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expenditure to be, in my judgment, assessed against the people of th: whole United States, and yet the cost of it was assessed against the District of Columbia.

Now, at the beginning of this Government, when the original Corgress set up the first system of government, it was provided, as I recall, that the Federal Government should—that was in 1878, wher the present organic act was passed—the Congress prescribed that the expense should be borne by the District and the United States Government 50–50.

Prior to 1878 Congress recognized that it was an obligation of the Federal Government to support substantially the city, but there was no regular principle. Sometimes they would make a large lump-sumu payment; sometimes they would make none at all, and thus it went until 1878, when it was specifically provided that the Government of the United States should contribute 50 percent of the cost; and then it was also provided that with respect to the other 50 percent. that should be raised by taxation.

Well, back in 1924, I think it was, that was again changed, and it was dropped to 60-40.

Senator Cain. May I ask a question? During the intervening years. when the 50–50 formula held sway, that is not to say that the Federai Government actually each year paid its 50 percent, is it?

Senator O'MAHONEY. Well, I have not examined each year, but I think they did.

Then complaint grew up back in 1936–1935, 1936, and 1937—that there was not a sufficient tax coverage in the District of Columbia: 1 there was no income tax, there was no corporate income tax, there was no inheritance tax, for example, and so the revenue act of the District was amended and provision was made for these other taxes. I think those taxes were perfectly proper; but while they increased the revenue from those who were subject to the tax, Congress, at about the same time, cut down the Federal contribution.

From 1925 to 1930, the contributions were $9,000,000 a year; 1931 to 1932 it was $9,500,000; in 1933 it dropped; it was cut down to $7,775,000; 1934 to 1936, $5,700,000, a big cut; you see, new revenue coming in, so Congress blithely shifted the burden; 1937 to 1939, $5,000,000; 1940 to 1945, $6,000,000; and last year we succeeded in boosting that by an additional $2,000,000.

Now, the proceeds from the individual income, the corporation income, the inheritance, and the estate taxes have more than offset any reasonable contribution by the people of the District, it seems to me

There is a table here which sets forth the proceeds. This is table B, and it appears on page 6 of the document which I cited a moment ago. Now, in 1939, before the passage of that act, the District received no income from individual income taxes. In 1940, it received $1,319,308; the next year it jumped to $1,790,000; in 1942 to $2.375,000; in 1943 to $2,740,000; in 1944 to $3,468,000 ; and in 1945 to $3,488,000. Of course, no doubt it might be higher now. But it will be seen that between the years 1939 and 1945 the revenue from income i taxes alone has been boosted by three and a half million dollars.

Now, the same thing is true with respect to the tax on corporation income taxes, corporate net income. That began in 1940 with $956, 000, and in 1945 it was $5,400,000.

Now, you add those and you have $9,000,000 additional taxes in a single year from the taxpayers of the District.

The inheritance and estate taxes-those increased from $43,621 in 1938, because the inheritance tax was imposed sooner, to $430,000 in 1939, and up to—I am skipping gradations—$1,505,000 in 1945.

So that when you take into consideration the increased tax revenue contributed by those who are subject to taxation in the District of Columbia you will see that they are producing a much greater proportion of the increased cost of maintaining the District of Columbia than thu Federal Government is, and yet the Federal Government receives through its officials and its Government functions the benefit of the municipal services which are provided here.

There is no assessment made against the Federal Government for paving; there is no assessment made against the Federal Government for curbing and for sidewalks; there is no assessment against the Federal Government for water, and with the increased functioning of the Federal Government, bringing hundreds of thousands of new employees into the District of Columbia, some of whom reside here and some of whom reside in the surrounding area, there is a tremendous increase of demand for water, and yet that cost is borne by the District.

The originator of this formula contained in this bill was Senator Overton, who was at one time the chairman of the subcommittee of the Senate Committee on Appropriations, handling the appropriation bill for the District of Columbia.

In the course of time he became chairman of the committee on the naval appropriations bill, and I became chairman of the Appropriations Subcommittee; and as a member of that committee, I immediately became acutely aware of what seemed to me the gravity of this problem; and having examined the proposal made by Senator Overton, I felt that it was absolutely sound and ought to be adopted.

