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It would, of course, be putting it mildly to say that the revenueraising recommendations of the commissioner's tax committee did not meet with the entire approval of all in attendance at that meeting.

The 1948 budget for our city, amounting to $85,082,500, is now pending before the Congress. The revenues of the District of Columbia under existing law fall short of meeting the charges in that budget by some $17,000,000.

Our budget officer, Mr. Walter Fowler, will explain the financial details of the budget, and our over-all fiscal condition, with special emphasis as to the reason for the constantly increasing expenditures with which the District of Columbia has been faced during the last

10 years.

The financial plight of the District is largely due to the failure of the Federal Government to recognize its full duty, and what it owes the Capital of the Nation. When the present system of government for the District was created in 1878, Congress, in section 3 of the organic act, provided that it would appropriate moneys to pay for 50 percent of the expenses of the District. This ratio was preserved until the appropriation act for the fiscal year 1922, wherein it was provided that the United States should pay 40 percent of the expenses of the District, and the District itself paying the remaining 60 percent.

This legislation was temporary, being only for 1 year; but in the appropriation act for the following year, it was made permanent. However, in the appropriation act for 1925, Congress, disregarding the mandate of the statute, appropriated for the expenses of the District a lump sum of $9,000,000 which was approximately 29 percent of the total expenditures.

The annual lump-sum payment continued to be reduced until the fiscal year 1937, when it reached the low ebb of $5,000,000, where it remained until the fiscal year 1940, and then, the $5,000,000 for each of these years amounted to over 12 percent of the annual expenditures.

For the fiscal year 1940, the lump-sum payment was increased to $6,000,000, and in the present year it was increased to $8,000,000. The sum of $8,000,000 represents only a trifle over 8 percent of the estimated budget for the next year.

The Commissioners wish to impress upon the committee the duty the United States owes to the District, as stated in S. 215, which embraces what is known as the O'Mahoney formula, and will correct to some extent the existing inequity, and the Commissioners trust that this bill will be given favorable consideration.

Now, gentlemen, Commissioner Mason is here, but I do not think he can add anything, particularly to this, but unless you have an agenda to follow, Mr. Chairman, I would suggest for details that you call on Mr. Fowler.

Senator Cain. Thank you. We have an agenda, Commissioner, on which his name follows yours.

Let me ask one question, which may not be very important. Were you here at the time when the Federal Government appears not to have been fulfilling what appeared to be its obligation to the District, financialwise?

Commissioner YOUNG. Was I Commissioner at the time?

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Senator Cain. Not necessarily Commissioner, but were you a part of the conversations that took place at that time?

Commissioner Young. I do not quite get that question, sir.

Senator Cain. Well, apparently the Federal Government was guaranteeing to the District so many dollars per annum, but they did not produce the dollars, and I am just curious to know why the Federal Government was so far behind in its promises and its promised cash contributions to the District.

Commissioner Young. Well, that is rather a long story. I was not in office then; I was a newspaperman myself, but I recall-it was due to the then chairman of the Subcommittee on Appropriations for the District of Columbia, and also the chairman of the Senate District Committee. I think they had a little petty dislike for the city; I am not positive, but it is a matter of record. It was before my time, and I only have a faint recollection of it. Senator Cain. It was a rather important dislike, if

your contention is correct.

Commissioner Young. Thank you, sir.

Mr. Bares. Commissioner, the reason back of this discussion relative to the over-all situation confronting the District of Columbia is perhaps the same as you, in your own words at the outset, stated, that it is a condition that is confronting all the communities in the United States; it is the result of postwar conditions due to many factors, and we are just trying to get into all the basic facts in order to determine just what the cause has been for this doubling up of the expenses of running this District, and the same thing may be said for many other communities in the country during the last 10-year period, and particularly, this year, when we are asked to increase the expenditures, say to $95,000,000 against expenditures of only a year ago of $72,000,000, or, in other words, we have an increase in 2 years of $23,000,000, which in itself is a substantial increase, and I think the people of the District, through us, in whom the responsibility lies, will expect us to go into the facts to find out just wherein the difficulty lies, in the administration of this District, and which results in this tremendous increase of the costs taking place.

