Education and Economic Well-Being in American Democracy EDUCATIONAL POLICIES COMMISSION National Education Association of the United States and the American Association of School Administrators Education and Economic Weil-Being in American Democracy Educational Policies Commission National Education Association of the United States and the American Association of School Administrators 1201 Sixteenth Street, Northwest, Washington, D. C. Copyright, 1940 National Education Association of the United States Washington, D. C. Illustrations by Lynd Ward Acknowledgment IN its consideration of the highly important relationships between education and economic well-being, the Educational Policies Commission has sought the counsel of economists, educators, and other competent scholars in this field. Chief responsibility for the writing of the report was entrusted by the Commission to one of its mem- bers, Dr. John K. Norton. The extensive litera- ture on the subject was reviewed. Thorough dis- cussion by the Commission and the drafting of the manuscript followed. To every phase of this process Dr. Norton brought a wide experience in educational finance, an unusual capacity to fol- low technical material through to practical con- clusions, a penetrating insight into economic and educational issues, and a clear literary style. The Commission records here its deep appreciation of his contribution. This report was approved for publication by the Commission on November 21, 1939. The Educational Policies Commission Appointed by the National Education Association of the United States and the American Association of School Administrators Appointed Members Alexander J. Stoddard, Chairman Cornelia S. Adair John K. Norton Lotus D. Coffman * Agnes Samuelson George S. Counts John A. Sexson Edmund E. Day Payson Smith J. B. Edmonson George D. Strayer Frederick M. Hunter Willis A. Sutton Emily A. Tarbell Ex-Officio Members WlLLARD E. GlVENS AMY H. HlNRICHS Ben G. Graham S. D. Shankland Elphe K. Smith Advisory Members J. W. Studebaker George F. Zook William G. Carr, Secretary 1201 Sixteenth Street, N. W. Washington, D. C. * Deceased, September 22, 1938. Table of Contents Chapter Page I. The Economic Challenge to an American Ideal 1 II. Education and Productivity in American Economy 7 III. Kind of General Education for Economic Weil-Being 33 IV. Kind of Occupational Education for Economic Weil-Being 75 V. Amount of Education for Economic Well- Being 103 VI. Existing and Desirable Amount of Education for Economic Well-Being 133 VII. Extension of Facilities and Selection of Students 155 VIII. Estimating the Cost 173 IX. Financing the Program 187 X. Securing Public Understanding and Action. . . 201 Index 219 Foreword The commission wishes to note here the assistance of a large number of persons who have contributed to the development of this report. Special acknowledgment is due Harold F. Clark for an extensive memorandum prepared especially for the Com- mission and which served as a basis for certain chapters of this volume. Mabel L. Walker prepared a special memorandum on economic literacy and read and criticized preliminary drafts of the report. A subcommittee of the Educational Policies Commis- sion, consisting of John K. Norton, George S. Counts, and Edmund E. Day, has met on numerous occasions during the consideration of this problem by the Commission. In May 1936 the Commission called into conference at Chi- cago a group of economists and sociologists including R. M. Haig, Harold G. Moulton, and Howard W. Odum. A preliminary draft of the report was read by J. M. Clark, who made extensive and helpful criticisms concern- ing it. Among many others who read and criticized the document we wish to mention especially Edwin A. Lee, Newton Edwards, and Frank Cushman. Alice L. Edwards read and criticized the section on the education of the consumer. Eugene S. Lawler reviewed and criticized the chapter on estimating costs. We are indebted to the staff of the Libraries of Columbia University, and particularly of the Library of the School of Business, for courteous assistance in making their re- sources readily available. The document draws heavily on many deliberative com- mittee reports and publications of sociologists, political scientists, leaders in government and school finance, econo- mists, and educators. Especially useful have been the find- ings of the Advisory Committee on Education, the Regents' Inquiry, the American Youth Commission, the National Resources Committee, and many other governmental and private investigations. The appreciation of the Commission is here expressed to these and other authors and publishers for their permission to quote from their publications. Although none of the individuals or organizations named above should be held responsible for any statements in, or omissions from, this document, the Commission is deeply grateful for their cordial encouragement and helpful cooperation. I. The Economic Challenge to an American Ideal Efficient universal education is the mother of national prosperity. — Ralph Waldo Emerson. The American ideal of equality of opportunity assumed one of its most concrete forms in a universal system of public schools. Education, conceived first in the limited terms of old world ideas, soon burst these narrow bounds. The common school was developed first to offer elementary education to all the children of all the people. Later sec- ondary education was provided at public expense. Today approximately two-thirds of youths of high-school age are enrolled in secondary schools. Higher education was first the prerogative of a favored few. Now more than a million youths attend the colleges and universities of the nation. Universal public education grew out of the democratic ideal. It flowered with the fulfillment of that ideal. Educa- tion came to be looked upon in the United States as the open door to opportunity. Children and youths might differ in [1] capacity, wealth, and social position, but in their right to get an education — to capitalize such talents as they pos- sessed— they were to be equal. Such became the ideal of our democratic society. Circumstances Require Reappraisal of an American Ideal. Progress requires continual measurement of ideals in terms of achievement. Repeated surveys by groups of thoughtful citizens in recent years have revealed that edu- cational opportunity is far from available to all. Quite apart from industry and ability, the likelihood that a youth will be able to secure adequate and effective education is reduced to a marked degree by such factors as the follow- ing: belonging to a poor family, living in regions where wealth and income are too low to afford an adequate local tax base, being a member of a minority group such as the Negro race, and living in a rural area. Fortuitous factors of the most indefensible character, rather than capacity to learn and willingness to work, now determine the kind and amount of educational opportunity provided millions of American youths. Educational oppor- tunity, instead of being a solvent of class lines based on hereditary wealth and position, threatens to become a cement which sets and perpetuates these distinctions. Some of the outcomes of this situation are that nearly a million children are not enrolled in any school and many more are attending schools of the poorest quality. Only a minority of the youth of the nation complete their high- school education. At least a third of those who leave school at an early age do so primarily because of financial limita- tions. Many of those eliminated for this reason possess superior intellectual capacity and other qualities which justify further schooling. Knowledge is not lacking as to what needs to be done in order that education may fulfill its democratic functions. [2] This has been the subject of careful study and clear pro- nouncement by a number of representative groups of citizens in recent years.1 Why then is action so laggard? The factors responsible are doubtless many and complex. One of the most formid- able barriers to educational progress, however, is easy to identify. Persons close to the practical operation of schools and colleges at all levels, public as well as private, in all parts of the country, would generally agree that problems of finance are formidable obstacles to the provision of much needed educational facilities and services. Education Is Receiving a Decreased Share of Public Funds. The problem involved in securing adequate funds for education is not a new one. Growing numbers of children and youths who have clamored for admission at school and college doors, and the increasing demands on education of a dynamic civilization, have long made this a difficult prob- lem. Depression conditions have accentuated its difficulty. Among the many factors involved are two which will be identified here. First, income has been sharply reduced. A national in- come which approximated 80 billion dollars at the close of the 1920's has vacillated between 40 and 70 billions during the past decade. A second factor has been the reduction in the percentage of governmental expenditures allocated to education. While public expenditures as a whole increased from $10,844,000,000 in 1930 to $15,563,000,000 in 1936, 1 The Educational Policies Commission has outlined The Unique Function of Education in American Democracy, described the charac- teristics which an educated citizen should possess as a result of the proper fulfillment of The Purposes of Education in American Democ- racy, and outlined its conception of what The Structure and Adminis- tration of Education in American Democracy should be. Other com- missions in recent years have made careful analyses of the current educational situation and have also offered proposals for its improvement. [3] expenditures for public education — elementary, secondary, and higher, regular and emergency, federal, state, and local —declined from $2,417,000,000 to $2,237,000,000 in the same period. The percentage of total governmental ex- penditures allocated to public education declined from 22.3 to 14.4 between 1930 and 1936.2 The factors which resulted in the foregoing trends in public expenditures are extremely complex. There was great pressure for expenditures for relief and social security in various forms. International conditions have resulted in the largest peace-time budgets in our history for war prepa- rations. The fact that the federal government possessed superior tax-raising and borrowing facilities, as compared with state and local governments and boards of education, and used them to finance certain services, was in the pic- ture. Also, local fiscal machinery, through which education is mainly financed in most states, broke down in many communities. Other factors were also involved. Education Has Decreased Support and Increased Responsibility. Financial limitations have caused thousands of schools and colleges to restrict their educational services. There has been little opportunity to develop facilities needed by millions of youths whose entrance into economic life has been abnormally delayed, or to respond to other new and urgent demands. In the meantime, the potential significance of schooling has greatly increased. This is readily illustrated in the eco- nomic sector of life. Many business and industrial concerns have sharply raised the amounts of schooling or occupa- tional training required of new employees. The opportuni- ties which young men and women have to "get ahead" in 2 Heer, Clarence. Federal Aid and the Tax Problem. Washington, D. C: Government Printing Office, 1939. p. 20-23. [4] life are dependent as never before upon the schooling they can afford. The amount of general, technical, and profes- sional preparation demanded for occupational success is steadily increasing. Furthermore, a higher degree of eco- nomic literacy is needed in order that citizens may have the ability to criticize and intelligently appraise current eco- nomic goals and policies. Failure to provide the educational facilities demanded by the nature of our society will amount to a rejection of the ideal of equality of opportunity. Education and Economic Well-Being Are Interdependent. Under current conditions, judgments are constantly being made affecting schools and colleges in the United States, in which immediate financial expediency is the determinant. Decisions as to the kind and the amount of education which will be provided are made with the most meager consideration of long-range effects on the economic as well as other areas of life. The problem of financing the kind and amount of edu- cation which will maintain a high technology in a demo- cratic, industrial society demands fundamental examination of the interrelations of education and economics. It calls for thoughtful appraisal of the contributions which educa- tion makes to productivity and general economic well-be- ing, and judicial consideration of the economic limitations on the amount which may be wisely spent for education. Hence this volume deals with questions such as these: What factors contribute to high productivity in an econ- omy such as ours, and what contribution does education make to such productivity? Does the improvement and strengthening of our national economy involve an im- proved program of public education? What kind of educa- tional opportunity for youth is socially desirable? What kind and amount of education will result in maximum eco- m nomic well-being? To what extent are children and youths of superior ability denied educational opportunity because of lack of family finances? What effect has such denial on productivity and national income? To what extent will an educational program, right in kind and amount, tend to amortize its cost? Has the nation reached a period when it appears that basic economic limitations require restriction of the further development of free education? Or does it appear wise, from a purely economic point of view, further to extend this expression of the American ideal of equality of opportunity? The program proposed here should be appraised from the point of view of long-term, rather than immediate, con- siderations. It should be looked upon as a series of general policies to guide future educational development, with its economic functions in mind, rather than a blueprint of specifics. The proposals made will need adaptations to state and local situations. They should be modified and perfected in the light of future experience. The Commission fully recognizes the limitations and difficulties of a study which focuses attention on the rela- tion of education to one sector of life — the economic. The influence of education is too pervasive to permit studying its economic effects in complete isolation. The results of education are by no means limited to the economic sphere. Education's contributions to the spiritual, ethical, and in- tellectual realms have always been, and will always be, of greater significance than those in the sphere of material things. The desirability of a given kind or amount of edu- cation can never be decided on purely economic grounds. The economic phase is inextricably interwoven with other phases of human culture. Accordingly, it is more accurate to say that this volume is mainly concerned with, rather than confined to, the interrelationships of education and economic well-being in American democracy. [6] II. Education and Productivity in American Economy The basic process by which the productive capacity of society is maintained or increased is by education. — Chester I. Barnard. It is the purpose of this chapter to identify elements and characteristics of an economy which contribute to productivity, and to appraise the extent to which educa- tion contributes to them. Economists Identify Certain Basic Factors of Production. Economists differ on details in analyzing the basic ele- ments in the productive process. Their discussions, how- ever, generally recognize four basic factors. Labor, whether of brain or of brawn, is identified as an essential element. Natural resources, involving the raw materials of land, water, and climate upon which production rests, consti- [7] tute another basic factor. A third element in production is capital, including such factors as tools and machinery, factories, warehouses, and inventories. The efficient use of all factors of production depends upon organization and management. These have become so important in in- dustrial economy that some class them as a fourth basic element in production. The manner in which labor, natural resources, capital, and organization and management operate in relation to production differs in many respects in a highly specialized technological economy from that in a less advanced society. In appraising the relation of education to the foregoing factors in the productive process, we shall have in mind their roles in a highly developed industrial society such as the United States. Intelligence and Efficiency of Labor Vitally Affect Economic Production. It is a lesson of history, as well as of contemporary times, that the human resources of a nation constitute its primary wealth. Nations have grown rich and powerful in the absence of outstanding physical resources by developing their human assets. Others have remained poor and back- ward in the presence of unusual natural resources. It is human intelligence which gives these resources value. To a savage, coal is black rock and a waterfall merely a physical danger to be avoided. To an intelligent man they are the source of energy for power-driven industries of fabulous productivity. It is such considerations which have led economists to recognize the importance of the human factor in the pro- ductive process. Seligman states the case as follows: "The older economists were fond of emphasizing the de- pendence of the demand for labor upon capital. While this analysis was in many respects valuable, they overlooked [8] the independent power of labor to contribute to its own uplifting through an increase of efficiency. It is precisely here that the economic effects of education and leisure as well as of social and political progress mean so much to the community. In the commercial warfare that is being waged between nations today, education is recognized as a potent weapon. . . . The finer the tool, the greater will be the product; when the tool consists of human energy, we have not only a greater product, but a greater capacity in the human being to utilize the product." 1 A carefully planned and efficiently administered system of education significantly increases the intelligence and efficiency of labor. Several ways in which education exer- cises this important economic effect are dealt with in sub- sequent paragraphs. Educational Opportunity Encourages the Worker To Rise through Personal Effort. One of the key ideals of American life has been the belief that the individual through his own efforts might rise to a position of competence and respect. A closer ap- proach to equality of opportunity, as opposed to oppor- tunity fixed by social and economic position of family, is a major distinction between the new and the old world. It supplied powerful incentive during the period when political and economic individualism were emphasized in the United States. It was "a driving influence in the ex- traordinary development of the material resources of the nation." 2 Through education every individual might ad- vance as far as his talents could carry him. Economists 1 Seligman, Edwin R. A. Principles of Economics. Sixth Edition. New York: Longmans, Green and Co., 1914. p. 292. 2 National Education Association and American Association of School Administrators, Educational Policies Commission. The Unique Function of Education in American Democracy. Washington, D. C: the Com- mission, 1937. p. 3 8. [9] recognize the economic effect of maintaining an open door to educational opportunity. "The greatest stimulus that can be given to the human spirit is to serve notice upon it that its achievements are to be limited solely by its own native power, . . . that neither birth nor family prestige will count for much, and that humble birth and lack of prestige are no handicap to the person of ability and industry. This has made the typical American a model of energy. Our public school system has provided him a free chance to train whatever native ability he possessed." 3 With the passing of each decade, graduation from high school and even more extended schooling are prerequisite to admission to a growing percentage of occupations. Energy and graduation from the "school of hard knocks" no longer promise success in most callings. Opportunity more and more lies along the route of extensive general education and specific trade or professional training. The doors of educational opportunity must be wider than ever before, if all Americans are to feel that no insuperable obstacles prevent the individual from realizing the best that is in him. Such a feeling must prevail if the dynamic economic effects of education are to continue. General and Specialized Training Increase the Efficiency of Labor. The industrial revolution, resulting in history's most dramatic increase in economic productivity, may be epit- omized in the fact that a growing percentage of trained workers have used more and more effective methods of work. A high output per worker is generally associated with a high level of vocational intelligence and skill — not the reverse. Census data show that the growth of pro- ductivity in the United States has been paralleled by a 3 Carver, Thomas Nixon, and Lester, Hugh W. This Economic World and How It May Be Improved. Chicago, 111.: A. W\ Shaw Co., 1928. p. 365. [10] reduction in the proportion of unskilled laborers.4 Instead of a great mass of unskilled labor, modern economy more and more demands semi-skilled and skilled workers. In the fields of manufacturing between 1910 and 1930, the num- bers of skilled workers increased most rapidly, semi-skilled, the next, and unskilled, least rapidly. In manufacturing in the United States today about one-fourth of the work- ers are unskilled; about one-half, semi-skilled; and about one-fourth, skilled.5 During the depression unemployment has been greatest among unskilled laborers. For example, the Keport of Com- mittee on Employment of the Chamber of Commerce of the United States in 1936 stated: "In each analysis which has proved possible, and in the reports received from organization members of the Cham- ber, the relatively small national figure for unemployment among skilled workers has become evident . . . the pre- ponderance of unskilled workers among employable per- sons on federal work-relief is equally apparent. ... In an eastern city, of applicants from relief rolls for employ- ment less than 6% were eligible as skilled workers, 5% as clerks, and over 65% as unskilled laborers, apprentices, or helpers. Responsible studies made in other cities bear out these percentages." A government study of employment made during the depression revealed that the highest number of unemployed persons per thousand gainful male workers in each occu- pation occurred in the following classifications: Unskilled laborers, semi-skilled workers, farm laborers, and servants.0 An acute shortage of skilled labor has been reported by some industries. Apparently, even during the abnormal 4 Spencer, Lyle M. "Some Effects of Technological Change on Jobs." Occupations 17:611-612; April 1939. 5 Jerome, Harry. Mechanization in Industry. New York: National Bureau of Economic Research, 1934. p. 296. 