And we are in the same geographical situation here.

On the other hand, imagine what would happen if real estate taxes were increased to make up the more than 20,000,000 missing dollars. People would sell out and move to the suburbs, to New Jersey, anywhere, rather than pay it. Real estate in Philadelphia would become a drug on the market, values would wither, assessments would drop, tax collections would drop, industry would move away as fast as ever it could, and no new industry would move in, opportunities for employment would shrink to the vanishing point.

In the spring of 1945 a highly organized and concerted effort was made to bring about the repeal of the city income-tax ordinance, but the reason for its retention, which was so valid and so intimately bound up with the prosperity and future of Philadelphia, that it made a marked impression on its former opponents, and in countless numbers of cases, rallied them to the side of its retention; when it finally reached the halls of the State legislature, where it died.

Mr. W. Frank Marshall was kind enough to grant me an interview on March 17, 1947, so that in addition to the printed matter I leave with you, I obtained a first-hand knowledge of it from his own lips, and I am authorized by him to say to you gentlemen that he will in person appear before you and give a review of the pioneering job they have done in the last 7 years, which they admit was a herculean task of trial and error, intermingled with growing pains, but in his own words, they are beginning to see the sunlight and to attain some stature. He stands ready with his knowledge to guide any younger brother.

The members of the Federation of Business Men's Associations, Inc., are grateful for the sympathetic attitude displayed by this committee in reference to the Overton-O'Mahoney formula, and the public utterances by members of the committee advocating a greater payment by the Federal Government to the District of Columbia for services rendered, aside from its realty tax-exempt holdings.

In appreciation thereof we are willing to leave the final phases of the proper amount in your hands, but desire to say that the suggested sum of $14,000,000, six over the present eight, appears to be along the line of our estimate.

In conclusion, the Federation of Business Men's Associations again reiterates its objections to the proposed sales, gasoline, amusement, cigarettes, alcoholic beverages, public utilities, and motor-vehicle tax, and offers in its stead the combination of H. R. 2282 and the Philadelphia plan, which it feels will be an asset to the fiscal problems of the District of Columbia, and especially feels that over the years the increase that will be obtained from it will save time and energy of the District officials, and last, but not least, will save the time of the District Committees of the Senate and House of Representatives for the District of Columbia, namely, this committee and those that will be serving in the years to follow.

In behalf of the Federation of Business Men's Associations, I thank you for your patience, and offer to you the services of the members of the special tax and legislation committee, namely, Benjamin Striner, Leon E. Hopkins, and myself.

Senator CAIN. Mr. McKee, you might bear in mind for us and of your colleagues that your statement will be thoroughly studied.

Now, may I make one or two suggestions before we recess or adjourn this morning. I think today's testimony has been worth while and constructive, but it has necessarily changed the point of view of the committee. We were not anxious to receive a lot of miscellaneous promiscuous criticism of the government of your District as it is and

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has been administered, but we wanted to give the citizens an opportunity to be heard on that subject.

In the absence of any criticism of that character, we want to suggest, Mr. Bates and I, that we would like to begin tomorrow morning at 10 o'clock to receive testimony from the Commissioners and their agents on their defense and support of the various revenue measures they have asked this committee to consider; following which we will take the other witnesses whom we had tentatively scheduled ahead of that time, after it, because it becomes very clear that people generally are interested in expressing themselves on the desirability or lack of wisdom in passing or even considering some of these tax measures. Therefore, we want to give the Commissioners the opportunity, which is their due, to be heard first.

Mr. Bates, if that is acceptable to you, we will adjourn.

Mr. Bates has a suggestion to make which is, namely, this: He still raises that question, and necessarily, I concur in that question, are there any persons in this room who are desirous of being heard on the subject of their definite, positive criticism of administrative procedures within the District?

Mr. RUFUS S. LUSK. I do.

Senator CAIN. Mr. Bates has authorized me to say that if there happen to be yourself and others that Mr. Bates and I will join with them, if I can, and will be pleased to sit with them this afternoon, beginning at 2 o'clock to listen to such testimony.

We want it known thoroughly, that for the first time in this District, that if you have anything to say which you think in the past has been unpopular if said, you certainly are going to be given an opportunity to say it.

