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Mr. TUCKER. What I wanted to ask you was whether you anticipated that situation would be remedied by this bill?

Doctor FINEGAN. I do not expect a remedy for that through this bill further than this, that I think this bill would create a wholesome atmosphere in every State in the Union that would be productive of educational results. I think that it would stimulate the State authorities in their educational activities and interests including the enforcement of the compulsory attendance statutes, which of course, rests very largely upon the public sentiment in every community.

Mr. TUCKER. Of course, with that great number of children out of school-and you have already expressed the view that Congress would be perfectly justified in providing in this bill for a 24-week school term-in view of the importance of that question, might not Congress in another session say that we will make it a condition of this bill that the States must keep those 5,000,000 children in school? Doctor FINEGAN. I think you do not quite get my point on that. The impression I wanted to get over to this committee was that here was a great social problem and a great educational problem, and one in which citizens everywhere have an interest. It is one in which the National Government itself may very well be concerned, and anything that the National Government might do for the purpose of stimulating action in the States, and which it could legitimately do, I think should be done. I should oppose vigorously the definite proposition that the Congress should enact a law, even if it had the constitutional right, requiring a school term of 24 weeks or a compulsory attendance law. It seems entirely proper for the Federal Government to aid those States which will maintain a 24-week term. The CHAIRMAN. I understand that the original plan of this bill was that the States should be asked to do more than they are now doing, and that the Federal Government would then match them to that extent, but under the bill as now drawn the State can be credited with what they are now doing. Now, where does the stimulus come under that arrangement?

Doctor FINEGAN. I have been wholly conversant with the measure from the beginning, and there have been some modifications and changes in the bill, which will always be made in any proposition of this kind, before you. For instance, take a group of school men who sit down to discuss this measure, or for that matter, we might come here a year from now and go over this measure, and you would find that some of us would desire slight modifications here and there. Now, the stimulus under this bill would be that here is a department of the Federal Government operating in the interest of the entire country. That department is interested in aiding the States to develop the highest type of public school systems that can be maintained. The State departments of education are constantly going to their legislatures and asking for increased funds. They want to develop various phases of their systems of education, and it is essential to have increased funds. The representatives of these departments are confronted with the fact, that everything is costing more, and that the Federal Government has absorbed and taken from the States sources of State taxation. The Federal Government is, however, making appropriations for public education. The State education department would say we shall need $200,000 increase to develop the State's program but we shall get $100,000 from the Fed

eral Government. This has been the result in the case of increased funds from the Federal Government for vocational education. The result would be the same for all educational enterprises.

The CHAIRMAN. If the bill provided that if the States would raise an additional sum over and above what they are now expending for education, then the Federal Government would match that amount, there would be some stimulus afforded the States, but I do not see where there would be any stimulus if we are not asking them to do any more than they are now doing.

Doctor FINEGAN. It would be more than they are now doing.

The CHAIRMAN. Then why not provide that it shall be more before they can get any Federal funds. That was done in the case of the Federal Board for Vocational Education.

Doctor FINEGAN. I have no objection to that plan if you desire to incorporate it in the bill, but I am not asking you to do that. Let me make myself clear on that point. I represent a State, and I go before the legislature and say to the finance committee, "We need an increase of $500,000 to develop our program next year, but we are going to get an increase from the Federal Government of $200,000. We shall need but $300,000 from the State." The mere fact that there is a substantial contribution coming from the Federal Government would give the committee a more liberal viewpoint than the committee would possess were it called upon for the full $500,000.

The CHAIRMAN. If you had a certain amount last year for educational purposes, and went before the legislature and said, "If you will give me $100,000 or $200,000 more than you gave me last year, the Federal Government will give you an equal amount," that would be a stimulus to action.

Doctor FINEGAN. Yes; and it would be a stimulus if I could go in and say to the committee, "What we are going to get from the Federal Government will enable us to carry out our program on a smaller appropriation from the State than would be required if the State were required to make the entire appropriation.'

The CHAIRMAN. I should think it would be just the other way. I think they would be more likely to say that the Federal Government will give so much, and therefore we will cut your appropriation down.

