the private market. Accordingly, the provision in H.R. 3000, that the Federal loan will be made only if the funds are not available from other sources on "equally favorable terms" is practically meaningless, because few institutions could obtain financing from other sources at a rate lower than the Federal Government itself would have to pay to obtain funds for similar maturities. The Federal Government already provides Federal financial assistance for college housing under similar conditions in the college housing program which was authorized in the Housing Act of 1950. This act authorizes long-term lowinterest-rate Federal loans for college housing facilities at an interest rate determined under the same formula provided in part A of title II of H.R. 3000 if the institution is not able to obtain the financing from other sources on "equally favorable terms." The result has been that most issues of college housing bonds since 1950 have been purchased by the Federal Government, although many of the institutions could have obtained financing in the private market at interest rates reasonable for such financing in relation to current market rates. By 1961 most of an authorized $1.675 billion in authorized funds had been committed under this program and the Housing Act of 1961 authorized an additional $1.2 billion in such funds over the following 4 years. When a program of low-interest-rate Federal loans is authorized as proposed under part A, title II of H.R. 3000 for academic facilities (just as with the college housing program), the Federal Government takes over almost completely an area of financing which theretofore had been handled satisfactorily in the private market and the beneficiary institutions rely on the Federal Government for such financial support. Consequently, the proposed program of Federal loans for college and university academic facilities would be directly contrary to the general recommendations in the report of the Committee on Federal Credit Programs to the President of the United States, transmitted by the President on February 11, 1963, to agencies with responsibilities for Federal credit programs. The Committee members were the Secretary of the Treasury, the Director of the Bureau of the Budget, the Chairman of the Council of Economic Advisers, and the Chairman of the Board of Governors of the Federal Reserve System. General recommendations regarding Government credit programs include the following (p. 15): "They should not be established or continued unless they are clearly needed. "When both public and private funds are involved, it is especially important that the terms and conditions prevailing in competitive private markets should. as far as consistent with program objectives, determine the basis on which the Government funds are advanced. If borrowers can obtain adequate funds at reasonable interest rates from private lenders (with or without guarantees). they should not be given special incentives in the form of substantially lower costs to borrow from the Government agencies." Most of the institutions which would obtain the special benefits from the proposed program may be expected to contend that there is a crisis in providing college academic facilities which cannot be met without the proposed Federal assistance. Such a crisis was claimed with respect to classrooms for elementary and secondary schools in 1957, but the classrooms have been provided without the proposed Federal assistance. Accordingly, we urge that there be careful consideration of the facts, recognizing that there will be a tremendous increase in college enrollment in the next decade. The fall enrollment in institutions of higher education increased about 58 percent in the 12 years from 1949-50 to 1961-62 (from 2,450,000 to 3,861,000) and these students were accommodated without the proposed Federal assistance. It is now estimated ("Facts and Figures on Government Finance," Tax Foundation, Inc., 1962-63, p. 171) that enrollment in institutions of higher education will increase about 77 percent during the 9 years from 1961-62 to 1970-71 (from 3,861,000 to 6,959,000). There are four ways to provide needed academic facilities without the proposed Federal assistance: (a) Despite the claims that college and university classrooms are filled to capacity (many of them probably don't want to expand their facilities), surveys have shown that there are many fine institutions which have vacancies and can accommodate substantial numbers of additional students. For example, a survey of the 58 members of the Council for the Advancement of Small Colleges is reported (U.S. News & World Report, Jan. 21, 1963, p. 81) to show that these colleges alone could have accommodated more than 7,500 additional students in the current school year and that there is still room