For several years I have suggested an outdoor roller skating rink with a big iron railing all the way around the rink and with a bicycle track on the outside of the railing.

Then light the rink at night. I know children want a safe place to skate and ride tricycles and bicycles. It will be nice even in winter for the snow could be removed. Then there should be more wading pools and showers for children.

Second, investigate how many people were brought here and put on relief by Eleanor Roosevelt and the New Deal. Return these people to their States and let them work. That will relieve the taxpayers here, also the health department, schools, housing, and transportation. Thirdly, prohibit the children from Virginia and Maryland from attending our schools at our expense.

Fourthly, the Federal Government should pay its share.

Fifthly, Glenn Dale-you will find there is $3,000 paid to Dr. Peabody that should be transferred for nurses.

The welfare slogan is "A home for every child." Then they put these children in "foster homes." What a reflection on Christianity and civilization. These children never should have been under Welfare. I suggest Congress transfer this appropriation to care for children to a fund for an orphan home for Washington children, one for white and one for colored, under the supervision of church, health, and education officials.

I thank you.

Mr. BATES. Thank you very much, Mrs. McIlwee.
Mrs. Sullivan, we will hear from you.

STATEMENT OF MRS. ELIZABETH T. SULLIVAN, REPRESENTING PROGRESSIVE CITIZENS ASSOCIATION OF GEORGETOWN, WASHINGTON, D. C.

Mrs. SULLIVAN. The Progressive Citizens Association of Georgetown, representing 500 leading residents of that section, voted at the February 1947 meeting to endorse the Federation of Citizens Associations' resolution which favors the passage of the proposed O'MahoneyHébert bill.

The District of Columbia must maintain adequate health, welfare, and educational standards and cannot do this unless the Federal Gov-ernment pays its just share. The Progressives offer three reasons for endorsing the formula:

(a) The Federal Government seeks additional revenue as it realizes higher costs; one example is the parking-lot situation; two have already been raised, and the Government is advertising for bids on the third:

1. Capital Park Hotel, formerly rented for $250; now rented $800 per month-220 percent raise;

2. Seventeenth and H Streets NW., formerly rented for $227.50; now brings $927 per month, 307 percent raise;

3. Thirteenth and Avenue (South Grand Plaza), formerly rented for $3,800; Government will advertise for new bids soon.

If the Government takes advantage of federally owned, tax-free land to increase their revenue, the Progressives feel that they should be subjected to taxes just like a private individual.

(b) Since such a large proportion of the District residents are Federal employees (200,000 or nearly 25 percent of 950,000) a large part of whom contribute nothing to the District, this places the financial burden on private industry and District employees.

(c) The Federal Government should pay for all the services it is now receiving free, such as water and additional police. For moral and practical reasons, the O'Mahoney-Hébert bill should pass.

In 1945, the Progressive Citizens Association urged that the Federal payment should be increased 25 percent of the entire District budget, but it agrees to the present proposal, as it considers the formula flexible and so workable with changing conditions.

The Progressive realizes that additional funds are needed and are willing to pay their share as District residents, but they definitely consider increase of the Federal contribution as the main means of securing revenue, which should be determined before additional taxing of the District occurs.

This organization does not know the amount of revenue needed to operate the District efficiently, except as recommended by the various D. C. department heads, and realizes the cost during certain years will be higher than other years, due to the increased population with replacement of and additional facilities, so it has voted on all the proposed new taxes, but it asks that they be used only as a last resort to raise needed revenue:

(a) The association votes in favor of a sales tax because it will reach all persons and will not be too hard on anybody; it is against a tax on foods, medicines, building materials, and utilities such as gas, electricity, and telephones.

(b) The association is in favor of broadening the provisions of the D. C. income tax to include more people; it is against increasing the rate that present D. C. taxpayers are contributing.

(c) The association is in favor of the special tax on liquors and cigarettes, but it excludes them from the sales tax. Since the Federal amusement tax is so high, it urges only a 2 percent tax on amusements.

These are the only taxes that the organization recommends that the District be burdened with, to increase the revenue not supplied by the O'Mahoney-Hébert bill.