6 Census of Partial Employment, Unemployment, and Occupations, 1937. Vol. I. Washington, D. C: Government Printing Office, p. 5-6. [11] period of the depression, there was a greater demand for trained than for untrained workers. In appraising this fact, it should be realized that native capacity as well as many factors other than general and vocational education affect an individual's chances of getting and keeping a job. The most immediate and apparent economic outcome of education is where it provides specific training for a trade or other definite vocation. Skilled workers generally pro- duce more than semi-skilled and still more than unskilled. Specific vocational education may be provided by a variety of agencies — trade schools, public and private, as well as industry itself. The important thing, however, is that the provision of such training has positive economic effects. Bye and Hewett sum up the situation as follows: "Without education one is likely to be limited to un- skilled occupations. With education he is able to find more remunerative employment. The general effect of more widespread schooling is to increase the ranks of skilled workmen and to decrease the number of people capable only of cruder manual work." 7 It is important, however, that education to increase effi- ciency of labor should not be conceived in narrow terms. The effective operation of enormous aggregations of labor and capital, characteristic of contemporary economy, de- mands high types of vocational and economic intelligence. Improved organization and industrial techniques can be the outgrowth of suggestion and initiative on the part of the rank and file worker as well as the product of research and managerial ingenuity. The general pattern of organi- zation in a business enterprise is likely to be different, as well as more efficient, when the manager is able to assume a degree of judgment and initiative on the part of the worker, as opposed to the ability merely to follow simple 7 Bye, Raymond T., and Hewett, William W. Applied Economics. New York: Alfred A. Knopf, 1928. p. 123. [12] directions in a routine manner. Even pressure for a higher standard of living on the part of ambitious workers, result- ing in more efficient production processes, may exercise an influence toward industrial advancement. Marshall clearly- recognized the need for something more than narrow voca- tional training even for the lower grades of industrial workers. "It is true that there are many kinds of work which can be done as efficiently by an uneducated as by an educated workman; and that the higher branches of education are of little direct use except to employers and foremen and to a comparatively small number of artisans. But a good educa- tion confers great indirect benefits even on the ordinary workman. It stimulates his mental activity; it fosters in him a habit of wise inquisitiveness ; it makes him more in- telligent, more ready, more trustworthy in his ordinary work; it raises the tone of his life in working hours and out of working hours; it is thus an important means toward the production of material wealth. . . . " 8 More recently, an industrial leader, from a background of practical experience in directing a large business organi- zation, stated: M. . . the effectiveness of individual capacity to produce, or to manage production, is determined by the degree of social cooperation, and that this cooperation depends pri- marily upon education .... high productive efficiency is impossible without widespread education. This is not simply a matter of securing leaders in science, invention, industrial organization, statecraft, etc., by an educational screening of the masses. No greater error could be made, it seems to me, than to adopt the notion too commonly held that either political or economic effectiveness is chiefly a matter of leadership. When generals can find no colonels, they must become mere captains. Captains are limited by 8 Marshall, Alfred. Principles of Economics. Eighth edition. London: Macmillan Co., 1920. p. 211. [13] the character, spirit, and ability of the men they command. The intensive training given to recruits is significant." 9 Education in the past has contributed in providing specific vocational skills as well as general economic under- standing essential to the existence and highest productivity of an economy, characterized by far-flung organization, specialization, and power-driven machines. In the future it can and should make greater contributions to produc- tivity in these areas. Workers with trade skills and economic intelligence are consistent both with democratic culture and maximum productivity. Education Increases 'Productivity by Promoting Occupational Mobility. It is an accepted tenet of economics that the ability of labor to secure the training needed to transfer from crowded and low-paid occupations to those less crowded and better-paid tends to increase the national income. When workers of energy and capacity must continue in low-paid common labor because of inability to secure training requisite to entering higher-paid callings, the national income tends to be decreased. Occupational mobility of labor is of increasing impor- tance in a dynamic economy in which new discoveries are continually creating new vocations, many of which involve technical training. Education in the past has assisted in thinning out the overcrowded ranks of unskilled labor by increasing the proportion of workers in skilled and pro- fessional occupations. Its contribution in this area in the future should and can be made far more effective. This vital economic responsibility is recognized by many leading economists. 9 Barnard, Chester I. (President, New Jersey Bell Telephone Com- pany, Newark, N. J.) "Education and Social Welfare." 1934. p. 13 and IS. [14] "To remove the obstacles which pen the mass of people within the lowest income classes we must rely upon educa- tion and vocational training. When a large section of the population is underpaid it is not because the economic function they perform is of little value in itself. On the contrary the labor of society's machine-tenders, clerical workers, and even unskilled laborers is indispensable in the sense that the productive system would collapse if these functions were not rendered. The fault lies, not in the vocation, but in the number of people who occupy it. Any policy whose effect is to reduce the numbers in the low- wage groups by transferring some of them to less crowded occupations will raise the lower incomes and reduce the higher, at the same time increasing the average."10 Health Education Has Significant Economic Effects. The conservation of human resources is a matter of primary and increasing economic importance in an econ- omy such as that of the United States. The cost and time involved in preparing youth for economic production is much greater than it was in earlier periods. The advance of medical science, the administration of public health, and health education disseminated through schools and other agencies have won major victories in the conservation of health. The average span of human life has been enormously increased. These gains are attributable chiefly to reduction in infant mortality. Education in child care is one of many factors helping to bring this about. The economic value of lengthening of human life has been estimated in billions of dollars.11 Each year which can be added to the productive period of life increases the social dividends paid on investments in education and training. 10 Fairchild, Fred Rogers; Furniss, Edgar Stevenson; and Buck, Nor- man Sydney. Economics. New York: Macmillan Co., 1937. p. 292-293. 11 Dublin, Louis I., and Lotka, Alfred J. The Money Value of a Man. New York: Ronald Press Company, 1930. p. 264. [H] Losses due to premature death and unnecessary illness, how- ever, are still enormous. Success in conserving human life in the ages beyond fifty has been much less spectacular than in the beginning years of life. Education is one of the means of combating deleterious effects on both mind and body of the stress and strain of modern industrial life. Health work in good school systems aims to build atti- tudes and habits of living which promote positive health. One study of the influence of health education over a twelve-year period on children, ranging in age from seven to twelve years, revealed improvements "in specific types of physical conditions as well as in general health and changes in health practices." Yearly tests of children who participated in this health-education program also revealed "very striking indications of a stimulating effect of health- training on a child's rate of improvement in school sub- jects." 12 The aim of physical education is increasingly to provide activities for all children, with individual needs and life- long recreational interests in mind, rather than athletic shows in which only the most physically fit participate. It is not possible to measure exactly the value of the con- tribution of schools and colleges to the physical well-being of the nation. The field of safety education, however, pro- vides one dramatic illustration of effective results. Cities with sound safety programs have been able to decrease fatalities among children. In New York City, for example, in the decade ending in 193 5, fatal automobile accidents involving adults increased 80 percent, while those involving children decreased 30 percent.13 12 Hardy, Martha Crumpton, and Hoefer, Carolyn H. Healthy Growth. Chicago: University of Chicago Press, 1936. p. 74, 184. 13 Stack, Herbert J. "The Place of Safety Education in the School Health and Physical Education Program." Journal of Health and Phys- ical Education 6:3-6, 71-72; March 193 5. [16] By 1922, safety education had been introduced in many schools. By 1937, fifteen years later, the accidental death toll among school children was 25 percent less per 100,000 population. The decrease between 1936 and 1937 alone was 6 percent.14 It seems probable that the teaching of safety in the schools is at least partly responsible for this decrease in accidents. The results of thorough safety education in schools not only tends to conserve the lives of children and youths but should carry over into later life. Avoidance of accidents is primarily an outcome of inculcation of knowledge and atti- tudes affecting safety and of practice in carrying out safety measures until these become habits. Great victories in the conservation of human life and health have still to be won. Premature death, avoidable illness, remediable physical defects, mental disease, unneces- sary accidents, and low vitality take tremendous economic tolls. One of the reasons why scientific knowledge as to how to eliminate these scourges is not more promptly ap- plied is stated thus by the American Youth Commission: "The facilities now available to young people are wholly inadequate to ensure that the resources of modern science will be applied to the highest development of their health and physical fitness. These facilities are inadequate for health instruction and physical examination as well as for remedial care."15 Education has, and should be expected to play, a potent part in putting growing knowledge in these areas into action. Better planned, better administered, and universally provided programs of health and physical education would have enormous economic effects. 14 National Education Association, Research Division. "Safety Edu- cation Thru Schools." Research Bulletin 16:241; November 1938. 15 American Council on Education, American Youth Commission. A Program of Action for American Youth. Recommendations of the American Youth Commission, 1939. p. 11. [17] Educated Man-Poiuer Is a Perishable Resource. Continuous education for replacement of economic knowledge and skill is of supreme importance in a tech- nological society. The length of the period of training and the brief span of a man's working years testify to this fact. Education has an enormous job to perform in merely main- taining the present accumulated capital of economic knowledge and skill. Every death of a professionally or technically trained worker reduces this capital unless it is currently replaced. King describes the perishable nature of this economic asset as follows: "Some of the most expensive and important forms of sav- ings are not tangible but consist of such things as accumu- lated scientific knowledge and the training of the human mind. Savings of the last-mentioned variety are extremely perishable, since they are constantly being lost through the death of the persons possessing the education." 16 Taussig points out the necessity and possibility of con- serving this asset. He writes: "Man's great moral, intellectual, educational equipment must be conserved, like his material capital, by unremitting effort, and like that can be increased by effort." 17 The Conservation of Natural Resources Is Important to Production. A second basic factor of production is the resources of land, water, and climate, which provide the raw materials of productive effort. The lack of foresight in America's wasteful depletion of natural resources is an outcome of 16 King, Willford I. "The Net Volume of Saving in the United States." American Statistical Association Journal, 1922. p. 307. 17 Taussig, F. W. Principles of Economics. Vol. I, Fourth Edition. New York: Macmillan Co., 1939. p. 96. [18] their plenitude. Other peoples have gained from experience the lesson which the United States is just beginning to learn. European farmers long ago learned to plow with the con- tours and to avoid losing the soil on steep hillsides. There are European valleys today in which fertility is greater than it was two thousand years ago. Sections of China and other parts of Asia offer soil-denuded deserts as a warning of the tragic economic results of improper use of resources. Our country already offers dramatic examples of tre- mendous economic waste resulting from improper use of Nature's heritage. The chief of the United States Soil Con- servation Service recently testified that erosion has already ruined 50,000,000 acres of agricultural land which was once productive and that another 50,000,000 acres has been almost ruined. Erosion is also seriously damaging 200,000,- 000 acres more.18 The profligacy with which we are using our vast mineral resources has been summed up as follows: "The United States is, in addition to being the greatest producer, also the greatest consumer of mineral products, and probably also the greatest waster." 19 A government planning commission recently declared: "The waste of gas, oil, and coal now going on . . . de- serves the measured use of the word 'intolerable.' . . . Present overdevelopment of some minerals has tended to obscure the central and dominant fact that, in relation to what we hope will be the life of the Nation, our mineral supplies are too limited to excuse the wasteful exploitation that now often prevails." 20 18 Hearings before a Special Committee to Investigate Unemployment and Relief, United States Senate, Vol. II, p. 1069; March 9, 1938. 19 Gustafson, A. F., and others. Conservation in the United States. Cornell Heights, Ithaca, N. Y.: Comstock Publishing Co., 1939. p. 3 56. 20 National Resources Board. Report on National Planning and Public Works in Relation to Natural Resources. Part IV. Washington, D. C: Government Printing Office, 1934. p. 392, 393. [19] Great stretches of virgin forest constituted a fabulous resource of the United States. Travelers in our early history- marveled at the glory of this heritage. Only recently has effort been made to check the exploitative character of the lumber industry. As late as 1920 it was estimated that the annual cut of forests, including waste and destruction by insects and fires, was four times the annual growth.21 While recent estimates indicate a lower ratio of consumption to growth, it is still far too high, when effects on soil, rainfall, and flood conditions are considered, as well as the need for a constant supply of high quality timber in the future. We are drawing heavily on a reserve built up for centuries previous to the occupation of the continent by the white man. Education Increases the Economic Possibilities of Conservation. Schools and colleges have already made substantial con- tributions in this area. Schools and extension services are teaching farmers the importance of contour plowing, crop rotation, soil fertilization, and protection of forests. Col- leges and universities are conducting research and im- parting technical knowledge to agricultural and chemical engineers, business executives, and other experts. The re- sponsibility of education for developing a conservation viewpoint is stated thus by a group of scientists: "A great need of our nation today is the development by the individual citizen of a consciousness of the definite necessity for the conservation of our natural resources. Much of real value has been accomplished during the past three decades, but a widespread campaign of conservation education is imperative. Such education has been in prog- 21 President's Research Committee on Social Trends. Recent Social Trends in the United States. Vol. I. New York: McGraw-Hill Book Co., 1933. p. 115. [20] ress in a limited way in the colleges for some years. A be- ginning has been made in placing information concerning the need for conservation in the hands of our younger students. This age-group must come to the realization that future supplies of food, clothing and other necessities are being jeopardized by the uneconomical and sometimes care- less or wasteful methods of the present day. They become voters soon after leaving high school and will then be in a position to insist upon wise conservation and utilization of natural resources." 22 Further contributions of education in conserving our heritage of physical resources should be made in directions already begun. There should be increased appreciation of the fortunate position of the United States. We have but 6.2 percent of the world's population, but we produce and consume some 50 percent of the world's mechanical energy. The United States ranks first among world powers as to national self-sufficiency in iron ore, coal, petroleum, copper, lead, sulphur, aluminum, zinc, phos- phates, and other strategic resources.23 Conservation education should emphasize wise and eco- nomic use of natural resources and various types of con- servation activity, and develop vigorous public disapproval of flagrant waste. Science and Education Significantly Contribute to Development of Capital. Capital is a third basic element in production. Here we are concerned with tools, machinery, plants, and technical processes employed in transforming materials into con- sumer goods. Science and technology are involved since they play a major role in discovering the tools and technical 22 Gustafson, A. F., and others. Op cit., p. 14. 23 Emeny, Brooks. The Strategy of Raiv Materials. New York: Mac- millan Co., 1934. 202 p. [21] processes which give capital its peculiar modern char- acteristics. Colleges and universities have conducted much of the significant research resulting in basic modifications in techniques of production and designs of machines and equipment. Research in the field of agriculture has per- haps been the most continuous and effective. Investiga- tions concerning agricultural and biological chemistry, soils and soil fertility, field crops, horticulture, animal husbandry, and many other areas have been a major factor in remaking agriculture in the United States during the past two or three generations.24 "Detailed study of the accomplishment of the agri- cultural experiment stations in strengthening agriculture and increasing the money value of its products shows an enormous return on the money invested."25 Agricultural research is undoubtedly one of the factors responsible for an almost unbroken increase in production per man in this basic industry. The research of scientific workers in universities has resulted in discoveries on which many new industries have been founded. Hall's discovery at an American university of an economic method for the production of metallic aluminum was crucial in the development of the aluminum industry. This is but one of many illustrations of the im- portant effect of university research in founding new industries. "Eighteen of the new industries which have grown directly out of scientific research within the past 50 years provide one-fourth of all the employment in the United 24 Fletcher, S. W. "The Major Research Achievements Made Possible Through Grants Under the Hatch Act." Proceedings, Fifty-First An- nual Convention, Association of Land-Grant Colleges and Universities. Washington, D. C, 1937. p. 136-144. 25 National Resources Committee. Research — A National Resource. Washington, D. C: Government Printing Office, 193 8. p. 169. [22] States. The majority of the products now manufactured by electrical companies were unknown 15 years ago. It is estimated that 95 per cent of our chemical industry is based on fundamental discoveries made in university laboratories." 26 Universities and colleges are continually contributing to the greater efficiency of existing industries. There is scarcely an industry of any importance today which has not been aided in its development at crucial points by the researches of university faculties.27 Nearly two hundred college laboratories are used not only for the purpose of instruction, but also to a considerable extent for industrial research work and commercial testing.28 The proved eco- nomic value of university research is one of the factors which has influenced industry to establish commercial research laboratories, involving expenditures of $100,- 000,000 annually.29 Universities offer an environment where disinterested- ness and continuity of scientific inquiry provide much of the basic information which must be drawn upon in improving existing technological processes and in estab- lishing new ones. The cooperative relationships, built up in recent years between university laboratories and in- dustry, have greatly increased the economic value of university research. At the same time these institutions carry on most of the pure research through which many discoveries of fundamental economic significance are made. 26 Compton, Karl T. "Technical Progress and Social Development." Electrical Engineering 58:12; January 1939. 27 Jackson, Dugald C. "The University Laboratory as a Partner of Industry." Chapter IX, Profitable Practice in Industrial Research, Mal- colm Ross, Editor. New York: Harper and Brothers, 1932. p. 176. 28 Hamor, W. A. "Industrial Research." Encyclopedia Britannica. Vol. XIX, Fourteenth Ed. New York: Encyclopedia Britannica, Inc., 1929. p. 206. 29 National Resources Committee. Research — A National Resource. Op. cit., p. 3. [23] Management Is a Crucial Factor in Modem Economy. The size and complexity of business concerns, the num- ber of employees involved, the range of raw materials consumed, and the amount and types of capital equip- ment employed, give a social significance to executive decisions and demand a grasp of technical knowledge and principles of organization, which transcend those required of entrepreneurs of earlier economies. The extensive role played by large business organizations in indicated by a recent survey which shows that "over a third of the man- power engaged in production in 1937 was attached to administrative units of 300 persons or more, while approxi- mately one-eighth was employed in administrative units of 10,000 persons or more."30 In 1937 in five great branches of industry — mining, the public utilities, manufacturing, transportation, and communication — the percent of all business done by corporations ranged from 90 to 100.31 Education Contributes to Effectiveness of Management. Education has provided an environment in which chil- dren and youths of all classes have rubbed elbows and have developed a community of understanding essential to a reasonable degree of social cooperation in the productive enterprise. The influence of the common school is one of the factors which has retarded the development of class lines. Education has also provided a means whereby genius and energy might rise to positions of leadership. Many econo- 30 National Resources Committee. The Structure of the American Economy. Part I. Washington, D. C: Government Printing Office, 1939. p. 99. 