in an accredited college somewhere for every qualified high school graduate. (b) There has developed in recent years an organized effort to obtain contributions for college facilities. It is reliably reported that private donations to colleges and universities are now running at a rate well over $1 billion a year. (c) Since college students are not on the fixed all-day classroom schedule customary in elemetary and secondary schools, most college classrooms and laboratories are utilized only a small percentage of the day and it has been recommended that under well-planned scheduling, existing academic facilities in colleges and universities could be utilized to accommodate substantially increased numbers of students each day. (d) Colleges and universities can obtain financing through the sale of bonds in the regular market at reasonable rates (as they have done in the past) and many publicly controlled institutions receive State support. For example, it was reported in the press on February 13 that the four State colleges and universities in Indiana have announced a $55.5 million program for additional classrooms-$31.5 million to be financed by revenue bonds and $24 million by proposed State appropriations. The situation has been summarized well in an address, entitled "Federal Aid *** Shall the Urgent Overrule the Essential?" by Dr. John Howard, president of Rockford College, in 1962 as follows: "It seems to be money and only money that is the present magnet drawing education toward Federal aid. However, for most educators, Washington dollars have long been considered a last resort. Since money is the lure, some money questions ought to be asked. Do we actually believe new funds can suddenly spring forth from Washington like Athens appearing full grown from the head of Zeus? Or have we deceived ourselves into thining we can borrow from the future larger and larger sums without ever having to pay them? "The additional money for education which we might obtain from the Federal Government is the same money which is already available to the State, municipal, and private sources, although it is true they are less prodigal than the Federal Government with their funds. Clearly our easiest course is to get Congress to vote moneys for us, but the sacrifices education must make for that easy money would seem to involve selling our educational soul. "I am not willing to believe that the people of America, nor their elected representatives, nor their educational leaders would take this step if they recognized its full implications. Difficult as it may be to obtain our finances through the traditional sources, the stakes warrant far more determined efforts than have yet been made to carry out our responsibilities without further Federal subsidy. "Great treasures are only earned and safeguarded by hard work, personal sacrifies, and vigilance. A strong diverse, dynamic system of colleges and universities guided and restricted only by their respective boards of control is truly one of the greatest treasures we possess. "It appears as if we are being stampeded into hasty action by governmental officers who understandably would like the credit for solving a grave problem and by the professional Washington staff members of educational organizations who are expressly hired to promote closer ties between Government and education. Perhaps these people are so engrossed in their own responsibilities that they lack the perspective to anticipate the consequences of their recommendations." Consequently, we believe that the needed academic facilities for increased college enrollment in the coming decade can and should be provided without the proposed Federal financial assistance by utilization of present vacancies, financing in the private market, increased private donations, and more efficient utilization of existing classroom and laboratory facilities. The Investment Bankers Association of America is a voluntary unincorporated trade association of investment banking firms and securities dealers who underwrite and deal in all types of securities. The association has close to 800 member firms engaged in the securities business in the United States and Canada, including about 100 commercial banks. Our members have, in addition to their main offices, about 2,100 registered branch offices. The underwriting and distribution of State, municipal, and corporate bonds in the United States (including bonds of public elementary and secondary schools and bonds for publicly and privately controlled colleges and universities) are done by firms which, with a few exceptions, are members of our association. APPENDIX A.-New issues of bonds sold in 1962 for public elementary and secondary schools (by State) APPENDIX B.