Mr. BATES. Thank you, Mrs. Sullivan.

Mrs. SULLIVAN. Thank you, Mr. Chairman.

Mr. BATES. Mr. F. Joseph Donohue?

STATEMENT OF F. JOSEPH DONOHUE, REPRESENTING WASHINGTON RETAIL LIQUOR DEALERS ASSOCIATION

Mr. DONOHUE. I am F. Joseph Donohue, and I represent the Washington Retail Liquor Dealers Association.

We are in process of preparing a memorandum which we would like permission to submit to the committee not later than tomorrow; in the meantime, if I may make some comment, I would appreciate the opportunity.

I am glad I followed the gentleman from the Central Labor Union, though not particularly glad that I followed the two ladies that immediately preceded me.

A few days ago I noted that Mr. West said that as far as he knew, we who speak for the liquor industry stand alone in our opposition to the 120-percent increase in the tax on spirits and liquor.

However, I am glad to see that the gentleman speaking for the 180,000 members of the Central Labor Union feels that the excise tax, including the excise tax on liquor or increased tax on liquor, is particularly burdensome on the working class and is in line with us at least on that point.

From the point of view of the retail liquor dealer, it would seem first that the proposed increase in the tax on alcoholic beverages is unfair.

Indirect or hidden Federal, State, or municipal taxes often total a very large part of the selling price of commodities. This is particularly true of liquor and tobacco, but in no industry is it quite as true as it is in the liquor industry where such taxes represent today on an average of 52 cents on each consumer dollar spent.

For example, a fifth of PM Deluxe, an 86-proof spirit popular blend of pure bond whisky, sells in the local market for $3.29.

Of this sum, $1.65 represents a direct payment by way of excise tax of $1.55 to the Federal Government and 10 cents paid to the District of Columbia government. This is at the rate of 50 cents for every

consumer dollar spent.

If the new tax schedule as proposed in H. R. 2284 is adopted, the amount of the purchase represented by direct tax will increase from $1.65 to $1.77 out of $3.29. This will be at the rate of 53 cents for every consumer dollar spent.

At this time I might make the suggestion that the present price of this particular brand of whisky in the District of Columbia is $3.29. It is currently selling-I have the April 1, 1947, price list of the State of Virginia. That same item is now being sold across the bridge in Virginia at $2.85. It is sold here for $3.29.

These figures represent only the direct tax paid to the Federal and District of Columbia Governments out of a purchase price of a bottle of liquor. The ultimate selling price must also reflect a number of other tax factors such as license fees, personal-property tax paid on inventory, Federal and local income taxes, real-estate taxes, and employers' contribution to social security and D. C. unemployment funds. While these figures are presented in the light of their effect on the retail seller of alcoholic beverages, we all appreciate it is the consumer who pays the bill and the tax.

Unfortunately, the consumer's voice is not often heard. It is generally agreed that there are some 50,000,000 persons in the United States, who, to some degree, use intoxicating liquor.

I would assume, therefore, that in the District of Columbia, in proportion, some 300,000 consumers of alcoholic beverages are present. It is upon them that this additional tax burden would fall. It was they who in 1946, as you know, in direct tax paid $2,697,000 to the District and an additional $775,000 in license fees, totaling $3,472,000.

However, these are the same 300,000 people in the District who in 1944, the last year for which I have the available figures, paid in a direct liquor tax to the Federal Government the sum of $36,962,677; and to both Federal and District Governments in 1944, the consumer in the District of Columbia paid in liquor taxes $39,066,386.

Speaking for the moment as one of those consumers, I am appreciative of the privilege of being able to enjoy an occasional drink. There are some 50,000,000 who, like myself, are equally thankful for that privilege. We are glad to pay for it, but are we not paying enough when, on the average, we pay 52 cents out of every dollar we spend in enjoying the privilege, in paying for that privilege? Unfortunately, it is not possible to estimate with any degree of accuracy the total contribution of the alcoholic-beverage industry to the support of the District of Columbia. The $1,400,000, as stated above, paid in gallonage tax and license fee is only a part of the total sum which is here paid. It has been estimated, for example, that $1,400,000 additional is paid by the industry in personal property taxes on its average monthly inventory of approximately $8,000,000 at the current personal-property-tax rate. In addition, it has been estimated that a fair statement of the amount paid in local real-estate taxes by property which is used for this industry is about $550,000.