At 2 o'clock this afternoon, Mr. Bates will be here. Mr. Lusk will appear as the first witness. We are not anxious to have any epidemic of such witnesses, but if they feel impelled so to speak, we will thoughtfully listen.

This meeting stands adjourned to 2 o'clock.

(Whereupon, at 12 noon, the committee took an adjournment to 2 p. m. the same afternoon.)

AFTERNOON SESSION

(The committee reconvened at 2 p. m., upon the expiration of the recess.)

Mr. BATES. The committee will kindly come to order.

I understand that some of the other members of the committee will be here presently. The purpose of the meeting this afternoon is to continue the progress we have already made in respect to the over-all fiscal condition of the District, the raising of revenue, and the further consideration of new revenues as suggested by the District Commissioners.

The purpose of the hearing up to the present moment is to determine the reasons why the expenditures in the District have increased from, in the period of 11 years, $42,000,000 up to $72,000,000, and this year has a budget of $95,000,000.

The department heads have already appeared before the committee, and also the District Commissioners, giving their reasons, all of which is part of the record, for this tremendous increase in the

expense of the District down through that 12-year period of time from 1937 on, including the budget of 1948.

In view of the general interest that we feel the citizens of the District have in their District government, appropriations for which are made by Congress and authorization for tax levies also approved by Congress, we thought that it would be well for the committee to listen to any information anyone would have, or any other thoughts that one may have among the citizenship relative to the administration of the District Government, particularly in relation to its efficiency or lack of efficiency, economy, or extravagance, or any other viewpoint that the committee would be interested in.

This afternoon, instead of hearing any testimony with respect to the opposition of any new tax, the hearing will be restricted entirely to the hearing of testimony from interested citizens of the District who are in any way critical of the administration of the District affairs.

I understand Mr. Rufus S. Lusk, president of the Washington Taxpayers Association, is present, and wishes to be heard on the subject matter I have discussed here.

STATEMENT OF RUFUS S. LUSK, PRESIDENT, WASHINGTON TAXPAYERS ASSOCIATION, WASHINGTON, D. C.

Mr. LUSK. My name is Rufus S. Lusk. I am the president of the Washington Taxpayers Association and the secretary of the Building Owners and Managers Association. I conduct my own real estate, statistical, and publishing business. My office address is 1508 H Street NW., and I am a native of Washington.

Since you have asked me, Mr. Bates, to confine myself to certain criticisms and suggestions as to the improvement of the management of the District Government, I will have to depart somewhat from this prepared statement which I made. I will not discuss taxes at all.

I want to preface any remarks I make, however, sir, with the emphatic statement that I am not criticizing the officials of our government. I know them all well, some of them intimately, and I think any city should be envied to have the type of men that we have, particularly as our operating heads of our government. I mean such as the fire chief, the assessor, and so forth.

The main difficulty with the District government is that piece after piece has been added to it often without any relation to the pieces that already exist. In consequence, we have a hodgepodge of all kinds of agencies, a great many of them, and some of the biggest, over which the Commissioners have practically, and in some instances, absolutely no control.

Washington Taxpayers Association has been urging for years— almost 15 years-that we should endeavor to centralize our government into the hands of the District Commissioners. There should be no completely independent boards, and probably very few quasi-independent boards over which the Commissioners, as I have said beforeand I cannot emphasize this too much-have practically no authority whatsoever.

As a result of this crazy-quilt set-up we have, expenses naturally have increased and efficiency and smooth operation of our government has been interfered with.

I want to talk to you about just three of these set-ups and the trouble they have caused. The biggest headache, of course, is the Board of Public Welfare. That is a body appointed by the Commissioners, and the Commissioners have supervision over its budget. Beyond that they have to all practical purposes no control at all. Before a man can be made a Director of Public Welfare or even the Superintendent of Prisons, his name must be sent in nomination, so to speak, by this Board.

It is composed of very high-minded citizens, but few of them know anything about the work they have in hand. His name is proposed by the Board and then goes to the Commissioners, and they, in turn, appoint the man. So both of them agree on an appointment when it is made.

