STATEMENT OF FRANK M. McLAUGHLIN, WASHINGTON, D. C. Mr. MCLAUGHLIN. Mr. Chairman, my name is Frank M. McLaughlin.

Mr. BATES. You are the owner of a filling station in the District of Columbia?

Mr. MCLAUGHLIN. Yes, sir.

Mr. BATES. Step right forward, Mr. McLaughlin. We will be glad to hear you.

Mr. MCLAUGHLIN. I am an independent gasoline dealer in the District of Columbia. My location is 3103 Rhode Island Avenue NE.

My purpose here this morning, gentlemen, is to voice opposition to the proposed increase of 1 cent per gallon tax on gasoline sales in the District of Columbia. My opposition is based on the conviction that this proposed tax increase of 333 percent is both unnecessary and unwise.

It is unnecessary because funds now available and to become available under the present tax rate of 3 cents per gallon will be adequate to properly maintain existing highways and generously provide for new highway extensions.

It is unwise because it increases the price of gasoline to the consumer at a time when he is hopeful for a decrease in price. His reaction will be to buy less gasoline or to buy it elsewhere.

Then, too, the volume of gasoline sales to consumers outside of the District of Columbia is extremely high, and produces a tremendous tax income for our Highway Department.

This is considerably the result of moderate transportation rates and reasonable taxation on the product, creating a good competitive position for the seller. To disturb this position by an increase in tax would shift a vast amount of gallonage to other States, with a consequent loss of revenue to the District of Columbia.

The loss of gasoline volume would be accompanied by loss of sales of motor oils and greases, lubrication and other services, tires, batteries, accessories, and many other items. It would also affect the business many other lines of merchandising and servicing.

of

As a service-station operator, I am immensely interested in highway development. Good roads and good streets attract the motorist. Increased mileage means increased gasoline consumption, and more sales for the service station. But I am strongly opposed to extravagant highway expansion out of revenues derived from excessive gasoline taxation.

I have talked to scores of motorists about this proposed tax, and I can candidly state that there is practically no sentiment at all for it. In a few instances, the response to my inquiry was that additional revenue is needed to carry on the cost of District Government, and it is just as well to raise those funds from an increased gasoline tax as from any other source. But when it was mentioned that highway revenues must be used exclusively for highway purposes, with no diversions, the objection was usually withdrawn.

As stated before, it is my opinion that an increase in the gasoline tax at this time would affect the service station business adversely. If it did, it would react on real estate values, rental incomes, and perhaps, even on wages and employment.

The cost of service station operation at present is very high. Wages are high, materials are high, and equipment is both high and scarce. It would be an additional handicap to have another cent added to the gasoline tax at this time.

In conclusion, therefore, gentlemen, I repeat that it would be unnecessary and unwise to increase the gasoline tax at this time. I thank you, sir.

Mr. BATES. Thank you, Mr. McLaughlin.

You think that an increase in the rate would bring about a decrease in consumption?

Mr. MCLAUGHLIN. Yes, sir; I do.

Mr. BATES. That seems to be the theme of your discussion here. When the gas price during the past few months was increased, say— what was it a cent and three-quarters, something like that-was there less business done by the filling stations as a result of it?

Mr. MCLAUGHLIN. I do not think that we had time enough to get much change in that yet. People are not too conscious yet of price, but before the war, I saw two stations side by side almost reverse their gallonage because of a 1-cent difference in price.

Mr. BATES. Well, that would be natural, side by side.

Mr. MCLAUGHLIN. Yes; through competition.

Mr. BATES. Yes.

Mr. MCLAUGHLIN. In other words, the 1-cent margin there would change the gallonage from one to the other.

Mr. BATES. You would not expect that, of course, in a condition of the sort that we are discussing here, because in Maryland and Virginia, I understand, the tax is higher.

Mr. MCLAUGHLIN. It is higher; yes, sir.

Mr. BATES. Where would you expect to see a similarity of conditions such as you now mention under this bill, and not through competition? Mr. MCLAUGHLIN. Well, my point is that my station, the one I am operating at present, is located right near the District Line, the Maryland State line, and a lot of business comes into the District from nearby Maryland. The same thing is true of the Virginia business I mentioned.

Mr. BATES. What is the Maryland tax now?