The theory of that principle is simply that since we recognize that land, though not still the principal source of wealth, is nevertheless still the most convenient measure of taxable wealth, that the contribution which the Federal Government should pay toward the expense of maintaining the city should be measured year by year by the amount of land taken over by the Government for Federal purposes, particularly since, as already indicated by the percentages I have read, that Government ownership of land has been expanding.

I have not mentioned the fact that, in addition to that, the foreign governments and their embassies and their legations are now seeking much more pretentious homes in the District of Columbia than they used to before Washington had become, as it might be said, the capital of the world. Now they want substantial estates where they were once satisfied to have a small building in the downtown section; they would now like to have a large area in another part of the District, and that, of course, increases the area of the tax-exempt real estate in the Government.

So, in order to get full documentation for this principle, we had these gentlemen who were loaned to the Committee on Appropriatons by the General Accounting Office make a thorough survey

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of all of the factors which go into the problem and to draw the bills. Two bills were drawn. The bill which was introduced is the one which bases the ratio upon the total revenues of the District of Columbia instead of on the general fund, and that would mean that year by year the Federal Government would contribute that proportion of the revenues of the District of Columbia which the land area owned by the Federal Government bears to the total land area of the District of Columbia. It seems to me, Mr. Chairman, to be sound from every point of view.

You may be interested to know that while I refer to this as the Overton formula, nevertheless I discovered through our researches that a Senate subcommittee as long ago as 1835 made practically the same suggestion. No action was taken upon it. That was 112 years ago. The Senate subcommittee proposed that the Federal real-estate holdings should be the measure of its contribution. The proposal was good and sound, but it was laid aside because a hundred years ago, as now, Members of Congress find it pretty difficult to pay attention to the problems of municipal government.

Senator Cain. Senator, I wish to ask you what steps were taken in connection with the (verton formula in recent years?

Senator O'MATIONEY. Well, Senator Overton did introduce this bill; it was not quite the same as this. Nothing was done with that bill, and then we had this investigation made. When the report was filed we submitted it to the full Appropriations Committee, and it was approved by the full Appropriations Committee and ordered printed, and then Senator Overton and I reintroduced, or introduced, the new bill.

Senator Cain. I see.

Senator O'MAHONEY. And at the beginning of this session we did the same. No action was taken last year. Now, it is up to the "new broom." I think you can sweep clean; and if you do, then the District of Columbia will have the benefit of very constructive work, it seems to me—and that benefit will last until time has the same effect, as it always has had, and Members will revert to the old policy of neglect and forgetfulness.

Senator Cain. We are hopeful of finding a formula which will be so solidly accepted by the Congress that it will be established as a going, continuing concern.

Senator O'MAHONEY. May I say that Washington is the Nation's Capital, and it ought to be the best capital in the world. We should not scrimp on the services that are provided here; we should not scrimp on our schools; we should not scrimp on the cultural activities which are carried on here. We ought to see that services of that kind are such as to draw the attention of the whole world.

Citizens from abroad, for example, find it difficult to understand why we do not have a great public auditorium in which the opera is produced, where great symphony concerts are produced; they do not quite understand it. Well, it is because so many of us in Congress think of the government of the District of Columbia as just a municipal task. The people of the District of Columbia have nothing to say about it.

Now, there is a great argument about that, which you have here, of course; but the reason why the framers of the Constitution gave the responsibility of government to the Congress was undoubtedly because they felt it would be unwise to have the Federal employees running the Federal city. So, they thought that Congress would run the city in the style to which the Capital of the great United States ought to be accustomed, though it is not.

Senator Cain. Thank you, sir. We are deeply appreciative of your coming this morning, Senator. We are faced with a very practical problem of finding approximately $17,000,000 either by cutting, on the one hand, or adding, on the other, and we think that basically your formula, sir, is headed in the right direction, and it will be given very serious consideration by the joint subcommittee.