—Preliminary tabulation of new issues of school bonds sold in January 1963 for public elementary and secondary schools Cobb County (Ga.).. Washington County (Ga.). Cook County Consolidated School District No. 127 (Illinois). Madison County Community School District No. 7 (Illinois). Bloomington Metropolitan Schools (Indiana). Carmel Junior High School Building Corporation (Indiana). Earlington School District (Indiana). New Hartford Community School District (Iowa). Fayette County (Ky.)..... Caddo Parish School District (Louisiana). East Carroll Parish Consolidated School District No. 1 (Louisiana). $2,500,000 1,250,000 3. 12167 2.889 1,500,000 3. 4027 2,400,000 3. 3446 170,000 1,000,000 2. 8972 345,000 2,063, 000 1,500,000 375,000 2,080,000 3,000,000 150,000 400,000 1, 115, 000 2,000,000 3.37 3. 165 3. 16185 3. 2247 3.0836 2. 91516 3. 193 2. 9572 3,750,000 2,875,000 2. 6535 1,216,000 1,490,000 1,100,000 1,900,000 275,000 1,900,000 4,500,000 1,200,000 12, 100, 000 3. 22831 3. 306939 2.99488 3. 35221 2.9616 Pennsylvania State Public School Building Authority (Pennsylvania). Catasqua Hanover Union High School Authority (Pennsylvania). 700,000 1, 330,000 1, 190, 000 10, 740,000 1,500,000 3,540,000 1,572,000 22, 200, 000 2,090,000 425,000 10, 000, 000 3. 5258 3.0387 3.3817 3.22 3.3695 2.909 3. 2749 2.7775 2. 7649 3.0478 3.067 7,850,000 1,495,000 1,075,000 1,245,000 3. 1293 1,400,000 3.254 1,800,000 3. 2678 130.000 7,639,000 2,293,000 1,761,000 3,290,000 19, 000, 000 3. 4989 3.7825 THE AMERICAN LEGION, Hon. ADAM C. POWELL, Chairman, House Committee on Education and Labor, DEAR CHAIRMAN POWELL: I am writing to you in connection with H.R. 3000, the National Education Improvement Act of 1963, which is presently under consideration by your committee. In connection with this subject please find enclosed a copy of resolution 22, adopted by the National Executive Committee of the American Legion at its 1962 fall meeting, You will note that this resolution places the American Legion in opposition to any program of Federal scholarship grants and loans to students unless it contains the loyalty oath and criminal penalty provisions incorporated in the National Defense Education Act and the Science Foundation Act by Public Law 85-835. As you undoubtedly know, the American Legion voiced its strong opposition in the 2d session of the 87th Congress to H.R. 8900, the College Academic Facilities Act, after it was amended to provide certain loans to students, but with no loyalty declaration being required. It does not appear that H.R. 3000 contains any repeal of existing provisions. However, it is deemed desirable to again advise you of the American Legion's position in this matter. We hope you will keep our views in mind in the event that any of the funds authorized by H.R. 3000 are to be administered outside the framework of the National Defense Education Act; that is, under programs not containing provisions to which we refer. While we do not desire to have a representative of the American Legion appear before your committee we would appreciate if you would make our views known to the members of your committee and incorporate this letter and our resolution in the printed record of the hearings. With best wishes, I am, Sincerely yours, CLARENCE H. OLSON, Director. NATIONAL EXECUTIVE COMMITTEE MEETING OF THE AMERICAN LEGION HELD OCTOBER 31-NOVEMBER 1-2, 1962 Committee: Americanism. RESOLUTION NO. 22 Subject: Requirements for Federal scholarship grants. Whereas H.R. 8900, 87th Congress, was approved by the House of Representatives, to authorize assistance to public and other nonprofit institutions of higher education in financing the construction, rehabilitation, or improvement of needed academic and related facilities; and Whereas the Senate amended H.R. 8900 by adding a new title to provide a program of loans and scholarship grants to students; and Whereas the amended H.R. 8900 was recommitted to conference by the House of Representatives by a close vote because of the aforesaid Senate amendment. and same was opposed by the American Legion, specifically because no loyalty test on the part of applicants for the proposed loans and grants was required in said amendment; and Whereas it is anticipated that similar legislation will be advanced in the 88th Congress : Now, therefore, be it Resolved by the National Executive Committee of the American Legion in regular meeting assembled at Indianapolis, Ind., October 31, November 1-2. 1962. That the American Legion oppose any program of Federal scholarship grants and loans to students unless same requires a test of loyalty at least equal to that now incorporated in the National Science Foundation Act and the National Defense Education Act, together with the penalty provisions contained in said acts, relating to the application for, or use of, said funds by members of subversive organizations. |