Hawaii in the proportion that the farm population of each bears to the total farm population of the several States and the Territory of Hawaii, as determined by the last preceding decennial census; and (3) the several States and the Territory of Hawaii shall not be required to offset the allotments authorized in this section. The sums appropriated pursuant to this section shall be in addition to, and not in substitution for, sums appropriated under such Act of May 8, 1914, as amended and supplemented, or sums otherwise appropriated for agricultural extension work. Allotments to any State or the Territory of Hawaii for any fiscal year from the appropriations herein authorized shall be available for payment to such State or the Territory of Hawaii only if such State or the Territory of Hawaii complies, for such fiscal year, with the provisions with reference to offset of appropriations (other than appropriations under this section) for agricultural extension work.

SEC. 22. In order to provide for the more complete endowment and support of the colleges in the several States and the Territory of Hawaii entitled to the benefits of the Act entitled "An Act donating public lands to the several State and Territories which may provide colleges for the benefit of agriculture and the mechanic arts", approved July 2, 1862, as amended and supplemented (U. S. C., title 7, secs. 301-328; Supp. VII, sec. 304), there are hereby authorized to be appropriated annually, out of any money in the Treasury not otherwise appropriated, the following amounts:

(a) For the fiscal year beginning after the date of the enactment of this Act, and for each fiscal year thereafter, $980,000; and

(b) For the fiscal year following the first fiscal year for which an appropriation is made in pursuance of paragraph (a) $500,000, and for each of the two fiscal years thereafter $500,000 more than the amount authorized to be appropriated for the preceding fiscal year, and for each fiscal year thereafter $1,500,000. The sums appropriated in pursuance of paragraph (a) shall be paid annually to the several States and the Territory of Hawaii in equal shares. The sums appropriated in pursuance of paragraph (b) shall be in addition to sums appropriated in pursuance of paragraph (a) and shall be allotted and paid annually to each of the several States and the Territory of Hawaii in the proportion which the total population of each such State and the Territory of Hawaii bears to the total population of all the States and the Territory of Hawaii, as determined by the last preceding decennial census. Sums appropriated in pursuance of this section shall be in addition to sums appropriated or authorized under such Act of July 2, 1862, as amended and supplemented, and shall be applied only for the purposes of the colleges defined in such Act, as amended and supplemented. The provisions of law applicable to the use and payment of sums under the Act entitled “An Act to apply a portion of the proceeds of the public lands to the more complete endowment and support of the colleges for the benefit of agriculture and the mechanic arts established under the provisions of an Act of Congress approved July second, eighteen hundred and sixty-two", approved August 30, 1890, as amended and supplemented, shall apply to the use and payment of sums appropriated in pursuance of this section.

Approved, June 29, 1935.

Dr. ADAMS. The second point which we feel supports our position that these funds should not be deducted is based on the fact that there is no duplication of payment involved. Those opposed to the measure have made much of this matter of duplicate payments. In the course of my testimony I would like to take issue with that point of view.

Senator HILL. Good. Do not only take issue, but if I may suggest this, go right to the heart of this question as you see it. I hope that you take sharp issue and state fully and in detail the basis for your side of the question-why you feel there is no duplication, because that goes right to the issue before this committee, I believe.

Dr. ADAMS. Yes, sir.

Now if I may start with the first point, Mr. Chairman, this matter of endowment character seems to us to be particularly important because the record shows that the intent of the Congress was to support and give continuing support to the land-grant colleges and

1 So in original.

universities. Throughout the language of the several acts we find constantly the mention of the word "endowment," "for the further endowment and support," and I would like to read a little bit from that.

It has been said, for instance, that this matter of the word "en-. dowment" has been included only in the title. The fact is that the second Morrill Act of August 30, 1890, to which I refer, provides a permanent annual appropriation now amounting to $25,000 annually for each State.

Its subtitle states that its purpose is the more complete endowment and support of the colleges for the benefit of agriculture and mechanic arts, established under the provisions of the act of July 2, 1862. The text of the act states in section 1 that the funds are to be paid for the more complete endowment and maintenance of colleges of agriculture and the mechanic arts.

Section 2 states that the sums appropriated for the further endowment and support of colleges shall be annually paid.

Sec. 3 says that

if any portion of the moneys received for the further and more complete endowment, support, and maintenance of colleges be diminished or lost, it shall be replaced by the State or Territory to which it belongs.

