,000 classrooms needed.3^ Apparently a great deal
depends on who prepares the estimate and what method :he
i
| uses to arrive at his figure. But nearly everyone seems
to agree there is a substantial classroom shortage. As a
matter of fact, it is common knowledge that crowded class
rooms have been a chronic problem ever since most of us
can remember. Perhaps some of,the estimators overlooked
the need to replace unsatisfactory or obsolete facilities.
For example, a large percentage of school buildings in use
in our larger cities are obsolescent firetraps built before
190G; they often have no libraries, cafeterias, or other
basic facilities. Another explanation of the widely vary
ing classroom shortage estimates may be differences of
opinion as to how overcrowded a school must be to cause a
reduction in the effectiveness of classroom instruction.
Educators are in general agreement that elementary school
classes should be no larger than thirty pupils per class
and that secondary schools should have classes of no more
than twenty-five pupils. In this connection it is
^Seymour E, Harris, The Economics of the Political
Parties (New York: The Macmillan.Company, 1962), p. 256.
106
Important to point out that statistics tend to be mislead
ing by stressing "excess” pupils. Although only ten
children may be labelled "excess” in a class of forty, the
remaining thirty are.equally affected.33
Teacher shortage. It has been estimated that the
shortage of qualified teachers is at least as pressing as
36
the shortage of classroom space. But, as is the case in
classroom shortage statistics, estimates of teacher short
age vary considerably. Probably this is due in large part
to subjective factors. For example, consider a small ele
mentary school with six classrooms, thirty-five pupils in
each. An estimator who believed that thirty-five pupils
per classroom was a proper ratio would report no shortage.
But an estimator who was of the opinion that elementary
school classes should be no larger than thirty pupils per
class would report a shortage of one teacher and one
classroom. And there are other complications. If two of
the six teachers in the above case were not certified, one
estimator might show a shortage of two teachers, another
estimator might disregard it, and third could say that
although two teachers were not certified, one was doing a
good job while the other was not— therefore, a shortage of
35
Seidner, op., cit.. pp. 2 f.
36Ibid.. p. 3.
107
one teacher existed. Another factor is that standards vary
from state to state; for example, two years of college is
sufficient for an elementary school teaching certificate in
some states. Thus, if two of the above six teachers were
college graduates and the other four had only two years of
college, it could be estimated as a teacher shortage of
either four or none. It can be seen that we are getting
into qualitative considerations, but these may be more
important than quantitative problems.
Probably the major factor accounting for the short
age of qualified teachers is low salaries. Use average
income of teachers is far below that of most other profes
sional persons.37 New York and Los Angeles, which have
comparatively high pay scales for teachers, do not suffer
any serious shortages. Low salaries for teachers are the
result of financial problems and of opinions as to the
value of education which were described previously in this
chapter. Working conditions are another important factor.
For instance, many teachers resent being burdened with such
menial tasks as routine clerical work, yard duty, and so
on. The teacher shortage is most acute among rural school
districts where salaries are generally lower and working
conditions not as favorable.3**
37Ibid., p. 4.
38Ibid.
108
The problems are even more serious in higher educa
tion, where the competition for staff with business and
even government is great, and the flow of Ph.D.'s is
inadequate to keep the ratio of adequately trained teach-
!
j ers even at present levels. Moreover, in the next ten
!
] years demand for college teachers will rise about three
39
times as much as for school teachers.
The drop-out problem. President Kennedy in his
recent message to Congress on aid to education referred to
'’the alarming number of students who now drop out of
school or who do not continue into higher levels of educa
tion.”^® No doubt his remark was prompted by statistics
such as the following:
For each 1,000 pupils who were enrolled in the
fifth grade in 1950, 885 entered high school (or the
ninth grade) in the fall of 1954; 584 of the 1,000
pupils graduated from high school in the spring of
1958; and 308 of the original 1,000 entered college
the following year. More important is the fact that
less than half of the upper 25 per cent of high-
school graduates earn college degrees. The drop-out
in college is much the same story. Only 6 out of 10
of the top 5 per £fnt of high-school graduates earn
a college degree.^1
The United States Department of labor studied
10,000 drop-outs in seven areas and found the major causes
39
Harris, More Resources for Education, p. 44.
^®The New York Times. January 30, 1963.
^Groves, op. cit., p. 43.
109
to be adverse school experience, financial pressure, and
lack of adequate guidance Of course, the economic
barriers are greatest in the case of college attendance.
The cost of sending one student to college has been esti
mated to be in the area of.$1,500 annually.43 And this
does not take into consideration the lost wages which
could have been earned during the period of school attend
ance. It is apparent that financial problems, both
directly and indirectly (the shortage of qualified counsel
ors), is the main reason for our serious drop-out problem.
III. SUMMARY
The necessity for making a maximum effort to
increase our rate of economic growth is based on two main
factors. First, we need to do everything we can to
counteract unemployment trends, improve conditions for
tens of millions of Americans who are living at substand
ard levels, and relieve the financial pressure on the
great bulk of our people who are striving to raise their
standard of living. Second, for over three decades the
U.S.S.R. has been making an all-out effort to achieve high
growth rates; the goal of the Soviet Union is to spread
communism throughout the world by showing that their
42ibid.. p. 44.
43Ibid.
110
economic system is superior to that of the capitalistic
countries* We must face the facts that they have been
making very real progress toward their goal, and this con-
tinuing progress is an ever-increasing danger to our way
| of life. To counteract Soviet, gains it is.imperative that
| we bend every effort toward maximizing our rate of eco
nomic growth.
A very important factor affecting economic growth
is education. But the costs of education have risen
rapidly since World War XI and promise to rise even faster
in the future. The principal explanation is the increased
school enrollment caused by our greatly increased birth
rate since World War XI, and children staying in school
longer. Educational responsibilities and economic ability
vary widely among our states and thousands of school dis
tricts. The low-income states.generally labor under the
handicap of having relatively more children. Financing of
our school system still depends mostly on the deteriorat
ing general property tax levied by local governments.
Also, state tax policies and methods of distributing
revenues to localities have certain weaknesses. The com
bination of the increased burden of public school education
and the present unhealthy condition of state and local
finances, plus variations in willingness to pay, perpetu
ates such educational.deficiencies as classroom and teacher
shortages, illiteracy, and excessive drop-outs. Surely
Ill
our national product is more than sufficient to support
greater educational efforts* The trouble lies in the
inadequacies of our financial machinery in diverting
enough dollars to education.
Additional help from the federal government is
necessary not only to correct the deficiencies of our edu
cational system, but also to increase our educational
efforts to the point where they will make a maximum con
tribution to stimulating economic growth. Only the
federal government has the financial resources which can
meet the large-scale need for funds; it collects three
fourths of all taxes and can raise money more, efficiently
and economically than the states and localities.^ The
federal government's levy of direct taxes are nine times as
heavy in its tax structure as in the tax structure of
state and local governments, and these are the most pro
ductive and equitable taxesMoreover, federal aid to
education of the past has demonstrated that federal funds
can be distributed effectively for the purpose of bolster
ing, weak spots in our educational system. The National
Defense Education Act is a notable example. The current
Administration's proposals for meeting our educational
needs will be described in the next chapter.
t \ i t
Seidner, op. cit., p. 15.
^Harris, More Resources for Education, p. 74.
CHAPTER VI
PROPOSED FEDERAL AID TO EDUCATION
In a special message to Congress on January 29,
!
i 1963, President Kennedy called for passage of a comprehen
sive education bill that would put $1,215,000,000 of
federal money into the nation*s schools and colleges in
the fiscal year beginning July first• The estimated
total cost over the next three years was $4*6 billion#^
The bill differed from the Administration* s past educa
tional proposals in two major respects: first, it lumped
all the President's education requests in one package; and
second, it cut considerably the key provision of federal
aid to public elementary and secondary schools# The
latter change was designed to meet Roman Catholic objec
tions .that defeated earlier general aid measures•3 The
Catholic hierarchy has opposed federal aid their schools
would not share# Instead of a general aid approach, the
^The New York Times, January 30, 1963#
^*'$4.6 Billion Baby,** Newsweek (February 11, 1963),
p# 86.
3Los Angeles Times, January 30, 1963#
112 _
113
bill proposed selective and stimulative federal efforts*
The President explained he was seeking a single educational
package because education could not easily or wisely be
divided into separate parts, as each part was linked to the
other* In the past two years, numerous bills dealing with
separate educational programs were defeated*4 j
j
This latest plan of the Administration for aid to
schools, "The National Education Improvement Act of 1963,1 1
will be the subject of this chapter*
I* NEED FOR FEDERAL AID
President Kennedy's omnibus aid-to-education bill
encompasses twenty-four different educational programs,
ranging from kindergarten through graduate school* It is
aimed at the many needy areas of American education*^
A portion of the President's message to Congress is quoted
below, not only because it presents a compelling case for
increased federal aid to education, but also because it
summarizes, to a certain extent, the first five chapters
of this thesis:
For the nation, increasing the quality and avail
ability of education is vital to both our national
security and our domestic well-being* A free nation
can rise no higher than the standard of excellence
set in its schools and colleges* Ignorance and
^The New York Times. January 30, 1963*
^Newsweek. February 11, 1963, p. 86*
114
illiteracy, unskilled workers and school drop-outs-*■
these and other failures of our educational system
breed failures in our social and economic system;
delinquency, unemployment, chronic dependence, a
waste of human resources, a loss of productive power
and purchasing power, and an increase in tax sup
ported benefits*
The loss of only one year's income due to unem
ployment is more than the total cost of 12 years of
education through high school* Failure to improve
educational performance is thus not only poor social
policy, it is poor economics*
This nation is committed to greater advancement
in economic growth; and recent research has shown
that one of the most beneficial of all such invest
ments is education, accounting for some 40 per cent
of the nation's growth and productivity in recent
years•
In the new age of science and space, improved
education is essential to give meaning to our
national purpose and power. It requires skilled
manpower and brainpower to match the power of
totalitarian discipline* It requires a scientific
effort which demonstrates the superiority of free
dom. And it requires an electorate in every state
with sufficiently broad horizons and sufficient
maturity of judgement to guide this nation safely
through whatever lies ahead*
In short, from every point of view, education is
