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Mr. HERRICK. I am R. A. Herrick, executive director of the Retail Gasoline Dealers Association of Washington. I represent an association of approximately 300 retail gasoline dealers in the District of Columbia.

We are very definitely opposed to the proposed increase in gasoline tax in the District of Columbia.

In the first place, we believe that the present tax rate on gasoline, plus other motor vehicle fees, is bringing into the District government more than enough money to carry out a sound program of streets, highway, and bridge construction.

The Highway Department will have, I understand, approximately $34,000,000 to spend in the years 1946 to 1949, and there is a serious doubt in my mind that this money can be spent in this period if a sound and reasonable program is adopted.

Each month shows an increase in the gasoline tax collections, and as you know, more new cars and trucks are being delivered, with the result that this revenue will continue to increase.

By the same token, the registration fees and personal property taxes collected by the District Government will increase and it will not be surprising to me if a handsome surplus should result by the end of 1948–49 fiscal year at the present tax rate.

The gasoline retail dealers in Washington have made every effort to give every possible service to their customers. This service costs money, and any reduction in the sales of gasoline, because of additional taxes, cuts into the income that provides this service. Reduced service will mean laying off help and the results-unemployment.

Many of the District gasoline service stations have expensive property that have high real estate taxes. The reduced volume caused by the increase in the gasoline tax would automatically make the real estate tax a new burden.

It is true that the gasoline dealers in Washington enjoy a substantial business from residents of neadby Maryland and Virginia. They are the people who work in Washington and spend a substantial part of their time here. They use our city streets, and the gasoline tax they pay through the purchase of gasoline here is their contribution to maintenance and upkeep of those streets.

Frankly, we admit a tax differential because of a lower tax rate, and have no desire to see this business siphoned out to smaller localities where the cost of operating a service station is lower than here in the District. By the same token, the District would lose a substantial tax revenue.

As I see this whole question, there is no proven need for this tax increase. Rather, it would serve as a detriment to the government of the District of Columbia, the retail gasoline dealer of the District of Columbia, and the general public of the District of Columbia.

The trend today, as I understand, is toward tax reduction and elimination of unwise spending. The Highway Department has more money than it can spend and to give it more tax revenue would be

to encourage unwise spending, and this certainly is not in keeping with the general tax policy of this Congress.

Several gasoline-station operators have appeared this morning to explain more in detail why the gasoline tax increase will affect their business. They are small businessmen who feel the impact of unnecessary taxation. They must watch their operating cost to make a living

I do not think it is the intention of this committee to do anything to make it difficult for these men to make a living. The proposed increase in gasoline could very well mean the difference between profit and loss to this group of small businessmen.

Mr. BATEs. Mr. Herrick, can you tell me when that first increase after VJ-day took place?

Mr. HERRICK. I believe that the first increase took place the early part of last year.

Mr. BATES. The early part of 1946.

Mr. HERRICK. 1946, I believe it was. I might state this, that I have just assumed the duties of this position since the middle of last month. I have been in contact with the service-station operators.

I heard a moment ago that the price of gasoline had gone up 2.6. I do not believe that is general. I think in some stations it has gone up 2.6, and in other stations, I think, it has gone up 1.6. In the District of Columbia at the present time you have some stations selling gasoline for 1 cent higher than other stations.

Mr. Bates. Today in the District of Columbia ?
Mr. HERRICK. Yes, sir.

Mr. BATES. Well, now, do the gasoline or the oil companies sell gasoline to the dealers here at a cent differential?

Mr. HERRICK. That is correct.
Mr. KELLER. Not the companies, sir; that is the individual dealer.
Mr. HERRICK. Individual dealers.
Mr. KELLER. Who set their own price.

Mr. BATEs. What I am interested in is when the increase was made after VJ-day.

Mr. KELLER. As I stated yesterday, I do not have any price information at al, but that is a matter of public record. I would be very glad to get the exact time when the price increase was effective and furnish it to you.

Mr. BATES. Is that all, Mr. Herrick?
Mr. HERRICK. Yes, sir.
Mr. Bates. Now, Mr. Keller, is there anybody else?

