But I think we could have

have been binding on you, of course. saved what I suspect is going to develop in this case into some unfortunate hard feelings. Our job is, over all, to protect the veterans; and to protect these colleges from what we think is a very discriminatory order; that is your job too. So, for whatever it is worth, Mr. Chairman, I want to say as one who did his best on this subcommittee, as chairman of it during the Eightieth Congress, who would have that job again if the wheels of political fortunes ever turn that waySenator TOBEY. Will the Senator change his remarks to "when?" Senator HILL. The Senator from New Hampshire means he is more optimistic than the Senator from Oregon.

Senator MORSE. I will still use the word "if," but what I am pleading for is to get together in advance on these problems. When you see them arising over in the Veterans' Administration, I think you should hotfoot it over here and sit down with us and see if we cannot work these problems out in advance.

I am sure if you had done it, gentlemen, you never would have had decision 812. I do not think that decision would ever have been issued because I do not think you could have got a corporal's guard in the whole Congress that would have agreed with the interpretation that you made.

I think we ought to work out a liaison between us where we settle these problems as much as we can in advance of the drawing of the real issue.

I will not say any more, Mr. Chairman. This is the only time you have ever heard me since I have been in the Senate, taking this position toward any of these actions. I stated very, very carefully I think the Veterans' Administration is dead wrong, and I want to see the bill passed and passed quickly.

Senator HILL. Mr. Birdsall, do you wish to make a statement respecting the policy of the Administrator of Veterans' Affairs regarding reports on legislative proposals?

Mr. BIRDSALL. Mr. Chairman, the matter of the preparation of reports on general legislative proposals by the Veterans' Administration in response to requests from committees of the Congress, has been very thoroughly discussed with the Administrator of Veterans' Affairs. He feels that it is his function to state the effects, pertinent legislative history, estimate of cost, and all relevant information but to refrain from recommending whether or not the committee should give favorable consideration to the proposal. It is his thought that such determination is primarily a legislative function. Except under unusual circumstances, for example, where it would not be possible for him to administer a bill, if enacted, or where it would adversely affect the over-all administration of veterans' benefits, as such, he does not expect to furnish any recommendation with respect to whether or not the bill should pass. I wish to submit, however, Mr. Chairman, that we have striven to make our reports fully informative and to include in them such complete and comprehensive data as will furnish adequate information and assistance to the committees in their deliberations. In addition, in accordance with the Administrator's policy, we stand ready at all times to furnish such technical assistance as the committee may desire.

(The following statement was forwarded subsequently from the Veterans' Administration for the record.)

STATEMENT OF CARL R. GRAY, JR., ADMINISTRATOR OF VETERANS' AFFAIRS, CONCERNING ADMINISTRATOR'S DECISION No. 812

The decision in question, Administrator's decision No. 812, while relating that the Congress failed to adopt specific language recommended by the then Administrator, held that it did give the Administrator specific authority to exercise his discretion within specified limits in providing for the payment of fair and reasonable rates of compensation for the training of veterans in instances where an institution applied for compensation in excess of its customary charges, and the Administrator finds that a higher rate is necessary to permit the institution to give training to veterans or that the customary charge is inadequate compensation therefor. In other words, as pointed out in the decision, the Administrator recommended a specific formula for measuring the increased compensation, whereas the Congress, instead of adopting such specific formula, gave the Administrator authority to prescribe such rate as he found fair and reasonable within specified limits. It is the conclusion in the decision that the failure of the Congress to write in a specific formula does not preclude the Administrator from applying that formula under the full discretion and responsibility vested in him by the statute. It also holds, however, that he is under no obligation to do so, but only to prescribe within said limitations a rate which he deems fair and reasonable and that he would be acting within his authority in taking into consideration Federal funds paid the institutions for use in defraying instructional costs under any such legislation as the Morrill-Nelson (but not the original Morrill) Act, the Bankhead-Jones Act, the Smith-Hughes Act, or the George-Dean Act. It was further pointed out to the present Administrator that the regulation in question was issued by his predecessor in office practically coincident with the amendment to the act in question, and that no authority exists in the Administrator to change the regulation retroactively, although authority does exist to change it prospectively. After long and careful consideration, the Administrator declined to change it prospectively for the reason that he deemed the original regulation was valid and resulted in fair and reasonable rates to the institutions in question. As pointed out in the decision, the statute does not require that the Administrator pay any maximum amount, but any amount which he deems fair and reasonable so long as it does not exceed the estimated cost of teaching personnel and supplies for instruction. In many instances, but not in all, the rate paid the institutions of higher learning supported by public funds, which rates are in lieu of their customary rates, approximate the full amount of the cost of teaching personnel and supplies for instruction, but this is not true in all instances, by any means.