of paramount concern to the national interest as
well as to each individual* Today we need a new
standard of excellence in education, matched by the
fullest possible access to educational opportuni
ties, enabling each citizen to develop his talents
to the maximum possible extent.
The Federal Government— despite increasing recog
nition of education as a nationwide challenge and
despite the increased financial difficulties encoun
tered by states, communities and private institutions
in carrying this burden--has clearly not met its
responsibilities in education*
It has not offered sufficient help to our present
115
educational system to meet its inadequacies and
overcome its obstacles.6
II. THE NATIONAL EDUCATION IMPROVEMENT ACT
OF 1963
A major new approach is revealed in the bill*s pro
vision for a four-year $1.5 billion program of federal
grants for public schools. This is a sharp cut from the
$2.3 billion the Administration asked for a three-year
program last year. But more change is involved than a cut
in the cost of the program. Departing from proposed
approaches in the past, the federal government would not
simply give large sums of money to states to use as they
see fit. Instead, states would have to submit plans for
use of the money, and list construction projects in order
of their urgency. These plans would not require federal
approval, but once published and submitted, the lists
would have to be followed.^ The federal government would
pay up to 50 per cent of the construction costs.
Federal funds could not be used for across-the-
board increases in teacher salaries. Rather, they would
have to be used selectively for the purpose of attracting
more teachers, keeping experienced teachers, or helping a
^The New York Times. January 30, 1963.
^Los Angeles Times. January 30, 1963.
116
particular community in financial difficulty* Thus, salary
increases could be provided for some or alls (1) beginning
teachers whose pay is below the state average; (2) teachers
having ten years or more experience; or (3) teachers in
districts unable to finance pay increases
This new selective approach intends to be more
effective than previous general aid proposals in strength- j
ening weak areas in our educational system. But the bill
asks for substantially the same federal help for education
requested in the past two years— aid for school construc
tion, higher pay for teachers, and new sources of money for
college students* The remainder of this section will out
line the provisions of the proposed Act*
The Expansion of Opportunities for.
Individuals in Higher Education
One of the national education goals of the Kennedy
Administration is increased opportunities and incentives
for all Americans to develop their talents to the utmost*
This includes increased opportunities for students who are
hindered by financial problems, but who are both willing
and intellectually able to advance their education at the
college and graduate levels*
The President believes the welfare and security of
&The New York Times. January 30, 1963.
117
the nation require that we Increase our Investment In
financial assistance for college students, both at under
graduate and graduate levels. Therefore he recommended
that Congress take the following action: (1) Extend and
liberalize the National Defense Education Act student loan
program, (2) Authorize a supplementary new program of
federal Insurance to underwrite private loans from banks
or colleges to students, (3) Establish a new work-study
program which would pay half of student wages for part-
time campus jobs, (4) Increase the number of National
Defense Education Act fellowships to be awarded by the
Office of Education from 1,500 to 12,000. (5) Authorize a
thorough survey and evaluation of the need for scholarships
for additional financial assistance to undergraduate stu
dents, (6) Expand the number of National Science Founda
tion fellowships and teaching grants for graduate study
from 2,800 In 1963 to 8,700 In fiscal 1964,^
Expansion and Improvement
of Higher Education
According to President Kennedy, the long-predicted
crisis in higher education facilities, especially insuffi
cient college classrooms, is now at hand. For the next
fifteen years, enrollment increases in colleges will
^ Ibid
118
average 340,000 each year. By 1970, college enrollment
will nearly double. Moreover, the cost of college educa~
tlon, including facilities, is several times higher than
in elementary schools. The President, therefore, recom
mended prompt enactment of the following:
1. A program to provide loans to public and non
profit private institutions of higher education for con
struction of urgently needed academic facilities.
2. A program of grants to states for construction
of public community junior colleges. The likelihood of a
high school graduate going to college is 50 per cent
greater if he lives within commuting distance. ,
3. A program of grants to aid public and non-profit
institutions in the training of scientific, engineering
and medical technicians in two-year college-level programs,
covering up to 50 per cent of the cost of constructing and
equipping as well as operating the necessary academic
facilities. There is an even greater shortage of techni
cians to assist scientists, engineers and doctors than
there is of the latter.
4. A strengthening of the National Science Founda
tion matching-grant program for institutions of higher
o
education to expand and improve graduate and undergraduate
science facilities. It is especially urgent that the
capacity for the graduate training of engineers, scientists
and mathematicians be expanded.
119
5, Authorization of federal grants to institutions
of higher education for library materials and construction,
on a broad geographic basis, with priority to those most
urgently requiring expansion and improvement,
6, A federal grant program for the development and
expansion of new graduate centers. Three quarters of all
doctoral degrees are granted by a handful of universities
located in twelve states,
7, Extension and expansion of the current modern
foreign language program aiding public and private insti
tutions of higher learning.*-®
Improvement of Educational Quality
Research in education. Despite the demonstrated
value of research in other fields, research in education
has been astonishingly meager and frequently ignored. To
strengthen our educational research efforts, President
Kennedy recommended substantially expanding the National
Science Foundation science and mathematics course mate
rials program and the Office of Education educational
research programs. He also urged legislation to broaden
the Cooperative Research Act for the purpose of stimulat
ing research in education.
Teacher training. The quality of the teacher is
*-®Ibid.
120
the primary factor in determining the quality of education*
Yet, one out of every five teachers in the United States
has either not been certified by his state as qualified to
teach or has failed to complete four years of college
study* Also, we lack sufficient trained teachers for six
million handicapped children* Therefore, the President
recommended that the National Science Foundation program
for training institutes for teachers in the natural
sciences, mathematics, engineering and social sciences be
expanded* Also, he proposed that new legislation be
enacted to: (1) broaden authority for teacher institutes
financed by the Office of Education to additional academic
fields; (2) authorize a program of project grants to help
colleges and universities improve their teacher preparation
programs; and (3) authorize training grants through col
leges and universities for teachers requiring specialized
training, with particular emphasis on the training of
teachers of handicapped children*xx
Strengthening Public Elementary
and Secondary Education
In addition to improved research and teacher train
ing, more and better teachers must be attracted to and
retained in the teaching profession* This requires working
X1Ibid*
121
conditions and pay levels which reflect more adequately
the value of the services they render. Yet, starting
salaries are too low in some cases to compete with other
positions available to college graduates. And compensa
tion for experienced teachers is often insufficient to
keep them from going elsewhere. Nearly 50 million people
were enrolled in our schools and colleges in 1962— an
increase of more than 50 per cent since 1950. Our educa
tional system faces a major problem of both quality and
quantity, and this applies not only to teachers but to
classrooms as well. President Kennedy put it this way:
Good teachers, moreover, need good schools.
Last year, over 1,500,000 children were in over
crowded classrooms and an estimated 2,000,000
others were studying amid grossly sub-standard
health and safety conditions. X am not the first,
but I hope to be the last, President to be com
pelled to call these needless shortcomings to the
nation's attention. These are national problems
crossing state boundaries, and deserving of national
attention.
I recommend, therefore, a four-year program to
provide $1,500,000,000 to assist states in under
taking under their own state plans selective and
urgent improvements in public elementary and
secondary education including:
1. Increasing starting and maximum teacher
salaries, and increasing average teacher salaries
in economically disadvantaged areas;
2. Constructing classrooms in areas of critical
and dangerous shortage; and
3. Initiating pilot experimental or demonstra
tion projects to meet special educational problems,
122
particularly In slums and depressed rural and urban
areas,12
V
The President also recommended extension of the
National Defense Education Act programs which contribute
to improving the quality of elementary and secondary edu
cation, and expansion of the grants for testing, guidance
and counseling programs. In addition, he recommended j
!
»
continuation of the current programs for subsidizing public-
schools in areas inundated by military families and federal!
workers. ^
Vocational and Special Education
The National Vocational Education Acts, although
revised and extended frequently since 1917, are no longer
adequate. Some occupations have declined or disappeared
and wholly new industries and jobs have emerged from eco
nomic growth and change. As modern science and technology
grow more complex, higher levels of training are required.
As a result, President Kennedy called for both budgetary
action and enactment of new legislation. He recommended
funds which would permit doubling the number of workers to
be trained by the Manpower Development and Training Act
programs. In addition, the President proposed legislation
to:
12Ibid.
13Ibid.
123
1. Expand the scope and level of vocational
education programs supported through the Office of
Education by replacing the Vocational Education Act
of 1946 with new grant-in-aid legislation aimed at
meeting the needs of individuals in all age groups
for vocational training in occupations where they
can find employment in today's diverse labor market,
and
2. Provide employment and training opportunities
for unemployed youth in conservation and local pub
lic service projects*
The details of this latter proposal are contained
in a separate bill— The Youth Employment Opportuni
ties Act*14
Continuing Education
Seven put of eight Americans have never taken as
much as one college course* But there is a growing recog
nition of the need and the value of continuing education*
The increasing number of Americans interested in self-
improvement should all be afforded the opportunity of
securing up-to-date knowledge and skills* Although the
state universities and land-grant colleges offer the
majority of adult education programs, the latter are still
very limited due to inadequate finances and facilities.
Therefore, President Kennedy recommended legislation
authorizing federal grants to states for expanding univer
sity extension courses in land-grant colleges and state
universities•
The fact that nearly 23 million adult Americans
14Ibid*
124
lack an eighth grade education indicates the need for adult
education below the college level. The President, there
fore, proposed a program to assist all states in offering
literacy and basic education courses to adults.
Another important resource for continuing education
is the public library. Yet, 18 million people in this
nation still have no access to any local public library
service and over 110 million more have only inadequate
service. Most public library buildings are old and lack
space and modern equipment. To overcome these deficien
cies, President Kennedy recommended enactment of legisla