Mr. KELLER. No, sir. That completes our list of witnesses this morning, Mr. Chairman.

I certainly would be ungrateful if I did not take this time to thank you for your very courteous and attentive hearing this morning. We all appreciate it very much.

Mr. Bates. Mr. Keller, have you seen this program that the Highway Department has laid out for, let us say, the next 10 years or so?

Mr. KELLER. Yes, sir, I have; and I have given it a very great deal of attention. I appeared at the public hearing which the Commissioners held on March 26, when that program was first presented at the public hearing.

Mr. Bates. Did you find any fault with any specific project or projects that they have planned that might well be delayed?

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Mr. KELLER. I think that there are two things that I could say about that. One, there are specific projects which I do not think the traffic flows would justify.

Secondly, I think there are other methods of going at the problem involved, in changing routes which we have now and concentrating on a few main routes to get traffic out of the city and into the city, and there are many other improvements which very competent traffic engineers have suggested, and I might say that there was very severe criticism of that proposed program by a number of different organizations. That is all a matter of public record, and the chairman may be interested in looking at that.

The National Capital Park and Planning Commisison is at variance with the Highway Department with reference to many features of that program, and there was a public hearing that day, and we even had a lot of traffic engineers who came there and talked about it; and we heard from a number of civic organizations and businesses.

The Capital Transit Co. was very critical of the program which they had planned.

Mr. BATES. That is a program over the period of years or the program in the next, say, 3 or 4 or 5 years?

Mr. KELLER. No, sir; this hearing was based on the program generally from 1950 to 1955.

Mr. BATES. Yes.

Mr. KELLER. They had a hearing last October on this program, and then

Mr. BATEs. What does that program embrace, 3 years?
Mr. KELLER. Yes, sir; 3 years.

Mr. BATES. Was there any specific opposition to that program or any part of it?

Mr. KELLER. The 3-year program?
Mr. BATES. Yes.

Mr. KELLER. Well, a number of people—I was interested onlythat was on the gas tax only; that was on the question of the gas tax; they had had on Friday, October 25, a 1-day hearing on the thing, and at that time a number of people appeared in opposition to the tax at that time. The three who appeared in favor of it, the Board of Trade was down there, and they favored it; and the American Automobile Association, Mr. Howett was down there advocating the increase in the tax at that time. He has advocated it all along, and the Capital Transit Co. came down and testified about the mileage tax, which the District Commissioners had proposed, and the mileage tax would have placed a very considerable burden on them because it was based on the number of miles that they travel in the District; and then the District Commissioners withdrew the mileage tax, and then the Capital Transit Co., after that tax was withdrawn, said that they would not oppose the gasoline tax. So that was the way that thing developed that day; and the other witnesses

Mr. HARRISON. Mr. Chairman, can I insert a remark here! Mr. BATES. Yes, indeed. Come right up, Mr. Harrison, and we will be glad to hear you. Mr. HARRISON. I merely wanted to refresh Mr. Keller's memory. At the hearing on March 26 the Commissioners did not take any action on any of the proposals. The Capital Transit Co. appeared; they offered objection to the mileage tax; they did not offer any objection to the gasoline tax and, subsequently, after the adjournment of the meeting, the Commissioners withdrew the mileage-tax proposal. The Capital Transit Co., when they offered no opposition to the gasoline tax did not have knowledge of that.fact, of the fact that the other tax would be withdrawn.

Mr. BATEs. Fine. Thank you very much, Mr. Harrison.
Mr. HARRISON. Yes, sir.

Mr. BATEs. The reporter will insert at this point an extract from official transcript to public hearing before the District of Columbia Commissioners on the proposed increase in the gas tax, inspection fees, and so forth.

(The information referred to above is as follows:)
Mr. NEBERLE. My statement will be relatively brief, Mr. Commissioner.

In the first place we appear here as one of the large users of gasoline; also one of the largest users of the highways.

We have listened to Captain Whitehurst's statement as to this difficult problem. We have no issue whatever with his figures. It has always been a pleasure to work with the captain, and we have worked with him many times.

