Mr. BATES. It is relative, in a sense. It could not encompass all the responsibility. I say it in that sense, that the Federal Government should not take over all the operative business.

Commissioner MASON. In that sense it is relative, of course. The people here should pay taxes, and they should pay them willingly.

Mr. BATES. Again, on the payment of those taxes, that is a relative question to say that the burden of the taxation is not resting too heavily on any segment of your taxpayers in comparison with other communities of the country, large communities of like size, taking into consideration all of the factors that enter into the administration of the municipal government.

There is an over-all complex, unique problem, as you expressed it, alone here in Washington, that we do not have in any other part of the country.

Now, what is the scientific approach to that up to this moment? I am not ready to say.

Commissioner MASON. I am not, either.

Mr. BATES. But this information we are getting, I think, is a proper approach to the problem, because it is all basic information. It is a determination of what your municipal fiscal problems are, in order to get to the other questions in the back of our mind, and certainly we must get an examination of what those problems are.

Commissioner MASON. I think it should be thorough, as you have made it. They can never be too thorough, because we are liable to err, just as any other group of people. None of us are perfect. I concede that to start with.

But I do think that on the question of approach to it, there are 190,000 people paying taxes here. Are they to be the base from which you operate as the needs for the Capital of the Nation, or is it some other base?

Of course, you cannot keep within the structure without being wholly conjectural. We do not know what that point is. It is all the traffic will bear, apparently, now.

We go into the policy with that uncertainty before us. We can raise so much by the present tax structure, and if that tax structure is too low, it should be raised, and I do not think the people would object, but if, on the other hand, there is an accomplishment and a recognition of our own responsibility, we will say, "You have got a lot of business with the Government."

That has been an argument made not only by you, from Massacnusetts, but from the gentleman from Texas, the gentleman from Delaware, and the gentleman from Arizona, and my own State of New Jersey.

Mr. BATES. A lot of business?

Commissioner MASON. A tremendous amount of business.

Mr. BATES. I do not think I made any comment in that regard. I think the only comment I made in respect to the economic base of this community was the tremendous Federal pay rolls, which is the basis of your economic life.

Commissioner MASON. It is the only industry we have.

Mr. BATES. That is as far as I have gone. I have not discussed any other economic feature at all.

Commissioner MASON. You should not break it down, as I have, that is true.

Mr. BATES. I only used that base because it is a fundamental basea base we must recognize if we are going to maintain the economic life of this community, and the values within the community, and if we wreck that base with either a diminution of employees or pay rolls, you are going to feel it along every highway in this community. That is as far as I have gone, Mr. Commissioner, in my reference.

Commissioner MASON. A former Member of Congress broke it down on that basis-hotels and stores. They pay Federal taxes, local taxes, corporate taxes, whatever rate you put on them. There is an indirect flow, and they help pay the rent. The faster the better, you are quite right.

It flows indirectly into the assessment of those properties, because the tenants of those buildings in their rent pay that. The landlord does not pay that, and takes it as a deduction.

Mr. BATES. Of course, at the outset, I asked the chairman if he would not supply to the committee a complete report as to the services that the District, itself, renders to the Federal Government, and vice versa, so that we can make an analysis of that, and see if there is an approach that we can make as to the Federal responsibility, what that may be.

I am surely wide open in my conviction as to that problem, entirely, at the moment. I have not any closed investigation at all as to what the choice should be.

My mind has been to absorbing the facts in the last few weeks and the last few months, and analyzing your over-all problems of those who are in the community, and that will give us something to work from.

From here on, after we close the meeting today, we go to work from the other angle, and I think you will agree with me that there has never been a more searching examination of the financial structure of your District than what you have seen in the last few weeks.

Commissioner MASON. Never.

Commissioner YOUNG. Very fine.

Mr. BATES. So, will you proceed?

