program and just got reimbursed for the milk itself, they would get 3 cents for the milk.

Mr. ABERNETHY. Are you in a position to express the views of the Department as to whether or not it would prefer that the program be made a direct integrated part of the school lunch program and just increase the school lunch appropriation earmarking a certain portion of it to milk?

Mr. DAVIS. I believe, sir, the Department's position would be that they are recommending an appropriation of $100 million for the national school lunch program, which the Department feels is sufficient for that program and $75 million for the school milk program which they feel is sufficient.

Mr. ABERNETHY. Do you have a breakdown of these funds in the school milk program as between the States?

Mr. DAVIS. Yes, sir. I have a table here which shows for fiscal year 1957 by States the number of outlets participating, the number of half pints of milk for which they have received reimbursement and total.

Mr. ABERNETHY. Do you have a copy of that?

Mr. DAVIS. I have just three copies, I believe.

Mr. ABERNETHY. Can you leave a copy of it with the reporter for

the record?

Mr. DAVIS. Yes, sir. We, also, have a table which shows the number of schools participating by States, and some additional information on the amount of the Federal

Mr. JOHNSON. Does it show the number of schools in the State and the number that participates in arriving at a percentage or just shows the ones that participate?

Mr. DAVIS. Just the ones that participate on this table, sir.

(The tables referred to are as follows:)

TABLE I.-Special milk program, preliminary report of special milk program operations, fiscal year 1957

TABLE II.-Special milk program, estimated obligations, fiscal year 1958

UNITED STATES DEPARTMENT OF AGRICULTURE

AGRICULTURAL MARKETING SERVICE

Special milk program-Number of schools participating,1 fiscal years 1955–57

1 March, peak month in terms of schools participating nationally (includes childcare institutions in fiscal year 1957). Not participating.

Mr. ABERNETHY. How do you arrive at the distribution of these funds between the States?

Mr. DAVIS. The first year we used the School Lunch Act formula which is based as you well know on the total number of schoolchildren in the State in proportion to the total for the United States, and the relative income level of that State, per capita level income, as against the total United States. When we switched the program from the historical base used the first year we gave the States what they had the year before essentially-we used that as the basis for making the apportionment among the States, except that where a State had made very little progress the year before, we held back some of the money. The system that we have now is based on historical use of the funds in each State, and this past year we gave each State 115 percent of what they had actually spent the year before. In other words, giving them 15 percent as a cushion for expansion.

Mr. ABERNETHY. Suppose you reached the point of spending the entire $75 million of your authorization, and in State A you were distributing, or let us say there two States, A and B, they both have 100,000 students in their schools-State A was receiving a quantity of milk that would supply 75,000 of their 100,000, and State B was receiving a quantity of milk that would supply 50,000 of its 100,000. And by next year we would say State B had reached the position it could and would participate in the program, on a per capita basis, equivalent to State A-what would you do about it?

Mr. DAVIS. What we have done in addition to this 115 percent apportionment in the first instance, that allowed us to hold back about 10 to 15 million dollars which we kept for just the instance that you mentioned.

Mr. ABERNETHY. But you have plenty of money. You only expended in 1957 $61,031,943. This year you anticipate $68 million. Let us say next year you would reach $80 million which, of course, you won't, but if this program goes on over the years you will. You mean you could reach that much, and there would be a deficit of money, and here is State A getting a quantity of milk sufficient to supply all of its chldren, but State B would not be able to get a sufficient quantity if you continued to adhere to the present method of dividing your funds. That is what would happen, isn't it? Mr. DAVIS. From a practical matter

Mr. ABERNETHY. In other words-may I interrupt-you are now distributing more or less on a historical basis?

Mr. DAVIS. Yes, sir.

Mr. ABERNETHY. The quantity of milk they have used in previous years?

Mr. DAVIS. Yes.

Mr. ABERNETHY. But some of the other States might come alongand I think they will-I think they are doing it, they are expanding their operations under this program and the day will come, I have no doubt but what they would reach a level of distribution equivalent to that in the States which now have a very high distribution? What I am getting at is, would you distribute it on a per capita basis or would you distribute it on the basis which you now have established?

Mr. DAVIS. Up to now we have felt that the historical base is adequate to the situation. I think in the case that you are referring to, the basis for your question, rather, it might very well be necessary for us to in future years go to a per capita basis to enable each State to realize its fullest potential.

Mr. ABERNETHY. That would be the fair thing to do, would it not

Mr. DAVIS. I think

Mr. ABERNETHY. To distribute it on a per capita basis?

Mr. DAVIS. The apportionment in the first instance could very well be on that basis. It would require, however, that we devise some way of holding back funds from some States that were not, and we had reasonable assurance would not reach their full potential based on per capita; in other words, we would be penalizing, we would not be using the total funds wisely, if we put it out there and they didn't use it and nothing happened.