We have no desire to embarrass anybody in the District; we do expect to get the facts, and from those in authority we feel that they should give us the facts.

But it is our responsibility to authorize the raising of taxes in this District; right or wrong, it is here; it is in our hands, and with that responsibility of authorizing the levying of more taxes ought to go the responsibility of investigating where the money is now going; how well it is being spent, whether or not the District officials are on the job; they know what is going on, and they can readily answer questions that members of this committee can ask in regard to the administration of the affairs of the District.

In your discussion, you laid particular emphasis on the Federal contribution. Whether it should be increased or not, it is a minute part, that increase, of what you actually need, in addition to what you now already have to meet the growing expenses of the government that you say that you do need, and that subject matter of Federal appropriation or Federal payment, with other considerations, ought to be thoroughly

explored because we all appreciate it is not entirely on the basis of the land that the Federal Government has acquired, because you have not a situation here dissimilar to many other communities in the country where we have tax-exempt land; it ought to be approached also on the basis of what the services are that are being rendered by the District that cost the District taxpayers money, and a great deal of money.

I expect that before these hearings are over that some representative of the District government will be able to tell this committee just what services, in the form of police, fire, water, highway improvements, and many other elements of cost, must be maintained in the interest of meeting the Federal requirements in the District; and to my mind if you totaled the amount of them, it would probably be a sizable amount of money.

I want also to be here somebody from the school department to tell us why we are educating a large number of children whose parents are domiciled outside of the District. Maybe it has a good reason for it, but it is costing the taxpayers of this District a lot of money not only in the form of teacher salaries, but school accommodations that must be provided, and when we stop to think that your school expenditures here represent at least 20 percent of your total expenditures, that is a field that we must get into in order to determine at least that question, and other related questions.

I am personally interested, Mr. Chairman, in finding out why we have so many children in the two-platoon system in the Capital City of the Nation; that is a matter that has to be attacked from an expense standpoint, as to why it is not being properly handled here.

So, we are not interested in saving money, for these services that are required. It is an over-all examination of the facts that we are interested in, and that alone, and we wish, if you could, to have your department heads here as the time goes on. This hearing may extend over a period of time, over a period of many days, to give us the required information that we need in that respect.

Commissioner Young. I am glad that you brought that out, Mr. Bates. As I said in my opening remarks, I was not going into details; I think we can furnish a detailed break-down on every one of the things that you brought out. Mr. Fowler here has the break-down, and then the department heads of the specific departments, particularly the schools, that you mentioned, and the highways, and the police and the fire and others, will discuss the services that we are giving to the Federal Government.

Mr. BATEs. There is one other thought that I forgot to express. As I read an editorial in yesterday's paper, it seemed to lay particular emphasis on the fact that as a result of Federal direction, that is Congressional direction of expenditures for certain conditions, it has added expense to the District that apparently the District did not want.

We would like to have somebody tell this committee also what, down through the past 10-year period for which we are laying the groundwork in our studies, the Federal Government did do, through the Congress, in forcing onto the District services and expenses that the District Commissioners themselves did not approve.

I have one thought in mind. Last year a bill was passed in the Congress for the day nursery schools.

Commissioner YOUNG. Yes, sir.

Mr. BATES. I opposed the bill in committee on the ground that I thought the per-capita cost was something like $800 a year, and I thought we were making allowance through welfare for only about $250; and that is one bill that I think we can well be criticized for, first of all, from the standpoint of excessive spending per capita in maintaining children and, secondly, from the standpoint of not providing sufficient money for the mother of the family to keep her little flock together in her own jurisdiction without compelling her to go out and seek employment to maintain her family.

Commissioner YOUNG. Mr. Chairman, now that I brought the subject up I would like to be presumptuous enough to say that Congress itself has been to some extent responsible for some of the increased expenses by enacting laws that we ourselves opposed, or else, did not actually approve.

Mr. Bates. That is what they were, so we will make it a matter of record.