Senator O’MAHONEY. I would like to say that the Subcommittee on the District of Columbia Appropriations, over a period of 5 or 6 years, has had the same conviction, but it is very difficult to do the job. I think you are going to do it.

Senator Cain. We are going to do all we can, sir.
Thank you very much.
Senator O'MAHONEY. Thank you, sir.

Senator Cain. Commissioner Mason has requested permission to insert into the record this letter and memorandum from Government Services, Inc., in connection with the statement made by the Commissioner the other day. Permission is granted. (The letter and memorandum are as follows:)

GOVERNMENT SERVICES, INC.,

Washington 6, D. C., March 11, 1947. Col. K. E. MADSEN,

Assistant Engineer Commissioner', Washington, D. C. DEAR COLONEL MADSEN : There has been received from the office of the water registrar of the District of Columbia a bill in the amount of $1,573.87, which it is stated represents charges for water consumed at the Armory Cafeteria from May 1, 1943, to February 17, 1947.

When contact was made with Mr. J. Wilson Smith, assistant water registrar, District of Columbia, concerning this bill, he stated that the bill had been rendered as a result of a talk which I had had with you, during which Mr. Smith understood, I made the statement that G. S. I. would be willing to pay for all water consumed in its various operations. I do recall saying to you that there would be no objection on my part to G. S. I.'s paying bills for water consumed, provided a suitable plan was worked out. I had in mind that if the Water Department cared to press this point, it could be presented to the Public Buildings Administration for consideration by that agency.

It is my understanding that the Federal Government appropriates a sum each year to the District of Columbia for the use of water, and it has always been my assumption that water used in our cafeterias was one of the things for which we paid the United States one-half of our net profits from such operations. Whether I am right or wrong about this should be determined by a careful and thorough study of the entire problem. No matter what decision might be reached as the result of such a study, it could not be retroactive, as our accounts for past years have been closed and appropriate settlements made with the United States. With best wishes, I am, Sincerely yours,

F. W. HOOVER, General Manager.

MEMORANDUM TO WATER REGISTRAR

THE ESTIMATED WATER CONSUMPTION OF SWIMMING POOLS OPERATED BY GOVERNMENT

SERVICES, INC., IN THE DISTRICT OF COLUMBIA

Basis of estimate as made by Mr. Robb of the United States Engineer's Office is as follows: All pools are equipped with circulating pumps, which replace the original pool water capacity every 10 days. Toilets and showers estimated at 40,000 gallons per operating day, per pool.

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WILLIAM H. BROWN,

Chief, Public Relations Division. Approved March 21, 1947.

R. B. WARD, Water Registrar. Senator Cain. I wonder now if Mr. Robert F. Cogswell, Administrator of the District Rent Control Office is available. If you are, Mr. Cogswell, please sit with us, and give the reporter your proper title, sir.

STATEMENT OF ROBERT F. COGSWELL, ADMINISTRATOR OF RENT

CONTROL FOR THE DISTRICT OF COLUMBIA, WASHINGTON, D. C.

Mr. CogswELL. My name is Robert F. Cogswell, Administrator of Rent Control for the District of Columbia.

Senator Cain. We should like to proceed as you see fit, Mr. Cogswell, explaining to us in as much detail as you care, the problems with which you are confronted, with particular emphasis on your financial structure, your needs.

Mr. COGSWELL. Well, Senator, our office staff is 26 in number, the same today as it was when we were first organized January 1, 1942, with the exception that in 1943, and in the appropriation there, we requested one investigator and two clerk-stenographers. From that time up until very recently, when I appeared before the deficiency committee, there has been no increase in the number of employees in the office, and there has been no increase in salaries other than those provided for by law.

Senator Cain. You expect, therefore, in a few minutes to give us the number of personnel and the salary totals and maintenance and operation that you have been accustomed to in recent years.

Mr. CogswELL. The entire number of persons employed, Mr. Chair. man, is 26. Our appropriation for 1947, the total estimate, was $103,500; and for 1948 the total estimate is $55,700, and that comes about by reason of the fact that under the terms of the District of Columbia Emergency Rent Act, it expires on December 31, 1947, and

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