Doctor FINEGAN. That has not been the history of appropriations by States for public education since the vocational education law was enacted.

The CHAIRMAN. But you have never had anything like this.

Doctor FINEGAN. We have had it for several years under the Vocational education law.

The CHAIRMAN. I am talking about the Federal Government now. The other funds for educational purposes were appropriated upon the 50-50 basis. That was true in the case of the Federal Board for Vocational Education, which was a new proposition. There the Federal Government said to the States, "If you will appropriate so much money for this purpose, we will match you." In this case, where you have an existing system of public schools the situation is different. I have served in both branches of the Massachusetts legislative body myself, and I think I know something about the psychology of members of the legislature. I fail to see where any stimulus would come under a bill drawn like this one.

Doctor FINEGAN. You will find that what I have said is true of the States generally. They have increased their appropriations from year to year, and you say that there ought to be a permanent increase during all the years to come, and I agree with you, and you will find that large increases have been made from year to year. That is so in Pennsylvania and it is so in New York. Many of the States have from year to year increased their appropriations, and generally would not decrease them because they receive funds from the Federal Government.

The CHAIRMAN. I want to call your attention to this condition: You have a lot of States in this country that are taxing their people for schools. As Doctor Winship said to the committee, there is a great craze for education, and localities are voting bonds everywhere for public education. Now, you have all of those States that are progressive and that are taxing themselves to the limit for local purposes. I do not know what the law is in Pennsylvania, but I know that in many States they are taxing the people upon the full valuation of their property for the purposes of local taxes. They pay State taxes and local taxes, a large part of which goes for education. Then, there are other States where the people are not taxing themselves to that extent. It was in evidence before us that in one State property was assessed for the purpose of local taxation at only 16 per cent of its real value, whereas, in Massachusetts it is assessed at full value. Now, do you think that any State should get Federal aid for education until it does tax its people at a rate or upon a basis equal to the average of the other States?

Doctor FINEGAN. The true measure, in my judgment, is not the basis upon which the property is assessed or the amount of taxes paid. One State may assess property at 20 per cent of its value, and have a high rate, while another assesses at full value and has a low rate.

The CHAIRMAN. I am assuming that they will have the same tax

rate.

Doctor FINEGAN. That does not follow, and my experience is quite the contrary.

The CHAIRMAN. What is your experience in Pennsylvania?

Doctor FINEGAN. My experience in New York and Pennsylvania is that the rates vary. For instance, where you have taxes levied upon a 20 per cent valuation, you will find that the tax rate runs to 4 or 5 per cent or even greater but where property is assessed at full value the rate is correspondingly lower.

The CHAIRMAN. Massachusetts has a rate of 3 or 4 per cent.
Doctor FINEGAN. Are not those rare instances?

The CHAIRMAN. That is the average. The rate is between $30 and $40 per $1,000, and the property is assessed at full value. Frequently it is assessed at more than you can get for it. My point is, why should you tax progressive States that are already carrying this terrible burden to help States that are perfectly able to do this for themselves?

Doctor FINEGAN. Federal Taxes are not assessed upon the States. Such taxes are assessed upon property irrespective of its location. Laying taxes for education is not different from laying taxes for any other purpose for which Federal appropriations are made.

Mr. BLACK. But if there is an increase in the Federal Budget, there must be a consequent increase in taxes, and the taxes must come from these States.

Doctor FINEGAN. There is nothing in this bill that proposes any increase in Federal taxes.

Mr. BLACK. But that is bound to follow, because it is an added charge upon the Federal Government.

The CHAIRMAN. Speaking of Federal taxation, what has happened in Pennsylvania has also happened in Massachusetts and many other States. When the people amended the Constitution and gave the Federal Government the right to tax individual incomes in time of peace as well as in time of war, they took away from the States the possibility of the States collecting income taxes and using that money for their schools.

Doctor FINEGAN. That money went to the Federal Treasury, as I have already stated, and the States are deprived of it for educational purposes. A proper proportion should be set aside for education. The CHAIRMAN. In other words, the Federal Government took just that much money out of the States?

