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Mr. PAYNE. The major portion of 10-year increase of cost to personal service has been due to the pay increases of July 1, 1945, and July 1, 1946.

Mr. BATEs. Now, let me have the increase of personnel from '37 to 946 again. '37 was what?

Mr. PAYNE. '37 was $31,192.
Mr. BATES. And '48?
Mr. PAYNE. '48 was $74,156.

Mr. BATEs. So that is more than double. Now you would not say that increase is due entirely to the increases in pay authorized by the acts of '45 and 246, would you?

Mr. PAYNE. I have covered that one point at a further point in my statement.

Mr. BATEs. But that is a statement you made that it was due to the increase in wages. That is not true, is it, when wages did not increased a hundred percent?

Mr. PAYNE. Not that much.

Mr. BATES.. Then that statement you made is not exactly so; it is as a result of a combination of increased personnel

Mr. PAYNE. In personal services.
Mr. Bates. And increase in wages, that is not what you said.

Mr. PAYNE. I have got one point farther back here that I think will clarify my position.

Mr. BATES. Fine.
(The matter referred to above is as follows:)

Alcoholic Beverage Control Board, operation costs and income, 1937-48

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1 $5,700 has been requested in a supplemental appropriation to cover pay costs authorized by the Federal Employees Pay Act of 1946 and Public Law 390.

? Does not include cost of police officers assigned to board work, estimated at average salary of $2,400 yearly. Such salaries were paid from budget of Municipal Police Department.

Mr. PAYNE. I will come back to that point after several paragraphs. The gross income of the municipal government from alcoholic beverage taxes, licenses, and fees for 1937 was $1,950,970.54. The total

disbursements of the Board for that year were $39,026, leaving a net income to the District of Columbia of $1,911,914.54. The gross income for the fiscal year ended June 30, 1946, from taxes on alcoholic beverages, licenses, and fees increased to $3,472,565.65. Net operating cost disbursements were $70,691.84, leaving a net income to the municipality of $3,401,873.81; showing a net increase in the 10-year period from such sources of $1,489,929.27, or almost double the 1937 amount.

Mr. BATEs. How many permits did you give out in 1937 and how many in 1946? This income is based entirely on the number of permits you issue? Mr. PAYNE. Yes, sir. Mr. BATES. And taxes are for various kinds of beverages?

Mr. PAYNE. In the fiscal year of 1937 which ended June 30, 1937, there had been a total of 2,502 licenses issued. On March 1, 1947, there was a total of all class of licenses of 2,169.

Mr. BATEs. There were less licenses in March 1947, almost 400 less licenses, than in 1937?

Mr. PAYNE. Yes, sir. In 1937 the salaries of eight Metropolitan Police officers assigned to the Board for control purposes were paid under the appropriation for that department, and were not included in the budget or appropriation for the Alcoholic Beverage Control Board. Since this was a proper charge against the Alcoholic Beverage Control Administration, it would indicate that 1917 pay-roll increase has actually been only $23,764. Does that answer the question that you had in mind, sir?

Mr. BATEs. Yes; excepting that the original statement that this increase is due entirely to the two pay acts in a major sense.

Senator Cain. If you just put another phrase in between those comments it will clarify that.

Mr. PAYNE. That is for personal services entirely. The total cost of administration for the last fiscal year was approximately 2 percent of the gross income which we believe to be the lowest cost of alcoholic beverage control administration in any jurisdiction of the United

Since 1935, the first full year of administration of the District of Columbia Act, the amount of work of the office and staff has increased 38 percent, and the income from these sources, taxes and licenses, is now approximately 5 percent of the District's total income.