tion to amend the Library Service Act by authorizing a
program of grants for the construction and operation of
libraries.
III. EVALUATION AND COMMENTS
In part of his message to Congress, President
Kennedy elaborated on the economic effects of educational
efforts. He also reported that recent research revealed
education to be one of the most beneficial of all invest
ments in economic growth. In addition, he said Russia was
well aware that educational effort had a major, long-run
effect on its power and progress. He cited figures show
ing that the Soviet institutions of higher education were
15ibid,
125
graduating three times as many engineers and four times as
many physicians as the United States, and that the Soviets
were maintaining an annual flow of scientific and technical
professional manpower more than twice as large as our own.
The President said, **It requires skilled manpower and
brainpower to match the power of totalitarian discipline.**
In different portions of his message, he stated that edu
cation was vital to our national security, and that his
proposed program would encourage ’’ the increase of the
knowledge, skills, attitudes, and critical intelligence
necessary for the preservation of our society,*1 and would
Mhelp keep America strong and safe and free.**^
The President needed only to coordinate the above
thoughts, and add to them that our conflict with the
U.S.S.R. is basically a contest between two economic sys
tems, and he would have formulated the forceful argument
that we must greatly increase our educational efforts to
help achieve the rate of economic growth necessary to win
the war with communism. Yet, he did not do so. Rather
than stressing this urgent, primary need, he emphasized
instead the widening gap between our increasing educational
needs and the relatively declining abilities of the states
and localities to meet them. And the President made this
surprising statement:
16Ibid.
126
The necessity of this program does not rest on
the course of the cold war* Improvement in educa
tion is essential to our nation's development
without respect to what others are doing* Never
theless, it is worthwhile noting that the Soviet
Union recognizes that educational effort in the
1960's will have a major effect on a nation's
power, progress, and status in the 1970's and
1980's*17
The latter sentence contradicts the first sentence of the
above quotation* The statement would make more sense if
the first sentence read, "The necessity of this program
does not rest solely on the course of the cold war,"
While it is true that President Kennedy's educational pro
gram would be justified even if there were no cold war,
surely considerations of national survival rate precedence
over domestic requirements*
As for the bill itself, to the extent that it
increases federal aid to education, and especially to the
extent that it aims to strengthen the weakest areas in our
educational system, it is.certainly a step in the right
direction. However, certain portions of the proposed pro
gram bear criticism: (1) With regard to the provisions
for loans to college students, the advisability of saddling
a college graduate with a large debt at a time when his
earnings are at a low point and his financial needs
(marriage, clothes, car, and so on) are high, is question
able to say the least* (2) The President recommended
17Ibid
127
expansion of the National Defense Education Act programs
for guidance and counseling, but he' did not elaborate on
their Importance* Lack of adequate guidance Is probably
almost as Important as economic barriers In causing drop
outs* Moreover, If the economic growth rate Is to feel
the full Impact of a rise In our national level of educa
tional achievement, the resulting Increased abilities must
be channeled Into their most productive roles* The
talents of the Individual should be fitted to meet,the
needs of the economy so that the result Is mutually bene
ficial* Thus, we require greatly Increased numbers of
qualified counselors so that adequate guidance for every
student can begin prior to his leaving elementary school
and continue throughout his school years* (3) From the
point of view of this thesis, the most disappointing
feature of the bill Is the large decrease (compared with
previous proposals) In the amount of aid recommended for
teacher salaries and classroom construction at elementary
and secondary levels* It is especially regrettable that
this decrease was brought about by opposition of the Roman
Catholic church**-®
Many congressmen think the bill is too costly, com
plex and comprehensive**-9 Moreover, the Administration's
* - ®Los Angeles Times, January 30, 1963.
^ Newsweek, February 11, 1963, p. 87*
128
current, huge tax-cut proposal has probably made some
congressmen reluctant to increase federal expenditures.
Southern congressmen complain that the Administration is
using federal funds as a financial club to force “feder
ally affected” districts in the South to integrate. With
the coalition of Catholics, conservatives, and segrega
tionists standing firm in their opposition, the Presi
dent^ education bill has little chance of passing Congress
in its present form.2® The only major portions of the bill
which have a good chance of getting Congressional approval
are college building loans, extension of the aid to
impacted (federally affected) areas, and renewal of at
least some of the National Defense Education Act provi
sions.The opposition to federal aid to education will
be elaborated upon in the next chapter.
20lbid.
^ “Kennedy*s Latest Plan for Aid to Schools,”
U. S. News & World Report (February 11, 1963), p. 60.
CHAPTER VII
OBSTACLES TO INCREASED FEDERAL AID
TO EDUCATION
Over the years, many federal aid to education bills
have been defeated in Congress. It took something as dra
matic as Sputnik to arouse Congress to express an interest
in general education, at the elementary and secondary
levels as well as in higher education. The result was the
National Defense Education Act of 1958. But many regard
this as a weak education Act because °it served as a kind
of mild cold war catharsis without coming to grips with
1
the vast educational needs of the nation.**
History will smile sardonically, said Robert M.
Hutchins, at the spectacle of this great country
getting interested, slightly and temporarily, in
education only because of the technical achieve
ments of Russia, and then being able to act as a
nation only by assimilating education to the cold
war and calling an education bill a defense act.2
In view of the need for increased federal aid to
education, why have numerous attempts to get it been
J. Seidner, Federal Support for Education
(Washington, D.C.: The Public Affairs Institute, 1959),
p* i.
2Ibid.
129
130
thwarted? The answer lies in a combination of factors:
1. The Republicans generally oppose any expansion
of our central government activities, financial or other
wise •
2. It is contended that additional federal aid
will bring federal control of education, and that this is
undesirable not only in itself but also because it means
federal usurpation of power traditionally reserved for the
states and localities.
3* Many opponents of federal aid say that the
states and localities have the ability to meet our educa
tional needs; therefore, the solution to the problem lies
in appealing to them to increase their efforts.
4. The richer states do not want to pay for educa
tion in the poorer states.
5. Segregationists fear that federal aid will be
used as a financial club to force integration.
6. The Roman Catholic hierarchy does not want
federal aid to go to public schools unless Catholic
schools get it also.
These obstacles to increased federal aid to educa
tion are the subject of this chapter.
131
I, THE ATTITUDE OF THE REPUBLICANS
TOWARD FEDERAL SPENDING
As little government as possible Is the fundamental
principle of the Republican party.^ This explains not
only the attitude of the Republicans toward spending in
general, but also toward federal aid to education in
particular. They are against increased federal expendi
tures, and they oppose federal participation in any activ
ity previously the province of the states and localities.
An economic aspect of the Republican ideology is its
tendency to regard government spending as bad; there is
little or no recognition of the fact that a dollar spent
by government may be as productive, if not more so, than
the dollar spent by an individual. ”The Republican lead
ers insist that a dollar spent by the government is some
how a wasted dollar.”^ Thus, regardless of what phase of
the business cycle the economy happens to be in, the
primary goals of the most conservative Republicans are
reduced federal spending, price stability, an annual bal
anced budget, and lower taxes. The Democrats have their
goals of price stability and a cyclical balancing of the
budget, but they seek first full employment and growth.
^Seymour E. Harris, The Economics of the Political
Parties (New York: The Macmillan Company, 1962), p. xxv.
^Ibid., p. xviii.
132
They aim to provide additional services out of rising
national income, and, if possible, then tax relief.
Therefore, it is not surprising that the House vote of
August 30, 1961 on an emaciated education bill showed 164
Democrats and only six Republicans for it, whereas eighty-
two Democrats and 160 Republicans voted against it. More
over, seventy-seven of the eighty-two Democrats who voted
against the bill were from the South.5
The Republicans want to continue as much as possi
ble to allow the consumer market to determine our order of
national priorities in the allocation of resources. On
the other hand, the Democrats hold that the budget is a
weapon to be used for economic improvement and that the
objective of economic policy is not a balanced budget, but
a balanced economy.*’ The Republican ideology appears to
result from an unrealistic appraisal of the needs of our
modern, complex economy and the role of central government
in meeting those needs. At any rate, their attitude
toward federal spending, especially that of the more con
servative Republicans, has been a major obstacle to addi
tional federal aid to education. In this connection,
Professor Harris made an important suggestion:
~*Ibid.» p. xxii.
g
Ibid.. p. xxxiv.
133
Economists, critical of the President for moving
too slowly, also have a responsibility: to dissemi
nate modern economics to congressmen and--even more
important— to their constituents, a responsibility
they have not taken as seriously as they should.
Most economists today would see no great danger in
deficits year after year if they were not excessive
in relation to income. But the public is not pre-
pared for theseviews. First they have to sell the
idea of cyclical, instead of annual, balancing of
the budget.7
It should be added that Mto disseminate modern
economics1 1 effectively requires presentations which are
interesting and easy to understand. This means, at the
very least, an avoidance of the jargon, abstractness and
tedious exploration of obscure points common to many
economists, and, instead, the adoption of a practical,
down-to-earth approach which will help both legislators
and voters.
Another suggestion along these lines would be to
require all students at both the secondary and college
levels to take at least an introductory economics course.
This does not necessarily imply that either political
party is right or wrong in its economic thinking, but,
rather, that voters should have sufficient knowledge to
enable them to analyze economic issues and make value
judgments. After all, the concept of an annual balanced
budget is easy to understand, but how many of our citizens
have much understanding of such things as fiscal policy,
^Ibid., p. xxxii.
134
deficit financing and cyclical balancing of the budget?
Yet, the number and complexity of economic issues which
voters must face are increasing all the time* From the
point of view of this thesis, it is to be hoped that more
universal education in economics would result in more
widespread thinking of this type:
Government has a large and increasing role to
play in the life of the nation. This is fundamental
to our well-being and our survival. How otherwise
could we have contended with the Great Depression
in the thirties; the communist threat in the post
war era; the disruptions caused by automation; the
gradual increase in our aging population; the need
to divert resources to the public sector for
research, health, education, resource development
(and incidentally for growth); for compulsory insur
ance for old age and health, for treatment of unem
ployment
In this connection it is noteworthy that many people who
once opposed such innovations as unemployment insurance
