In other communities, they have the family physician, and they accept the family physician's report.

Dr. REED. The individual physician has nothing to do with our local enforcement.

Commissioner YOUNG. We are very fortunate in having a very fine board, Mr. Chairman.

Mr. BATES. Thank you very much, Doctor.

Commissioner YOUNG. This is Colonel Shurm, Assistant Engineer Commissioner. I think, Colonel, what the committee wanted was what General Young's plans were for the outlay for further improvement, in the next 5 years, was it not?

Mr. BATES. Whatever the program is that the Engineer Commissioner had, a statement which he was going to make this afternoon. Will you please give your full name?

STATEMENT OF LT. COL. VERNON A. SHURM, ASSISTANT TO THE ENGINEER COMMISSIONER, DISTRICT OF COLUMBIA

Colonel SHURM. I am Lt. Col. Vernon A. Shurm, Assistant Engineer Commissioner.

I would like to read a brief statement prepared by the Engineer Commissioner, Brigadier General Young, regarding the matter which Commissioner Young referred to this morning, the increase in cost of construction projects. [Reading:]

We have a number of projects on our books which Congress has approved and for which it has appropriated money but which have not been built. The estimates on which the appropriations were based were made at various dates. Many of them are inaccurate, being too low for today's costs. Generally speaking, the older they are the more inaccurate they are.

In such a situation the obvious course is to bring the estimates up to date. However, over the past 2 years that has been easier said than done. I have been in the construction game, off and on, for nearly 30 years, and I have never seen a period when it was so difficult to make a reasonable advance estimate of the cost of work. The cost indices have been rising steadily though irregularly. These indices are based on labor and material costs, and your committee has had ample testimony as to those increases.

In addition, however, we have found that actual bids are often much higher than the indices would seem to justify. The reason can be stated in one word-fear. Bidders for the past 2 years have been fearful of future developments. They have feared yet higher costs; they have feared strikes; they have feared delays in material deliveries. Therefore they have increased their bids to allow for such contingencies. I do not criticize a bidder for taking such precautions against future uncertainties. But both I and my predecessor, General Kutz, have been hesitant to spend large sums of District money on the basis of another man's guess as to future trouble; or to reestimate our costs on that basis. However, as the result of certain recent bids I haye become convinced that the time has come for a comprehensive revision of the estimates on which have been based past appropriations for work not yet done. The Municipal Architect and the Director of Construction are working on such a revision. It is not yet completed, and I am unable to give you exact figures. But I am quite sure that certain of our appropriations for particular projects must be increased by a total that will run well into the millions.

With the committee's permission I would like to submit the complete statement for the record as soon as it is completed. It will also probably be necessary for the Board of Commissioners to consider it as a body.

In this connection I would like to comment on one point which was raised this morning. A statement was quoted to the effect that there was a trend toward

lower taxes throughout the Nation, and questioning the propriety of a contrary trend in the District of Columbia. It is true that there is a widespread demand for lower taxes everywhere, including the District. But concurrently, there is an even louder demand for better municipal services: better highways and parking facilities, more schools, higher standards of public service in the welfare and health fields, et cetera. I have repeatedly heard the two demands made concurrently from the same source. I merely wish to point out that we cannot have it both ways. If these improved services and facilities are to be provided by the District-and I consider it absolutely essential to the city's welfare, and to its future prosperity, that they be provided-then some meats must be found to pay the bill.

Mr. BATES. Thank you, Colonel. Then the Engineer Commissioner is going to supply the committee with this projected program over. say, a period of 5 years or so, with a revised estimate of cost?

Colonel SHURM. I believe, sir, from the statement I have just read. General Young has prepared and is now having worked up a revised cost estimate for the 1948 budget and for capital improvements for which there have been appropriations in the past fiscal years, but which have not been built.

Mr. BATES. Yes. Well, in addition to that, I wish you would see to it that the report is made of the projects of public works, that that also is included. The program that you are projecting in the future for what we call capital improvements. I would like to see that at least on a 5-year basis for other than the water system, which has got to be projected way beyond that.

We do not know what the backlog of appropriations are at the present time, or do you? That is, the available cash, let us say, that you can go to work now with.

