Rigid rules of rank and seniority employed by most American college faculties today prevent the talented teacher from fully developing his potentialities, Mrs. Douglas Horton, ex-president of Wellesley and currently a director of the Fund for the Advancement of Education, stated yesterday.

Mrs. Horton's statement followed an announcement by Clarence H. Faust, president of the FAE, of the establishment of a $500,000 program under which, degree-bearing colleges and universities may apply for individual grants to experiment for "more effective deployment of teaching faculties."

"The principal fault of American education is its failure to allow the best teachers to dominate the field," Mr. Horton said. "Although many college graduates are interested in teaching, they are discouraged by poor opportunities for advancement and low salaries.

"This situation can be partly alleviated by breaking down the formal ranking system used in most colleges and schools. Under this system good men are discouraged, and enter higher paying industries which promise rapid advancement. What is needed is individual creativity, not trade union seniority," she said.

The Fund for the Advancement of Education was set up in 1951 by the Ford Foundation.