Corporate and personal income taxes paid to the District Govern-. ment add to the total sum and represent a contribution by this industry to local government far out of proportion to that which is paid by any other industry. Any increase of this burden would be discriminatory and unfair.

Secondly, the proposed increased alcoholic beverages is economically unsound. It is difficult for me to understand by what process of reasoning the Commissioners of the District of Columbia, who, during the war years, when population was swollen, prices rising, unemployment negligible, inventories of consumer goods low, and incomes at their highest, failed to see any express reason for raising then the tax on alcoholic beverages, yet now when population is reverting to normal, prices are falling, unemployment is increasing, inventories are piling up, and income is receding, and they advocate a 120 percent increase in the gallonage tax on alcoholic spirits.

I have always felt that the repeal of prohibition was in a large measure purposed to raise public revenues and to aid in bringing an end to the era of unemployment that marked the late twenties and the early thirties.

Locally it has done much to accomplish both of those purposes. Its contribution to Federal and District taxes we have already discussed. Hundreds of stores that were vacant during the depression years of 30 to 34 were put into productive use by the act of Congress of January 24, 1934, which established the private license system under which we operate in the District of Columbia.

Today, including retail package stores, grocery stores handling beer and light wines, restaurants, and hotels, there are some 1,800 licensed places in the District of Columbia.

Statistics are not available to establish the number of persons who are directly and indirectly supported by these places of business, yet

obviously thousands of families are wholly dependent for their economic well-being on this industry for their support.

The security of these persons is even now cause for concern by reason of the rapid return here from a wartime to a peacetime economy. The crowded hotel and the long line of waiting persons in restaurants and nights clubs are a thing of the past. From all sources come reports of an alarming decrease in the volume of business. In no instance is the report more true than in those businesses which are associated with the sale of alcoholic beverages.

In January and February of this year, the apparent local consumption of spiritous liquors was 707,588 gallons as against 818,245 gallons for the same period last year.

There is a decrease of 110,847 gallons, a decrease of 14 percent plus. With respect to wine the figures show a decline in consumption during the same compartive period from 207,817 gallons to 109,216 gallons, a decrease of 47 percent plus.

Individual dealers, accountants who handle their tax returns, all are aware of the marked decrease in sales.

Another problem complicates the local situation: We are a very small geographic unit. We are surrounded on two sides by State monopolies, which, now, that rationing is over, are offering alcoholic beverages at prices which cannot be met over a long period of time by any appreciable number of local retailers.

The attempt to meet such prices is economically unsound for all but a few of the retailers who do a very large volume of business, and may cause a highly undesirable situation with respect to the more numerous small retailers who may be forced by ruinous competition to a way of doing busines not in keeping with the public interests.

A monopoly of opportunity is not unlikely here with a few well financed, large retailers, meeting the competition of the adjacent monopolies, at least long enough to force a large number of smaller retailers into bankruptcy and ruin.

Before the war years during which it is conceded that nearly everyone in every line of business made money, bankruptcy was not unknown in the liquor business.

Now that the war is over, it has returned, and while it has not yet reached the retail package store it has closed a number of night clubs and restaurants.

Indicative of the times is a certain retail package store which was sold only last September for $65,000. The same store was sold a few weeks ago for $30,000, an appreciable factor in the depreciated price being computed fall in the weekly gross volume of business which as a matter of fact had fallen from $4,300 a week gross volume of business to $2,700 a week in the period from September last to March of this year.

With conditions as they are, it would seem economically unsound to aggravate the situation by an increase in the tax of 120 percent, with its corresponding effect in the selling price of alcoholic beverages.

Now the problem, Mr. Bates, is not something that is to be feared only in the event the tax increase is a matter of law. The problem is an immediate, present problem.