and social security now favor these programs. Perhaps
some day the same can be said of federal aid to education.
II. THE CONTENTION THAT FEDERAL AID
LEADS TO FEDERAL CONTROL
Probably the most widely used argument against
federal aid is the contention that it will inevitably
bring federal control. The opponents say that since every
appropriation of federal money prescribes standards under
8Ibid.. p. xv.
135
which the money is to be spent, eventually a centrally
controlled system of education will result. Some of these
arguments become quite dramatic:
America's public schools, long cherished for
their home-grown independence, are on the road to
becoming federalized institutions--dependent on
federal money, responsive to federal directives,
and shackled by a growing number of federal deci
sions. Tempted by government grants, loans, con
tracts and other forms of financial subsidy, the
elementary, secondary and higher-level schools
are bargaining away their freedom to determine
what our young people should be taught, who should
teach them, and under what circumstances the
teaching shall take place.9
They point out the dangerous possibility that a political
party or some special interest group might use centralized
control of education for their own propaganda purposes.
And they list as additional disadvantages of federal
control, the inefficiencies of huge bureaucracy, inflexi
bility, the tendency to inhibit progress born of experi
mentation, and the removal of education from the immediate
concern of the citizen.
Proponents of federal aid quickly respond that the
evidence does not support these dire predictions. Federal
activities in the sphere of education (described in Chap
ters III and IV) have brought with them no hint of federal
domination or control. Furthermore, all past federal aid
proposals, including the Administration's most recent,
Q
"The Real Crises in Our Schools: Federal Domina
tion," Nation's Business. 48:58, March 1960.
136
have recognized both the opposition to, and the danger of,
extreme federal control, and have included provisions to
perpetuate state and local control. The best way to
insure the latter is to provide the requisite financing so
that state and local governments will have the ability to
meet educational needs. Senator Murray, in defending his
education bill in 1959, told the Senate:
While the perennial opponents of this kind of
legislation will no doubt again cry doomfully
that this bill means federal control of education,
reasonable men can agree that, on the contrary,
the passage of the bill will give the local school
boards actual, instead of only nominal, control of
education, A school district which is bonded to
the limit, and is holding classes in churches and
community halls, and is taking any teachers it can
get, despite their lack of qualifications, does
not have control of education.10
The federal control argument infers that Congress
men and their constituents are so politically immature
that they will not be able to provide the machinery for
federal support without helplessly finding themselves vot
ing for pervasive federal control. It reveals a lack of
confidence in the good sense of the American people and in
the judgment of Congress, Moreover, both opponents and
proponents of federal aid often tend to overlook the fact
that a certain degree of federal control is both necessary
and desirable in achieving national education goals. Some
critics say that the greatest single obstacle to a
^Seidner, op. cit., p. 17,
137
renovation of our educational system stems from the fact
that control, financing, and direction of education are in
the hands of too many boards of education. One study of
this subject concluded that a large proportion of our
school districts are much too small to provide adequate
education efficiently.^ Another disadvantage of exces
sive local control is that non-professionals, especially
parents whose emotional attachment to their children pre
cludes objectivity, may exert too much control of educa
tion. Further, our tens of thousands of school districts
not only vary considerably in their needs and resources,
but also in their opinions as to educational standards and
national education goals and the desirability of meeting
them. Probably the national interest would be served best
if the extremes of both centralization and decentraliza
tion were avoided.
III. THE ARGUMENT THAT FEDERAL AID
IS NOT NEEDED
The argument that.federal aid is not needed runs
along the lines that the states and localities have been
doing a good job in the field of education; they have been
increasing their efforts to meet rising needs; and the
11
Harold M. Groves, Education and Economic Growth
(Washington, D.C.: National Education Association, 1961),
pp. 47-49.
138
areas with the greatest needs have been putting forth the
greatest efforts. Moreover, statistics are employed to
support the contention that the states and localities have
the financial resources to meet their educational needs•
It is admitted that our educational system has serious
shortcomings and deficiencies, but both its weaknesses and
needs are minimized. One long article purporting to
stress federal domination of schools as the real danger
was devoted almost entirely to the argument that federal
aid to education was not necessary. It was concluded in
the following manner:
Clearly, America must improve the quality of its
education and face up to school needs. But these
challenges cannot be magically met by easy recourse
to federal money. The responsibility rests with
each state and each community*--and it can be met
there if America's citizens are willing to do the
most important homework they've ever faced,12
The '’if" in the last sentence offers a question rather than
a solution to the problem. How are America's citizens to
be made more willing to voluntarily pay more for education?
The material presented in the first six chapters of
this thesis make it difficult to take seriously the argu
ment that federal aid is not needed. This argument is
based on unrealistic appraisals of the present and future
educational needs of the nation, and of the relatively
12»tThe Real Crisis in Our Schools: Federal Domina
tion," p. 92,
139
declining abilities of the states and localities to meet
those needs. It is a negative :approach which proposes no
concrete action, but merely hopes that somehow in some
mysterious way the states and localities all will make the
necessary increases in their educational efforts. The
very most such an approach could hope to achieve is a
perpetuation of the.weaknesses in our educational system
which have plagued us for decades. Even the strongest
urging could not enable all of the states and localities
to narrow the ever-widening gap between their-financial
resources and rising educational needs•
IV. OPPOSITION OF THE RICHER STATES
It was estimated that under the federal aid to edu
cation program proposed in early 1961, the State of Penn
sylvania would pay over $60 million into federal coffers
for school aid but receive only $45 million'in return.
Arkansas would be taxed a trifle less than $4 million but
13
would receive nearly $14 million. Many of the richer
states are reluctant to have their tax money diverted to
poorer states to help build their schools and pay their
teachers. This point of view was expressed by Katherine
13
Henry Brinton, "Should Pennsylvania Taxes Build
Schools in Arkansas?" Daily Local News (West Chester,
Pennsylvania), February 1961, in U. S. Congressional
Record. Vol. 107, p. A947*
140
St. George, Representative from the State of New York:
I think the objections of the majority of the
thinking taxpayers of New York to federal aid to
education boils down to robbing Peter to pay Paul,
and the State of New York, when it comes to federal
expenditures, is invariably Peter •
Also, it is contended that some of the poorer states, hope-
i
|ful of obtaining help from Washington, have actually been j
i !
j ’’dragging their feet” when it comes to raising tax money j
i
for their schools. But the latter contention is contra
dicted by other opponents of federal aid who claim such
aid is not needed, and give as one of their reasons
statistics showing that the poorer states are devoting a
comparatively larger percentage of their resources to edu
cation— in other words, they are putting forth the great
est efforts.
The ’’ robbing Peter to pay Paul” argument is a short
sighted point of view which fails to consider the long-run
benefits to richer states in the form of national security,
economic growth and a reduction in their educational prob
lems caused by influxes of population from poorer states.
Moreover, federal aid does not simply divert funds from
rich states to poor states; it also stimulates all areas to
devote more of their own funds to their own educational
systems through the ’’ matching funds” principle. In addi
tion, the combined processes of federal taxation and an
^U. S. Congressional Record. Vol. 107, p. A860.
141
extensive federal aid program would have the effect of
diverting more of the resources of the richer states to
their own education. Thus, a strong federal aid to educa
tion program would benefit the nation as a whole, includ
ing the richer states as well as the poorer ones.
i
«
V. FEAR THAT FEDERAL AID WILL
STIMULATE INTEGRATION
The education bill offered by President Eisenhower
in 1960 might well have passed into law if Representative
Adam Clayton Powell had not insisted on an anti-segrega
tion amendment which drew solid Southern opposition and
guaranteed the bill's defeat.^ of the eighty-two Demo
cratic representatives who voted against President
Kennedy's education bill in 1961, all but five were from
the South.I **
The latest federal aid to education program pro
posed by the Administration does not exclude segregated
schools; it leaves that problem for the courts. But
Southern opposition stems from the belief that either the
provisions of an education Act, or later court decisions,
could block federal aid to segregated schools. In view of
■^"Federal Aid: Second Round.'1 The Commonweal.
75:553, February 23, 1962. !
^Harris, oj>. cit.. p. xxii.
142
the Supreme Court decision outlawing segregation in public
schools, it is probably true that federal funds would not
find their way to segregated schools. Naturally, segrega
tionists do not want to have federal funds (to which they
contributed) benefit integrated schools, but not segre-
I
gated schools. But their major concern is that segregated j
I
schools would be tempted to integrate in order to get
federal aid, and thus the process of integration would be
stimulated. As a result, not only Southern schools (which
need help most) but schools all over the nation are denied
federal aid.
For those who are not well acquainted with the
history of the race problem in the South, or for those who
are not personally involved with the practical problems of
living in the South, it is easy to adopt the academic
point of view that the attitude of the segregationists is
illegal, undemocratic and immoral. However, integration
is one of the most difficult and complex internal problems
facing the country, and it is not appropriate that it be
pursued further in this thesis. Suffice it to say, it
provides a serious obstacle to federal aid to education,
and this opposition is likely to diminish only slowly as
integration gradually spreads to more Southern schools.
143
VI. OPPOSITION OF THE ROMAN CATHOLIC HIERARCHY
The quotation below appeared in the February 23,
1962 issue of a Catholic periodical, The Commonweal. It
explained the defeat of President Kennedy's first education]
bill and accurately predicted the defeat of his second
education bill. Moreover, it applies equally well to the
latest education program proposed by the Administration:
President Kennedy's second school aid bill will
almost undoubtedly meet the same fate as his first--
one or another kind of legislative death. It is
unfortunate this should be so. In the first place,
there is the clear and pressing need for some sort
of federal assistance to the nation's schools and
teachers. Beyond this, however, it is particularly
unfortunate that last year's school aid bill should
have been killed in the way it was, and in the way
this year's bill will probably be killed— by a com
bination of forces in which the most significant
was pressure by the Roman Catholic hierarchy.17
The pressure referred to in the last sentence con
sisted mainly of a public declaration by the Roman Catholic
Bishops that they would do all in their power to block any
school aid program which did not benefit parochial schools
equally as well as public schools.This action evoked
criticism even from Catholics, some of whom resented the