Mr. MCLAUGHLIN. I think the Maryland tax is two cents higher than ours, and in Virginia it is perhaps three cents, I believe. I am not sure of those figures.

Mr. BATES. Has your organization had a chance to study this overall street improvement program to determine whether or not it is justified in view of all the conditons facing the motorists here?

Mr. MCLAUGHLIN. I understand the District petroleum organization has, but I am speaking merely as an individual here, Mr. Chair

man.

Mr. BATES. Of course, I can well understand, being on the District Line the Maryland tax just went up 1 cent more, did it not? Mr. MCLAUGHLIN. Yes, sir; it did.

Mr. BATES. That is a 2-cent differential. Of course, that probably will mean a great deal of business for those on the border line, with the 2 cents differential.

Mr. MCLAUGHLIN. That is right. Of course, there is one distinction there between an increase in the price of a product and an increase in

STATEMENT OF FRANK M. McLAUGHLIN, WASHINGTON, D. C. Mr. MCLAUGHLIN. Mr. Chairman, my name is Frank M. McLaughlin.

Mr. BATES. You are the owner of a filling station in the District of Columbia?

Mr. MCLAUGHLIN. Yes, sir.

Mr. BATES. Step right forward, Mr. McLaughlin. We will be glad to hear you.

Mr. MCLAUGHLIN. I am an independent gasoline dealer in the District of Columbia. My location is 3103 Rhode Island Avenue NE.

My purpose here this morning, gentlemen, is to voice opposition to the proposed increase of 1 cent per gallon tax on gasoline sales in the District of Columbia. My opposition is based on the conviction that this proposed tax increase of 33% percent is both unnecessary and unwise.

It is unnecessary because funds now available and to become available under the present tax rate of 3 cents per gallon will be adequate to properly maintain existing highways and generously provide for new highway extensions.

It is unwise because it increases the price of gasoline to the consumer at a time when he is hopeful for a decrease in price. His reaction will be to buy less gasoline or to buy it elsewhere.

Then, too, the volume of gasoline sales to consumers outside of the District of Columbia is extremely high, and produces a tremendous tax income for our Highway Department.

This is considerably the result of moderate transportation rates and reasonable taxation on the product, creating a good competitive position for the seller. To disturb this position by an increase in tax would shift a vast amount of gallonage to other States, with a consequent loss of revenue to the District of Columbia.

The loss of gasoline volume would be accompanied by loss of sales of motor oils and greases, lubrication and other services, tires, batteries, accessories, and many other items. It would also affect the business of many other lines of merchandising and servicing.

As a service-station operator, I am immensely interested in highway development. Good roads and good streets attract the motorist. Increased mileage means increased gasoline consumption, and more sales for the service station. But I am strongly opposed to extravagant highway expansion out of revenues derived from excessive gasoline

taxation.

I have talked to scores of motorists about this proposed tax, and I can candidly state that there is practically no sentiment at all for it. In a few instances, the response to my inquiry was that additional revenue is needed to carry on the cost of District Government, and it is just as well to raise those funds from an increased gasoline tax as from any other source. But when it was mentioned that highway revenues must be used exclusively for highway purposes, with no diversions, the objection was usually withdrawn.

As stated before, it is my opinion that an increase in the gasoline tax at this time would affect the service station business adversely. If it did, it would react on real estate values, rental incomes, and perhaps, even on wages and employment.

The cost of service station operation at present is very high. Wages are high, materials are high, and equipment is both high and scarce. It would be an additional handicap to have another cent added to the gasoline tax at this time.

In conclusion, therefore, gentlemen, I repeat that it would be unnecessary and unwise to increase the gasoline tax at this time. I thank you, sir.

Mr. BATES. Thank you, Mr. McLaughlin.

You think that an increase in the rate would bring about a decrease in consumption?

Mr. MCLAUGHLIN. Yes, sir; I do.

Mr. BATES. That seems to be the theme of your discussion here. When the gas price during the past few months was increased, saywhat was it a cent and three-quarters, something like that—was there less business done by the filling stations as a result of it?

Mr. MCLAUGHLIN. I do not think that we had time enough to get much change in that yet. People are not too conscious yet of price, but before the war, I saw two stations side by side almost reverse their gallonage because of a 1-cent difference in price.