Commissioner MASON. There is no activity that we engage in that is not indirectly, at least, and almost directly, done in the light of the Federal Government. We collect revenues from certain segments of the workers. We collect it from the stores, the merchants in business who are servicing those people, and it all comes back.

But, again, I say, it is so very difficult to project highways and water systems to meet the expansions which normally take place, aside from the wars, and they affect everybody, that just grow out of the fact that the Government is getting bigger and bigger and bigger all the time.

We have got a beatuiful city here. We are very proud of it, but when we get back of the facaded beautiful buildings, we find some terrible conditions. We have got some of the worst slums of the country. We have got some of the worst institutions in the country, structurally.

You set the standards by your national legislation which we are forced to accept, and when we approve a bill, we do not do it because

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we think it is sound philosophically, but it is a mandate from Congress that we do it.

All your welfare, your social security, is in a local policy. It is a national policy, and we must go along or not participate and become worse off than we are.

In that respect we are treated as a State with a territory of a small city, with exceptionally few of the greater metropolitan areas. We have got a lot of people encompassed in the 39 square miles. many more than most cities, and we have no way of expanding.

We have

Then we get into the extraterritorial-jurisdiction question. And now you are proposing that our health program include the counties of Arlington, Fairfax, Prince Georges, and Montgomery, because they are so closely related.

The CHAIRMAN. Who proposes that?

Commissioner MASON. The health councils and various bureaus. The CHAIRMAN. Who is going to pay for that?

Commissioner MASON. That is what I want to know, and that is why I have not approved it.

Mr. BATES. Commissioner Mason, let me again repeat that from the standpoint of the future and the necessary growth of the Capital City. projected into the future, you never had a plan to do that before.

Commissioner MASON. Never.

Mr. BATES. We are working that plan under your schedule here that we are following.

I have just asked the Budget Officer to submit to me a schedule of Capital improvements as well as the District Engineers' projected work over a period of years, not only streets and highways and subways, but buildings, over a span of years, as you wish, 10 years, including your water system, and then we can gear your sources of revenue to tie into that. That is what we are trying to do today.

We can say, "Here, you have so much money to run the city this year." And we sharply draw the line and you cannot see more than 1 year.

What we are trying to do is to project you into the future. That is the way I think a city ought to be run. You ought to look ahead 10 years.

Commissioner MASON. That is the whole thesis.

Mr. BATES. The scheduled income and the outgo, on the basis of how the burden is going to rest on the taxpayers.

Commissioner MASON. That is the whole thesis.

Mr. BATES. You cannot find much fault with this problem, as I see it. The CHAIRMAN. Mr. Chairman, are those figures you have just asked for going to include some of the figures the Commissioner asked for? Mr. BATES. I think that is something just in the wind, a fertile idea. The CHAIRMAN. Well, it is the next step to the schools.

Commissioner MASON. Yes, the schools. We have got this right presently at our door. We have got the so-called 52-20 payment to

veterans.

Now, the veterans come here. This is the Mecca, the National Capital. Congress is here. They want to petition Congress, and they want to go to the Veterans' Administration, the War Department, the

Navy Department, with which they were affiliated in the war, under which they served during the war.

They come here, and we pay that. We are reimbursed for that money. We spend out of our unemployment compensation. We are reimbursed for that, but when the 52 weeks are up, most of those are indigents, and they are going to be here and be on your welfare rolls in 1948 and 1949. That is where you are going to get it, every one of them. We have no way to meet that.

The CHAIRMAN. I do not want to think that is going to be true.

Commissioner MASON. Well, that is the indication. They have gone over 7 or 8 months, and they are still here drawing it. They do not. have to work.

The CHAIRMAN. When the money runs out, perhaps they will go to work.

Commissioner MASON. But it will not run out until another year, and then we will have them on our relief.

Now, we have had quite a development in our health program, both preventive and curative. We have gone up to the point where we are asking in this year alone $8,191,000 for 1948.