31 United States, Temporary National Economic Committee. Investi- gation of Concentration of Economic Power. Hearings, Seventy-Fifth Congress, December 2, 193 8. p. 96. [24] mists have recognized the economic importance of this educational function. Marshall many years ago stated it as follows: ". . . the wisdom of expending public and private funds on education is not to be measured by its direct fruits alone. It will be profitable as a mere investment, to give the masses of the people much greater opportunities than they can generally avail themselves of. For by this means many, who would have died unknown, are enabled to get the start needed for bringing out their latent abilities. And the economic value of one great industrial genius is suf- ficient to cover the expenses of the education of a whole town; for one new idea, such as Bessemer's chief invention, adds as much to England's productive power as the labour of a hundred thousand men." 32 Schools have long provided literacy and other elementary education which even the "self-made" man has possessed. The tendency recently has been to emphasize the impor- tance of formal training as a qualification for leadership in business enterprises. Gemmill, in discussing the relation of education to modern business, writes: "It is vital . . . that management be well-informed and mentally alert, with the ability to reason from cause to effect, and the power to visualize in advance the outcome of a proposed course of action. . . . Training for business life must not be expected to work miracles, but it has done much, and can do still more, to add to the effectiveness of human effort (whether manual or managerial) expended in economic activities. Colleges, technical schools, and universities train scien- tists, engineers, and technologists who provide expert knowledge for the business executive and who in some cases themselves assume managerial ability. Graduate 32 Marshall, Alfred. Op. cit., p. 216. 33 Gemmill, Paul Fleming. Fundamentals of Economics. New York: Harper and Brothers, 1939. p. 171. [25] schools of business are training growing numbers of young men, who first enter minor executive positions from which are recruited those who rise to positions of major managerial importance. Education Significantly Affects All Factors of Production. Economists recognize the effects of sound education on all factors of production. Education's influence is so per- vasive and important that some classify it as a basic factor of production in itself. Almost a century ago, near the beginning of the industrial revolution, Senior assessed the economic value of education as follows: "No country is so poor as to be unable to bear the expense of good elementary schools. Strictly speaking it is not an expense. The money so employed is much more than repaid by the superiority and diligence, in skill, in economy, in health — in short in all the qualities which fit men to pro- duce and preserve wealth, of an educated over an unedu- cated community."34 Later economists, cited elsewhere in this chapter, expand the considerations which suggest the relationship of high productivity and adequate provision for education. Is there direct evidence as well as economic theory to support the thesis that education improves national productivity? Are there facts which support the claims of economists on this point? Statistical Evidence Indicates Relation of Education and Productivity. Per capita production and per capita income have in- creased several fold during the past century in nations like 34 Senior, Nassau W. Industrial Efficiency and Social Economy. Vol. II. Original mss. arranged and edited by S. Leon Levy. New York: Henry Holt and Co., 1928. p. 328. [26] Great Britain and the United States.85 During the last sev- enty years, population in the United States has increased threefold while the physical volume of goods produced and consumed has increased more than ninefold.36 The primary factor in this phenomenal expansion in pro- ductivity has been the application of science to the proc- esses of production. Education, however, makes significant contributions to all factors of production as has been in- dicated in this chapter. Scientific knowledge is helpless in achieving high productivity where ignorance abounds. The economic development of the nations of the world indicates that a high level of economic productivity and substantial provision of educational facilities go together. The coincidence of ignorance and poverty is also a uni- versal phenomenon. The foregoing evidence, however, cannot be accepted as conclusive. The complexity of the factors involved is too great to permit easy conclusions. The fact that logical analysis and statistical evidence reveal the correlation of two factors does not in itself conclusively prove causal relationship. Both may be the outcome of one or more comprehensive causes. It is important, however, that as techniques of research have been refined, resulting evidence increasingly supports the hypothesis of economists as to the relationship of education and productivity. A number of studies have attempted to assess the re- lationship of productivity and provision for education among the forty-eight states of the Union. One of the most comprehensive and careful of these was made several years ago by Bowyer.37 It attempted to compare the per- 35 Thornton, Jesse E. (Compiler) . Science and Social Change. Wash- ington, D. C: Brookings Institution, 1939. p. 290. 36 Stewart, Paul W.; Dewhurst, J. Frederic; and Field, Louise. Does Distribution Cost Too Much? New York: Twentieth Century Fund, 1939. p. 337. 37 Bowyer, Vernon. "Relation of Public-School Support to Subsequent Per-Capita Wealth of States." Elementary School Journal 3 3:33 3-45, 417-26; January and February, 1933. [27] centage of its wealth which a state spends for schools with the rate of increase of its wealth during the subsequent twenty-five years. This study found that "in those states in which the percentage of wealth expended for public schools in 1890, 1900, and 1912 was the greatest, the increase in the average per capita wealth during the fol- lowing periods was larger than the corresponding increase in states which had provided less adequately for their schools." The significance of this finding is increased by the fact that the study, by using the partial correlation technique, attempted to eliminate or to hold constant such factors as population changes and migration, wealth of a state at the beginning of the period, differences in temper- ature and climate, private school attendance, proportions of population colored and foreign-born, and value of min- eral products. The conclusion was that: "Elimination of the influence of these various factors fails to disclose any which seem to have an appreciable effect in helping to produce the positive relation between school support and subsequent changes in per capita wealth. In fact, elimination of the influence of the other factors serves in most cases to increase the positive correlation. . . . "The fact that this study has revealed no outside influence which furnishes an explanation of the positive correlation found between school support and subsequent per capita wealth does not, of course, preclude the possibility that such a factor may be found in the course of further investiga- tion. Until and unless some other factor is discovered which accounts for the positive relation shown to exist, however, it is reasonable to conclude that financial support of public schools has had a causal bearing on subsequent increase or decrease in per capita wealth of the states." 3S The negative effect on earning power of inadequate pro- vision for education has been appraised by Odum in his 38 /&/9: 659; May 19, 1934. 36 Conant, James B. "The Selective Process in Education." School and Society 47:158; January 1938. 37 Gemmill, Paul Fleming. The Economics of American Business. New York: Harper and Brothers, 1930. p. 434. [148] Accidents of Geography Condition Educational Opportzmity. It is a well-established fact that educational opportunity varies tremendously, both in amount and quality, from one part of the country to another. These differences do not arise out of a considered policy which judges that children in the South cannot acquire or do not deserve a complete educational opportunity. We are not at the moment con- cerned with fixing responsibility or with tracing causes. Suffice it to say that this educational underprivilege is one result of a complex array of economic and social forces. It does not appear, however, that the distribution of educa- tional opportunity according to accidents of geography promises to maximize the economic effects of education. The disparities in educational provision which exist in metropolitan areas are often large. The working classes live within the city limits, while well-to-do owners, pro- fessional men, and company officials live in surrounding residential suburbs. The city is thus faced with a dispropor- tionate number of children to taxpaying capacity. The result is often limited educational opportunity where any national appraisal of needs would urge the opposite. Rural or Urban Residence Determines the Level of Educational Opportunity. In urban areas in 1931-32 one child in four attended high schools, while in rural areas only one in seven of the school population was in high school. It seems reasonable that this disparity in opportunity rests on other causes than native ability or interest. 88 38 Watson, Goodwin. Human Resources. Washington, D. C: Ameri- can Council on Education, 1936. p. 5 5-58. [149] Farm youth so far as education is concerned, is usually at a great disadvantage as compared with village youth.39 This is illustrated by a Wisconsin study which reveals that "70 farm young men per 100 did not enter high school, while 70 village young men did," and "that twice as many farm youth per 100 as village youth leave high school before graduation." 40 Rainey after reviewing a series of studies made for the American Youth Commission concludes: "A low educational level and rural poverty go hand in hand." 41 After an extensive study of the educational handicaps suffered by rural youths in New York State, Eckert and Marshall conclude that "apparently little provision has been made for country boys and girls to acquire the skills and knowledge that must determine their daily effective- ness as workers and as citizens in a democracy." 42 The Factor of Race Significantly Conditions Educational Opportunity. Great progress has been made in the education of the Negro population since the time when it was a misde- meanor in some states to educate a Negro slave. Neverthe- less, serious denial of educational opportunity still exists. The eighteen states maintaining separate Negro schools reported in the last census that white children on the aver- age were receiving 10.6 grades of schooling, while Negro children on the average were receiving 7.1 grades of school- ing. This disparity is accentuated by the fact that all sta- 39 Melvin, Bruce L., and Smith, Elna N. Rural Youth: Their Situa- tion and Prospects. Works Progress Administration, Division of Social Research, Research Monograph XV. Chapter III. Washington, D. C: Government Printing Office, 193 8. 40 James, J. A., and Kolb, J. H. Wisconsin Rural Youth, Education and Opportunity. Bulletin, 437. Madison: Agricultural Experiment Station, University of Wisconsin, 1936. p. 6-7. 41 Rainey, Homer P., and others. How Fare American Youth? New York: D. Appleton-Century Co., 1937. p. 110. 42 Eckert, Ruth, and Marshall, Thomas O. Op. cit., p. 185. [150] tistics on this matter indicate that length of school term, average attendance, teachers' qualifications, type of school buildings, and other facilities are much less adequate where Negro schools are concerned. Expenditure per Negro child is often a minor fraction of that per white child in the South, despite the fact that expenditures for the latter are less than half the national average. Dollard's study of a southern community has carefully analyzed how literacy and vocational training tend to ad- vance the social and economic status of the Negro, and how lack of schooling and inferior opportunities tend to restrict advancement.43 Negro youths in rural areas are especially handicapped by lack of high schools.44 In the early thirties, the United States Office of Education estimated that at least 900,000 Negro youths of high-school age were not in school. In two south- ern states less than 5 percent of the Negro population of high-school age are enrolled in school, and in five the per- cent is less than 10.45 The National Advisory Committee, after appraising the situation, concluded: "Because of the intimate economic relations that neces- sarily exist between the two races, the low level of educa- tion among Negroes is a severe burden not only on them- selves but on all who must employ them or have dealings with them. Even in Northern States, the large influx of Negroes from the South makes the quality of their previous training a matter of vital importance to the localities where they live and work." 46 The Negro has demonstrated his capacity to profit from educational opportunity. In spite of handicaps, a period of 43 Dollard, John. Caste and Class in a Southern Town. New Haven, Conn.: Yale University Press, 1937. p. 199-200. 44 Caliver, Ambrose. Availability of Education to Negroes in Rural Communities. U. S. Office of Education. Bulletin, 193 5, No. 12. Wash- ington, D. C: Government Printing Office, 1936. 45 Melvin, Bruce L., and Smith, Elna N. Op. cit., p. 43-44. 46 Advisory Committee on Education. Op. cit., p. 11. [151] three generations has seen the members of this race change from 80 percent illiterate to better than 80 percent literate. It is still doubtless true, however, as Booker T. Washington observed, that it is "too great a compliment to attribute to the Negro child the ability to gain equal education for one dollar to every seven spent on the education of the white child." Fortuitous Distribution of Educational Opportunity Has Disastrous Economic Effects. The evidence clearly reveals that fortuitous factors to a large extent determine whether a child shall have generous or little educational opportunity in the United States today. A child's chance to prepare for a high calling, or for any calling except unskilled labor, often rests upon such factors as the character of the soil as determined by a glacier in the ice age; whether his father is a professional man or a laborer; whether he is born in the North or in the South, in the city or the country, in an urban or a suburban com- munity; or whether his skin is black or white. Large num- bers of youths are prevented from continuing their edu- cation through high school and into college, because of lack of ability to meet expenditures required. Many of these youths have superior ability. When these superior youths are given financial aid permitting them to continue their education, they make superior records. The distribution of educational opportunity in the nation today is such that the potential economic effects of education are far from being fully realized. Tens of thou- sands of youths each year are foolishly being thrown into the overcrowded ranks of casual and unskilled labor who could have qualified for callings which demand more and pay more. They have both the capacity and the ambition to so qualify. But we permit fortuitous forces beyond their control to sentence them to thirty or forty years of low- [152] grade and low-paid service. The youths thus condemned by an uneconomic social policy will earn less than they could have earned, and the nation's income will be less than it might have been. Wise public policy urges that this undemocratic and uneconomic situation be corrected as rapidly as possible through the right kind of effectively free education. [153] VII. Extension of Facilities and Selection of Students A high degree of social mobility is the essence of the American ideal. . . . The perpetual disintegra- tion of hard and fast class lines would seem to me the first aim of an educational system. . . . — James Bryant Conant. The preceding chapter described fortuitous factors which determine the amount of schooling provided chil- dren and youths in the United States today. The present distribution of educational opportunity is such that the potential economic effects of education tend to be greatly reduced. Education will not yield maximum economic re- turns until existing fortuitous and uneconomic bases for selecting youths for educational opportunities beyond the universal minimum are replaced by a program for making education effectively free. The development of such a program will require the solution of several major problems. Decisions must be made as to types of facilities to be offered at advanced levels. [155] Methods, which are sound from an economic as well as other points of view, must be developed for selecting those to receive advanced educational opportunity. A pro- gram of student aid must be devised which will enable qualified but financially handicapped students to obtain appropriate training. Careful planning and much experi- ence will be necessary before it will be possible to develop specific means whereby these problems may be met. Some guiding principles and practices, however, are beginning to emerge. These will be dealt with in this chapter. Certain other problems involved in the program pro- posed in this report, such as its cost and financing, neces- sary administrative reorganizations in education, and the securing of public understanding and support, will be dealt with in subsequent chapters. Social and Economic Needs Should Guide Extension of Educational Facilities. The development of free education beyond the universal minimum, considered solely from an economic point of view, should be so planned that the greatest possible in- crease in production will be obtained from each extension. As a general policy, therefore, facilities should first be pro- vided so that workers may obtain training for those occu- pations in which they will be able to produce the largest returns for themselves and for society. The satisfaction of this principle presupposes knowledge of areas of greatest productivity. Occupational surveys of each community and region must be kept continuously up to date. Such surveys should show exactly the points where the greatest productivity may be obtained, and consequently, the fields in which training should first be offered. Training facilities for callings already over-supplied, where wages are low and unemployment is frequent, would not be developed. The areas selected for the first extensions of free training [156] should satisfy a second selective criterion: free education should be extended first for those fields in which an in- creased output will be of the greatest social importance. The application of these criteria will lead first to exten- sions which will greatly increase the number receiving training for the upper levels of the trades and technical occupations, and for the semi-professional and professional fields. These increases should be continued until there are but few workers left in the unskilled branches of these occupations. Extension will follow in the professional fields and all others requiring greater amounts of training. Accordingly, colleges and other agencies concerned with the development of facilities for occupational training beyond the universal minimum should give preference to vocations in which those trained will be able to earn the largest incomes and to fields where increased output will be of greatest social importance. Bases for Selecting Youths for Advanced Training Should Be Improved. Whatever may be the causes, whether of heredity or en- vironment, it seems clear that by the time youths have completed the universal minimum they profoundly differ from one another. One may be able to deal with highly abstract questions; another experiences great difficulty in learning except from tangible and concrete situations. One may be largely endowed in imaginative power; another seems to lack such ability. One may have excellent muscular coordination, strength, and agility; another may be clumsy and weak. One may show special aptitude for getting along with other people and special pleasure in personal contacts; another may lack these qualities and may' do his best work alone. To pretend that every youth is equally capable of profit- ing from the same amount and kind of education is to re- [157] fuse to face the most obvious of facts. There are a few persons who are capable of taking advantage of the most comprehensive educational opportunities. Gifted youths are the future scientists, philosophers, statesmen, and leaders in other areas. By offering them unlimited educational op- portunities society will reap a rich economic reward. How- ever elaborate the process and however great the expense of educating them, it will be infinitesimal in comparison to the return they will yield. A democratic school system will not treat all students alike. The difficulty with present practice, from the eco- nomic point of view, is not that different persons are given different amounts and kinds of education. It is proper that different amounts and kinds of education should be given to different individuals. The real source of the difficulty lies in the fact that our educational opportunities are not closely enough correlated with individual abilities and social needs. We are making it possible for some persons of limited intellectual endowments to waste their own time and that of others in the pursuit of unsuitable advanced education, while at the same time some persons of great potential abilities are given only meager educational op- portunity. This maldistribution applies both to amount and kind of education given. The economic importance of training an adequate supply of leaders was dealt with in the chapter on the relation of education to productivity. It is pertinent here, however, to have one well-known economist's appraisal of the sig- nificance of this function: "Education should aim to supply the kind of ability which society needs. . . . He who can devise educational systems and educational methods which will increase notice- ably the kind of talent of which there is a felt scarcity, and diminish the kind of talent of which there is a felt super- abundance, is one of the greatest conservers of human energy that any country can possess. . . . Generally speak- [158] ing, his work consists primarily in training men for skilled work who would otherwise be compelled to do unskilled work; for mental work who would otherwise be compelled to do physical work; for work requiring judgment and discretion men who would otherwise be compelled to do routine work; for work requiring courage and initiative men who would otherwise be compelled to work under direction. The reason for this is not that these so-called higher kinds of work are inherently superior to the others — it is simply because the supply of laborers in these so-called higher occupations is scarcer relatively to the need for them."1 Choice of occupation should not depend, so largely as at present, upon family, economic status, neighborhood, the part of the country in which one happens to be born and grow up, and other irrelevant factors. As a result of this situation there are persons occupying positions for which they are not well fitted by their abilities, and there are other persons filling positions of less responsibility than those which their natural endowments fit them to occupy. Society is a loser in both instances. The better placement of individuals would result from a more intelligent selec- tion of youths for advanced training. Certain principles should guide this difficult process. Individual Ability Should Guide Selection for Advanced Training. In selecting students for free education beyond the min- imum, individual capacity and diligence should be pre- dominant considerations. The objective should be to admit youths to advanced technical or professional training only when it appears that they can fully meet the rigorous re- quirements of the callings involved. Bases of judgment here should be broad rather than narrow. No mere facility in memorizing and docilely adjusting to academic routine 1 Carver, Thomas Nixon. The Economy of Human Energy. New- York: Macmillan Co., 1924. p. 170-172. [159] will suffice. In addition to first-rate intellectual capacity those selected should possess physical qualifications, dili- gence, social purpose and character, and other personal qualities appropriate to the responsibilities they must bear and the public-spirited service which society should expect from them. The fulfillment of this function will require continued development and perfection of methods and techniques of selection. There is already evidence that youths of real ability can be identified before they enter college. Closer and more intelligent cooperation between high schools and colleges, and the further development of selective methods should make possible the practical administration of a pro- gram in which individual ability is the basis of selection for advanced education. Advanced Training for Qualified Youths Must Be Made Effectively Free. Many competent youths are now debarred for financial reasons from obtaining training which they are qualified to undertake. This must be corrected in order to maximize the economic effects of education. The goal must be a situ- ation where no one will be denied training due solely to lack of money to pay for it. The implementation of this policy involves a series of problems and decisions. We now provide free tuition in the elementary and sec- ondary levels of education. This is a wise policy but it does not go far enough. Effectively free schooling requires more than free tuition — it is schooling provided under such conditions that persons who should have the schooling are not debarred from it by financial reasons. This means that the cost of books, educational supplies, and mainte- nance will be provided in part or in whole if the lack of such provision keeps qualified youths from attending school solely due to financial limitations. [160] This is necessary if the universal compulsory minimum of ten years of schooling is to be put into action. It applies to an even greater degree if the median schooling of Ameri- can youth is to be raised to fourteen years and if personal financial limitations are not to bar youths of superior capac- ity from continuing beyond this average. The problem in- volved is clearly stated by the Advisory Committee: "Even though tuition may be free, attendance at high school is expensive to the pupils and their families. The higher up the educational ladder young people progress, the larger become the costs that are not ordinarily met through public funds. The financial status of families and of indi- viduals is thus one of the most important factors in deter- mining whether a young person shall remain in high school to the completion of the course, and is usually decisive when college attendance is under consideration. In consequence, additional provision for education free of tuition costs to the individual will not greatly reduce inequalities of oppor- tunity for secondary and higher education if there is not also some provision to make attendance possible." 