Now coming to the Nelson amendment, the title says that the act provides for the more complete endowment and maintenance of landgrant colleges. The act is in two paragraphs. The first provides a permanent annual appropriation "for the more complete endowment and maintenance" of agricultural colleges. The second paragraph states the manner of payment of the "sum hereby appropriated to the States and territories for the further endowment and support of the colleges."

The act further states that the expenditure of such funds shall be governed in all respects by the acts of July 2, 1862, the initial Morrill Act, and of August 30, 1890, which was the second Morrill Act. In the Bankhead-Jones

Senator HILL. Before you leave the second Morrill Act and the Nelson Act, do you have with you the full text of those acts? They are available to us and of course we can get them very readily from the law library.

Dr. ADAMS. I have only these excerpts with me, Mr. Chairman. The Bankhead-Jones Act of June 29, 1935, in section 22 has pertinent language. The title of the act uses the words "for the more complete endowment and support of land-grant colleges," and in section 22 the opening is, "in order to provide for the more complete endowment and support of the colleges," and then there is interpolated language which I will not quote entitled "to the benefits of this act approved July 2, 1862, as amended and supplemented."

The funds are required to be expended for the purposes of the act of July 2, 1862, as amended and supplemented. From the above it is clear that not only the title but the text of each act clearly states that the funds appropriated are to have an endowment character, and that the acts are all related.

To us this seems to establish the character of the funds in question unmistakably in the intent of Congress, as funds appropriated to establish and to maintain the system of land-grant colleges and uni

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versities which have made a truly remarkable contribution to the educational history of this country, and indeed of the world.

Now, for the second point, the matter of duplicate payments, my associate, Dr. Lunden, will have much to say concerning the details of the accounting involved in these matters. I should like to leave it in his competent hands to give you that testimony, but I should like to get at the thing in a more homely fashion by saying simply that the point has been raised by some that these are duplicate payments, because if Professor Jones was on the staff and was receiving his salary as a part of the Morrill-Nelson, Bankhead-Jones funds, it would be a duplicate payment if the institution received money from the Federal Government for his salary.

In reply to that I would say there was a Professor Jones on the staff before the Veterans Readjustment Act was ever contemplated. The mere fact that that fund is allocated for payments under that heading means simply that it has been used as an accounting device to identify the disposition of the funds.

With the coming of the veterans to the colleges-and I must interpolate here that perhaps we do not all realize the tremendous job that the colleges and universities did in accommodating the veteranswho returned from war, more than doubling the enrollment-in the midst of all this the contracts with the Veterans' Administration were negotiated in order that the veterans' education might start promptly. History shows that in some cases these contracts did provide for such deduction of Federal land-grant funds, Morrill-Nelson and BankheadJones specifically.

In others they did not, and it was not until over 3 years later that decision 812, by the Solicitor of the Veterans Administration, resolved the intent of the Veterans' Administration.

Now, in connection with the resolution of that point, Mr. Chairman, I think the language of the Solicitor himself in decision 812 is pertinent and cogent. He says in respect to the intent of Congress-and this brings up further the point that it has been argued that there is no thwarting of the intent of Congress in this issue and I quote:

H. R. 3119, later reported as H. R. 3749, was presented by this Administration— that is, the Veterans' Administration

to the Committee on World War Veterans Legislation, and this proposed measure was introduced on the same day in the House as H. R. 3119 by Mr. Rankin, chairman of the committee. Such bill provided for authority in the Administrator to readjust payments to institutions furnishing education or training "in consideration of increased or decreased enrollment and available contributions to meet such costs, whether from public or private sources.

May I depart from the text to interpolate here that this statement which was proposed was in essence an attempt to make it a part of the law that such deductions could be made, the very deductions we are arguing about now.

When this proposed legislation, following consideration in committee; was passed by the House on July 18, 1945 (H. R. 3749), the original provision, as referred to in the foregoing, to the effect that contributions to institutions of public or private funds be considered in the determination of charges to the Veterans' Administration for the education or training involved, had been eliminated, and the bill, H. R. 3749, Seventy-ninth Congress, as the same passed the House, did not include, as had been proposed by this Administration, any direction for or reference to consideration of contributions from other sources, public or private,

in relation to costs from which proper charges were to be calculated against the Veterans' Administration for education or training.

Such elimination of the provision directing that Federal contributions from other laws be taken into account in the determination of costs cannot be considered in any sense as an oversight, but, to the contrary, as a rejection by the House when it passed H. R. 3749 of the suggestion that Federal contributions were to be considered in the manner as originally proposed.