With respect to the land-grant colleges, as well as other institutions receiving Federal funds, the rates established by the Administrator pursuant to the authority of the statute in many instances are equal to the estimated cost of teaching personnel and supplies for instructions reduced by the pro rata amount of the Federal funds used for instruction purposes. This, the decision holds, is a legal exercise of the authority imposed on the Administrator, and that indeed, to do otherwise would be to pay for such instruction twice.

Aside from the question as to whether the Morrill-Nelson or the BankheadJones Act funds are used for instructional purposes, the criticism aimed at the Administrator's decision No. 812 is that the rejection of the formula proposed by the then Administrator precludes the exercise of any discretion by him; in other words, that an act is to be construed not by the language which it contains, but by that which it does not contain.

The universally acknowledged rule of statutory construction is that an act must be construed from the language which it contains and that recourse to legislative history is permissible only when the language is not clear. In the present instance examination of the statute discloses no doubt whatsoever as to its intention. The specific language of the statute is:

"That any institution may apply to the Administrator for an adjustment of tuition and the Administrator, if he finds that the customary tuition charges are insufficient to permit the institution to furnish education or training to eligible veterans, or inadequate compensation therefor, may provide for the payment of such fair and reasonable compensation as will not exceed the estimated cost of teaching personnel and supplies for instruction; and may in like manner readjust such payments from time to time."

The language which was recommended by the then Administrator, and for which the above-quoted language was substituted was that the Administrator establish fair and reasonable rates "in consideration of increased or decreased enrollment and available contributions to meet such costs, whether from public or private funds.' While in exercising the discretional authority given him by

the statute, as amended, he is not required to consider increased or decreased enrollment or available contributions from public or private funds, he is not precluded from so doing by the fact that this language was not written into the statute. No objection has been raised by anyone to his taking into consideration increased enrollment, or even decreased enrollment, and likewise no objection has been taken to his taking into consideration any Federal funds paid other than those under the Morrill-Nelson or Bankhead-Jones Act, but it is obvious that if the theory of construction of the statute by language omitted from the bill is applicable to the one, it must be to the others.

There is no known rule of statutory construction which would require limiting the discretion extended by the statute by the language which was proposed in the bill, but not enacted into law. In Horack's Sutherland Statutory Construction (3d ed.) page 506, section 5015, it is stated:

66* * * Generally the rejection of an amendment indicates that the legislature does not intend the bill to include the provisions embodied in the rejected amendment. However, such rejection may occur because the bill in substance already includes those provisions. Other interpretive aids may indicate that this is the case.

"Adoption of an amendment is evidence that the legislature intends to change the provisions of the original bill. Again, however, the amendment may have been adopted only because it better expressed a provision already embodied in the original bill. Thus caution must be exercised in using the action of the legislature on proposed amendments as an interpretive aid. Other interpretive aids should be considered in order to determine the legislative intent."

The applicable rule was well stated by the Circuit Court of Appeals for the Eighth Circuit in United States v. Allen (179 Fed. 13), at page 19:

(* * * Courts can find the intent of the legislature only in the acts which are in fact passed, and not in those which are never voted upon in Congress, but which are simply proposed in committee. It is not contended that the bill referred to was ever brought to a vote in Congress and rejected. It was simply one of the measures which was under consideration at the time the act of May 27, 1908, was passed. To hold that such facts can be looked to for the purpose of narrowing the effect of a statute actually passed, would be to invent a new and dangerous canon of statutory interpretation."

The foregoing was cited with approval by the Supreme Court of Oregon, in City of Portland v. Duntley, et al. (203 Pac. (2d) 640, at p. 647).