2 The question arises as to whether advanced training is to be free for all qualified youths, or merely for those unable to pay for it themselves. Some will probably argue that all costs of advanced training should be provided qualified students, irrespective of whether they are rich or poor. In support of this position, they might argue that it is unde- sirable to determine whether education shall be free or not according to the criterion of economic class. This basis was rejected nearly a century ago at the elementary-school level. The stigma attached to those attending "pauper schools" had to be removed in order that schools appro- priate to a democracy might evolve. It is possible that the course of social evolution will eventually result in making advanced education free to all qualified youths, regardless of their economic status. De- 2 Advisory Committee on Education. Report of the Committee. Washington, D. C: Government Printing Office, 1938. p. 100. [161] cision on this matter, however, can wait. At this time the objective should be to make education effectively free as the term has been defined in this report. This will be a major undertaking since, as was shown in a previous chapter, there are large numbers who are intellectually but not financially qualified to continue their schooling beyond present levels. Accordingly, the cost of financing effectively free education will require that the amount of aid received by students should vary according to their needs. It should be practical to determine the annual amount required to finance advanced study in a given situation.The proportion of this amount which it is feasible for students to obtain themselves or from their families, taking account of in- come, could be estimated. The difference should be made available. This will make education effectively free and will permit society to reap the economic returns promised by such a policy. Furthermore, such experience as has been gained to date suggests that it is possible to give financial aid at the higher education level without stigmatizing those accepting it. Extending student aid in such a manner as to involve stigma or loss of self-respect should not be tolerated. Student Aid Should Imply Honor and Responsibility. The program for aiding worthy and needy students should involve no loss in self-respect. The provision of aid should imply that the recipient is recognized as possessing superior mentality, character, and other personal charac- teristics which make his training an excellent social and economic investment. He should be made to feel that ac- ceptance of aid is equivalent to contracting a debt which can be amortized only by rendering substantial returns in service to society. Sober responsibility, rather than snobbish superiority, should characterize those selected to receive student aid. [162] It may be argued that society should trust no neophyte with the two-edged sword of an advanced technical or professional education who does not possess these knightly qualities. The point is a good one. This element is recog- nized as important in the training of some technical and professional workers. Witness the Hippocratic Oath taken by the young physician. Here we are concerned with the fundamental question as to whether conditions under which many professional and technical men now secure their preparation are such as to inspire the highest social purpose. This preparation usually involves extensive personal outlays. If the student concerned comes from a family in rela- tively good economic circumstances, he is likely to look upon the payment of the cost of his advanced education as a matter of course, particularly if economic advantage has been enjoyed by his family for more than a generation. At any rate, even though a portion of his tuition is fi- nanced from endowment, he is likely to look upon his training as pretty much of a private affair. It is a personal investment on which he is privileged to recover principal and interest according to the standards of competitive business. If the student concerned comes from a poor family he achieves advanced training only after tremendous personal effort and sacrifice. Often his course may be completed only after endangering his health and incurring substantial debt. The situation here is one which even more encourages the person completing extensive technical or professional training to look upon it as a means first to private profit, and incidentally — if at all — as an obligation for public service. This whole situation emphasizes the need for careful thinking as to how an attitude of social responsibility may be created as an outcome of advanced education. This is [163] important at all levels and irrespective of how the student's training is financed. It is peculiarly important in an econ- omy which places such unprecedented power in the hands of leaders. It seems sound to grant aid to students only under circumstances which carry honor rather than stigma and emphasize social obligation. Present Forms of Student Aid Need Extension and Appraisal. Persons who might be prevented from securing the mini- mum amount of education deemed desirable for American citizenship, or from pursuing the advanced education for which their abilities and interests qualify them, should be given aid which will make it possible to secure the proper amount of education. Provision should be made not only for tuition, but also other costs of continued education, in- cluding maintenance when necessary. It is too early to be certain as to the forms this aid should take. This aid may be furnished in the form of scholarships. All institutions of higher education should increase the number of scholarships as rapidly as conditions permit. Wealthy donors, in many cases, might better give funds for the endowment of scholarships than for the erection of buildings. A substantial increase in such benefactions would greatly help in developing this form of student aid. This has been the principal source of scholarships in non- tax-supported institutions and has also been a source of aid for many students attending public institutions. It would also be highly desirable to increase the number of scholar- ships at every state university or college, financed at public expense. A special development of the scholarship plan exists in New York State. Since 1913 this state has financed three thousand $100 scholarships. These are available on a competitive basis for high-school graduates wishing to attend college. The recent Regents' Inquiry recommended [164] that the number of scholarships be raised to six thousand and that the stipend be increased to not to exceed $300. It was recommended that a plan be initiated whereby those awarded a state scholarship, who did not need the full $300, should receive such part as the commissioner of education determines. The idea was that this plan would enhance the prestige of the scholarships and would reduce the total cost to the state. There was also a recommendation that local school authorities be authorized to finance competitive scholarships for not more than 5 percent of the graduating class to be awarded by the state commissioner of education. It was also proposed that one hundred graduate fellowships of $400 each be made available for graduate, academic, scientific, and professional study, to be awarded by the commissioner of education.3 Student loans have been widely employed as a means of financing advanced schooling. Loans to selected students at moderate interest rates have proved good financial risks. The extension of this form of student help is desirable in the present situation. The partial subsidizing of the costs of education has long been a practice in many private and public institu- tions. Tuition fees in the former are often less than cost, the difference being met from endowment. Unfortunate reversal of this situation is threatened by the trend as to tuition charges. Between 1925 and 193 5 the portion of current expenses met by student fees in publicly controlled institutions of higher learning increased 2.7 percent and that in privately controlled, 2.5 percent.4 Many institu- tions partially subsidize student maintenance by providing it at less than cost. 3 Gulick, Luther H. Education for American Life. Report of the Regents' Inquiry. New York: McGraw-Hill Book Co., 1938. p. 59-60. 4 Badger, Henry G; Kelly, Frederick J; and Greenleaf, Walter J. Abridged Statistics of Higher Education, 193 5-36. U. S. Office of Edu- cation, Bulletin 1937, No. 2. Washington, D. C.: Government Print- ing Office, 1938. p. 20. [165] Such methods of aiding students should be extended until all those qualified for advanced training are provided for. Constant appraisal of the forms of aid given should eventu- ally permit the perfection of a system which will allow society to capitalize all of its human resources. Conditions for Granting Student Aid Require Careful Thought. Opinions differ as to what conditions or requirements should be involved in providing student aid. Is it desirable that the student should directly repay the cost of his edu- cation in part or in whole to the agency helping him? From the economic point of view, the first consideration is that the financial barriers to training be removed in order that all human talent be fully capitalized. When this is pro- vided for, the economic effects of education are maximized. Accordingly it would be logical that the maintenance grants should be outright allotments and should be regarded neither as charity nor as payment for services currently rendered. They would be, rather, the means by which society maintains and increases its economic productivity. Certainly maintenance grants should not involve an amount and kind of work which hinders the student from fully capitalizing the educational opportunities offered. President Conant has dealt with this matter as follows: "At present it is extremely difficult for a student to work his way through college. It seems to me a mistake to make a young man of intellectual promise spend long hours doing non-intellectual tasks to help himself through college. It taxes ... his physical strength and may break his morale. It is a social waste." 5 This does not mean that work should be excluded from the lives of college students. Work in the form of serious 5 Conant, James B. "The Harvard Prize Fellowships." School and Society 39:639; May 19, 1934. [166] intellectual endeavor is necessary, if their training is to have economic value. The educational process itself is, or should be, a socially useful form of work. This process indeed might very appropriately consist, in part, of work of remunerative character but it should be work in which learning rather than earning receives the center of emphasis. It is doubtless true that higher education for many youths today does not involve sufficient substantial work. It seems unlikely that superior occupational training can result from a situation in which youths are too much insulated from contact with what is involved in earning an honest dollar in the open labor market. The experience certain pioneer institutions are gaining today in making higher education a process of many direct connections with real life and real work needs to be attentively studied. There should be more effective use of the summer vacation period as a time of practical work related to the student's probable future vocation. The primary objective, however, should be kept clearly in mind, namely, that the training of youths should be such that they will be most fully prepared to meet the exacting requirements of our complex economy. The foregoing discussion has dealt with policies which should govern the granting of student aid to youths of superior ability. Under existing practices, however, con- siderable sums are used in financing the education of youths who do not possess such ability. This happens when- ever any part of the tuition and other costs to a college due to the attendance of unqualified youths is met from public funds or endowments. The families of some youths, who do not possess the capacity, diligence, character, and other qualities whch should be prerequisite to college ad- mission, insist that they be admitted. In some instances these youths come from families of low economic status, who have little conception of the qualifications requisite to college success. In other instances, they come from fam- [167] ilies of high social and economic status and influence. What should be the policy in regard to such youths? Some urge that they be excluded since their presence tends to lower college standards. This, in fact, is the policy of certain colleges. There are others which will admit these students. In such instances it seems clear, however, that the total cost to the college including tuition as well as all other expenses should be met wholly by the families concerned. Effectively Free Education Would Tend To Raise College Standards. Making education effectively free for youths of superior ability would not lower college and university standards. Institutions of higher learning could select those admitted from all rather than from a fraction of high-school grad- uates. If the methods of selection were in accord with prin- ciples outlined in the next chapter, the effect would be to secure student bodies of high caliber. Social and economic status would play a less important role in determining ad- mission to college, while ability, diligence, character, scho- lastic record, and similar factors would play more important roles. If at the same time, appropriate opportunities could be developed by technical schools, business, labor, and other appropriate agencies for those whom it appears would not benefit from attending colleges and universities, the latter institutions would be relieved of a pressure which now tends to lower their standards. The total result would be better differentiation of post high-school education and the general improvement of standards at this level. The providing of appropriate educational opportunities at the post secondary-school level, however, is partly the responsibility of existing colleges and universities. One of the reasons why standards of effort and accomplishment of college students of even superior ability are often not high is the narrow curriculum and uninspired teaching [168] which too often exists. Traditional courses which take too little account either of individual interests or social need should be replaced by those which hold greater challenge and value. Proper Occupational Distribution Need Not Involve Regimentation. Maintenance grants to superior students should not be conditioned upon the recipient's agreeing to prepare for, to enter upon, or to refrain from entering, particular voca- tions. Authoritarian control over vocational distribution should not be exercised through the manipulation of main- tenance grants. Such guidance as is appropriate to a demo- cratic society may be achieved better through other means. This general policy, however, should not be interpreted as precluding the desirability of establishing scholarships and other financial aids for students admitted to particular professional schools. Better occupational distribution is a matter of major concern. It determines in large measure both the quality of individual living and the successful operation of the national economy. The following statements made by special investigators for the Regents' Inquiry and the Presi- dent's Advisory Committee are pertinent: "Our human resources will be conserved to their fullest and used most effectively when each individual is so placed that he can make his maximum possible contribution to the social good consistent with his own individual happiness and welfare. It is not enough that he give his utmost; he should also be doing that work which will result in the fullest richness of his own life. For everyone to make the correct choice is probably only an ideal, but at least it es- tablishes our goal, and any step in that direction is an ad- vance for the individual and for society."6 6 Norton, Thomas L. Public Education and Economic Trends. Cam- bridge: Graduate School of Education, Harvard University, 1939. p. 2 5. [169] "For those who earn their livelihood by work of hand or head, the job is an important consideration. It is one's daily tasks that give life its tone and color; both for the worker and his family many of the satisfactions of life grow out of the attractiveness of his occupation. Further- more, the orderly operation of the economic system requires, among other factors, a balanced distribution of workers in the various occupational groups. It is enormously impor- tant, both from the individual and the social point of view, that the right persons with the proper training be appropri- ately distributed among the various occupations. Herein lies one of the major social obligations of the American educational system." ' This obligation need not involve a series of regimented controls. Rather, it should be achieved through educational methods which are more consistent with a democratic society. This will greatly increase the need for guidance and advisory services in the schools, especially at the point where the proposed universal minimum of education termi- nates. It will be necessary also to develop ways and means of compiling information on the supply and demand for workers in all vocations, the requirements for success in each of the vocations, the standards enforced, and the opening up of new occupations. These facts should be widely disseminated and should be made the basis of occu- pational instruction in the schools. Equipped with such information, each person would know the probabilities of success in any particular vocation, the financial rewards to be expected, and the standards for admission. Given this information, he would be a free agent with respect to vocational choice but he would be both informed and free rather than, as is often the case at present, free and ignorant. The use of facts, advice, and intelligence in shap- ing one's occupational career should be made a part of the 7 Edwards, Newton. "Social Development and Education." The Prob- lems of a Changing Population. National Resources Committee. Wash- ington, D. C: Government Printing Office, 1938. p. 213. [170] mores of the people, replacing present uninformed, happen- stance procedures. This matter was dealt with as follows by the National Resources Committee: "Any well-planned program that looks toward a more adequate adjustment of population to occupational oppor- tunity must be based on careful and detailed analysis of occupational trends and of the changing demands that the various occupations are making upon the skill, the intel- ligence, and the social qualities of the worker. Such an analysis has yet to be made." b A population with adequate facts and advice will not have to be regimented into a proper occupational distri- bution. Enlightened self-interest may be trusted to cause informed citizens to avoid overcrowded, and to prepare for under-supplied, callings where wages and other con- ditions of work are attractive. Careful Selection and Student Aid Would Raise Occupational Standards. The program proposed in this chapter does not contem- plate the lowering of standards of admission to any of the trades or professions, nor the lowering of standards for admission to the schools which give professional or other occupational training. All standards of capacity, interest, health, character, and the like, which can be shown to have a valid connection with success in serving the public in a particular occupation, should be maintained at the highest possible level. Such standards are of peculiar importance in advanced callings; they need not and should not be relaxed. They will exert a wholesome selective influence upon those who enter or prepare to enter each of the vocations. The difference between what is here proposed and what now exists is that genuine standards would be possible for ad- mission to advanced callings, in place of the accidental and 8 Ibid., p. 213. [171] mediocre selections which now too frequently occur. A carefully developed program of student aid, along the lines projected, would make it possible for those who can meet the rigorous selective process proposed to continue their training, instead of leaving school to enter semi-skilled or unskilled callings as happens too often under existing policies. Colleges and other agencies would be able to select students whose secondary-school experience promises that they can profit richly from continued training regardless of the economic or social group to which they belong. If ability, diligence, and character were the bases of selecting youths for advanced training, and if all who can meet the standards required are placed in a financial posi- tion to continue, student bodies would be made up of the best from all sections of society. The total effect should be to raise rather than lower the standards required for admis- sion to advanced training. Untold social, as well as eco- nomic, advantage might be expected to accrue to our democratic society from such a situation. [172] VIII. Estimating the Cost It is not so much the amount of taxes and public expenditure that should command attention as the purposes which public funds serve and the circum- stances surrounding their disposition, that is, whether the object of the expenditure is wise and whether the function has been properly conceived and is being efficiently and economically adminis- tered in the interest of the community as a whole. — National Industrial Conference Board. Preceding chapters have shown that education plays an important economic role in our complex industrial culture. A program has been outlined concerning the kind and amount of education which would further increase the positive economic effects of education. It is concluded that the cost of this program would pay for itself in the long run — that after it had been paid for there would be more left with which to buy other things than there would have been otherwise. This chapter deals with the more immediate [173] financial problem. It presents an approximate estimate of the amount required annually to finance the proposed program. For the purpose of estimating costs, the program pro- posed in this volume may be divided into: 1. Financing the proposed ten-year minimum of schooling. 