The summary then goes on to show that the Senate did not include the authority requested by the Administrator, but that the provision was eliminated in conference committee. A careful checking of the testimony given before the Senate committee shows that educational organization representatives did not discuss this proposition, since it had been eliminated in the House, and that while it was proposed by the Solicitor of the Veterans' Administration and accepted by the Senate committee, there was no discussion in the testimony of the effect or implication of this particular portion of the language.

The Solicitor of the Veterans' Administration says further in Decision 812, commenting on final passage of the bill without the requested provision-and these are all direct quotations as follows:

From the legislative history

* * it is manifest that, in the consideration

of the legislation here involved, the Congress did have before it the question of contributions of Federal or private funds to institutions being taken into account in the determination of costs upon which charges for the education or training were to be based, and in the final enactment of the law the original proposal to that effect was eliminated.

He says further that neither the conference report nor statement of managers on the part of the House

contains reference indicating any purpose or intention in the bill, as agreed to, leaving to administrative regulation the question of public or private contributions to institutions being a consideration in the determination of costs contrary to the final action of the Congress in the nonacceptance of the original proposal to that effect.

In fairness to the Solicitor of the Veterans' Administration, it may be said that he goes on to argue that despite this rejection the Administrator's powers to establish "fair and reasonable" compensation carry with them the power to require the deduction of any funds. entering into cost calculations.

Now, on this matter of deduction which is the central point of which I was to talk, and the question of duplication of payment, let us take for example an institution which in 1938 was receiving regularly Morrill-Nelson and Bankhead-Jones funds. Comes the war, and with it comes the passage of the Servicemen's Readjustment Act, and subsequently the flood of veterans taking advantage of that

act.

The record clearly shows all the way through that it was the intent of the Congress to help to pay the cost of veterans' education. Indeed in some places it seems as though the language says it was the intent of Congress to pay all of the cost of veterans' education. I will not argue that point, however, because the facts clearly show that in no instance do payments from the Veterans' Administration actually pay all the costs of veterans' education.

Senator MORSE. On that point, Mr. Chairman, may I ask the witness a question?

Senator HILL. Certainly, go right ahead.

Senator MORSE. President Adams, take two institutions, A and B, one a land-grant college and one not. In 1938 the land-grant college had Morrill-Nelson funds. For years it had had those funds, had come to rely on those funds, in building up its budget.

Dr. ADAMS. Yes, sir.

Senator MORSE. Institution B, not a land-grant college, had had sources of funds too, we will say from private foundations, from the taxpayers of the State if it happens to be a State institution but not a land-grant college, and it has built up its budget on the basis of those funds.

Then a war comes along, and then passage of the Servicemen's Readjustment Act, providing some funds to both institutions A and B under that act for the training of the veterans.

If we followed decision 812 of the Veterans' Administration, we discriminate against institution A and in favor of institution B, because we would deduct from the budget of institution A certain allowances made under the Morrill-Nelson Act. True or false? Dr. ADAMS. True.

Senator MORSE. So the real kernel of the nut we are trying to crack is this question: Was it the intention of the Congress when it passed the Servicemen's Readjustment Act to discriminate against land-grant colleges in favor of other colleges by taking into account Morrill-Nelson funds upon which grants those colleges had been relying for years. True or false?

Dr. ADAMS. True.

Senator MORSE. Just as simple as that, is it not?
Dr. ADAMS. I think it is.

Senator MORSE. Therefore, we have the right to ask the Veterans' Administration to find some place outside of their imagination, which is the only place I have been able to find it yet, anything in the Veterans' Readjustment Act that justifies such an outrageous Decision as 812.

I want to serve notice as a member of this committee, because I happen to be the ranking Republican member of this subcommittee, that I have studied this matter from the beginning, and I am outraged by the conduct of the Veterans' Administration in regard to this matter. I consider the Veterans' Administration guilty of a great disservice to the veterans themselves by the way they have handled. this case. As far as I am concerned, Mr. Chairman, I am willing to take judicial notice as to the soundness of the House bill and proceed to report it favorably.

I am familiar with the record the Veterans' Administration has made on this matter to date. It is a very sorry record of incompetence in my judgment, and a complete misuse of the discretionary power of the Veterans' Administration in handing down such a decision as 812. I do not know of a single time since I have been in the Senate that I have ever been as deeply incensed over what I think is an injustice, as in the case of the Veterans' Administration handling this matter.

I see no reason for discriminating against the land-grant colleges in this country, as they have been discriminated against in this case, by what I consider to be a highly arbitrary and capricious ruling. It is just the type of thing that I think it is the duty of the Congress to check, and check in no uncertain terms. This ruling illustrates what