Bishops* attempt to superimpose their political views on
the Catholic people, and, further, to assume a position of
political leadership. They also objected to the failure
^"Federal Aid: Second Round," p. 553.
18Ibid.. p. 554.
144
of the Bishops to consult Catholic parents, locally or
nationally, before undertaking their drive*^ Other
Catholics criticized the Bishops because instead of taking
the role of persuasive spokesmen for the Catholic commu
nity to advance what has been called the Catholic case in
| order to bring about understanding of the issue and a
I
• change in public attitudes on it, they cast themselves as
i
a minority pressure group, trying to win special legisla
tion by strategic, balance-of-power influence on legisla
tion involving the general welfare*^0
One of the arguments for federal aid to Catholic
schools is based on an unusual'interpretation of the First
Amendment of the Constitution* . The contention is that tax
discrimination against religious schools impedes the free
exercise of religion provided for by the amendment. In
other words, tax money should be used to support churches
and their schools* This is in direct contrast to the usual
interpretation of the amendment which says that it provides
for separation of Church and State and therefore is a con
stitutional barrier against the assistance of denomina
tional schools with public monies* Moreover, the term
”tax discrimination” implies unfair taxation* This would
19
’’ Federal Aid: Second Round— Letters to Editors,”
The Commonweal. 76:38, April 6, 1962*
2G»tFederal Aid: Second Round,” p. 554.
145
only be the case If Catholics were taxed for public schools
but were not allowed to attend them. It is significant
that Protestant and Jewish schools are in accord with the
1
usual interpretation of the First Amendment and therefore |
do not believe they should be tax supported.
i
| Another argument for federal aid to Catholic schoolsj
: i
i is the complaint of many Catholics that they must pay for
public schools which they do not use, and then pay again to
support their own schools. They are fond of pointing out
the resulting savings to taxpayers. This argument con
vinces some non-Catholics. It has even been contended that
as long as Catholic schools provide an education at least
equal to that in public schools, they should be fully tax
supported. The latter contention gives a hint as to what
may be the ultimate goal of the Catholic hierarchy. After
all, it would be inconsistent to want federal aid but not
state and local aid. Actually, for years Catholic schools
have been striving to get more state and local aid, at
least in the form of free lunches, textbooks, school bus
facilities and elimination of property taxes. In the short
run, and especially with limited federal aid, it is hard to
see how fully tax-supported Catholic schools could help but
keep the national level of educational standards of the
public schools from rising as fast as it should. As for
the **double pay*' complaint, this is a situation which
anyone attending a private school, denominational or
146
non-denominational,' should expect to .face* After all,
parents who cannot afford to send their children to pri
vate schools should send them to public schools* In this
connection it is noteworthy that most parents who. can
afford to send their children to private schools prefer to j
i
have them educated in public schools* For parents to send I
their children to private schools which they cannot afford,
and then demand public money to pay the bill, seems highly
unreasonable to say the least* The argument that,, in
effect1 , they should not be taxed for public schools which
they do not use suffers two main weaknesses* First, they
have a choice; if they cannot afford a private school, they
can send their children to a public school* Second, the
**pay for use” argument, if carried to its logical conclu
sion, would exclude tens of millions of single persons and
married people without children (who pay higher taxes than
married people with,children) from any financial obligation
to support schools* Actually, this argument makes tax
relief for people who have no children far more justifiable
than tax relief for Catholics who have children and there
fore can send them to public schools if they wish. Carried
to its extreme, the only financial support for public
schools would come from the parents of the children attend
ing, and tuition would be charged per student, just as it
is in our private colleges and universities* This, of
course, would be a very damaging blow not only to our
147
educational system but to our entire economic and demo
cratic structures. It is hard to conceive of anyone taking
such a proposal seriously. Yet, the Catholic hierarchy
would have us move in this direction.
Probably the major reason the Roman Catholic hier- j
archy opposes federal aid to public schools only is the j
fear it will eventually weaken and diminish the Catholic
school system. Catholic schools, like public schools, are
faced with problems of rising costs and needs, but limited
resources. As Rev. Daniel S. Hamilton says:
Parochial schools could not compete with a
massively-aided public school system. To make our
schools equal in excellence, apart from public
aid, we would have to keep them very few. It is
neither emotion, exaggeration, nor deception to
say that the policy of the federal government, if
implemented and sustained, heralds the end of the
parochial school system as we know it. This school
problem is an ever tightening noose choking the
pastoral effectiveness of the Church in American
society.21
Assuming the problem as stated above is not exag
gerated, two solutions present themselves: first, urge
Catholics to increase their financial efforts to support
their schools, and, second, encourage Catholic parents who
definitely cannot afford parochial school education for
their children, to send them to public schools. But the
first probably is already being done, and the second is
21<*pederal Aid: Second Round— Letters to Editors,”
pp. 36 f.
i4a
contrary to Catholic doctrine. It is an integral part of
the Catholic religion that Catholic children be provided a
parochial education. Thus, it is not a matter of parental
choice. James J. Laughlin made this clear when he said:
I belong to the Archdiocese of Indianapolis and
for many, many, many years there has been a direc
tive in that Archdiocese that Catholics send their
children to parochial schools with a very few
recognized exceptions. Failure to do this is a
grave offense for which only the ordinary can grant
absolution.22
Here then is the crux of the problem. Catholic
parents really do not have a .choice as to which school to
send their children. The Catholic hierarchy virtually
compels them to send their children to Catholic schools.
Federal aid which excludes parochial schools makes it more
difficult for the Catholic hierarchy to achieve their goal
of a Catholic education for every Catholic child. Natur
ally they oppose such aid. And, of course, they are in
favor of tax money from any source being diverted to
parochial schools, as this enables them to provide more
and better Catholic education. This is consistent with
their interpretation of the First Amendment to the effect
that public money should be used to encourage the free
exercise of religion. But this is the antithesis of the
principle of separation of Church, and State. The explana
tion lies not only in the need for public funds to meet
^Ibid.. p. 36.
149
Catholic educational goals, but also in the attitude of
the Catholic hierarchy the world-over which for centuries
has opposed separation of Church and State. The Catholic
hierarchy undoubtedly holds the firm conviction that their
own religious goals should take precedence over national
goals. Thus, they are willing to sacrifice the public
school system of the entire nation unless their own
demands for federal funds are met. Fortunately, not all
Catholics are in accord, as the following opinion, edi
torialized in a Catholic periodical, will testify:
. . . to be willing to relinquish one's own just
claims for the sake of the common good— especially
when one's claims threaten the passage of needed
public school aid bills— is also to act on princi
ple. It is certainly justifiable to struggle for
justice against "hopeless odds." But it seems to
us unjustifiable to stand in the way of aid for
others because our own claim is not recognized;
such a stance looks uncomfortably like outright
political coercion.23
It must have taken a great deal of courage, objec
tivity, patriotism and sensitivity to the rights of others,
for Catholics to write and publish the above statement.
If such an attitude were adopted by the Catholic hierarchy,
and by the segregationists as well, federal aid to public
schools would be assured. However, one must take issue
with the "just claims" presumption in the above quotation.
As indicated previously, the arguments for public support
23Ibid.. p. 38.
150
of parochial schools have been shown to be Invalid, More
over, "the real aim of Catholic education is attainment of
the ultimate goal— in fact the only goal— life everlast
ing.”24 Obviously the primary purpose of Catholic educa
tion is to promote Catholicism. Otherwise there would be
no point to it; Catholic children can receive at least as
good an education in public schools, and at much less cost
to their parents. The "Catholic" education is achieved
not only by formal classroom instruction in Catholicism
(which usually is only a small part of the curriculum) but
also by subjecting children, at formative and impression
able ages, to the daily influence of nuns, sisters, priests
and a Catholic atmosphere, including church attendance.
Is it a "just claim" on public money to demand that non-
Catholics contribute to the propagation of religious
doctrines to which they do not subscribe? Should Protes
tants, Jews, agnostics and others be forced to pay taxes
which would be used to spread Catholic beliefs and atti
tudes with which they are not in agreement?
VII. SUMMARY
Many Congressmen who have voted against federal aid
to education probably could not give an accurate accounting
of the weight they gave each of the arguments against
24Ibid.. p. 36.
151
federal aid in arriving at their decisions. Some of these
Congressmen might use the "federal control” contention
when actually their main reason was fear of stimulating
integration. Others might state objections to increased
federal spending, whereas, in reality, they were motivated
mostly by the religious issue.
Nevertheless, it is possible to make a rough
appraisal of the,relative strength of the arguments
against federal aid to education. No doubt the reluctance
of the Republicans to increase federal spending or to
expand the activities of central government is the major
obstacle. It is not unlikely that the "federal control"
and "federal aid is not needed" arguments have far less
influence on Congressional voting than their publicity
would suggest* The extent of opposition of the richer
states, although difficult to evaluate, is probably not a
major factor. The key "balance of power” opposition comes
from the segregationists and the Catholic hierarchy—-both
of them special interest groups which would sacrifice the
good of the nation to their own selfish ends.
CHAPTER VIII
SUMMARY AND CONCLUSIONS
The challenges of the cold war, our rising unemploy
ment trends, and the needs and desires of the great bulk
of our people for a higher standard of living make it
imperative that we bend every effort toward increasing our
rate of economic growth. More and more it is being recog
nized that education is an important cause of economic
growth. Therefore, it follows that we should increase our
educational efforts to the point where their contribution
to economic growth is maximized. But for decades the
states and localities have been unable to achieve even
’’ adequate” educational standards; it would be impossible
for them to make the more extensive efforts required by
our economic growth needs. Rising educational costs have
made more apparent the weaknesses of state and local
financial machinery for diverting funds to education.
Thus, it is argued that the federal government should bear
a much larger portion of the financial burden of education.
Yet, conservatives, segregationists and the Roman Catholic
hierarchy have combined forces to block additional federal
aid to public schools.
152
I. SUMMARY
153
Basically, the cold war is a struggle for supremacy
between two economic systems. The Russians see themselves
engaged in a valiant, long-range effort to surpass our pro
duction levels and thereby prove to us and the rest of the