2. Carrying the median person through fourteen years of schooling. 3. Additional cost of providing free textbooks, school supplies, school fees, and other "educational necessities." 4. Additional costs in certain cases for clothing and necessities of life which would enable all children to remain in school for ten years and the median youth to remain for fourteen years. 5. Lifting the poorest schools to a reasonable minimum of effi- ciency. 6. Improving and extending the program of education in other respects, including carrying qualified persons through edu- cation beyond fourteen years, providing vocational retrain- ing and other desirable forms of adult education, and addi- tional improvements. Estimates of Future Costs Are Difficult. Exact predictions of cost for the above items would re- quire extensive data which are now lacking. Furthermore, future social trends cannot be definitely predicted. For example, concentration of population in cities would make schooling relatively less expensive than a sparse distribution of population in rural areas. Yet it is impossible to predict accurately what the population movements in this country may be. Again, the number of children to be educated in the future will depend on birth-rates, death-rates, and im- migration quotas, none of which can be positively pre- dicted. It is desirable, however, in spite of serious difficulties, to anticipate as well as we may the needs and developments of the future, while building a better basis of statistical information upon which future planning may rest. [174] The Cost of the Ten-Year Minimum Program Is Estimated. In estimating the cost of the ten-year minimum program, it is assumed that elementary education will be provided for all children 6, 7, 8, 9, 10, and 11 years old, and general junior secondary education for all youths 12, 13, 14, and 15 years old. The number of children in the foregoing elementary-school ages in 1939 was estimated at 13,700,000 in the study of population trends prepared by the Scripps Foundation for the Educational Policies Commission.1 Ele- mentary schooling now costs approximately $75 per child in average daily attendance.2 Assuming that 90 percent3 of the elementary-school population would be attending daily, the annual cost for children aged 6 to 1 1 inclusive would be in round numbers $925,000,000. The number of youths, 12, 13, 14, and 15 years old, in the four years of the proposed junior secondary-education period is 9,700,000. The present cost of junior high-school education is approximately $140 per child in average daily 1 National Education Association and American Association of School Administrators, Educational Policies Commission. The Effect of Population Changes on American Education. Washington, D. C: the Commission, 1938. p. 52. 2 This includes current expenses and capital outlay. The cost of public elementary schools, in states where separately reported, was $76 in 1930, and $6 5 in 1936. Since costs in 1936 were rising rapidly toward pre- depression levels, $75 is a conservative estimate for the 1939 cost. (U. S. Office of Education, Biennial Survey of Education, 1928-30. p. 80; Statistics of State School Systems, 193 5-36. p. 101.) 3 Average daily attendance of 90 percent of enrollment would require better enforcement of attendance laws than at present. The average attendance has recently been about 8 5 percent of enrollment. More than half of the states attain this average. With improved enforcement of attendance laws, a 90 percent average attendance could be maintained. The figures on attendance are for all public day schools, elementary and secondary. No figures are available which make it possible to use different percents for the elementary and secondary levels. [175] attendance.4 Again assuming 90 percent attendance, the estimated cost of this part of the universal minimum pro- gram would be $1,222,000,000. The elementary and junior secondary parts of the program taken together then would cost $2,147,000,000. This estimate, as well as that for the senior secondary school, includes all children and youths and makes no differentiation between public and private school attendance, since in both cases the cost is a charge against the total national income. The Cost of Raising the Median Schooling to Fourteen Years Is Estimated. The number of youths aged 16, 17, 18, and 19 in 1939 was approximately 9,900, 000. 5 In order to estimate costs at this point, it is necessary to make some assumption re- garding the rate at which students will be eliminated from school prior to the completion of fourteen years of school- ing by one-half of them. For the purpose of estimate, a uniform rate of elimination is assumed from the point at which all children complete their tenth year of schooling to the point at which one-half of all children complete their fourteenth year of schooling. This would mean that approximately 50 percent of the 19-year-olds, 62 percent of the 18 -year-olds, 74 percent of the 17-year-olds, and 86 percent of the 16-year-olds would be at school. The number enrolled would then be 1,200,000 of the 19-year-olds, 1,600,000 of the 18-year-olds, 1,900,000 of the 17-year-olds, and 2,000,000 of the 16-year-olds. For the education of the 16- and 17-year-olds, we may assume an average cost of approximately $160 per student per 4 The actual cost in 1930 was $143; in 1936, $105. Since costs are returning to pre-depression levels, $140 seems a conservative estimate for 1939. (U. S. Office of Education, loc. cit.) 5 National Education Association and American Association of School Administrators, Educational Policies Commission. Op cit. p. 52. [176] year,6 and for the 18- and 19 -year-olds an average cost of $200 per year.7 Allowing for 90 percent of attendance among all groups results in an estimate of $1,066,000,000. Added Cost of Providing Educational Necessities Can Be Estimated. In line with the general theory proposed throughout this report, the cost of textbooks, supplies, fees, and special equipment required for school attendance would need to be financed. Expenditure from public funds for textbooks and school supplies is about $4 per pupil in average daily attendance in city school systems where such supplies and books are furnished at public expense.8 The number 6 The cost in regular and vocational senior high schools was $168 in 1930 and $139 in 1936. Since costs of schooling are increasing toward pre-depression levels, $160 per year appears to be a conservative esti- mate for the first two years of the senior secondary unit in 1939. The unit costs used in these estimates are in no sense to be regarded as standards. The present difference between elementary- and secondary- school costs is due in part to the many low-cost elementary schools located in rural districts without high schools. In districts that support both elementary and high schools, a form of organization greatly to be preferred, the average unit cost in high schools is about 1.7 times that of elementary schools. Application of this ratio for 1929-30 would give unit costs of $86, $112, and $146, for elementary, junior high, and senior high schools, respectively, to reach the same total costs as used in the above estimates. The trend, in practice and theory, seems to be toward a lessening of the gap between elementary- and high-school costs. 7 There are no nationwide figures on junior college costs. The cost of public separate junior colleges in California was $233 per student in average daily attendance in California in 193 8. This state has about one-third of all public junior college students. Other secondary-school costs in California are approximately one-third higher than the national average. It is therefore estimated that the average cost of junior col- leges is in the neighborhood of $200. 8 Cost for textbooks and supplies at $4 per pupil is based upon a study by the Educational Research Service of the National Education Associ- ation. (Schoolbooks and Supplies: Recent Trends in Expenditures and Policies, Circular No. 2, 1934.) In 303 cities the average cost of fur- nishing free books and supplies for all elementary, junior and senior high-school pupils was $4.45 in 1930-31 and $2.97 in 1933-34. The $4 estimate is not suggested as a desirable or standard amount. [177] of pupils in average daily attendance in the proposed plan would be 90 percent of 30,100,000, or 27,100,000 pupils. Perhaps two-thirds of all pupils already receive textbooks and supplies at public expense.9 The expense of such ma- terials, therefore, is included in the per pupil costs used in the estimates which have already been made. Supplying these materials to the remaining one-third would cost, in round numbers, $36,000,000. In addition to textbooks and supplies, practically all secondary schools require pupils to have special clothing and equipment for physical education and science classes, student activities, and other items. These activities are re- garded as indispensable in the complete educational pro- gram. Properly administered, their value for all students is unquestioned. They should, therefore, be provided for all. From the limited studies available covering these items it is estimated that the annual cost per pupil enrolled would be about $5. The enrollment in the junior and senior sec- ondary schools under the proposed plan would be 16,400,- 000, which at $5 per pupil enrolled would amount to about $82,000,000. Some of this expense, however, has already been included since a few schools now finance a part of this cost. If the part of the cost already being financed is arbi- trarily placed at about 10 percent, the estimated net addi- tional cost would be in the neighborhood of $74,000,000. The total cost of the "educational necessities" item would be, therefore, $110,000,000. Certain Necessities of Life Requisite to School Attendance Must Be Provided in Some Cases. If children from families in the lowest income brackets are to attend school, some of them must have additional clothing and other maintenance provisions. Creation of an effectively free school system will make necessary the ab- 9 A rough estimate based on school population in the states which have mandatory or permissive free textbook laws. [178] sorption of some of these costs for some children and all of them for children from families of the lowest incomes. Otherwise, such costs will serve as an effective barrier to school attendance. If a youth is able to earn enough to defray a part or all of the expenses of attending school, without injury to his health or loss of other more valuable experiences, he should be permitted and encouraged to do so. Schools should, in fact, make it possible for every student to participate in some type of productive work.10 If, however, a youth can- not secure work, or must injure his health, or lose much of valuable school experience in order to earn money, his schooling should be financed from other sources. The pro- posal is for enough help with all factors considered to make education effectively free within the age limits and other conditions defined in this report. It is probable that only a minor fraction of children of elementary-school age are out of school for financial rea- sons. It is difficult to estimate the relatively small amount that would be required to make elementary education effec- tively free in the United States. At the present time, consid- erable sums are spent for free lunches, clothing, and other items for needy children in Grades I- VI. These expendi- tures would have to be continued and extended. Perhaps $50,000,000 would be enough to make elementary edu- cation available under conditions that would not deprive any of it for financial reasons. It is estimated that the total number of youths aged 12 to 15 inclusive is 9,700,000. There are at present about 8,100,000 enrolled11 in Grades VII-X, which correspond with the foregoing ages. This leaves 1,600,000 to be en- 10 National Education Association and American Association of School Administrators, Educational Policies Commission. The Purposes of Education in American Democracy. Washington, D. C: the Com- mission, 1938. p. 91-93. 11 Figures for public schools in 1936, increased by 8 percent for non- public schools. [179] rolled under a program which would provide for a mini- mum of ten years' compulsory schooling.12 It is estimated that the total number of youths aged 16 to 19 inclusive is 9,900,000. Out of this number, 6,700,000 would be enrolled under that part of the proposed program which provides for raising the median amount of schooling to fourteen years. The present enrollment in Grades XI- XIV inclusive, corresponding to the foregoing ages, is about 3,100,000.13 This leaves 3,600,000 to be enrolled at this level in the senior secondary school. Not all children leave school early for economic reasons. Many other factors are involved. A few children have se- verely restricted intelligence. A few live in such isolated areas that education by correspondence and radio are the only practicable means of reaching them. Many more would attend school if the instruction were more practical and varied. Some leave school as soon as released by compul- sory attendance laws, not because they are financially unable to attend any longer, but because the attraction of earning money outweighs the attraction of school. A sur- vey of many studies of reasons for leaving school suggests that one-third of all now leaving do so on grounds of financial necessity. The foregoing estimates as to the addi- tional numbers who would be in school under the proposed program total 5,200,000. If one-third of this number is not in school because of financial necessity, the total number needing assistance to stay in school would be 1,700,000. The amount of aid necessary would vary from a very small amount in a few cases to considerable amounts for 12 Data as to present school enrollments are from U. S. Office of Edu- cation, Statistics of State School Systems, 193 5-36, p. 57; and Statistics of Higher Education, 193 5-36, p. 16. Data as to number of children in different age groups are from Educational Policies Commission, The Effect of Population Changes on American Education, p. 52. 13 Estimate: 2.4 million in Grades XI and XII and postgraduate classes, plus .1 million in private schools, plus .6 million freshmen and sopho- mores in higher institutions and advanced technical schools. [180] food, clothing, medical care, and the like, in other cases. The aid given under the student aid program of the Na- tional Youth Administration has $6 per month for a maxi- mum in high school, and $20 per month as a maximum for college students. In a nine-month school year the annual maximum totals would be $54 and $180, respectively. The actual yearly payment, for high-school and college aid combined, averaged $78 in 193 5-36 and $72 in 1936-37. It would appear, then, that $70 per year may be used as an estimate of the average need. This amount for 1,700,000 students would be about $120,000,000. Adding the $50,- 000,000 for elementary education yields a total of $170,- 000,000 for item 4. The Poorest Schools Should Be Lifted to Some Reasonable Minimum of Quality and Cost. The costs which have been estimated so far involve largely the provision of the present average educational program to a somewhat larger group of persons than those now in school. In addition, it is highly desirable that the quality of the program itself be improved and in many cases this improvement in quality will require additional finance. Perhaps the most critical financial problem in the schools at present, if the matter be looked at in a na- tional way, is to remedy the extremely low level of educa- tional opportunity which prevails in certain sections. Both equality of opportunity and economic efficiency would be promoted if these lowest levels of educational opportunity could be improved until they reached something that might be acceptable as a national minimum of educational quality. It is estimated that the amount required to increase the expenditure of those school districts which now have ex- tremely poor financing of education up to a level of $60 per elementary-school pupil and correspondingly higher expenditures per high-school pupil would be about $500,- [181] 000,000 at the present time under the proposed program. Assuming that conditions are such that equalization up to a reasonable level is no more difficult proportionately than it was in the year 1930-31, this amount would be sufficient to remove all the worst financial conditions in schools in impoverished and poverty-stricken areas.14 The Program of Education Should Be Generally Improved and Extended. The foregoing estimates do not exhaust the possibilities for improving the effectiveness of American education. Additional education beyond the fourteen-year median should be provided for persons competent to work in the more highly skilled trades and professions. Scholarships for such purposes should be provided for any competent person if the absence of such aid would prevent that person from securing the education necessary for him to work in the occupations where he can be most productive. Vocational retraining for adults is made necessary by occupational shifts and technological changes in industry. Such retrain- ing should be provided as a part of the program for making education contribute most fully to economic well-being. It can hardly be doubted, furthermore, that substantial 14 Mort, Paul R., and others. Principles and Methods of Distributing Federal Aid for Education. Advisory Committee on Education, Staff Study No. 5. Washington, D. C: Government Printing Office, 1939. p. 19, 70. The estimate is based on the chart given on page 8 of the foregoing study. The cross-hatched portion of the chart shows the dis- tribution of expenditures for schools in the United States. The dotted portion shows the amount required to raise the expenditure of the lowest districts to a minimum of $48 per census unit, or $60 per "weighted" elementary unit in the year 1930-31. In that year the total current expense of the schools, represented by the cross-hatched area, was ap- proximately two billion dollars. The dotted area is 1 5 percent of the cross-hatched area, which indicates that the amount required for the purpose of improving the program in the lowest districts was $300,- 000,000. The attendance load proposed in this study is about 1.3 times the load in 1930-31. This increases the $300,000,000 to $390,000,000. Increasing this by one-fourth to take into account capital outlay and other non-current expenses, increases the amount to practically $500,000,000. [182] economic and social benefits would accrue from a more general provision of kindergarten and nursery school edu- cation than is now the case. It would be desirable to lighten the load carried by many teachers and other members of the educational profession; the employment of additional personnel for this purpose would often result in more effec- tive schooling and hence in greater economic and social efficiency for the population as a whole. The sums spent on educational research are pitifully small when compared with the vast expenditures which private industry finds it profitable to make for experimentation. Great improve- ments in the economic effectiveness of education could doubtless flow from a relatively small provision for educa- tional investigations. These are but a few of the possible further developments of education which will require additional financing as our economic, social, and educa- tional systems move forward. No estimates of the cost of such improvements, however, are included in this chapter. Preceding Estimates Are Summarized. To recapitulate, the annual cost for the items listed on page 174 are estimated as follows: 1. Financing the proposed ten-year minimum of schooling $2,147,000,000 2. Carrying the median person through four- teen years of schooling 1,066,000,000 3. Additional cost of providing free text- books, school supplies, school fees, and other "educational necessities" 110,000,000 4. Additional costs in certain cases for neces- sities of life which would enable all chil- dren to remain in school for ten years and the median youth, for fourteen years. . . . 170,000,000 5. Lifting the poorest schools to a reasonable minimum of efficiency 500,000,000 6. Improving and extending the program of education in other respects No estimate [183] The total of the foregoing estimates, exclusive of item 6, is just under four billion dollars. In 1938, the cost of ele- mentary, secondary, and higher education, both publicly and privately financed, was about three billion dollars.15 A Program of Effectively Free Education Should Be Gradually Developed. The additional expenditures required to make education effectively free in the United States would not involve an immediate increase of the amount estimated above. It would require a considerable period of years to develop a program involving this additional expenditure. The as- sumption is that this program, along with other positive factors, would cause increases in the total national income greater than the increased costs of financing the program. The evidence supporting this assumption appears suffi- ciently convincing to justify the initiation of the program. The rapidity and extent to which it would be developed would depend upon increases in the national income and other factors. In proportion as the educational program here proposed, together with other measures, brings about a more satisfactory standard of living and distribution of income, the need for maintenance grants for youths would decrease. How rapidly this may occur depends on a complex array of unpredictable factors. Many Agencies Should Share in the Cost of Making Education Effectively Free. It should be recognized that all of the foregoing costs would not be financed by taxation or paid out of the public school budget. A certain number of those included in the proposed program would attend private schools at their own expense, although the total demand of education on 15 An estimate based on: U. S. Treasury Department Bulletin, August 1939, p. 4; and data for 1936 from the U. S. Office of Education. [184] the social income would not be greatly different by virtue of this fact alone. Furthermore, it is specifically proposed that the cost of item 4, above, should not be a charge against the education budget, but should be financed as a part of the general program of public welfare and social security, to be administered in cooperation with school authorities. This accords with a previous declaration of policy by the Commission : "That the material wants of indigent school children be supplied by agencies other than the public schools; that school authorities stimulate community action leading to the establishment of appropriate agencies for removing social, economic, or physical handicaps that affect the edu- cation of children; and that school authorities seek actively to coordinate educational services with social services ren- dered by other public and private agencies." 16 Increased costs, involved in making public education effectively free — other than those due to student aid and maintenance — should become a part of the regular educa- tional budget. The financing of this increased program is discussed in the next chapter. 