Commissioner YOUNG. Also the several large increases in salaries, which were fine. At the same time, we were watching our cash drawer. Those increases, I think, will account, last year for over, I think, $10,

, 000,000. Mr. Fowler might correct me; I am just doing it out of my head-just $10,000,000. If I am wrong in the figures, Mr. Fowler will correct me; that is congressional legislation.

Mr. Bates. Did the Commissioners oppose that legislation?

Commissioner Young. Not all of it, no, sir; some of it, part of it we probably did.

Mr. BATES. That which you opposed, we would like to know about.
Commissioner YOUNG. Mr. Fowler has the details.
Senator Cain. Your technicians will lay that on the table.
Commissioner Young. Yes, sir.
Mr. Bates. Thank you.

Mr. O'HARA. Mr. Young, over what period of time has there been this deficiency in the tax-raising program that you feel in a general way-has it just come on us now or has it extended over a period of time?

Commissioner Young. Well, if my recollection is good, I think our first suggestion came from the Subcommittee on Appropriations. I do not know whether it was the Senate or the House. I think it was the House. The suggestion was that we should be looking into new taxes. That was probably 2 years ago.

Mr. O'Hara. I recall that last year there were some necessary expenditures which the Commissioners felt should be made, but because of the limited amount of money left at the close of the legislative year, that you could not do so.

Commissioner YOUNG. Well, to commence, Mr. O'Hara, we have done very little building during the war. We have a lot of building that should be done. There is a lot of work to be done on our institutions, and a lot of street work which has to be done, enlarging the sewers, providing more water; and that work could not be done during the war. Now we are making plans looking ahead. We have several

programs, one of 5 years, one of 10 years, that amount to many millions of dollars, to bring the city up to what it should be.

Mr. O'Hara. For example, water utilities, is that a self-paying proposition or is it far behind ?

Commissioner Young. No, sir, that is self-sustaining.

Mr. O'HARA. Is the District still furnishing free of charge to the Government the water for the Government buildings?

Commissioner Young. Yes. It amounts to between eight and nine hundred thousand dollars a year if they paid the same as you pay for

your water.

Mr. O'HARA. Does that include the Pentagon Building?
Commissioner Young. Yes.
Mr. O'HARA. That is all.

Senator Cain. Are there any other questions? If not, thank you, Mr. Young

Comissioner Young. Thank you, Mr. Chairman.
Senator Cain. Mr. Fowler, will you come to the table, please?

Mr. Fowler, as I think you all know, is the budget officer for the District of Columbia, and we shall be delighted to have you proceed in your own way.

STATEMENT OF WALTER L. FOWLER, BUDGET OFFICER, DISTRICT

OF COLUMBIA, WASHINGTON, D. C. Mr. FOWLER. Mr. Chairman, before I make this statement that I have here prepared; and which is very brief, I would like to say to Mr. Bates that we have here practically every department head, and I am pretty confident that they will be able to answer any questions with reference to these expenditures over the last 10-year period, and I would also like to bring to your attention before I make my prepared statement, a slight amplification of Mr. Young's statement with reference to the Federal payment.

Last year before the Committee on Appropriations, I made a statement which I would like to put into the record here. It is brief, and it gives you the history and background of that statement.

Under the title of the "Federal Payment to the District of Columbia" in the act of Congress providing a permanent form of government for the District of Columbia, approved June 11, 1878, appeared the first legislative provision definitely recognizing the obligation of the Federal Government to share in the cost and development of the District.

That act provided, in part, thatto the extent to which Congress shall approve of said payments, Congress shall appropriate the amount of fifty per centum thereof, the remaining fifty per centum of such approved estimate shall be levied and assessed upon taxable property and privileges in said District, other than properties of the United States and the District of Columbia.

Now, the 50–50 plan of appropriating for the District of Columbia, as it came to be popularly known, continued unchanged until the fiscal year 1921. For the fiscal year 1921 and 1922, Congress provided 40 percent, and in the appropriation act for 1923, made this 60-40 plan permanent law.

Beginning with the fiscal year 1925, Congress began ignoring this definite obligation, and its own substantive law, and commenced ap

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