Senator Cain. You are practically unassailable, sir.
Mr. PAYNE. Well, I will admit that Mr. Bates' point is
Mr. BATES. I am not through with him yet.

you see the number of enterprises growing substantially less and the cost going substantially higher, I would like to know the reason for that. Now, in 1937 you had 2,502 permits; you have only got 2,100 today, or in 1947. Now, I would like to know what has happened. After all, you are dealing with permits in the first instance, and the supervision of those permits, the taxing of the supplies go

into those areas, and why is it that the expenses have more than doubled in that period of time, and your permits are much less. Now, admitting that your increase is due in major degree to personnel, say 40 percent, as a result of those two pay acts, you do not buy matériel, you do not buy supplies, you do not buy wheelbarrows and



road rollers and gravel, and things of that kind, and your expenditures are probably 95-percent personal, are they not?

Mr. PAYNE. Office supplies.
Mr. BATES. I know that is incidental.
Mr. PAYNE. Office equipment.
Mr. BATES. What is office equipment?

Mr. PAYNE. A typewriter or a new desk or pens or pen holders, and such things.

Mr. Bates. Well, for the fact that your permits are so much less in 1947 than in 1937, what is the cause of all these increased amounts over and above the 40 percent?

Mr. Payne. Among other things the report as prepared for 1937 includes 332 transfers of licenses. The figures that I gave for last March 1 did not include the transfers. I think that those 332 should probably not be included there.

Mr. BATES. That is 1937?
Mr. PAYNE. In the 1937 figures.

Mr. Bates. So that you have relatively about the same number of permits, actual permits today that you had, say, in 1937?

Mr. PAYNE. Just about; yes, sir.
Mr. BATES. I see.

Mr. PAYNE. The 1937 figure also included 62 class F licenses, which are 1-day permits for excursions, bazaars, and so forth.

Mr. BATEs. You gave the number of personnel you had in 1937 and 1947, did you not?

Mr. Payne. We had 12 in 1937, including the Board, and 22 in 1947.

Senator Cain. Are you hazarding a guess as to how your revenues by way of income are likely to keep up or fall off over the next 5-year period?

Mr. PAYNE. That is very difficult to answer, Senator. About a year and a half ago we tried to estimate what the income for the last fiscal year would be, and thought there would be a drop. Actually there was an increase of $300,000. From what we observed in the licensed establishment I believe the District's income will be less from this source this year from the tax end because of a considerable drop in sales, as high in some of the larger establishments as a drop of 30 percent, as against just a few months or a year ago.

Senator CHIŃ. Right now their sales are falling?
Mr. Payne. Yes. In the package stores, as well.

Mr. BATEs. That reflects, does it not, the drop in the Federal pay roll which, after all, is the basis of your whole economic life in the community and something that we have to look forward to with some apprehension as it diminishes to a degree which we read so much about in the papers, as a result of the reduced appropriations?

Mr. PAYNE. I believe sir, that is only one of the reasons.

Mr. BATES. I am just going to cite these brief facts. Ten years ago the pay rolls in the Federal departments of this District, which after all is your greatest industry, were about $235,000,000. In 1943 they went to $685,000,000. In 1944, $661,000,000; 1915, $674,000,000; and last December, or last year, 1946, they reached a peak of $692,000,000, and that is nearly $700,000,000 compared with $235,000,000 in 1937.

Of course, the basis of your economic life here and whatever affects that pay roll, the employment of our people, which will be affected by reduced appropriations and a substantial number, it is going to affect

the business you are doing in the liquor stores and every business along the highway. That is the thing we have to view.

Mr. PAYNE. That is only one factor, Mr. Bates. There is another we must take into consideration. During the war period there were, of course, great numbers of persons in uniform in and around the city and their friends and relatives visiting here. This was a mecca for them. Also for large numbers of businessmen coming to transact various business affairs before the various agencies.

Mr. BATES. You do not think that these conventions that we will have from now on to replace those business people will take up that slack?

Mr. PAYNE. Most of the conventions are not dry, Congressman, that is a fact. There is another factor, however, and that is that due to the increase in living expenses, people are possibly not buying as they did. They do not have the money to throw away as they did. The hotels have noted that. Then there are large numbers of persons who for 14 years have had a certain amount of security here and they do not know what that security is this coming year. They are withdrawing in their amusements or recreational activities.