16 National Education Association and American Association of School Administrators, Educational Policies Commission. Social Services and the Schools. Washington, D. C: the Commission, 1939. p. xi. [185] IX. Financing the Program The wisdom of spending public and private funds on education is not to be measured by its direct fruits alone. It will be profitable as a mere investment. — Alfred Marshall. Earlier chapters have outlined a program of effectively free education, which would greatly improve the produc- tivity and economic welfare of the nation. This program would involve raising the median level of schooling to four- teen years and making it effectively free as defined in this report. It would remove financial barriers which now pre- vent many youths from obtaining the kind and amount of education justified by their capacity and diligence. In the long run the cost of such a program would more than pay for itself. The financing of the program would involve additional expenditures for education to be paid through taxation. Does the present and possible future productive capacity of our economy suggest that it will be practical from an [187] economic point of view to raise the funds required to initi- ate the policy of effectively free education? What fiscal and administrative first steps are required? Let us begin by examining the productivity of the exist- ing economic system — the operation of which permits us to raise taxes and to have all the material products and tangible services which compose the social income, the basis of our standard of living. What is the present and probable future productivity of the existing economic system? Did it reach the maximum which may be hoped for in the decade fol- lowing the World War? Should we expect a lower level of production than that realized in the 1920-1930 decade? Or may we expect a return to and rise above that level? Present and Potential Productivity Have Been Estimated. The foregoing questions have been the subject of inves- tigations of three types. First, there are studies which estimate the amount of loss due to non-utilization of exist- ing plant and equipment. Second, there are calculations of potential productivity based on the assumption that all plants can reach a standard of efficiency represented by best current practice. Third, there are estimates which assume basic improvement in economic organization and methods of production. Calculations of potential productivity based upon all three types of researches are summarized below. The studies cited are selected from a large number which arrive at substantially similar conclusions. Existing Plant and Equipment Are Not Ftdly Utilized. One of the earliest studies was conducted by the Com- mittee on the Elimination of Waste in Industry.1 It discov- 1 Federated American Engineering Societies, Committee on the Elimi- nation of Waste in Industry. Waste in Industry. New York: McGraw- Hill Book Co., 1921. 409 p. [188] ered a waste of productive capacity in six major industries ranging from 29 to 64 percent. Several other engineering surveys have found that even in the prosperous decade following the World War industry was not producing all the goods and services that it should have been able to pro- duce with existing plant and equipment and the natural resources and labor force available. Studies by economists concur in this conclusion. Out- standing among such investigations is the four-volume report by the Brookings Institution.2 The basis of its esti- mate is stated as follows: ". . . we are concerned not with the theoretical maxima of production but with practical results which could be obtained under conditions of operation with which we have had actual experience. We are not attempting to cal- culate productive performances that might be brought about under ideal conditions ... In our analysis we have endeavored to arrive at capacity estimates that are obtain- able under the practical operating conditions which exist. . . . the analysis by which we have proceeded to these final conclusions has been sufficiently buttressed by statis- tical measurement at all major points, and our final esti- mates have been checked against the practical experience and criticism of technicians and business men to an extent that eliminates possibilities of serious error." 3 On the basis of the facts assembled, the Brookings Insti- tution concluded that in 1929, at the end of the era of post-war economic expansion, there was an average utili- zation in industry as a whole, of only about 8 1 percent of total capacity, leaving an excess of practically attainable production of about 19 percent. This would have added approximately $15,500,000,000 to actual production in 1929 and would have brought the total in that year up to $97,500,000,000. We were not living beyond our means in 2 Moulton, Harold G. Income and Economic Progress. Washington, D. C: Brookings Institution, 193 5. 191 p. 8 Nourse, Edwin G., and Associates. America's Capacity To Produce. Washington, D. C.: Brookings Institution, 1934. p. 23, 27, and 28. [189] 1929. We were not trenching on our resources of capital goods or of labor. Rather, "our economic society lacked almost 20 percent of living up to its means." 4 If full use had been made of productive capacity in the years 1922 to 1929, the income of the American people would have been increased by approximately $113,000,- 000,000 or $14,000,000,000 a year. In the four years, 1930, 1931, 1932, and 1933, the loss in potential income, assuming that 1929 productive power remained constant through this period, aggregated in 1929 dollars about $135,- 000,000,000, or approximately $34,000,000,000 a year. In general, during the period 1922 to 1935, the productive system of the nation operated at little more than two-thirds efficiency.5 The National Resources Committee reports similar find- ings. It estimates that during the eight-year period 1929 to 1937, loss through low production: ". . . due to the idleness of men and machines . . . was in the magnitude of 200 billion dollars' worth of goods and services. Most of this represents sheer waste, though to some extent it reflects a smaller depletion of natural resources. "The significance of this figure of 200 billion dollars is hard to grasp, but some idea can be obtained by considering what 200 billion dollars would mean in terms of concrete goods. If all the idle men and machines could have been employed in making houses, the extra income would have been enough to provide a new $6,000 house for every family in the country."6 Improved Practices Would Greatly Increase Production. Opinions of prominent engineers, summarized in the Columbia University study, estimate that the output of *Ibid., p. 425. 6 Moulton, Harold G. Op. cit., p. 27-30. 6 National Resources Committee. The Structure of the American "Economy. Washington, D. C: Government Printing Office, 1939. p. 2-3. [190] all industries could be increased by approximately 78 per- cent if equipment and management could be raised to the level of best current practice. Even with existing equip- ment, it was estimated that on the average a 36 percent increase in the output of all industry could be effected.7 The National Survey of Product Capacity attempted to develop a chart or "flow sheet" by which the progress of the production of commodities could be traced from the raw materials in which they originated to the final con- sumer. The objective was to discover whether it is possible to achieve a level of production which would provide a comfortable standard of living for all. The investigators concluded that this would have involved production in 1929 amounting to $13 5,516,000,000, as compared with an actual production, according to their methods of esti- mate, of $96,5 53,000,000. They also concluded that exist- ing equipment in 1929 was sufficient not only to produce the additional $38,963,000,000 worth of goods and serv- ices necessary to establish a comfortable standard of living for the entire population, but to replace obsolete and worn- out capital equipment as well.8 Engineers and Economists Agree That Productivity Can Be Substantially Increased. The foregoing estimates of the yearly value of goods and services which our economy is capable of producing, range from $97,000,000,000 to $135,000,000,000. Several conclusions may be drawn from the studies cited and many others which arrive at similar findings. First, engineers and economists generally agree that the level of production reached in the 1920's should not be looked upon as a maximum. They disagree as to how much it is rea- 7 Columbia University Commission. Economic Reconstruction. New- York: Columbia University Press, 1934. 2 50 p. 8 Loeb, Harold, and others. The Chart of Plenty. New York: Viking Press, 193 5. 180 p. [191] sonabie to expect to increase our income over the levels of the 1920's, mainly because of differences in their methods of inquiry and the assumptions upon which their estimates rest. There is no disagreement, however, as to the physical possibility of increased production. Second, even the most conservative estimates suggest the clear possibility of increasing the national income, on the basis of existing facilities, by an amount which is several times the present cost of education, and of what its cost would be if it were effectively free. Gains in National Income May Be Expected. The preceding analysis indicates that the nation already possesses the physical requisites, such as labor supply, natural resources, and plant and equipment, necessary for an income considerably larger than that of recent years, or even of the peak year 1929. The depression of the 193 O's is due to economic maladjustments and incoordinations rather than to lack of physical means of production. The problems involved in resolving the maladjustments and incoordinations in our economy are, however, enor- mous. Many proposals have been made as to what needs to be done to decrease the gap between actual and potential productivity. Some believe that the solution is to be found in an increase of consumer purchasing power through a gradual reduction in the prices of consumer goods, made more abundant through more efficient methods of produc- tion. Others advocate increased use of certain taxes to prevent oversaving which they claim leads to depressions. Through taxes upon income and inheritances at progressive rates, they would finance public services now paid for through proportional or regressive taxation. By partially releasing those of limited means from such taxes, their private purchasing power would be increased. Other econ- [192] omists declare that actual production would be brought nearer potential productivity if more were spent for capital goods, such as machinery, factories, stores, and transporta- tion systems. Some writers have suggested that the advent of fortuitous events of economic significance, such as the development of one or more new industries or the stimula- tion resulting from a general war, is destined to play a central role in inducing economic recovery. This whole problem is further complicated by debate as to the proper function of government in relation to business enterprise. It is beyond the scope of this report to arbitrate among the many specific proposals of economists and engineers for bringing about the more effective operation of the existing economic plant. It is enough to point out that those who are studying this problem exhibit no spirit of defeatism. Their writings do not assume continuing and permanent inefficiency in the use of our productive facil- ities. Rather, they justify the expectation of an eventual narrowing of the gap between potential and actual pro- ductivity. From the viewpoint of this chapter, the impor- tant fact which emerges from the preceding analysis, is that the initiation of the educational program proposed in this report need not be indefinitely delayed. The physical facilities requisite to a much higher national income are already in our possession. It is reasonable to expect that the means of putting these facilities into more effective operation will be found. As this is accomplished, it will become increasingly practical to finance the proposed edu- cational program. In fact, the initiation and development of this program may be properly looked upon as one of the essential ingredients which should be included in any sound formula looking toward recovery and economic welfare. In short, it appears both feasible and wise to finance the proposed educational program concurrently with recovery. [193] The Proposed Program Should Be Initiated Promptly. The development of the proposed program for maxi- mizing the economic effects of education should be initi- ated at once. Some educational funds now expended for less vital purposes should be directed to this end. Funds from this source should be supplemented by additional ap- propriations as rapidly as conditions permit. This policy is justified on the grounds that the proposed educational program in the long run will yield substantial economic returns. It will pay for itself since it promises to increase national income more than enough to cover the expenditures required. Education may not be self-liquidating in the immediate and narrow sense of a toll road or harbor, where tolls and wharfage fees meet original investment and maintenance costs. Education of the right kind is self -liquidating in a far more fundamental sense than material improvements can be. In contributing to increased productivity, it helps to create the economic basis in national wealth and income upon which taxation for education and other governmental activities, as well as our whole standard of living, depends. The financing of the proposed educational program for economic efficiency will involve surmounting certain prac- tical fiscal and administrative hazards. Long-needed re- forms which are of fundamental importance to the proper financing of education will have to be achieved. These are dealt with below. An Equitable and Adequate Revenue System Is Essential. Education is one of a series of public enterprises which involves taxation. It cannot be properly financed except through systems of taxation which are appropriate to modern economic conditions and adequate as to amount of revenue raised. The proper support of all governmental [194] activities, including schools and colleges, requires an ade- quate tax system, providing for a just sharing of the cost of government by all possessing taxpaying ability. The theory and practice of taxation have developed to the point where tax systems which meet these and other recog- nized criteria are possible. Materials available in publica- tions of the National Tax Association, reports of the Twentieth Century Fund, studies of the Tax Policy League, and numerous texts on public finance, provide factual information and reasoned conclusions that are indispens- able in the formulation of sound tax systems. Experts in the field of public finance, connected with universities and other reliable agencies, stand ready to offer sound advice. Any state, genuinely desiring to do so, may improve its tax system. Few states thus far have made substantial progress in developing types of revenue systems, which are essential if the proper financing of a program of effectively free education, as well as other essential public enterprises, is to be possible. This situation must be fundamentally revised if the program for maximizing the economic effects of education is to be more than an unfulfilled ideal. Plans Which Involve Pooling of Fiscal Resources Must Be Put into Effect. The uneven distribution of taxpaying capacity between school districts and between states, which is characteristic of our industrial economy, requires the pooling of fiscal resources if equal educational opportunity is to be achieved. Gross inequalities in opportunity now characterize edu- cation in the United States. In some sections, schools and colleges are generously supported and rich educational op- portunities are provided. In other sections the most meager facilities prevail. An individual's opportunity is not deter- mined by his capacity and willingness to work. Rather, as [195] was pointed out in an earlier chapter, fortuitous factors determine to a large extent whether youths shall have gen- erous or little educational opportunity in the United States today. As a result, valuable human resources are wasted and the potential economic effects of education are not realized. The methods whereby this situation may be corrected are now well known. They involve provision of sufficient financial support from the state to permit every school district to finance a minimum program of education through a fair and equalized tax on local property. In brief, this involves the equitable taxation of wealth and income regardless of where they are located in order to educate all boys and girls regardless of where they live. Nothing short of the effective translation of this principle into practice will suffice. The alternative, inevitably, must be a continuance of present conditions of educational in- equality and human waste. Furthermore, it will not be possible to limit the applica- tion of this principle to state boundaries. Enormous differ- ences in ability to finance education exist between, as well as within, states. Two national commissions, appointed by administrations of each of the major political parties, have studied this question during the last decade.0 Stubborn facts led both to conclude that provision of adequate edu- cational opportunity for all American children must in- volve some pooling of the nation's fiscal resources. The conclusion of the latter of the two commissions was sum- marized as follows: "The facts presented previously in this report indicate that no sound plan of local or state taxation can be devised 9 National Advisory Committee on Education. Federal Relations to Education. Two Vols. Washington, D. C: American Council on Edu- cation, 1931. Advisory Committee on Education. Report of the Committee. Wash- ington, D. C: Government Printing Office, 1938. 243 p. [196] and instituted that will support in every local community a school system which meets minimum acceptable stan- dards. Unless the Federal Government participates in the financial support of the schools and related services, several millions of the children in the United States will continue to be largely denied the educational opportunities that should be regarded as their birthright." 10 More recently the American Youth Commission, headed by Owen D. Young and composed of eight laymen and eight educators, came to a similar conclusion after exten- sive investigation: "In view of the marked inequality in tax resources among the several states, federal aid to the states for educational purposes, safeguarded against federal interference, is essen- tial and should be expanded as rapidly as possible. . . . Equalization of educational opportunity should be regard- ed realistically, not as charity from wealthy cities and states to their poorer brethren, but as a necessary provision for national security. . . . On the same principle of equali- zation of educational opportunities, the nation cannot afford to permit any young persons to be deprived of proper opportunities because of the misfortune or even the poor management of their parents. In fact, the less worthy the parents, the more essential is some measure of public attention to the needs of their children." X1 Reorganization of Units of Attendance and Administration Must Be Effected. Another report of the Educational Policies Commission deals at length with essential reorganizations in the struc- ture and administration of American education.12 10 Advisory Committee on Education. Op. cit., p. 47. 11 American Council on Education, American Youth Commission. A Program of Action for American Youth. Washington, D. C: Ameri- can Council on Education, 1939. p. 15-16. 12 National Education Association and the American Association of School Administrators, Educational Policies Commission. The Structure and Administration of Education in American Democracy. Washington, D. C: the Commission, 193 8. 128 p. [197] Here it is sufficient to emphasize that many of these reforms are prerequisite to maximizing the economic ef- fects of education. Education of a high quality cannot be expected in most of the existing 127,000 local units of school administration. They are too small to permit the organization of schools with sufficient teaching personnel, equipment, and other facilities essential to a program of general and occupational education such as this report projects. They draw from too small a territory to obtain adequate lay leadership on boards of education. They lack the vision and the ability to provide the requisite profes- sional personnel essential to administrative and supervi- sory leadership. Similar recognition of the inadequacy of the resources of many higher educational institutions, as at present organized, is called for. The multiplication of colleges in some states has created an excessive number of these insti- tutions, many of which are poorly equipped to discharge their responsibilities effectively either in general or in pro- fessional education. Correction of outworn patterns of organization as to structure and administration is essential at all levels, if potential economic as well as other returns from education are to be appropriately capitalized. Efficient Administration and Constructive Economy Are Essential. The other elements of a plan for funding the program for maximizing the economic effects of education will require administration marked by efficiency and discrimi- nating economy if the major objective is to be achieved. Competent leadership will be required in every state de- partment of education as well as in the reorganized local units of administration. The method of securing state and county school superintendents by popular election which exists in many states must be abolished. A uniform and [198] continuous policy of honest, economical, and productive spending of all school money is essential. More discriminating oversight on the part of the gen- eral public is of fundamental importance. This will require accurate, intelligent, and frequent reports to taxpayers and the general public on the management of school money. It will also require more discriminating and constructive attitudes with respect to taxation and the value of public services than are sometimes shown by certain sections of the public. The identification of economy with parsimony should be replaced by an attitude of critical but construc- tive appraisal. School budgets should meet the tests of genuine educational need and economical and efficient ad- ministration. They should not be expected to conform to the demands of those interested in beating down taxes re- gardless of educational and social effects. [199] X. Securing Public Understanding and Action If I am right in my conviction that the conscious effort by the mass of men to produce an ordered society is the determining element of this age, then for a long time to come we shall not be allowed to rest and to take our case, living on the consolidated achievements of our forefathers. — Walter Lippmann. Are the recommendations of the report theoretically in- teresting, but impractical as a basis of action? Or, is it reasonable to expect, men being what they are, that enough success can be achieved in putting these proposals into ac- tion to effect measurable change in the contributions of education to economic welfare? In a democracy the proper bases for improvement in social policy and action are public understanding and sup- port. Such understanding and support are brought about through formal and informal agencies of education, civic associations, and other organized groups. Therefore, let us [201] identify the changes in public understanding and attitude which must be accomplished and the agencies and organiza- tions which should participate in this process. Democratic Ideals and Economic Welfare Are at Stake. The first public attitude which must be created involves understanding of the social and individual significance of effectively free education. In place of indifference toward inequalities in educational opportunity, there must be keen appreciation that their existence constitutes an abro- gation of a fundamental imperative of American life — equality of opportunity. In 1938 the nation expended $1,622,000,000 for na- tional defense. This was believed necessary in order that our lives and democratic institutions might be safeguarded from foreign aggression. It is probably true, however, that the threat to our democracy which resides in existing nulli- fications of equal opportunity is both greater and more immediate than that of foreign invasion. Distribution of opportunity according to economic and class lines, rather than according to ability and diligence, was the essence of the aristocratic systems to which the rise of the United States constituted so sharp a challenge. Will we permit position, rather than ability, to determine opportunity until