A recent application of the rule by the Supreme Court of the United States may be observed in Commissioner v. Church (335 U. S. 632). In that case the Court reversed, in effect, the decision reached by it several years previously in the case of May v. Heiner (281 U. S. 238). As pointed out in the latter decision, and with more particularity by Justice Frankfurter's dissenting opinion in the case decided at the same time, Spiegel's Estate v. Commissioner (335 U. S. 701), the Congress, when it was advised of the decision in May v. Heiner (which decision, in effect, was that under the Internal Revenue Act a trust inter vivos with interest reserved by the settler during his lifetime was effective as of the date of settlement rather than of the date of death, and therefore, was not included in the gross estate for transfer tax purposes) promptly adopted a joint resolution which in somewhat modified form was enacted into law at the next session, providing specifically that as to trusts created after the effective date of such amendment, the act would apply. It was shown by the legislative history that it was proposed and debated that the said act should be made retrospective as declaratory of the intent of the original act, but that this was rejected for reasons deemed satisfactory, and the act was made prospective in effect only. It was urged by the Government that this was binding upon the court and the dissenting opinions strongly urged that this view should have been adopted by the court, but the decision of the court was that such legislative history did not preclude it from refusing to longer follow a decision which it deemed erroneous.

Another rule of statutory construction relied upon by the courts again and again is that administrative construction adopted contemporaneously with the statute will be deemed correct unless wholly unsupported by the language of the statute (United States v. Zazove (334 U. S. 602)). The regulation here in question, in its present form was promulgated by the then Administrator, Gen. Omar W. Bradley, within a very short time after the amendment to the Readjustment Act in question, Public Law 268, Seventy-ninth Congress, act December 28, 1945. This, plus the fact that administrative officials had worked closely with the committees of Congress and the conferees on the bills which became Public Law 268, leaves little doubt as to the contemporaneous understanding that the amendment

placed on limitation upon the Administrator's discretion other than "not to exceed cost of teaching personnel and supplies for instruction." Otherwise, he could provide, in lieu of customary charges, such rates as he deemed fair and reasonable compensation for the training of veterans.

Permit me to summarize the conclusions of Administrator's Decision No. 812, and the reasons therefor:

(1) The statute, Public Law 268, Seventy-ninth Congress, places complete discretion in the Administrator to pay:

(a) Customary charges; or

(b) In lieu of customary charges, fair and reasonable compensation not to exceed cost of teaching personnel and supplies for instruction.

(2) The exercise of such discretion is conditioned only by the requirement that he find such rate is:

(a) Necessary to enable the institution to furnish instruction to veterans; or (b) That customary charges are inadequate compensation for such training. (3) In making such finding and in fixing a fair and reasonable rate, the Administrator may consider all applicable factors, including numbers of veterans in training and funds available from any or all sources. The fact that the Congress did not prescribe a specific formula for making such determination does not narrow the discretion authorized by the statute;

(4) The regulation issued by General Bradley, then Administrator, requiring nonduplication of other Federal payments to institutions, was a proper exercise of such discretion, and therefore valid, and it cannot be retroactively canceled by the present Administrator;

(5) The statute does not require, in terms, that the Administrator consider other available funds, hence, the Administrator has power to change the regulation prospectively;

(6) The funds appropriated under the Morrill-Nelson and Bankhead-Jones Acts are not endowments, as were the grants made under the original Morrill Act, but are authorized by the said acts to be used for paying instructional costs, and they are so used in many institutions;

(7) For the Administrator, in fixing fair and reasonable rates, to ignore such funds so used, would, in effect, mean that the Federal Government would be paying twice for such instruction, and to pay the same rates to an institution receiving such Federal funds and to one not receiving such funds would not be fair and reasonable, in that it would discriminate in favor of the one receiving the Federal funds.

Senator HILL. Our distinguished colleague from New Hampshire, who is the main author of the bill, Senator Tobey, is here with us. We had just granted consent before you came in, Senator, for any Senator who wished to do so, to file a statement in the record, but if you desire to read your statement, you may do so.