| world the superiority of their system. In the process,
j
they expect communism to spread throughout the world, until
finally the last stronghold of capitalism, the United
States, succumbs also. Of course, they also resort to
propaganda, subversion, foreign aid, political machina
tions and military might to bring other nations into the
communist sphere. But their source of strength for the
latter activities, as well as the primary goal of the
Soviet Union ever since its inception, is economic growth.
Most Americans probably do not even know what eco
nomic growth is. Many of our citizens think of combating
communism in such terms as military strength, organizing
to fight internal subversion, propagandizing our concepts
of freedom and democracy, and fostering religious atti-
*
tudes. But lack of freedom, as we know it, and atheism
are used by the U.S.S.R. as tools and methods for achiev-
■ e
ing a faster rate of economic growth— and it is their
growth rate which poses the greatest threat to us. The
rate of economic growth in the Soviet Union has far sur
passed ours— in other words, they are gaining rapidly on
154
us. And this has been the most significant factor in their
rise to military prominence and in the spread of communism
to a large part of the world. Yet, how many Americans
think of fighting communism by deliberately taking steps
to increase our rate of economic growth? And even among
those who do, how many are aware of the extent to which
|
educational efforts affect productivity?
In a sense, the United States can be likened to a
heavyweight boxing champion who underestimates the ability
of his number-one challenger, and who spends too much time
berating the training methods of his opponent and devotes
insufficient effort to increasing his own strength and
skill. Only an unrealistic appraisal of the situation
could enable us to dull ourselves into complacency by com
paring the much lower Russian standard of living with ours.
The strength of the Soviet Union lies primarily in its
ability to increase total production at a fast rate. And
it does little if any good to rant and rave about the
Godless, enslaved Russians, or to lean on the hope there
may be a revolution. The average Russian probably is
better off than he ever was; besides, he could not possi
bly comprehend the freedom and standard of living which
most Americans enjoy. We must face the fact that the
economic strength of the U.S.S.R. is gaining rapidly rela
tive to ours, and then make an all-out effort to reverse
that trend by taking positive steps to increase our rate
155
of economic growth. Our dividends will be national
security, less unemployment and a higher standard of liv
ing.
One of the surest, long-run methods of promoting
economic growth is to invest in greater educational
efforts. From a common-sense point of view, it is appar
ent that education increases an individuals capacity to
produce. A person who can read and write is capable of
doing many different types of work which an illiterate
cannot do. And an individual who advances his education
beyond just learning to read and write— to the point where
he has acquired useful knowledge and skills which enable
him to specialize in such occupations as laboratory tech
nician, electrician, and so on— has obviously become more
productive. Likewise, a person who continues his educa
tion until he is prepared to become a doctor, scientist,
executive--or enter other work at the professional level—
has enhanced his productivity still further. Thus, the
more fully developed an individual1s ability has become—
especially in the direction which can best be utilized by
our economy— the greater will be his contribution to total
production.
Another factor affecting GNP is the physical and
mental condition of each worker. Health affects perform
ance and also largely determines the number of hours per
year, as well as the number of years, each person works.
156
Education promotes better health by (1) increasing our
store of medical knowledge through research; (2) helping
to provide more and better health services; (3) teaching
each person how to take better care of himself; and (4)
i
j providing a higher income which better enables an indi-
i
| vidua1 to take advantage of the latter three items.
So far, we have been considering how education
improves the quality of an individual worker, and thereby
results in increasing both his productivity and his total,
lifetime production. But in order to become fully cogni
zant of the impact of education on economic growth, we
must think in aggregate terms. More specifically, we must
endeavor to comprehend improvement in the quality of an
average worker multiplied by over 70 million (the composi
tion of our labor force). Also, we have to consider the
tens of millions of students who will become.members of
the labor force. Moreover, the effects of education are
cumulative; they are passed on from parents.to children,
from worker to worker, and so on. TAnd education is more
than the dissemination of existing knowledge; it is also
the acquisition of new knowledge through research. In
addition, as the abilities of the labor force are devel
oped, they not only become more productive with existing
resources, but develop more and.better resources and
methods of utilizing them. Still another factor is the
size of the labor force and the percentage of it which is
157
employed* About one third of our civilian labor force
consists of women. Education facilitates the employment
of most women and enables many others to earn high enough
incomes to keep them working even though they don’t have
to. The unemployed comprise mostly the unskilled, less
educated, displaced and minority group workers; developing
their abilities acts as an antidote to unemployment. The
useful knowledge and skills which people acquire through
education are a form of capital, and this capital is in
substantial part a product of deliberate investment.
Thus, it is apparent that education is a major investment
in economic growth;
The statistical approach to analyzing the effects
of education on economic growth is at least as convincing
as the common-sense approach. A large part of GNF in
recent decades is not accounted for by increases of land,
man-hours, and physical reproducible capital. The major
explanation probably is investment in human capital.
Professor Schultz estimates that between 36 and 70 per
cent of the hitherto unexplained rise in the earnings of
labor is explained by returns to the additional education
of workers.^
^Theodore W. Schultz, ”Investment in Human
Capital,1’ The American Economic Review. 51:1, March 1961.
2Ibid.. p. 13.
158
Statistical studies show that, on the average,
higher levels of educational achievement result in higher
incomes; it follows that they also result in greater pro
ductivity* But these averages conceal large discrepancies*
For example, the principal beneficiaries of innovation and
research are not the innovators and researchers* To a
lesser degree the same can be said of teachers and certain !
other non-unionized, white-collar groups* Thus, much of
the benefits of educational investment may not accrue to
the individual who makes it* This leads to three conclu
sions: First, the indirect benefits of education to the
economy may be its major contribution* Second, the con
tribution to production of outstanding scientists, inven
tors, executives, educators, and others may be greater
than that of thousands of more ordinary workers. Third,
many individuals do not have either sufficient economic
incentive or financial ability to carry their educational
investments in themselves to the point where their needed
abilities are fully developed. In such cases, society as
a whole would benefit by taxing resources away from rela
tively unproductive uses and diverting them to education*
Where any substantial part of the population is
poorly educated, crime, disease and dependency rates tend
to be high. The resulting costs can be reduced through
greater educational efforts, and the economic benefits
will accrue to both the individuals involved and society
159
as a whole. Another statistical indication of the rela
tionship between education and growth is the correlation
between literacy and economic development. Statistics for
the year 1950 show that illiteracy, defined as lack of
ability to read and write one’s name, applied to 70 per
cent of the total populations of the underdeveloped coun
tries compared with 6 per cent in developed countries.
People who cannot read or write are seldom highly produc
tive, and, as indicated previously, levels of educational
achievement correlate with incomes and productivity. This
is shown in another way by comparing natural resources,
educational development, and per-capita income figures for
different countries as well as for our own states. Under
developed countries have a special problem in that their
fast population growths tend to counterbalance any
increase in GNP. Statistical studies in underdeveloped
countries demonstrate that women with more years of formal
schooling tend to bear fewer children. Therefore, the
raising of levels of education must play a large part in
any program for raising per-capita income through lowered
birth rates.
Increased educational efforts would go far toward
stimulating economic expansion. This, in turn, would make
it less necessary to increase the proportion of GNP spent
for education. Thus, investment in education, more than
in any other sphere, can have a ’’snowballing” effect on
160
national growth:
As an investment In human learning and poten
tial, it vitalizes activity in every aspect of the
life of the country. Dollars spent on education,
by training the men and women who will be on the
frontiers of discovery, innovation and invention
can bring dividends a hundred-fold. To do less
than invest boldly in this area is to rob the
nation of full use of all its latent human re
sources • As put by the Rockefeller Brothers report:
"Perhaps the greatest problem facing American edu
cation is the widely held view that all we require
are a few more teachers, a few more buildings, a
little more money. Such an approach will be disas
trous. We are moving into the most demanding era
in our history. An educational system grudgingly
and tardily patched to meet the needs of the moment
will be perpetually out of date. We must build for
the future in education as daringly and aggressively
as we have built other aspects of our national life
in the past.f,3
Seldom does anyone write on the subject matter of
this thesis without lamenting the lack of precise statis
tics measuring the economic benefits to both the individual
and to society of investment in education. It is implied
that if only such accurate figures were forthcoming
through more research in this area, then we could really
move ahead in our educational efforts. This writer is not
in accord with the latter point of view. In the first
place, the combination of the common-sense and statistical
approaches presented in preceding pages, and elaborated on
in prior chapters, establishes beyond any reasonable doubt
%. J. Seidner, Federal Support for Education
(Washington, D.C.: The Public Affairs Institute, 1959),
pp. 8 f.
161
that education is a major cause of economic growth. Thus,
we do not need more precise figures to tell us that our
primary national education goal should be to enable all
Americans to develop their needed talents to the utmost.
The word ’’ needed” is significant. From an economic point
of view, there is nothing to be gained from developing
skills and abilities which cannot be utilized by the
economy.
Second, exact data measuring the economic effects
of education is impossible of attainment. Any mathemati
cian would almost immediately recognize that there are too
many variables, and the variables themselves overlap and
cannot be accurately measured. Some of the more difficult
variables are time, countless millions of past, varying,
individual, educational efforts, and the overlapping con
tributions of the factors of production. Consider just
one example— we are now enjoying the economic benefits of
the agricultural experiment stations established in the
late 1800*s; but exactly to what extent would be impossi
ble to figure. We can measure natural resources with some
degree of accuracy, but we cannot develop a precise mathe
matical formula which explains why some nations are poor
even though rich in natural resources, or which reveals
the exact contribution of natural resources to the wealth
of other nations. Yet, it is obvious that it is what
people do with their natural resources that determines____
162
their creation of capital goods and subsequent wealth.