the very foundation of our democratic order is under- mined? The answer given to this question has great sig- nificance for the internal security of the nation. The appeal to the public should be made on economic as well as on political and social bases. When qualified youths are unable to secure the training which will permit them to enter high-paid, rather than to remain in low-paid, callings, the total national income tends to be reduced. The result, in the long run, is that we all are poorer. When mil- lions of qualified youths are predestined to earn at the level [202] of unskilled or semi-skilled labor merely because they are born in poor families, or in areas unable to afford good schools, the whole nation suffers economically. It needs to be clearly understood that this uneconomic situation can be corrected only if education is made effec- tively free. This will permit youths with capacity and energy to rise from the ranks of unskilled and low produc- tive labor, with resulting increases in the average of individ- ual incomes and in total national income. The program proposed in this report is crucial to the perpetuation of democratic ideals and to the achievement of greater economic well-being. The issues involved need to be clarified and dramatized until all American citizens comprehend their significance. New Vision of Education as a Method of Democratic Progress Is Involved. The free and universal public school system created in the United States during the nineteenth century has been called America's greatest contribution to civilization. The vision and courage of the people in creating this democratic institution constitute a landmark in mankind's upward climb. Fundamental changes have taken place in American life since the foundations of our educational system were laid. We are in a period in which skill, technical and profes- sional knowledge, social insight, and consistent and intel- ligent group action are essential. In developing all of these, schools and colleges make a vital contribution. Public vision and insight will determine the value of this contribution in the future. Our forefathers in the nineteenth century had the in- sight and courage to transcend previous conceptions and practices as to what schools and colleges should do for a nation. They fashioned a system of universal, popular edu- [203] cation which had no precedents in other nations. It ac- corded with their ideals and met the needs of their times. We of the twentieth century, confronted with vastly changed conditions and baffling new problems, should do no less. The nations of the western world are now in a period of profound transition. A handicraft and agrarian econ- omy is being replaced by one characterized by science, technology, and the power-driven machine. The indus- trial order which is emerging inherently requires skill, technical knowledge, organization, coordination, and ex- pert performance at many different levels. Above all, it involves intelligent direction and control. We cannot choose whether these elements will or will not be present in our economy. They are inherent in indus- trialism. The area in which choice may be exercised con- cerns the character of the controls and the source from which they come. Requisite expertness, coordination, and control can be achieved under a system of government which emphasizes human regimentation and dictatorial direction. It can also be achieved under a system which respects human personality and involves democratic sanctions. The degree of regimentation and dictatorial control will vary in inverse ratio to the extent that education and enlightenment prevail. Genuinely educated citizens re- quire a minimum of compulsion to act intelligently. They obey rules necessary for personal and public health, follow the practices which promote good government, deal with each other on a plane of tolerance and humanitarianism, and order their economic affairs in an intelligent manner, because they know how to do these things and realize that it is wise to do them. Democracy is a form of government through which people educate themselves to conduct their personal and [204] common affairs, with a maximum of intelligence. The amount and kind of understanding requisite in a society such as ours, can be provided only if we consciously, vig- orously, and wisely use education to create it. Better Bases of Appraising Public Expenditures Are Involved. The educational program projected in this report prom- ises in the long run to more than pay for itself through resulting increases in total national earned income. It re- quires, however, like any investment, that money be put into it. More taxes will have to be raised if education is to be made effectively free. It is unfortunate that this fact alone will condemn the program in the minds of certain minorities in the United States, whose attitude toward all public enterprises is dominated by uncritical opposition to increased taxation. This viewpoint is reflected by such slogans as "the less taxation the better" and "any budget can be cut." Now, it is true that any budget can be cut. In fact, it can be eliminated altogether. The important question, how- ever, is not whether a budget can be cut or increased, but rather, what will be the effects of cutting or increasing it. Indiscriminate criticisms of taxation and public expend- iture usually rest upon certain assumptions. It is assumed that the amount expended for a public service in itself is of great significance. Hence all increases are condemned, while all decreases are commended. This attitude in turn rests upon the assumption that money expended under public auspices is somehow swallowed up without yielding a return, while private expenditures inherently and even automatically result in tangible dividends. These assumptions fail to recognize that proper judg- ment cannot be passed on public expenditures in general, or on those for particular items, except through discriminating [205] consideration of what they buy. Governmental costs have steadily increased in the United States because an increasing population has demanded continuous expansion of public services. Public money now pays for the construction and maintenance of highways and streets swiftly traveled by nearly 30,000,000 motor cars and trucks. We pay for a vast range of services through taxation — flood control, recla- mation work, river and harbor improvement, police and fire protection, sewage disposal, public health, a supply of pure water, parks and playgrounds, relief and social secu- rity, national defense, and public education in its many aspects. Taxation and public expenditure are cooperative means of purchasing certain goods and services. Intelligent deci- sions concerning these services cannot rest merely on amounts spent. Is the service essential to general well- being? Is it more essential, and will it bring a greater return in worthy satisfactions and general well-being than possible alternative expenditures, whether public or pri- vate? This question must be asked again and again and answered with keen discrimination before a nation of free citizens can spend its income intelligently. The process is not an easy one, for it goes to the very roots of individual and social values, but it cannot be avoided by a people who would be intelligent in the use of their income. Neither public nor private expenditures inherently or automatically result in social or individual benefits. One can readily think of private outlays which are far from productive, as for example, payments to astrologers or for habit-forming drugs and certain patent medicines. A close analysis of public expenditures will reveal that in general they purchase essential benefits, although exceptions occur as in the case of private enterprise. Accordingly, there is no royal road to a decision as to what distribution of the national income should be made [206] between public and private enterprise. Decisions, which dogmatically assume a return or lack of return from public expenditure, reflect lack of discrimination. Intelligence re- quires that every public outlay be continually weighed against the difficult but fundamental criterion of general benefit. Governmental enterprise in a democracy is not equiva- lent to tyrannical tax impositions by conquerors or tyrants. Rather, public enterprise is an outcome of democratic action which seeks to promote general welfare. The fact that democracy is the impelling force behind expanding public action in itself, however, does not validate a given public enterprise. Every public activity should be appraised against additional tests. Will it result in a benefit essential to the well-being of society, which will otherwise be lack- ing in part or in whole? Will the quality of the commodity or service produced under public auspices be equivalent or superior to that which would result from private initi- ative? What is the relative cost under public as opposed to private production? Are corruption and wasteful admin- istration absent and honesty and efficient management pres- ent? Is the revenue for financing the service obtained by methods which are equitable and sound? When a state activity can meet tests such as these, it is justified. Other- wise, it is not. "An increase in taxes has been viewed, per se, as an evil. Such a position is wholly an illogical one. Though govern- ments may spend more, they do more; and it may well be that the increased demand made upon the taxpayer is more than offset by the additional service rendered to him. The really important things are not so much the grand totals of governmental revenues and expenditures as the sources from which such revenues are derived and the pur- poses to which the expenditures are devoted, the extent to which governments are improving their financial condi- [207] tion through the payment of their debts or the reverse, and the like."1 The foregoing considerations bear directly on the prob- lem of financing the educational program projected in this report. This program cannot be put into action with- out some additional expenditures. The amount required is not large considering the nation's actual and potential productive capacity. The increased expenditures can be added gradually. The costs will, in the long run, be more than met by increases in income. The development of the program along these lines is in accord with sound eco- nomic theory. "Parks and playgrounds, schools and text books . . . yield to the public generally important satisfactions and services which they might not otherwise be able to obtain. As the years pass, the furnishing of such services out of funds derived from taxes might well be made very much more important than has been the case heretofore. The field of opportunity is here very great and the services rendered are of a fundamentally important character." 2 Similar considerations doubtless caused Henry Carter Adams, one of the great minds which America has produced in the field of finance, to say in his Science of Finance: "A continual increase in the educational budget must be ex- pected as a natural result of social development, and may be accepted as a normal expression of a healthful society." 3 Accordingly, the Commission urges that the program proposed in this report be judged on its merits. It should be neither supported nor condemned until it has been ap- praised against criteria which are valid and appropriate. 1 Willoughby, W. F. Financial Condition and Operations of the Na- tional Government, 1921-1930. Washington, D. C: Brookings Insti- tution, 1931. p. 3. 2 Moulton, Harold G. Income and Economic Progress. Washington, D. C: Brookings Institution, 193 5. p. 100. 8 Adams, Henry Carter. The Science of Finance. New York: Henry Holt and Co., 1898. p. 72. [208] Sound Attitudes on Occupational Distribution Are Essential. Earlier chapters of this report have discussed criteria which should guide entrance to occupations. When occu- pational distribution is thus determined, the outcome is both socially and economically desirable according to dem- ocratic standards. The use of education as a means of promoting occupa- tional mobility and of disintegrating class lines based on caste and inherited position will appear disturbing to some, although education has been doing this for a century. The disturbing thing today is that it is not doing it well enough. So long as society demands additional workers in certain callings as indicated by willingness to pay superior wages or salaries to those working in them, then all youths who possess the capacity and diligence to qualify for these callings should be admitted. Such a policy tends to thin out the ranks of unskilled labor. The effect should be to raise average and total income, although some individual incomes, enjoyed primarily because of artificial scarcity and monopolistic position, may be reduced. The program of education to achieve optimum occupa- tional distribution should be developed gradually. Accu- rate and extensive occupational information must be as- sembled and intelligently interpreted. The evils which result from an over-supply of workers in particular callings should be guarded against. Educational methods as opposed to those which employ regimentation should be emphasized. High Standards and Occupational Mobility Are Both Possible. A profession or trade may well establish high standards for admission. On the other hand, no profession or trade should expect to enforce arbitrary numerical limits, the purpose of which is to perpetuate a scarcity of needed [209] workers as a means of keeping up the incomes of those already admitted. Specifically, this proposal would mean that artificial limitations on the number of persons ad- mitted to certain professional schools and to certain occu- pations would be removed ; so would artificial limitations on the number of persons admitted to apprenticeship in cer- tain trades. Standards required for successful operation in profes- sions and trades should be carefully developed. These should be based on competent judgment and would be relative at any given time to the number of qualified persons avail- able. Ability to reach these standards and the social need for workers in the occupation, rather than limitation in terms of some arbitrary number, would decide whether an applicant might enter the profession or trade. Also, careful guidance, which would supply the fullest possible pertinent information as described in earlier chapters, would be required. Effectively Free Schooling Promises More Equitable Distribution of Earned Income. In addition to increasing the total national income, the provision of effectively free schooling will tend to assure a more equitable distribution of that income. Existing in- equalities in distribution of income have been a matter of much concern to some during recent years and several remedial plans have been proposed. Whatever may be said for more direct methods of attack on this problem, the least that can be done if the great American tradition of equal opportunity is to prevail, is to remove artificial bar- riers which now prevent millions of youths from fully capitalizing their talents. It should be clearly understood that this proposal does not involve a complete and general leveling of wages and salaries. If all persons were given equal educational oppor- [210] tunity, greater remuneration would follow upon greater efficiency, ability, zeal, and service. The reward is probably a fundamental motivator of human nature. The removal of artificial barriers, which is proposed here, would give this incentive greater scope rather than less. The argument is not advanced that education is a panacea for all economic ills and injustices. Some of the most extreme differences in income arise from funds re- ceived from fortunate investments, windfalls, inheritances, and pure luck, rather than from the differences in wages and salaries paid various classes of workers. Reasonable equality of earned income is not the perfect answer to all problems of the distribution of national income for the simple reason, among others, that the total of earned in- come is less than the total amount of national income. Earned income does, however, comprise a large part of the total. Between 90 and 95 percent of the population rely largely on earned income for support. But even with this and other limitations granted, the full power of education to make economic conditions more equitable has not been used. The distribution of earned income is one matter that is affected in a direct manner by the quantity and quality of schooling offered. America can, by providing the correct amount of schooling and by training the proper number of persons for each occu- pation, contribute to more reasonable equality of earned income. Existing inequalities, so far as they are an out- come of limited availability of schooling and are not due to individual ability and other personal qualities, can be greatly ameliorated by making schooling completely, free- ly, and effectively available to all who can and will use it. All people are not of equal energy and ability and it is neither desirable nor possible, therefore, to obtain an equali- tarian distribution of earned income through education. It is impossible to say in advance exactly what differentials [211] in income would remain if arbitrary barriers to education were completely removed. The only method by which this could be determined would be to remove these barriers and see. Those who believe in our historic doctrine of equality of opportunity will support this proposal. The most reasonable assumption is that the distribution of income would somewhat approximate the distribution of ability and energy. The income of an individual in one occupation would tend to become approximately equal to that of any other person of like ability in any other socially useful occupation. The distribution of income to be ob- tained through education is not, then, absolute equality of income for all, but rather, greater equality for those of like ability and energy regardless of the occupation in which the income is earned. If America is to live up to one of the basic assumptions of its democracy, equality of opportunity, it is imperative that all artificial barriers to occupations be removed. If this is done, not only will the total income be increased, but greater equity in the distribution of earned income will be achieved. Sound Economic Education Will Benefit 'Private Business Enterprise. The program proposed in this report would strengthen industry on the productive side. Skilled and intelligent workmen become more important as business enterprise is more and more based on science and technology and the use of expensive capital and equipment. America until now has imported much of its skilled labor. The time has come to train it at home. The program also assumes an increase in the percentage of consumers who are economically literate. Sound business has nothing to fear from intelligent consumers. Such con- sumers will support concerns which aim at giving the maxi- [212] mum in quantity and quality consistent with reasonable profits and proper treatment of labor. The program projected in this report would strengthen sound business enterprise at a number of crucial points. It would give it an adequate supply of trained and intelligent workers. It would provide a consumer market with a maxi- mum of purchasing power. It would contribute to the better understanding essential to proper solution of such problems as labor relations and those between government and business. It would provide the inestimable benefits which would accrue from increasing the economic intelli- gence of all the people. Educational Statesmanship Will Need To Be Exercised. Earlier sections of this report have pointed out needed revisions in kind of education and in administrative organi- zation. These will require cooperation of both lay and pro- fessional personnel concerned with the control and conduct of schools and colleges. There are more than 400,000 laymen who hold positions on boards of education, school committees, and similar bodies. The districts over which they have jurisdiction were in many instances established long before good roads, auto- mobiles, and modern methods of communication were available. Many of the existing 127,000 local school districts cannot be expected to organize and administer the type of program proposed in this report. Basic reorganizations must be accomplished. This will involve vision and devotion to the general welfare. In accomplishing essential reorganizations, statesmanlike leadership should be expected from the 10,000 school and college administrative officers in the United States. The rank and file of teachers are also intimately concerned. The projected program in the course of the years will un- [213] doubtedly involve substantial revisions in the content and methods of school and college work. Greater differentiation to take account of the non-intellectual boy or girl will be required. A much better informed and discriminating type of educational and vocational guidance must be developed. Closer cooperation between industry, government, and education will be required. Education must be more defi- nitely concerned with real life problems. This will involve flexibility of mind, clear educational purpose, and energy on the part of the rank and file of teachers. It will also require greater recognition by boards of education and the public generally that oversized classes and overloaded teaching schedules are neither conducive to good classroom work nor to the individual acquaintance with, and guidance of, children and youth which is inherent in the program projected. Those who have never had ex- perience in teaching sometimes do not realize the energy required by good teaching, involving helpful, individual contacts with many different personalities. Courageous acceptance of the responsibilities of leader- ship by the schools and colleges of the United States will do more to put the projected program into action than any other factor. It is not too much to expect that the organized teaching profession will accept leadership in advancing public understanding and action on the program proposed in this report. Professional Standards of Administration Are Required. Successful operation of the proposed program will re- quire expert and professional standards of administration at many points. There are signs that the Jacksonian idea that governmental administration can be successfully dis- charged by amateurs of brief tenure is being displaced by a realization that modern conditions demand expertness and [214] continuity in public service. Substantial progress has been made in requiring professional standards of training and performance in school administration. Some progress has been made in securing the adoption of similar standards in municipal and state governments. Acceleration of the trend toward professional standards of administration should per- mit efficient management of the projected program for economic well-being. Participation by All Agencies of Community Enlightenment Is Essential. What are some of the agencies of leadership which may be expected to come to the front in implementing the pro- posals of this report? One has already been identified — the educational system. The schools and colleges of the nation may provide facilities of study and discussion essential to understanding and implementing a program of this type. Adults, as well as children and youths, should be involved. Extension work of universities and colleges, and the adult educational activities of school systems, should accept a major responsibility for enlightening the general public. The process will be too slow if we wait for children and youths now in school to replace the present adult popu- lation. The methods used should be educational, and appro- bate to a democracy, rather than propagandistic. This pro- posed program should be advanced in every legitimate way by the organized teaching profession, through its numerous national, state, and local associations. The carrying out of the proposed program, however, should involve all educational agencies — not merely schools and colleges. It is the economic welfare of society as a whole which is involved. It is appropriate, therefore, that all agen- cies of education participate in promoting