STATEMENT OF HON. CHARLES W. TOBEY, UNITED STATES SENATOR FROM THE STATE OF NEW HAMPSHIRE

Senator TOBEY. I have no oral remarks to make. The only thing I would say in addition to what Wayne Morse has said is that whenever he speaks, he speaks with an understanding of problems that commands our respect, whether we agree with him or not. In this case I happen to, but as to the Veterans' Administration contention that this means dilution of their funds unless they do make such a ruling, I would like to point out in the future as to those who will benefit by these funds.

What the Veterans' Administration is doing is not only caring for the veterans of today and those of the past, but this is for the education of the veterans of tomorrow. They are coming, and some of us are going. Think that over a little bit and do not dilute these funds. Leave them unrestrained.

This is toward the application of the education of the youth of our lands who are the veterans, to support this nation in all future wars, which God forbid.

Thank you, Mr. Chairman.

(The prepared statement of Senator Tobey follows:)

STATEMENT OF THE HONORABLE CHARLES W. TOBEY, A UNITED STATES SENATOR FROM THE STATE OF NEW HAMPSHIRE

I joined with several other Senators in the introduction of S. 2909 both to correct a specific inequity which has arisen in the administration of the Servicemen's Readjustment Act, and to protect nonprofit educational institutions generally from the application of a principle which, if it now goes unchallenged, constitutes an extremely dangerous precedent in the relationships of the Federal Government with education.

The issue has arisen between the Veterans' Administration and educational institutions over a difference of interpretation as to the intent of the Congress in providing for payment to institutions of a portion of the cost of the education of veterans under the Servicemen's Readjustment Act. It is the purpose of S. 2909, and of this statement, to the extent that it may further that purpose, to make the intent of the Congress unmistakably clear.

The specific correction our bill S. 2909 applies is to a ruling of the Veterans' Administration that funds appropriated by the Congress for the further endowment of land-grant institutions established in each State under the Morrill Act of 1862 must be deducted when these institutions estimate their cost of teaching personnel and supplies as a basis for partial compensation for this portion of the cost of veterans' education under the Servicemen's Readjustment Act. The broad principle asserted by the Veterans' Administration (Administrator's Decision 812, Apr. 22, 1949) is the authority of the Administrator to require the deduction of any funds, whether of State, Federal, or private-endowment origin, in estimating such teaching costs. Both the broad power asserted and its as yet restricted application are disturbing, both directly and in their implications, as to other Federal programs of aid to education and research.

Specifically, our bill says that, effective December 28, 1945, the Administrator of Veterans' Affairs is prohibited from requiring the deduction, in estimating cost of teaching personnel and supplies under the veterans' program, of funds authorized by the Congress in legislation long antedating World War II, for the further endowment of colleges established under the Morrill Act of July 2, 1862. These funds have not been increased since World War II, and were and are being used by the colleges for the purposes for which they were authorized. They are a part of the teaching cost of these institutions and should be so recognized. Further, our bill prohibits the Administrator from requiring the deduction of State and municipal funds or private endowments or gifts going to institutions, in estimating teaching costs.

December 28, 1945, is the date on which the Congress passed amendments to the Servicemen's Readjustment Act providing for payment of the estimated cost of teaching personnel and supplies, on behalf of veterans, to institutions whose customary tuition changes are low or nonexistent.

The Veterans' Administration issued detailed regulations as to how teaching costs should be estimated. These regulations, as they applied to income from Federal sources, were vague in their language for more than 3 years after passage of the act of December 28, 1945.

Some of our leading State colleges and universities, acting in all good faith, signed contracts with the Veterans' Administration on a cost basis which did not involve deduction of Federal endowment funds. Payments under these contracts have been expended for veterans' education. These institutions are now faced with demands from the Federal Government for repayment of amounts which were a part of teaching costs supposedly due because of failure to deduct these funds in estimating those costs. Further payments for continuing veterans' programs are being held up and have been held up for months, pending agreement by the institutions to a settlement which they did not and do not believe to be equitable. One or two institutions have agreed to such a settlement. Many others did deduct the funds in question in estimating costs, although they believed the requirement wrong. They have received less compensation than their real estimated cost of teaching personnel and supplies for instruction. All these