What happens? When George Allen was a Commissioner here in the District of Columbia, he wanted Elwood Street to be the Director of Public Welfare. For some reason, I do not know why, the Board of Public Welfare did not want Elwood Street to be the Director of Public Welfare.

As a result of that, there was a deadlock. We did not have any Director of Public Welfare for 6 or 7 months, and finally the Board gave in.

The administration of that Board has been so unsatisfactory and so expensive that about 7 or 8 years ago the hospitals were taken away from it and put under the Department of Health. Lately, after two of our most picturesque murderers, armed only with their imagination and a can opener, broke out of our jail, the jails were taken away from the Board of Public Welfare.

However, they still administer relief and they still handle our correctional institutions.

In connection with that jail break, I took the trouble to find out of whom the subcommittee of the Board of Welfare which was running our jails was composed: A seller of store equipment, a Negro female physician, and a retired railway mail clerk. They were the three people running our jails.

Fortunately, they do not have anything more to do with them.

Over a year ago the Commissioners proposed that the Public Welfare Board be abolished except as an advisory board, which was as it should be. Hearings were held in the House, as you remember, Mr. Chairman. I thought at the time the thing was scheduled to go through.

However, they had so much influence among the people on that Board that the bill was killed. Now there is even talk of giving the Board more power than it now has, putting it on a par with the School Board.

Mr. BATES. Mr. Lusk, let me interject a comment at this moment, if you please.

You seem to feel that we ought to have more concentration of the duties of the Government in the hands of the Commission. You are finding fault now with the Public Welfare Board, which you say is appointed by the Commission. So if there is any fault to find with the administration of the Public Welfare Department, is it not in the final analysis up to the Commissioners to rectify that condition either by calling those conditions to the attention of the Public Welfare Board and if they are not rectified remove the members of the

Board? That power, you say, rests in the hands of the Commissioners.

Mr.. LUSK. The power to appoint them rests in the hands of the Commissioners.

Mr. BATES. Are they appointed for a specific period of time? For how long?

Mr. LUSK. I think it runs 1, 2, 3, and 5 years-something like that. Mr. BATES. Are they subject to confirmation by anybody?

Mr. LUSK. No, sir.

Mr. BATES. Then the Commissioners themselves have the power to remedy the complaints that you speak about.

Mr. LUSK. Do you think they would put me on that Board?

Mr. BATES. What you are telling the committee here is that we ought to concentrate the power of the Government more in the hands of the Commissioners, and on the other hand you are criticizing a board that they themselves create. There is a little inconsistency there.

Mr. LUSK. I do not think there is any inconsistency there at all. The Commissioners do not appoint except with the approval of the Board all the officials. That is where the difficulty comes from.

It so happens that able businessmen who have been on that Board with very few exceptions have resigned within a short time.. Most of the people who were on it for one reason or another, it just so happens, are those with a very strong public welfare attitude and very anxious to spend all the money they can for the District of Columbia.

If we had no board except as an advisory board, it would run like this: For example, the ABC Board, we would not have half the trouble we do with that Board. It has been going on for 25 years. Mr. BATES. You say the Board is extravagant, yet you tell us that the Commissioners have the power to remove them.

Mr. LUSK. Just what their power to remove them is, I do not know. I presume they can, but they do appoint them.

Mr. BATES. Subject to no confirmation.

Mr. LUSK. That is right.

Mr. BATES. So they have absolute power to remove at the end of their appointed period.

Mr. LUSK. That is right.

Mr. BATES. So the whole thing revolves back to the Commissioners. Mr. LUSK. I do not care to agree with you on that. The Commissioners have to appoint a board. They cannot get anybody to serve on it. It is no fun. As a practical matter what I say has happened, and it is happening today. If that Board had all its powers swept away from it, except to advise, we would not have the scandal after scandal that has occurred on the Board of Public Welfare. Congress has recognized this. It has taken away the hospitals; it has taken away the jails.

All it has now is the administration of relief and correctional homes, and things such as that.

Every person who has made a study of the government, such as Griffenhagen and Associates, recognize that as one of the first things; they recommended that all these boards be made advisory, except if they have a quasi-independent function such as the ABC Board.