the program. The press — newspapers, magazines, books, and other publi- cations— may be expected to play an important part. The [215] radio, through its forums and other programs aimed at en- lightenment, may also make a major contribution. The numerous occupational, civic, fraternal, patriotic, and re- ligious organizations should participate. Associations of professional workers, of executives of trade and industry, and of labor and agriculture, should be vitally interested. Women's organizations may well make the difference be- tween success and failure in putting the proposed program into action. Their members have the understanding and time necessary for study of the issues involved. They may provide much of the civic leadership required. There Is No Royal Road to Wise Public Policy and Action. This chapter has dealt with the practicality of putting the findings of the report into practice. Action in the direc- tions projected must be based upon understanding of the close relationship of the proposed program to the perpetua- tion of the democratic ideal of equal opportunity, as well as to the achievement of greater economic well-being. It will necessitate new vision as to the role of education in serving society. It will involve clear thinking concerning the relative roles of public and private expenditure in a democratic, industrial economy. It will require that general well-being take precedence in determining occupational distribution. It will necessitate the recognition by business that trained and intelligent workers and consumers are both essential to sound business enterprise. It will require the triumph of statesmanship over provincialism in developing appropriate educational facilities and organization. It will necessitate continued progress in developing professional standards of administration in education and in general government. The attainment of the foregoing goals calls for the in- terest and cooperation of a wide range of organizations. [216] It is urged that all agencies of education and enlightenment join in applying educational methods to the achievement of the educational reforms and extensions contemplated. This whole report, in a word, is a proposal for continuing and further perfecting one phase of the brave experiment in democracy which our American forebears launched more than a century and a half ago. There was no definite and exact manner in which they could have known that such a great social innovation would be successful. It required vision, faith, and courage for a few million colonists to found a republic far on the edge of a hostile world. It re- quired the same qualities to build a system of free and uni- versal education appropriate to the needs of such a govern- ment. It will require vision and courage to continue our great educational experiment along the lines projected in this report. It appears, as far as fact, logic, and man's poor prescience can prophesy, that such a course of public action will be a wise one on several bases — including the economic — with which this document is primarily concerned. The Educational Policies Commission urges careful thought and positive action on the program here proposed. It believes that such action can be the product of dynamic citizenship, in which statesmanlike leadership and intelligent rank and file response are complementary elements. There is no other way in a democracy. [217] Index Ability, individual basis for college attendance, 172 differences in, 157-15 8 educational provisions in relation to, 122-126, 158-159 measurement of, 160 Abramson, Victor. See Lyon, Leverett S., joint author Accidents, reduction of, 16-17 Adams, Henry Carter, on educational expenditures, 208 Adams, Thomas, on housing, 60 Adult education extension services, 20, 215 forums, 37 improvements needed in, 37 occupational training and retrain- ing, 98-99, 182 part of effectively free program, 174 Advertising amount spent for, 48 contributions of, 50—51 mass production, relation to, 47 weaknesses in, 47—48 Advisory Committee on Education, on federal aid for education, 196—197 high-school attendance, expense of, 138-139 Negro education, 151 skilled workers, need for training of, 82 student aid, 140, 161 cited, 169 American Youth Commission, on federal aid for education, 197 health facilities, inadequacy of, 17 high school drop-outs, 13 5, 136- 137 occupational opportunities and skill required, 87 rural poverty and education, 150 school attendance and family in- come, 141—142 Avocations education for, 66 expenditures for, 64 Badger, Henry G.; Kelly, Frederick J.; and Greenleaf, Walter J., cited, 165 Baker, Elizabeth F., cited, 86 Barnard, Chester I., on education and productivity, 7, 13-14 Beard, Charles A., cited, 77 Bell, Howard M., on vocational education, 125 cited, 115-116, 135, 137 Better business bureaus, 50 Bingham, Walter V., on amount of education needed, 8 5 Bowyer, Vernon, on school support and per-capita wealth, 27—28 Briggs, Thomas H., on secondary education, length of, 131 cited, 94 Brookings Institution, on productivity potential, 189-190 relation to consumption, 70 Brunner, Edmund deS., cited, 115 Buck, Norman Sydney. See Fairchild, Fred Rogers, joint author Bye, Raymond T. and Hewett, Wil- liam W., on education, 12 Caliver, Ambrose, cited, 151 Capacity. See Ability, individual Capital concentration of, 3 5 education's contribution to develop- ment of, 22-23 factor in production, 21 organizations of, 36—37 Carley, Verna A., cited, 145 Carnegie Institute of Technology, 86 Carver, Thomas Nixon, on training of talent, 158-159 Carver, Thomas Nixon and Lester, Hugh W., on education and mobility of labor, 106 incentive to personal effort, 10 Cassady, Ralph. See Waite, Warren C, joint author Cassels, John M., cited, 72 Caswell, Ellis A., cited, 115 [219] Chamber of Commerce, on unem- ployment, 11 Chase, Stuart and Schlink, F. J., cited, 46 Chicago, study of education and in- come in, 117 Children, gifted economic limitations of many, 13 5— 136, 142-143 NYA aid for, 135 student aid for, in high-schools, 145 Clark, Harold F., on earnings of unskilled and profes- sional workers, 119 effectively free education, 108 occupational distribution, 121 Clothing education for wiser purchasing of, 58-59 expenditures for, 58 Coles, Jessie V., cited, 49 College alumni, economic status of, 119 College students, mentally superior economic limitations of many, 142— 145 NYA aid for, 140, 146-147 scholarships for, 145-146 Colleges and universities attendance, factors conditioning, 136-142 economic problems, study of, in, 42-43 enrollment in, 1, 125 extension work, 20, 215 occupational education, 90—91 research contributions of, 22—23 student aid in, 145-146, 164-166 tuition fees in, 165 Columbia University Commission, cited, 191 Committee on Elimination of Waste in Industry, 188 Compulsory school attendance present minimum, 129 proposed minimum, 128—130 Compton, Karl T., on chemical agriculture, 5 5 scientific research, 22—23 Conant, James B., on Harvard scholarships, 147-148 social mobility, 15 5 superior students not in college, 148 working way through college, 166 Consumer education difficulties encountered in, 52 kind needed, 44-73 technical phases of, 70—73 Consumers cooperation, 48-49 difficulties, 46-48 education, 44—73 expenditures, 53-54, 56, 58, 59, 62, 64, 67 organizations, 71—73 power, 44—45 social responsibilities, 73—74 standards of value, 51-52 Cooperative attitudes, development of, 37-38 Counts, George S., on selective char- acter of high schools, 134 Cowley, W. H., on NYA students in Ohio, 146-147 Dailard, Ralph C, on school drop-outs, 136 Defense, national, expenditures for, 202 Dewhurst, J. Frederick. See Stewart, Paul W., joint author Dietary customs, effects of, 57—5 8 Dollard, John, on Negro education, 151 Douglass, Harl R., on length of uni- versal education, 131 Drake, C. Ellwood. See Kefauver, Grayson N., joint author Dublin, Louis I. and Lotka, Alfred J., cited, 15 Eckert, Ruth E. and Marshall, Thomas O., on college opportunity, inequality of, 141 drop-outs, economic status of, 136 rural education, 150 cited, 117 [220] Economic contributions of education, statements by: Barnard, Chester I., 7, 13—14 Bowyer, Vernon, 27—28 Bye, Raymond T. and Hewett, Wil- liam W., 12 Carver, Thomas Nixon, 159 Carver, Thomas Nixon and Lester, Hugh W., 10, 106 Compton, Karl T., 22—23 Edwards, Newton, 37—38 Ely, Richard T. and Wicker, G. R., 107 Emerson, Ralph W., 1 Fairchild, Fred Rogers and others, 15, 106 Gemmill, Paul Fleming, 2 5, 148 Marshall, Alfred, 13, 25, 187 Odum, Howard W., 29 Seager, H. R., 103 Seligman, Edwin R. A., 9 Senior, Nassau W., 26 Taussig, F. W., 107, 111 Todd, Arthur James, 31-32 Wootten, Barbara, 106 Economic intelligence, need for, 3 5 Economy, right kind of, 198-199 Edie, Lionel D., on education and wages, 120 Educational expansion bases for, 156—1 57 proper limits of, 113-114, 122, 126-127 Educational inequality extent of, 2, 134-142 factors responsible for, 2, 134—136, 149, 153 Educational Policies Commission, on education contributions of, 6 exaggerated claims for, 30 equality of opportunity, 9 local units, reorganization of, 197 publications of, 3 secondary education, length of, 129, 131 social services, 94, 185 vocational education, 75, 91, 96, 100 cited, 92, 134, 175, 179 Edwards, Alba M., on workers, distri- bution of, 85 Edwards, Newton, on economic literacy, 37—38 occupational distribution, 170 cited, 87 Effectively free education advanced levels of, 160—162 college standards, effect on, 168 cost of, 174-184 definition of, 107-108 income, effect on, 108, 119-121, 210-212 limits for, test of, 113-114, 120 occupational mobility, effect on, 113 occupational standards, effect on, 171-172 proposed program of, 107—109, 128-131, 160-162 Elementary school costs, 175 population, 175 Ely, Richard T., and Wicker, G. R., on education, 107 Emeny, Brooks, on natural resources, 21 Emerson, Ralph Waldo, on education and prosperity, 1 Engineering education, 83 Equality of educational opportunity American ideal of, 1—2, 9 limitations on, 149-153 program for increasing, 107-109 stimulus to personal effort, 9-10 Ethics, education's relation to, 6, 73, 162-163 Expenditures for clothing, 58 education, 4, 184 food, 56 governmental services amount, 3, 67-68 bases for appraising, 205—208 health, 62 recreation, 64-66 shelter, 59 Fairchild, F. R.; Furniss, E. S.; and Buck, N. S., on education, 15, 106 [221] Family income distribution of, 53—54 school attendance, relation to, 138- 145, 148 Federal aid, pronouncements favoring, 196-197 Federal Trade Commission, work of, 49-50 Federated American Engineering So- cieties, cited, 188 Field, Louise. See Stewart, Paul W., joint author Fisher, Irving, on trade schools and wages, 120 Fletcher, S. W., cited, 22 Food expenditures for, 56 education for wiser choice of, 56-58 production, 54—55 Fortune, poll on vocational training, 90-92 Foster, Emory M., on school survival rates, 134 Friedman, Milton. See Kuznets, Simon, joint author Gemmill, Paul F., on education for business life, 25 wasted human talent, 148 Geography, effect on educational op- portunity, 149 Gilks, J. L. See Orr, J. B., joint author Goetsch, Helen B., on inequality of college opportunity, 141 Gorseline, Donald Eugene, on school- ing and income, 118 Greenleaf, Walter J., on economic status of college alumni, 119 See Badger, Henry G., joint author Gulick, Luther Halsey, on education and social change, 33 cited, 165 Gustafson, A. F., on education for conservation of re- sources, 20—21 cited, 19 Hall, Charles Martin, inventor, 22 Hamor, W. A., cited, 23 Hardy, Martha Crumpton and Hoefer, Carolyn H, on health education, 16 Harvey, Oswald L. See Johnson, Palmer O., joint author Health Education contributions of, 15—17, 62—63 facilities for inadequate, 17 Hearings, U. S. Senate, on waste of natural resources, 19 Heer, Clarence, cited, 4 Hewitt, William W. See Bye, Ray- mond T., joint author Higher education. See Colleges and universities Hoefer, Carolyn H. See Hardy, Martha Crumpton, joint author Holt, Frank O., on superior youths not in college, 141 Horner, Harlan H., cited, 137 Housing, See Shelter Howe, Harriet, cited, 53 Hunt, Edward Eyre, on leisure, 64 Income individual, education, effect on, 115-117, 122 family, distribution of, 53-54 school attendance, conditioned by, 138-145, 148 national, amount of, 1, 53 distribution of, 53 education, effect on, 106, 120- 121, 210-212 fluctuations in, 3 gains expected in, 192 occupational efficiency, relation to, 104-105 Industrial relations need for improvement of, 36 study of, recommended, 36—37 Inter-relations of education and eco- nomics, 5—6, 127 Jackson, Dugald C, cited, 23 James, J. A. and Kolb, J. H, on Wis- consin rural youth, 150 [222] Jerome, Harry, on mechanization in industry, 81 cited, 11, 78 Johnson, Palmer O. and Harvey, Os- wald L., on financial aid for stu- dents, 140 Junior college cost per student, 177 part of common school system, 130-131 regional, 96 Kefauver, Grayson N.; Noll, Victor H.; and Drake, C. Elwood, cited, 135 Kelly, Frederick J. See Badger, Henry G., joint author Kimball, Bradford F., on occupational pattern, 77 cited, 80 King, Willford L, on educated man- power, 18 Koepke, Charles A., on skill among factory workers, 78 Kolb, J. H. See James, J. A., joint author Kotschnig, Walter M., on unemploy- ment in professions, 112 Kuznets, Simon and Friedman, Milton, on incomes in professions, 120 Kyrk, Hazel. See Monroe, Day, joint author Labor efficiency of, increased by education, 8-14 factor in production, 7, 8—10 organizations, study of problems of, 37 relations, 36—37 vocational education, interest in, 93 Lang, Richard O., cited, 117 Learned, William S. and Wood, Ben D., on superior students not in college, 143 Leaving school, causes of, 2, 13 5—13 8, 144-145 Lee, Edwin A., cited, 99 Lester, Hugh W. See Carver, Thomas Nixon, joint author Leven, Maurice; Moulton, Harold G.; and Warburton, Clark, cited, 56 Life expectancy, increase in, 15-16, 63 Lindley, Betty and Ernest K., on NYA-aided students, 140 cited, 13 5, 146 Lindley, Ernest K. See Lindley, Betty, joint author Lippmann, Walter, on social action, 201. Loeb, Harold, cited, 191 Lotka, Alfred J. See Dublin, Louis L, joint author Lull, Orren H., cited, 140 Lyon, Leverett S.; Watkins, Myron W.; and Abramson, Victor, cited, 50 MacFie, Alec L., on economy and value, 52 Malnutrition cause of, 45—46 cumulative effects of, 57 education needed to prevent, 56-58 extent of, 56 Management factor in production, 24 general education's contribution to, 24-2 5 qualifications for, 24 university's contributions to, 25—26 Manuel, Herschel T., on superior students not in college, 144 Manufacturing, proportion of skilled workers in, 77—78 Marshall, Alfred, on benefits of education, 13 education of leaders, 25 expenditures for education, 187 Marshall, Thomas O. See Eckert, Ruth, joint author Maryland, youth survey in, 125, 136 Massachusetts, survey in, 142-143 McCall, W. C, on student aid, need for, 137, 139 McNeely, John H., on college student mortality, 137-138 [223] Mechanical competency by-product of industrial life, 39 education's relation to, 39—40 Mechanization, relation to skilled labor, 80-81 Melvin, Bruce L. and Smith, Elna N., cited, 150, 151 Metropolitan Life Insurance Company, on life expectancy, 63 Miller, S. D. L., cited, 147 Milwaukee, survey in, 141 Minnesota, study of manufacturing plants in, 78 Mitchell, "Wesley C, on consumer choices, 5 1 Mobility of labor, education's con- tribution to, 14-15 Monroe, Day; Kyrk, Hazel; and Stone, Ursula B., cited, 56 Montgomery, Donald E., cited, 45 Mort, Paul R., cited, 182 Moulton, Harold G., on capital, growth of, 69—70 expenditures, public, 208 cited, 189, 190 See Leven, Maurice, joint author National Advisory Committee on Edu- cation, cited, 196 National Bureau of Economic Re- search, on mechanization in industry, 78 National Industrial Conference Board, on public expenditures, 173 skilled workers, shortage of, 82—83 cited, 78 National Occupational Conference, cited, 91 National Resources Board, on natural resources, waste of, 19 National Resources Committee, on agricultural experiment stations, 22 business organization, 24 consumer expenditures, 53—54 economic organization and indi- vidual freedom, 38 incomes of families, 138 losses due to low productivity, 190 occupational distribution, 171 occupational opportunities and skill required, 86 occupations, shifts in, 88 cited, 23, 53, 78, 139 National Survey of Product Capacity, 191 National Survey of Secondary Educa- tion, 13 5 National Tax Association, 195 National Youth Administration student aid provided by, 13 5, 139- 140, 181 success of students aided by, 146— 147 Natural resources conservation of, 1 8—2 1 production, relation to, 18 rank of the United States in, 19, 21 waste, examples of, 19—20 Negro education availability, 1 5 0-1 5 1 economic status, relation to, 151 New York City accident reduction in, 16 environs, 65 regional survey of, 60 New York State occupational pattern in, 77 rural education, 150 scholarships for high-school gradu- ates in, 137, 164-165 school attendance and economic status in, 141 survey of school drop-outs in, 116 Noll, Victor H. See Kef auver, Grayson N., joint author Norton, John K., on length of uni- versal education, 130 Norton, Thomas L., en occupational choice, 169 skill required of workers, 80, 8 5-86 cited, 94 Nourse, Edwin G., on potential pro- ductivity, 189, 190 Nursery-kindergarten-primary school, its relation to economic well-be- ing, 43-44 Nystrom, Paul H, on economics of fashion, 5 8-59 [224] Occupational education. See Voca- tional education Occupational distribution correct basis for, 121, 209 regimentation involved in, 169—171 shifts in, 88-89 Occupational mobility education's relation to, 10S— 107, 113, 158-159 productivity, relation to, 14-15, 105 standards, effect on, 209-210 Odum, Howard W., on economic lag, causes of, in South, 28—29 Ohio, testing program in, 143-144 Orr, J. B. and Gilks, J. L., cited, 57 Palmer, Emily G., cited, 89 Pennsylvania scholarship holders in, 147 testing program in, 143 Perishability of educated man-power, 18 Physical education, aim of, 16 Pittsburgh, occupational survey in, 86 Printing industry, skill required in, 86 Private business enterprise and eco- nomic education, 212-213 Production factors in, 7-8 increase in relation to population, 27 proportion of workers engaged in, 88 Production schedules, consumers' re- sponsibility for, 45 Productivity complementary relation of educa- tion to, 3 1 education's influence on, 7—32, 104- 105 expansion of, 27 occupational mobility, relation to, 14-15 potential, 188-192 skilled labor, relation to, 10-11 Professional workers earnings of, 119 increases in, 77 preparation of, 99-100, 110-111 social responsibility of, 101 unemployment among, 112 Rainey, Homer P., on education and rural poverty, 150 Ratcliffe, Ella B., cited, 146 Recent Economic Changes, Commit- tee on, 51, 64 Recent Social Trends in the United States, cited, 20 Regents' Inquiry, Report of, on compulsory school attendance, 129 non-academic courses, 125 secondary school, selective character of, 136 vocational education and wages, 116-117 cited, 8 5, 169 Research agricultural, 22 economic welfare promoted by, 23 industrial, 22 occupational, 93 university and college contribu- tions to, 22—23 Rosander, A. O, on economic stratifi- cation, 142 Rose, Mary Swartz, on nutrition and health, 57-5 8 Rural education, weaknesses in, 149- 150 Russell, John Dale, cited, 93, 94 Safety education, effect on accident reduction, 16—17 Savings amount of national, 68 capital provided through, 70 education needed for, 68-70 Scholarships achievement of holders of, 147-148 increases recommended, 164-165, 182 number available, 145-146 New York State provisions for, 137, 164 Science, economic contributions of, 21-23, 27, 34, 40 [225] Science Research Associates, on skilled workers, 8 5 Scientific competency, education's re- lation to, 40-42 Scientific method application to economic problems, 41 need for broader use of, 41—42 Schlink, F. J. See Chase, Stuart, joint author Scott, Charles F., on technical educa- tion, 83 Seager, H. R., on education, 103 Secondary school changes needed in, 125 cost of, 176, 177 enrollment, 1, 134 graduates increases in number of, 134 percentage attending college, 125 length of, 130-131 NYA aid for students of, 139-140 population, 175—176 selective character of, 134 withdrawal from, causes of, 134- 136 Selection of students bases for, 157-160 occupational standards, influence on, 209-210 Seligman, Edwin R. A., on economic value of education, 8-9 Senior, Nassau W., on economic value of education, 26 Shelter expenditures for, 59 education for wiser purchasing of, 59-62 number of new dwellings needed, 61 Skilled labor demand for, 11, 81 mechanization, relation to, 80—81 productivity, relation to, 10, 12 proportion of, increasing, 11, 84— 87 shortage in, 11-12, 82-83 unemployment among, 1 1 Slichter, Sumner H., on consumer ignorance, 71 Smith, Elna N. See Melvin, Bruce L., joint author Social intelligence, education's respon- sibility for, 34-36 South Carolina, college attendance in, 137, 139 Spaulding, Francis T., on non-academic courses, 125 secondary education, length of, 131 wages and education, 116 cited, 94, 129 Spencer, Lyle M., on skilled workers, 85 cited, 11 Stack, Herbert J., cited, 16 Standards administrative, 2 1 4—2 1 5 college, effect of free education on, 168-169 consumer, 45, 51—52, 74 occupational, effect of free educa- tion on, 209-210 Statesmanship, need for, 213—214 Stewart, P. W.; Dewhurst, J. F., and Field, Louise, on consumer expenditures, 45 cited; 27, 5 5, 88 Stone, Ursula B. See Monroe, Day, joint author Student aid conditions for granting, 166-168 educational standards, effect on, 168-169 forms of, 164-166 implications concerning, 162—163 NYA, 13 5 need for, 13 5-145 occupational standards, influence on, 171-172 private sources of, 145—146 proposed program, 107-108, 128- 131, 160-162 Student employment, 166, 179 Superior ability. See Children, gifted; and College students, mentally superior Taussig, F. W., on educated man-power, conservation of, 18 [226] environment and education, 124 occupational choice, 133 productivity and education, 107, 111 Tax Policy League, studies of, 195 Taxation basis for appraising, 20 5—208 reasons for, 67—68 reforms in, 194-195 Technical institutes, 83, 96 Temporary National Economic Com- mittee, cited, 24 Texas, study of high-school graduates in, 144 Text-books, cost per pupil, 177 Thorndike, Edward L., on effects of education, 31 Thornton, Jesse E., cited, 27 Todd, Arthur James, on industry's dependence on education, 31-32 Toops, H. A., on ability of college students, 144 Twentieth Century Fund, on consumer expenditures, 45 taxation, 195 Unemployment, among learned professions, 112 skilled and unskilled workers, 11 Unskilled labor, decreases in, 11, 77-78 proportion of, 1 1 unemployment among, 1 1 United States Housing Authority, on dwellings, number needed, 61 United States Soil Conservation Serv- ice, 19 Universities. See Colleges and uni- versities Urban Youth, cited, 135 Vocational education bases for development of, 12, 76— 77, 83-90, 109-111 criteria for selecting types of train- ing, 97-98 extension courses, 99 Fortune poll on, 90-91 function of, at different levels, 94— 97 higher institutions, contributions to, 99-100 mobility of labor, relation to, 14— 15, 105-107 numbers enrolled in, 99 principles, development of, for, 92-94 productivity, effect on, 10, 12, 14 retraining, provisions for, 98-99 school's responsibility for, 92 wages, effect on, 106—107 youth's desire for, 12 5 Vocational guidance, 83, 93, 94, 119 Waite, Warren C, and Cassady, Ralph, cited, 57 Warburton, Clark. See Leven, Mau- rice, joint author Washington, Booker T., on Negro education, 152 Watkins, Myron W. See Lyon, Lev- erett S., joint author Watson, Goodwin, cited, 149 Webb, Beatrice. See Webb, Sidney, joint author Webb, Sidney and Beatrice, on in- crease in skilled workers, 76-77 White House Conference on Child Health and Protection, cited, 56 Wicker, G. R. See Ely, Richard T., joint author Willoughby, W. F., on governmental expenditures, 207-208 Wisconsin rural youth in, 150 testing program in, 140 Wood, Ben D. See Learned, William S., joint author Wootton, Barbara, on education and mobility of labor, 106 Young, Owen D., chairman, Ameri- can Youth Commission, 197 Zook, George F., on superior students not in college, 142-143 [227]