Doctor FINEGAN. That was my argument a moment ago.

The CHAIRMAN. Of course, the people are burdened with taxes. In Massachusetts it is a very great burden, and especially to the little householders. They are paying the great bulk of the local taxes. The great bulk of that comes from the assessment of real estate property, and in Massachusetts we have a tremendous lot of people who own their own homes. My own district is full of home owners, and they are paying a tremendous tax rate upon a high valuation. However, they are glad to do it in order to educate their children, but why should they be taxed still more by the Federal Government in order to pay for the schooling of children in States where the people who are able to do it for themselves are not willing to tax their people to the extent to which the people of Massachusetts are taxed? In other words, I am not saying anything against Federal aid if it is necessary, but I have not been able through all these hearings to find out where it was necessary. My point is that the State, before it gets Federal aid, ought to be willing to do as much as its sister States do, according to its ability.

Doctor FINEGAN. The true basis for determining that is not the amount of taxes which a State pays, but the measure would be the amount of taxes which a State pays for public education in proportion to its economic income.

The CHAIRMAN. There should be some ascertainment of those facts.

Doctor FINEGAN. Yes. Further, I justify appropriations for public education by the Federal Government, not only upon the fact that the Federal Government has been taking the resources of the States through the Federal tax system but upon the whole general theory that anything which makes the people who work in the cotton fields of the South more productive, which makes those who work on the farms of the West more productive, or which makes those who work in the textile mills of Massachusetts more productive, is something that contributes to the general welfare of the country and the general prosperity of the Nation.

The CHAIRMAN. That is perfectly true, and nobody will deny that, and if we had a centralized Republic where one tax was paid to the Federal Government, that principle would be absolutely correct. Then all of the taxes would be levied and collected by the Federal Government, and the money would be apportioned all around throughout the country according to where it was needed, in order to bring it up to the standard.

Mr. BLACK. With one complete system of Federal education. Doctor FINEGAN. We are opposed to that and this measure not only does not contemplate it but actually prohibits it.

The CHAIRMAN. If it could be shown that all of the States are doing as much as the average State, or if they were required to do as much as the average State before applying for Federal_aid, I would agree that your argument would apply, and that the Federal Government, as a national matter, should help those States that can not help themselves. That has always been the policy of our Government, but it has never been the policy of the Government to help those who can help themselves.

Doctor FINEGAN. I think I can place in your hands a document which contains the data to show what the expenditures of each State for public education are, and the relation of such expenditures to the economic income in such States.

Mr. BLACK. New York is having difficulty in getting money enough for its own needs. We have many rural people up there to look out for.

Mr. LOWREY. Did you say there were some States that taxes their property at 16 per cent?

The CHAIRMAN. There is one county in Virginia that assesses property for taxation at 16 per cent of its value.

Doctor FINEGAN. Then Virginia needs Federal aid.

The CHAIRMAN. Why not tax it upon an equal basis with Massachusetts? They are assessing property in this county in Virginia at 16 per cent of its fair market value.

Doctor FINEGAN. What was the tax rate?

The CHAIRMAN. I do not know..

Mr. LOWREY. In regard to that I want to say that in the two States I have lived in, Mississippi and Texas, ever since I have been paying taxes I have had to make my oath that I was giving in the property at what I would be willing to accept for it on a sale.

The CHAIRMAN. Then you have the same law that we have `in Massachusetts.

Mr. LOWREY. In Texas I paid last year a rate of $3 per $100. There were three blocks out in a city division that I tried to sell for $500, but could not sell them. The equalization board valued them at $1,500, but I could not get $500 for them to save my life.

The CHAIRMAN. Of course, how property is valued for the purpose of taxation should be taken into account, as well as the tax rates, and unless a State was doing for itself along that line up to the average of all the States of the Union it ought not to receive Federal aid. They should first be required to do what they can before they get Federal aid.

Doctor FINEGAN. I would not quarrel with you on that. I think I can furnish you a table that will show in general what the States are contributing from their economic resources for public education,

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