Thus, although we can measure natural resources and
capital goods, we cannot measure the efforts, abilities,
skills and knowledge of the countless people who have
brought capital goods and the resulting consumer goods
into being. Therefore, it is not possible to measure the
exact contribution to production of capital goods. But
does anyone doubt their value?
Third, the Soviet Union had no precise statistics
to guide them in the establishment of their educational
system. Common sense led the Soviets to make prodigious
educational efforts deliberately aimed at promoting eco
nomic growth. Their success has been remarkable and
probably will be even more so in the future. This is
especially true in view of their program for matching free
education (at all levels) and subsistence, with the abili
ties of their students and with the needs of the Russian
economy. And, finally, it is not lack of precise statis
tics which is blocking increased federal aid to education
in the United States. It is the opposition of the con
servatives, segregationists, and the Roman Catholic
hierarchy.
Federal aid to education is one of the oldest types
of legislation in our history. It founded the public-
school systems of most of our states and has grown
steadily ever since the first land grants in 1785. The
163
Morrill Act of 1962, The Hatch Act of 1887, and The Smith-
Lever Act of 1914 all provided for agricultural education
and research* The Federal Vocational Education Act (The
Smith-Hughes Act of 1917) extended federal stimulus to
vocational education to schools below the college level.
The 61 Bill of Rights enabled millions of veterans to
avail themselves of higher education* ^Impacted areas”
legislation provided for aid to school systems affected by
influxes of servicemen or other federal workers. Sputnik
brought about The National Defense Education Act of 1958,
wherein Congress, for the first time, expressed a broad,
federal interest in general education at all levels* More
recently, The Man Power Training Act was enacted by Con
gress to combat unemployment through job retraining* And,
finally, the federal government has invested billions of
dollars in research in the past decade alone*
A study of the history of federal aid to education
reveals it has been far more extensive and successful than
is generally realized. It has been successful in two
ways: first, in promoting economic growth, as described
in Chapter IV, and, second, in avoiding the excessive
federal control and inefficient bureaucracy which its
opponents have frequently predicted would result. It
stands to reason that since education promotes economic
growth, federal aid to education does also* The stimulus
of federal aid to agricultural efficiency alone probably
164
has paid dividends which more than cover the costs of all
federal aid to education programs combined. Thus, in the
long run, federal aid more than pays for itself through
economic growth. In the short run, we must pay for educa
tion one way or another, and the federal government has
the most productive, efficient and equitable machinery for
diverting resources to education. Moreover, it is in the
best position to objectively appraise the educational
needs of the nation, especially as they relate to the
national interest.
Both proponents and opponents of increased federal
aid to education agree that greater educational efforts
are necessary, but they disagree as to the extent. Also,
opponents of federal aid maintain that the states and
localities can and will meet our educational needs without
federal help. But the position of the opposition to
federal aid rests on an unrealistic appraisal of the situ
ation. They fail to take into account (1) the chronic
inability or unwillingness of the states and localities to
meet even adequate educational standards during past
decades; (2) the greatly increased educational efforts
required by economic growth needs and rapidly rising
school attendance; and (3) the present unhealthy condition
of state and local finances, plus variations in willing
ness to pay. Thus, an honest analysis of the problem
leads to the conclusion that the states and localities
165
will not even come close to what should be our national
education goals, unless they receive considerably more
help from the federal government.
The Administration's most recent proposal for
federal aid to education called for legislation to put
$4.6 billion of federal money into the nation's schools
and colleges over the next three.years. The bill asked
for substantially the same federal help for education
requested in the two previous years— aid for school con
struction, higher pay for teachers, and new sources of
money for college students. However, it differed from the
Administration's past educational proposals in that it cut
considerably the amount of federal aid for public elemen
tary and secondary schools, and changed the method of
distribution from a general aid approach to selective and
stimulative federal efforts aimed at the most needy areas.
These changes were designed to meet objections of the
Roman Catholic hierarchy that defeated earlier general aid
measures. The proposed legislation encompassed twenty-
four different educational programs, ranging from kinder
garten through graduate school. Such a comprehensive and
selective education bill would be a good start toward
obtaining much needed federal aid to education.
Unfortunately, President Kennedy's education bill
probably is doomed to the same defeat his earlier federal
aid proposals suffered. It will undoubtedly crumble under
166
the combined pressures of the conservatives, segregation-
ists and the Roman Catholic hierarchy. The opposition of
the conservatives consists mostly of the reluctance of the
Republicans to expand central government activities,
financial or otherwise. Also, they sometimes use the
arguments that federal aid will bring federal control,
that it would be unfair to the richer states, and that it
is not really needed. The segregationists are against
federal aid to education because they believe it will
stimulate integration. The Roman Catholic hierarchy does
not want federal aid to go to public schools unless
Catholic schools get it also. Thus, it appears that
increased federal aid to education is blocked year after
year, not as the result of objective analysis of the need
for it, but rather by deep-rooted political, racial and
religious attitudes.
II. CONCLUSIONS
Education is a major cause of economic growth, and
this is especially true when it is molded to fit the
abilities of the individual and the needs of the economy.
The challenges of the cold war, our unemployment problem,
and the needs and desires of the great bulk of our people
for a higher standard of living require that we make an
all-out effort to increase our rate of economic growth.
Therefore, we must expand our educational efforts to the
167
point where their effect on economic growth is maximized.
It would be out of the question to expect all of our
states and localities to do this. Thus, we come to the
basic conclusion of this thesis: We must strive to
increase federal aid to education with the goal of achiev
ing the greatest possible contribution to economic growth:
Even in a world at peace it would be priority
business for our free society to help every young
person develop his full potentialities through
education. In a world threatened by the aggres
sive challenge of the Soviet Union education be
comes a means for national survival as well. The
world struggle between freedom and communism has
become a battle of brainpower. All citizens, and
not simply scientists and engineers, are engaged.
In the light of the struggle with communism the
question may fairly be asked whether we can afford
to put the major responsibilities for public school
education on the local governments first and state
governments second, especially in view of the vast
differences in capacity and needs. The danger of
our system is increased as the USSR GNP continues
to grow relatively to ours. In ten or twenty years
their GNP may be 80 per cent of ours as compared to
45 per cent today; and they much more effectively
control its allocation. It is difficult indeed to
envisage our keeping up with the Russians unless
the federal government intervenes and diverts pur
chasing power from frivolities to education.^
It is clear that in order to achieve maximum growth,
the amount of additional federal aid to education must be
sufficient to enable and encourage Americans to develop
their useful skills and knowledge to the utmost. Rut the
specific types of aid which should be provided is another
^Seymour E. Harris, More Resources for Education
(New York: Harper and Brothers, i960), pp. " 3 ' S " t : -------
168
question* And, of course, the big problem is how to gain
Congressional authorization and appropriation.
From the point of view of amount of federal aid,
President Kennedy’s latest education bill can be consid
ered only a start. With regard to the types of aid it
provides, if we leave political considerations aside for a
moment, the following changes and additions would increase
the bill’s long-run effect on economic growth:
1. The provision for financial assistance to only
the neediest areas of the elementary and secondary school
levels should be greatly expanded to include ’ ’ across the
board” general aid. The preparation children receive in
their early years largely determines what they will do
later on and even how well they will do it, Basic mental
attitudes are usually adopted at pre-college ages. Yet
the bulk of past federal aid has been directed toward the
college level, with too little concern being evidenced
over education in elementary and secondary schools,
2. A provision should be added to encourage uni
versal education in at least basic economics. The issues
which voters are being called upon to decide are becoming
increasingly complex and economic in nature.
3. The provisions for loans to college students
should be reduced, and the number of scholarships greatly
increased. Much of the benefits of investment in college
education accrue to society rather than to the individual
169
who makes it. Therefore, the trend of federal aid should
be in the direction of making higher education effectively
free for those who can profit both themselves and society
by it.
4. In this scientific era, research, especially
basic research, initiates most technological advances and
is responsible for much human progress. But basic
research is expensive and the outcome is uncertain; there
fore, the financial responsibility lies mostly with the
federal government. In his education bill, President
Kennedy recommended strengthening our educational research
efforts. But federal expenditures for basic research
should be greatly increased in other areas, for example,
the field of health.
5. The greatest weakness of the Administration's
latest education bill is insufficient emphasis on guidance.
From an economic point of view, there will be no net gain
from advancing levels of educational achievement if they
cannot be utilized by the economy. For example, there is
no point in flooding the labor market with liberal arts
college graduates if their knowledge and skills cannot be
converted into productivity by the economy. Much more
attention should be given to channeling students into man
power shortage areas, consistent with their abilities.
Both the individuals involved and society as a whole would
benefit. This does not mean we should abandon our
170
American attitudes toward individualism. But it does mean
we should at least help to make students more aware (and
the earlier, the better) of their own abilities and of
potential employment opportunities. Tens of millions of
Americans, from high school ”drop-outsM to college gradu
ates, encountered no contact with guidance at all during
their school careers. Surely, a strong guidance and coun
seling program should go hand-in-hand with any proposal to
raise national levels of educational achievement.
President Kennedy is faced with formidable obsta
cles in his attempts to get Congress to pass his compre
hensive education bill. GNP has been lower in recent
years than anticipated. Yet, government costs have been
running high, one of the major reasons being our space
projects. The Administration has proposed a large tax
cut. The result is that many Congressmen, mostly Republi
cans, fear huge deficits. This is hardly a climate con
ducive to the passage of a $4.6 billion education bill.
And, of course, there is the chronic opposition of the
conservatives, segregationists and the Roman Catholic
hierarchy.
Perhaps it would be politically feasible for
President Kennedy to press this year for passage of his