The first part of the proposal before us is with respect to the increase in the gasoline tax. During the 12 months ended with September we used 8,000,000and-odd gallons of gasoline, slightly more than 8,000,000. Our use is increasing. Our use was at the low ebb in the 12-month period, along about March of this year. During the last 3 months—that is, July, August, and September—this increase has been at the rate of a million gallons per annum.

Now, that increase will not indefinitely continue, but I would like for the use of gasoline to approximate 10,000,000 gallons, as manpower returns, unless our demand for ridings materially decrease.

The first bracket would cause an increase in the tax cost of Capital Transit Co., on the present basis, of $80,000, and we can readily foresee $90,000 per


We live in the District of Columbia. We are relatively heavy taxpayers. Our taxes to the District of Columbia, of all kinds, amount to about $1,200,000 per annum. An increase of $80,000 is approximately 7 percent.

We have respect for Captain Whitehurst. We know he has a very difficult job. We are not questioning and we offer no opposition to the increase in the gasoline tax, notwithstanding the fact that it does mean a substantial increase in our taxes.

The second item, the increase in the inspection fees, seems to be well justified, and its effect is very small. We have no objection to it.

With respect to the third proposal, as the captain has indicated earlier, we have had an informal conference with him, where I hope we ironed out the minor differences that existed in respect to the taxes per bus that we are now paying.

Mr. Bates. Mr. Harrison, you get me the program that I requested as soon as you can.

Mr. HARRISON. Yes, sir.

Mr. Bates. Because we will in all probability close these hearings tomorrow.

Now the hearing will adjourn to 2 o'clock this afternoon, when we will hear other witnesses who may wish to be present in favor or in opposition to these various types of taxes.

(Whereupon, at 12:15 p. m., the committee adjourned to meet at 2 p. m. the same afternoon.)


(The committee reconvened at 2 p. m., at the expiration of the recess.)

Mr. BATEs. The committee will come to order and we will proceed with witnesses with respect to views on the pending tax bills, for the purpose of raising additional revenue for the District.

I have here, Mr. William Howard Payne, representing the District American Legion. Will you step forward, Mr. Payne? We will be very glad to hear your views.


Mr. PAYNE. Mr. Chairman, I come here as vice chairman of the legislative committee of the District of Columbia Department of the American Legion.

There are today 57 posts of the American Legion in the District of Columbia with 25.000 members and 30 units of the American Legion Auxiliary with 3,000 members. I am advised that the American Legion is the largest fraternal organization in the District of Columbia and the largest veterans' organization.

The District Department of the American Legion, at its annual convention in August of 1946, unanimously adopted a resolution voicing opposition to the proposed imposition of a general sales tax. If the committee please, I would like to offer a copy of that resolution for the record at this point. Mr. BATES. It will be included in the record at this point. (The copy of the resolution referred to is as follows:)




Whereas prominent citizens and public officials, including Members of the Congress and of the administration, have publicly advocated the imposition of a sales tax within the District of Columbia to alleviate the revenue difficulties of the District government; and

Whereas said proposals do not exclude the purchase of cost-of-living items and will have the effect of taxing corporations and individuals with large incomes at a rate no greater than people with fixed and limited incomes, including members of the armed services and veterans who are for the most part living upon the limited incomes earned by day-to-day labor, clerical positions, or veterans' educational allowances; and

Whereas the present revenue difficulties of the District government are primarily attributable to the ever-increasing amount of tax-exempt Federal-Government property holdings in the District and the steadily diminishing percentage of District government revenue which is supplied by the Federal Government; and

Whereas said proposals would cause a portion of the normal revenue of District businesses and individuals, including veterans who have commenced small businesses, to be diverted to surrounding States : Now therefore be it

Resolved, (a) That the District of Columbia Department of the American Legion publicly announce its opposition to, and take necessary and proper steps to avoid, the imposition of a general sales tax within the District of Columbia ;

() That the District of Columbia Department of the American Legion advocate that Congress alleviate the present revenue difficulties of the District government by either an increase in the portion of the District government revenue which is contributed by the Federal Government or by an increase in the District of Columbia income-tax rates.

(NOTE.—Adopted unanimously by 1946 convention of the District of Columbia Department of the American Legion.)


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