Mr. BATES. Well, that would be natural, side by side.

Mr. MCLAUGHLIN. Yes; through competition.

Mr. BATES. Yes.

Mr. MCLAUGHLIN. In other words, the 1-cent margin there would change the gallonage from one to the other.

Mr. BATES. You would not expect that, of course, in a condition of the sort that we are discussing here, because in Maryland and Virginia, I understand, the tax is higher.

Mr. MCLAUGHLIN. It is higher; yes, sir.

Mr. BATES. Where would you expect to see a similarity of conditions such as you now mention under this bill, and not through competition? Mr. MCLAUGHLIN. Well, my point is that my station, the one I am operating at present, is located right near the District Line, the Maryland State line, and a lot of business comes into the District from nearby Maryland. The same thing is true of the Virginia business I mentioned.

Mr. BATES. What is the Maryland tax now?

Mr. MCLAUGHLIN. I think the Maryland tax is two cents higher than ours, and in Virginia it is perhaps three cents, I believe. I am not sure of those figures.

Mr. BATES. Has your organization had a chance to study this overall street improvement program to determine whether or not it is justified in view of all the conditons facing the motorists here?

Mr. MCLAUGHLIN. I understand the District petroleum organization has, but I am speaking merely as an individual here, Mr. Chair

man.

Mr. BATES. Of course, I can well understand, being on the District Line-the Maryland tax just went up 1 cent more, did it not? Mr. MCLAUGHLIN. Yes, sir; it did.

Mr. BATES. That is a 2-cent differential. Of course, that probably will mean a great deal of business for those on the border line, with the 2 cents differential.

Mr. MCLAUGHLIN. That is right. Of course, there is one distinction there between an increase in the price of a product and an increase in

STATEMENT OF FRANK M. MCLAUGHLIN, WASHINGTON, D. C. Mr. MCLAUGHLIN. Mr. Chairman, my name is Frank M. McLaughlin.

Mr. BATES. You are the owner of a filling station in the District of Columbia?

Mr. MCLAUGHLIN. Yes, sir.

Mr. BATES. Step right forward, Mr. McLaughlin. We will be glad to hear you.

Mr. MCLAUGHLIN. I am an independent gasoline dealer in the District of Columbia. My location is 3103 Rhode Island Avenue NE.

My purpose here this morning, gentlemen, is to voice opposition to the proposed increase of 1 cent per gallon tax on gasoline sales in the District of Columbia. My opposition is based on the conviction that this proposed tax increase of 333 percent is both unnecessary and unwise.

It is unnecessary because funds now available and to become available under the present tax rate of 3 cents per gallon will be adequate to properly maintain existing highways and generously provide for new highway extensions.

It is unwise because it increases the price of gasoline to the consumer at a time when he is hopeful for a decrease in price. His reaction will be to buy less gasoline or to buy it elsewhere.

Then, too, the volume of gasoline sales to consumers outside of the District of Columbia is extremely high, and produces a tremendous tax income for our Highway Department.

This is considerably the result of moderate transportation rates and reasonable taxation on the product, creating a good competitive position for the seller. To disturb this position by an increase in tax would shift a vast amount of gallonage to other States, with a consequent loss of revenue to the District of Columbia.

The loss of gasoline volume would be accompanied by loss of sales of motor oils and greases, lubrication and other services, tires, batteries, accessories, and many other items. It would also affect the business of many other lines of merchandising and servicing.

As a service-station operator, I am immensely interested in highway development. Good roads and good streets attract the motorist. Increased mileage means increased gasoline consumption, and more sales for the service station. But I am strongly opposed to extravagant highway expansion out of revenues derived from excessive gasoline taxation.

I have talked to scores of motorists about this proposed tax, and I can candidly state that there is practically no sentiment at all for it. In a few instances, the response to my inquiry was that additional revenue is needed to carry on the cost of District Government, and it is just as well to raise those funds from an increased gasoline tax as from any other source. But when it was mentioned that highway revenues must be used exclusively for highway purposes, with no diversions, the objection was usually withdrawn.

As stated before, it is my opinion that an increase in the gasoline tax at this time would affect the service station business adversely. If it did, it would react on real estate values, rental incomes, and perhaps, even on wages and employment.