tax cut bill and for those portions of his education bill
which have a good chance of gaining Congressional approval.
Then next year he could make an all-out effort to get
171
Congress to pass the remainder of the education bill. But
if the tax cut bill is to pass this year, it appears the
President must make a much greater effort to explain to
Congress and the public such things as deficit financing,
cyclical balancing of the budget, and their effect in
stimulating economic growth, reducing unemployment, raising
our standard of living, and strengthening our national
security.
Next year the President should initiate a bold plan
of action to obtain the legislation recommended in the
remainder of his education bill, as well as that suggested
in previous pages of this thesis. Such a plan would re
quire prodigious efforts and great courage. Two methods
present themselves--first, a much stronger appeal to the
national interest than the Administration has availed
itself of heretofore, and, second, an attack on the posi
tion taken by the Roman Catholic hierarchy.
Sputnik dramatically aroused so much concern over
the national interest that it resulted in the first major
non-wartime education act in over forty years. Must we
wait until a Russian astronaut lands on the moon before
Congress will pass another major education act? President
Kennedy should strive to create a patriotic, Sputnik-type
reaction from Congress and the American people by present
ing forcefully the arguments of this thesis. He should
make it clear that our struggle with communism is_________
172
basically economic in nature, and should stress the fact
that the Soviet Union is gaining rapidly on us in terms of
economic growth* We must counteract those gains if we are
to win the cold war. Moreover, we need faster economic
growth to combat our unemployment problem, raise our
standard of living, and alleviate our tax burdens. Educa
tion is a major cause of economic growth. But the states
and localities cannot possibly increase their educational
efforts to the extent required by our economic growth
needs. Therefore, greatly increased federal aid to educa
tion is essential to the national interest and even to our
survival. If President Kennedy and his Administration
present this line of reasoning often enough and forcefully
enough, the result will be a weakening of the opposition
to federal aid. The conservatives will become less reluc
tant to appropriate federal money for education, and the
segregationists and Roman Catholic hierarchy will become
less willing to sacrifice the national good to their much
more narrow interests.
President Kennedy should take a more firm and con
vincing stand on the religious issue. There are many who
believe that the opposition of a handful of Roman Catholic
Bishops is the key factor in preventing passage of the
Administration's education proposals. It is easy to show
that the demands of the Roman Catholic hierarchy for
public money are unjust and are based on invalid arguments.
173
And even if they did have a just claim on tax money, they
should not block aid to public schools. Moreover, the
Catholic Bishops are not true spokesmen for the Catholic
people— on the contrary, they are trying to impose their
views on the Catholic people as well as the rest of the
nation.
So far, the President has not done much more than
say that federal aid to parochial schools would be uncon
stitutional. But the issues go much deeper. As elaborated
upon in Chapter VII, religious schools are not entitled to
tax support. And it must be borne in mind that if they
had a right to federal money, they also would be entitled
to state and local support. But to divert any tax money
to parochial schools would be to force non-Catholics to
pay for the propagation of beliefs and attitudes to which
they do not subscribe. Moreover, the funds supporting
Catholic churches and schools can be separated only super
ficially. Usually, Catholic parents are not charged the
full cost of parochial school education, and this is
especially true of those who are suffering financial
difficulties or who have more than three children. Church
funds make up the difference. Thus, tax aid for Catholic
schools would be, in effect, public financial support for
the Catholic church also! Obviously, this would be very
unfair to non-Catholics. To those who say that the need
for increased educational efforts is so great that we
174
should ignore the religious issue and acquiesce to the
demands of the Catholic hierarchy so that both public and
parochial schools will get federal aid, the answers are
clear. First, Catholic parents who cannot afford a
parochial school education for their children should do
the same as non-Catholic parents who cannot afford a pri
vate school education for their children— they should send
them to a public school. Second, if the President brings
the above factors to the public's attention and emphasizes
them sufficiently, the impact will be reflected in Con
gressional voting on federal aid to education. The latter
can thus be obtained without abandoning the principle of
separation of church and state, and being unfair to non-
Catholics •
The emphasis in this dissertation on economic
growth should not obscure the fact that greater educa
tional efforts would reap political and social dividends
as well. Also, prodigious efforts to increase our rate of
economic growth would not necessarily result in greater
happiness for all Americans. But the latter seems a minor
factor relative to considerations of national survival and
the overwhelming probability that the great bulk of our
people would achieve greater happiness both through
increased educational efforts and the resulting higher
growth rate. In addition, it may be feared that extensive
educational efforts to promote economic growth would
175
transform our schools into not much more than job-prepara
tion factories, and instill in our students an attitude
that is too materialistic. Such an extreme is neither
likely nor desirable. But it would be a step in the right
direction to move farther away from education molded in
the aristocratic tradition, which is a holdover from the
days when only the rich went to school and were interested
only in acquiring culture and not in preparing for an
occupation•
In 300 B.C., Aristotle advised politicians that
’’ the primary function of any legislative body is the edu
cation and training of its youth.®’” * This thesis has given
Congressmen ample reason to take that advice seriously.
**Harry W. Ernst, ’’ Federal Aid or Local Taxes ?*'
The Nation. 190:491, June 4, 1960.
BIBLIOGRAPHY
BIBLIOGRAPHY
A. BOOKS
Bach, George L. Economics. Englewood Cliffs, New Jersey:
Prentice-Hall, Inc., 1960•
Campbell, Robert W. Soviet Economic Power. Cambridge:
Houghton Mifflin Company, i960.
Colm, Gerhard, and Geiger, Theodore, The Economy of the
American People. Washington, D. C.: National Planning
Association, 1961•
Dale, Edgar, Audio-Visual Methods in Teaching. New York:
Henry Holt and Company, Inc., 195$.
Freeman, Roger A. Federal Aid to Education--Boon or Bane?
Washington, D.C.: American Enterprise Association,
Inc., 1955.
Galbraith, John K. The Affluent Society. Boston:
Houghton Mifflin Company, 1958.
Groves, Harold M. Education and Economic Growth.
Washington, B.C.: National Education Association,
1961.
Harris, Seymour E. The Economics of the Political Parties.
New York: The Macmillan Company, 1962.
_______• More Resources for Education. New York: Harper
and Brothers, I960.
Hirschman, Albert 0. The Strategy of Economic Development.
New Haven: Yale University Press, 1958.
Hodgman, Donald R. Soviet Industrial Production 1928-1941.
Cambridge: Harvard University Press, 1954.
Jaffe, A. J. People. Jobs and Economic Development.
Glencoe, Illinois: The Free Press, 1959.
177
178
Leibenstein, Harvey, Economic Backwardness and Economic
Growth, New York: John Wiley and Sons, Inc,, 1967.
Meier, Gerald M,, and Baldwin, Robert E, Economic Devel
opment. New York: John Wiley and Sons, Inc., 1957,
National Education Association. The Facts--On Federal Aid
for Schools. Washington, D.C.: National Education
Association, 1948.
Rivlin, Alice M. The Role of the Federal Government in
Financing Higher Education. Washington, D.C.: The
Brookings Institution, 1961.
Seidner, F. J. Federal Support for Education. Washington,
D.C.: The Public Affairs Institute, 1959.
Shannon, Lyle W. Underdeveloped Areas. New York: Harper
and Brothers, 1957,
The Research and Policy Committee of the Committee for
Economic Development. Economic Growth in the United
States. New York: Committee for Economic Development,
1961.
Walch, J. Weston. Federal Aid to Education. Portland,
Maine: The Author, 1961.
Youngson, A. J. Possibilities of Economic Progress.
London: Cambridge University Press, 1959.
B. FEDERAL GOVERNMENT PUBLICATIONS
Quattlebaum, Charles A. Federal Education Policies. Pro
grams and Proposals. Washington, D.C.: Government
Printing Office, 1^60.
The Legislative Reference Service of the Library of Con
gress. Soviet Economic Growth: A Comparison with the
United States. Washington. D.C.: Government Printing
Office, 1957'.
U. S. Bureau of the Census. Statistical Abstract of the
United States: 1962. Washington, D.C.: Government
Printing Office, 1962.
U. S. Congressional Record. Washington, D.C.: Government
Printing Office, 1962.
179
U. S. Department of Health, Education, and Welfare, Office
of Education. Guide to the National Defense Education
Act of 1958. Washington. D.C.: Government Printing:
Office, 1959.
C. PERIODICALS
Blum, Sam. **Why the Rich Don*t Get Sick and You Do,*1
Pageant. November 1962, pp. 28-35.
"Business Outlook: Farm Jobs at New Low,1’ Business Week.
January 19, 1963, p. 19.
"Coming: A Crisis for Young Workers,” Business Week.
February 16, 1963, p. 27.
Ernst, Harry W. "Federal Aid or Local Taxes?” The Nation.
190:491-500, June 4, 1960.
"Federal Aid: Second Round,” Editorial, The Commonweal.
75:553-554, February 23, 1962.
"Federal Aid: Second Round--Letters to Editors," The
Commonweal. 76:36-38, April 6, 1962.
”$4.6 Billion Baby," Newsweek. February 11, 1963, pp. 86-
Hano, Arnold. ”U. S. Education Five Years after Sputnik,”
Pageant. November 1962, pp. 108-116.
Heller, Walter W. "Education and Economic Growth," NEA
Journal. 50:9, October 1961.
_______• "National Economy and Public Education Move
Together," School Life. 44:28-35, November-December
1 9 6 1 .
"Kennedy*s Latest Plan for Aid to Schools,” U. S. News and
World Report. February 11, 1963, p. 60.
Miller, Francis P. "The Role of the Department of State
in Educational and Cultural Affairs,** The Department
of State Bulletin. 45:811-812, November 13, I§6l.
Norton, John K. "Education Pays Compound Interest,** NEA
Journal. 47:557-559, November 1958.
"Numbers Game,** Newsweek. February 4, 1963, p. 56.________
180
"Research Briefs,” Business Week, January 12, 1963, p. 86*
"Research Briefs: Federal Spending on R & D Takes Jump,
with Big Stress on Fundamental Work,” Business Week,
December 29, 1962, p. 42.
Rusk, Dean, and Coombs, Phillip H. "Economic Growth and
Investment in Education,” U. S. Department of State
Bulletin. 45:821-823, November lS, 1961.
Schultz, Theodore W. ”lnvestment in Human Capital,” The
American Economic Review. 51:1-16, March 1961.
_______. ”Investment in Man: An Economist's View,” Social
Service Review. 33:109-117, June 1959.
"The Real Crisis in Our Schools: Federal Domination,”
Nation's Business. 48:58-92, March 1960.
"The Truth about Soviet Education,” U. S. News and World
Report. 49:66-71, July 4, 1960.
Villard, Henry H. "Investing in Education and Research,”
American Economic Review. 50:340-378, May 1960.
D. NEWSPAPERS
Los Angeles Times. January 30, 1963.
The New York Times. January 30, 1963.
UNIVERSITY OF SOUTHERN CALIFORNIA LIBRARY

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Asset Metadata

Creator Baumgardner, Don (author)

Core Title An analysis of the relationship between federal aid to education and economic growth

Degree Master of Arts

Degree Program Economics

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag economics, general,Education, Finance,OAI-PMH Harvest

Language English

Contributor Digitized by ProQuest (provenance)

Advisor Anderson, William H. (committee chair), Kottke, Frederick Edward (committee member), Pollard, Spencer D. (committee member)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c20-451346

Unique identifier UC11265111

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Legacy Identifier EP44796.pdf

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Document Type Thesis

Rights Baumgardner, Don

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

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