Colonel SHURM. I think that the Budget Officer has that.

Mr. FOWLER. I think we put that in the record this morning, Mr. Chairman. This is something else.

Mr. BATES. 1947, 1948, 1952. That is all right. Those were capital improvements.

Something of that type, on a separate sheet of paper, and break them down at each one of those years so we can get it right across the board.

Commissioner YOUNG. Yes.

Mr. BATES. But you have a backlog of appropriations which are still static? Are the funds still available?

Mr. FOWLER. Some of the funds are available; yes, sir.

Mr. BATES. They are not rescinded?

Mr. FOWLER. No, sir.

Mr. BATES. At the end of the year, they still stay on the books as available funds?

Mr. WILDING. And, Mr. Bates, for the most part, these projects are only for planning money. The appropriation for the carrying out of the construction project itself has not been appropriated, but in some instances, partially appropriated.

Mr. BATES. I think in the schedule of projects that you are speaking about in the Engineering Department, I wish you would schedule them over a period of years as to when you would like to put them into effect, and complete them.

I think you have a tabulation somewhere, particularly on the high

ways.

And also, if there is any money available at the moment, I would like to know what it is. Of course, if it is only plans, that is something else.

Is that all you have to say, Colonel?

Colonel SHURM. Yes, sir.

Mr. BATES. Thank you very much.

Senator CAIN. I am going to ask the indulgence of Mr. Bates to permit me to satisfy a commitment that I gave in good faith yesterday to two persons who wanted to be heard in a serious way in order that they might get away.

Now, I am inclined to think that it is proper, if not only for that reason, but because they are going to be perhaps critical of any approach we have yet made to the general subject of taxation.

Each one of them said that he would like about 20 minutes. With Mr. Bates' permission, I would like to call them.

Mr. McKee, if you will be kind enough to sit with us. Our time has expired a little more rapidly than we thought. If it will suit your convenience, Mr. McKee, to restrict yourself approximately to 20 minutes, we shall be greatly appreciative of that.

STATEMENT OF JEROME B. McKEE, EXECUTIVE DIRECTOR, DISTRICT OF COLUMBIA RETAIL LIQUOR DEALERS' ASSOCIATION, WASHINGTON, D. C.

Mr. McKEE. First, I want to give a report of the District of Columbia Retail Liquor Dealers' Association, of which I am executive director, and then I will go into the specific taxes from the report of the federation.

Senator CAIN. Go right ahead.

Mr. McKEE. Honored members, while there are many users of alcoholic beverages, as can be testified to by the income both to the Federal Government and to our city, these consumers hesitate to appear in public in defense of the complaints they make to retailers about the anticipated increased costs to them through the imposition of an increased gallonage tax on alcoholic beverages.

Therefore, those engaged in the sale of alcoholic beverages have to plead their own case, and that of the consumer, which thereby places the industry on record openly as fighting this suggested increase in liquor gallonage tax, plus the increased tax on beer and wine.

At a tax hearing before the honorable Commissioners of the District in September 1946, I stated that as soon as supplies became available in sufficient quantities, so that rationing could be dispensed with in our neighboring States, that there would be a decline in sales by at least 15 percent for the year 1947. This has already come true, and if additional taxes on our products are imposed, then a further decline will take place.

We recognize that our gallonage tax of 50 cents a gallon is low, and we recognize that our ratio of sales have been higher than any other area. However, all statistics are based upon States, as a whole, and no statistics are kept in regard to major cities separately.

99538-47- -37

lower taxes throughout the Nation, and questioning the propriety of a contrary trend in the District of Columbia. It is true that there is a widespread demand for lower taxes everywhere, including the District. But concurrently, there is an even louder demand for better municipal services: better highways and parking facilities, more schools, higher standards of public service in the welfare and health fields, et cetera. I have repeatedly heard the two demands made concurrently from the same source. I merely wish to point out that we carnot have it both ways. If these improved services and facilities are to be provided by the District and I consider it absolutely essential to the city's welfare, and to its future prosperity, that they be provided-then some means must be found to pay the bill.

Mr. BATES. Thank you, Colonel. Then the Engineer Commissioner is going to supply the committee with this projected program over, say, a period of 5 years or so, with a revised estimate of cost?