Mr. BATES. In other words, the heyday is over and they are putting their thinking caps on as to what tomorrow is going to bring?

Mr. PAYNE. Yes, sir.
Mr. BATEs. That is true all over this Nation.

Mr. PAYNE. I noted that the Federal income from alcoholic beverage tax resources in January was 2.2 percent less nationally than it had been the year previous. That figure had been dropping since last October and is apparently still dropping, and reached the point in January which was equal to that of June of last year. Apparently the indications are that consumption is reduced.

In the State of Pennsylvania, which is a monopoly State, in January there was a reduction of 34 percent in the sales from the State's commissary stores.

Mr. Bates. What policy does the Commission have here in the District relative to the establishment of these licenses in neighborhood districts?

Mr. PAYNE. Under the act, all but one type of license, that is, for the sale of beer and light wines in groceries-must be in commercial zoning. It is illegal to place any other type of license in residential Zoning. The same pertains to placing a license within a distance of 100 feet of educational or religious institutions.

Mr. Bates. The prohibition against 400 feet, is that an adoption of the Board ?

Mr. Payne. That is the regulation of the Commissioners.
Mr. BATEs. And you try to rigidly live up to that, do you not?
Mr. PAYNE. Yes, sir.
Mr. Bates. And also the neighborhood restrictions?
Mr. PAYNE. Yes, sir.
Mr. BATEs. I think that is a good sign.

Senator Cain. Next we have the gentleman present who can help us on correctional matters as they affect the District of Columbia, not necessarily the Committee.

(Statement later received for the record from the Alcohol Beverage

Control Board.)


1939: Increase due to five reallocations, $1,140.

1942: Decrease, reclassification of Administrative Assistant from CAF-7 to CAF-5, $600.

1943: Increased by one inspector at $2,300 and one CAF 3 clerk stenographer at $1,620, $3,920.

1945: Increased by addition of seven inspectors to the staff, $18,200. 1946: Increased by the addition of one messenger, $1,320.

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CORRECTIONS, DISTRICT OF COLUMBIA Mr. CLEMMER. My name is Donald Clemmer, I am Director of the Department of Corrections of the District.

Mr. Bates. What we are particularly interested in, Mr. Clemmer, is what overlapping there may be with respect to Federal institutions, care of Federal prisoners, what contribution the District makes through your department to take care of Federal prisoners.

Mr. CLEMMER. In a very few moments I believe I can show the contrast in the fiscal picture between 1937 and 1947. The appropriation for 1937 was $1,300,000, for 1947 it is $2.200,000.

The personnel in 1937 were 303. The personnel in 1947 are 592. . The per capita cost of keeping an inmate in 1937 was 89 cents day. The per capita cost this year is $2.40 a day.

Senator Cain. Do you want to stop right there? Mr. CLEMMER. As you wish. Maybe I can give you these few additional figures first and the picture will clear itself up.

The expenditures for salaries in 1937 were almost a half a million dollars—$196,000. The expenditures for salaries in 1947 are $1,300,000.

As an example of increased costs, in 1937 we could feed a man for 19 cents a day, in 1947 the cost was about 45 cents. Those are the basic figures of contrast, gentlemen, between 1937 and 1947. I can explain pretty well the reasons for the differences.

Take for example, this figure: The correctional officer of the guard in 1937 was making $1,500 a year for a 48-hour week. That comes to 60 cents an hour. In 1947 that same correctional officer is making $2.695 a year for a 40-hour week. That is $1.30 an hour. It is over 100 percent increase in wages.

The expenses of this department have increased because the number of employees has increased obviously, almost 100 percent, because the pay of personnel has increased, because the services have been expanded and because the capital improvements that have been added over this period have called for expanded personnel.

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