Mr. BATES. That is the total?

Commissioner MASON. That is the total for health. Out of that we operate the Health Department, grounds, two hospitals, and an annex to one of the two.

Gallinger, which is a 1,650-bed hospital. We care for everything there in the way of general medicine, surgery, psychopathic, communicable, contagious diseases. And some out-patient clinic work. We have a small tubercular unit out there.

We have another tubercular unit out in Maryland, about 20 miles from Washington, of 650 beds, a few of which are closed because of the shortage of nurses.

And then we have the tubercular hospital at Upshur and Thirteenth Streets, to which we send convalescents to recover and harden up preparatory to going back into the stream of society.

The increase in pay has been terrific at those institutions, for this reason: They operate 24 hours a day, 365 days a year. When we do not have sufficient help we have got to use overtime, and the so-called night differential. That adds to the expense.

Now, we have a policy written into the appropriations act which limits those to residents of Washington, except in emergency, but the adjoining counties

Mr. BATES. You mean the admission of patients?

Commissioner MASON. The patients.

Mr. BATES. Yes.

Commissioner MASON. To those hospitals; they are limited to the residents of Washington except in emergency.

Now, it is not infrequent that, after they try these little hospitals that they have existing out in the counties surrounding us, that they come in and bring a pregnant woman or a blast victim in and put them on the doorstep and say, "Good-by. Take care of them." You have to do it out of humaneness.

We get a lot of them. We attempt to bill the county authorities for it. We got an answer to one letter a year and a half after we sent

it, and then only after we got on the telephone and prodded them. And we never did get paid for it. That is in our budget.

Mr. BATES. If that happened in my State, if a resident of one community went into another community, then the community in which he is domiciled would have to pay that bill.

Commissioner MASON. What means of enforcement have you?
Mr. BATES. The State law. Sue them.

Commissioner MASON. I know, but if the adjoining State of Connecticut, for instance, ignored that, what would you do?

Mr. BATES. We do not go as far as that.

Commissioner MASON. If they were on that principle, I could understand.

How are we going to enforce it against Prince Georges County?

Mr. BATES. That is one of the factors I would like to have you explain in the memorandum that you are sending to the committee. We must be able to go before Congress and say that in our opinion, the Federal contribution should be increased, that is our opinion, and for these reasons, and the stronger you make the reasons, the stronger your case will be.

Commissioner MASON. That is what I want to say.

Mr. BATES. You are not only trying to sell it to us, but we have got to sell it to the Members of Congress, if we are convinced.

Commissioner MASON. That is right.

Mr. BATES. Because they look upon this Federal Government money as their own constituents' money, also. We have a selling point to put over, there.

Commissioner MASON. We get the same contribution from the Federal Government on all the preventive medicine that the States from which you gentlemen come, get. We have to match it, just as they do in other States, and in that respect, we are States, but that throws a lot of preventive medicine work on us, which is an evolutionary thing, as is welfare, evolving out of probably a very bad situation years ago.

The theory and the philosophy then was to keep people out of the hospitals, and that has been growing now to keep them out of the hospitals, and it has worked well, we think, and we think it is a very sound policy, for the whole Nation and for the District of Columbia,

too.

We have the same problem in our welfare. Formerly, when I was a boy, the churches took care of most of the indigents. Those that they did not take care of went to the poorhouse.

Then the private agencies came along and did the same thing. Now, there has been a gradual shift over the last 25 years to taxpayers; and I think, personally, philosophically, that it belongs on the tax rolls instead of having these drives constantly to raise money. Take it out of the taxes and spread the burden where it belongs. Mr. BATES. If they are deserving.

Commissioner MASON. If they are indigent. If they are not, that is an administrative proposition. Then the administrator should be given the devil for it.

Mr. BATES. I think the records I showed here, a comparison of the other communities, showed that you had the lowest per capita cost here of any of the 14 cities that we have made a study of, for relief.