Colonel SHURM. I believe, sir, from the statement I have just read, General Young has prepared and is now having worked up a revised cost estimate for the 1948 budget and for capital improvements for which there have been appropriations in the past fiscal years, but which have not been built.

Mr. BATES. Yes. Well, in addition to that, I wish you would see to it that the report is made of the projects of public works, that that also is included. The program that you are projecting in the future for what we call capital improvements. I would like to see that at least on a 5-year basis for other than the water system, which has got to be projected way beyond that.

We do not know what the backlog of appropriations are at the present time, or do you? That is, the available cash, let us say, that you can go to work now with.

Colonel SHURM. I think that the Budget Officer has that.

Mr. FOWLER. I think we put that in the record this morning, Mr. Chairman. This is something else.

Mr. BATES. 1947, 1948, 1952. That is all right. Those were capital improvements.

Something of that type, on a separate sheet of paper, and break them down at each one of those years so we can get it right across the board.

Commissioner YOUNG. Yes.

Mr. BATES. But you have a backlog of appropriations which are still static? Are the funds still available?

Mr. FOWLER. Some of the funds are available; yes, sir.

Mr. BATES. They are not rescinded?

Mr. FOWLER. No, sir.

Mr. BATES. At the end of the year, they still stay on the books as available funds?

Mr. WILDING. And, Mr. Bates, for the most part, these projects are only for planning money. The appropriation for the carrying out of the construction project itself has not been appropriated, but in some instances, partially appropriated.

Mr. BATES. I think in the schedule of projects that you are speaking about in the Engineering Department, I wish you would schedule them over a period of years as to when you would like to put them into effect, and complete them.

I think you have a tabulation somewhere, particularly on the high

ways.

And also, if there is any money available at the moment, I would ike to know what it is. Of course, if it is only plans, that is something Ise.

Is that all you have to say, Colonel?

Colonel SHURM. Yes, sir.

Mr. BATES. Thank you very much.

Senator CAIN. I am going to ask the indulgence of Mr. Bates to permit me to satisfy a commitment that I gave in good faith yesterday o two persons who wanted to be heard in a serious way in order that hey might get away.

Now, I am inclined to think that it is proper, if not only for that reason, but because they are going to be perhaps critical of any approach we have yet made to the general subject of taxation.

Each one of them said that he would like about 20 minutes. With Mr. Bates' permission, I would like to call them.

Mr. McKee, if you will be kind enough to sit with us. Our time has expired a little more rapidly than we thought. If it will suit your convenience, Mr. McKee, to restrict yourself approximately to 20 minutes, we shall be greatly appreciative of that.

STATEMENT OF JEROME B. McKEE, EXECUTIVE DIRECTOR, DISTRICT OF COLUMBIA RETAIL LIQUOR DEALERS' ASSOCIATION, WASHINGTON, D. C.

Mr. McKEE. First, I want to give a report of the District of Columbia Retail Liquor Dealers' Association, of which I am executive director, and then I will go into the specific taxes from the report of the federation.

Senator CAIN. Go right ahead.

Mr. MCKEE. Honored members, while there are many users of alcoholic beverages, as can be testified to by the income both to the Federal Government and to our city, these consumers hesitate to appear in public in defense of the complaints they make to retailers about the anticipated increased costs to them through the imposition of an increased gallonage tax on alcoholic beverages.

Therefore, those engaged in the sale of alcoholic beverages have to plead their own case, and that of the consumer, which thereby places the industry on record openly as fighting this suggested increase in liquor gallonage tax, plus the increased tax on beer and wine.

At a tax hearing before the honorable Commissioners of the District in September 1946, I stated that as soon as supplies became available in sufficient quantities, so that rationing could be dispensed with in our neighboring States, that there would be a decline in sales by at least 15 percent for the year 1947. This has already come true, and if additional taxes on our products are imposed, then a further decline will take place.

We recognize that our gallonage tax of 50 cents a gallon is low, and we recognize that our ratio of sales have been higher than any other area. However, all statistics are based upon States, as a whole, and no statistics are kept in regard to major cities separately.

9953847- -37