The District Highway Department has not said that "We have this much money to spend from the gasoline tax, and therefore we will lay out a program which will be within the bounds of this budget." Instead of that they have laid out the most glittering array of highways here in the District that you will find in any city. I am not critical of that, but I think that Rome was not built in a day, and we ought not to build Washington in a day, and we ought not to try to unbalance and throw out of kilter our whole economic system here in the District just to have a highway system that is the finest and the best in the world. Mr. BATES. Now, that testimony would be rather fitting in the hearing that we will have a few days from now after this. Mr. KELLER. Yes, sir. Mr. BATES. Any criticism that you have as to the necessity of an enlarged program of public improvements here. But what we would like to know today is whether or not, in your opinion, the Highway Department is being efficiently run; whether or not contracts are being awarded on a competitive basis; whether or not there are sufficient contractors bidding on those contracts; whether or not the material that they buy, whether the prices are in line with the prices paid by other communities; whether or not you have any criticism whatever of the administration of the Department from the standpoint of efficiency and economy. That is what we want today. Mr. KELLER. Well, I must be frank and say that I do not have any specific information on that point. I did furnish to the Congressmen a comparative statement of the amounts of money which were being spent on District highways in comparison with other cities of the same size. Mr. BATES. That is meaningless, Mr. Keller, as you know. Other cities are not comparable so far as miles of highway are concerned, the width of the highways concerned, the type of travel over those highways, the character of the pavement that must be installed to meet the traffic loads that go over those highways; but are you satisfied in your mind that the money being spent by the Highway Department in the physical properties is wisely and economically spent? Are you satisfied that the competition-the testimony of which is that we only receive two or three bids-is keen enough? Are the materials that they buy, in your opinion-asphalt, oil, sand, cement, and all those supplies that go into highway building-are they bought at the lowest possible price, and is everything being done to bring about the economical purchasing of those supplies and materials? What is your point of view about that? Mr. KELLER. Well, I think that the Highway Department, from that standpoint-well, I have not made a careful study. Mr. BATES. Have you made any study-I would rather not have any comment unless you have given some thought to it. Mr. KELLER. Only in a general way, Congressman. I would say only in a general way; and my general idea-just as a layman, if that is worth anything to you, I would be glad to give it to you-is that the Highway Department is being efficiently managed. I think their only sin is that they refuse to live within the proper budget that they completely Mr. BATES. That is not their fault. Mr. BATES. That is the fault of those above, whether it is Congress in the first place or the Commissioners or the Bureau of the Budget. If they are given $4,000,000 to spend, they are going to spend it. If they live within the $4,000,000, you can find no fault with it because they are authorized by the budgetary provisions to spend that money directly. Mr. KELLER. Yes, sir; but I would like to make a specific point right there. The budget for 1947, which has already been approved, provides for a 42 percent increase in operating expenditures in the Highway Department. Their proposed increase for next year-and that has not been approved-provides for and is 69.4 percent, and in 1949 it shoots up to 74.9 percent-almost 75 percent. Now, if you have an open-end arrangement whereby if you lay out a plan and you do not have enough money to increase the tax, that thing is always going to happen. Your increased expenditures and your increased minor capital outlays and major outlays, capital outlays-all you need to do is to increase the price of gasoline tax, and you will Mr. BATES. Now, the reason for those expenditures that you are now anticipating will be given to the Commissioners and Highway Department when the Commissioners sponsor another gasoline tax, and that will be in the highway fund. Again I get back to the question of whether or not in your opinion the Highway Department is being efficiently and economically run today. The expenditures made are completely in line with like expenditures being made for similar work in other communities of the country, or is there extravagance? Mr. KELLER. I would have, I am sorry, no specific information to give you. Mr. BATES. Are you satisfied that two or three bids on the project by the same contractors year after year, who bid on the same type of work, is keen enough competition? Do you think there may be a possibility of collusion? Have you ever studied the comparative costs between the bids submitted and accepted by the District for highway work with the bids accepted, say, by the city of Baltimore or any other government? Mr. KELLER. Congressman, could I do this? It would be very helpful to me, and I hope it would be helpful to you, if when that time comes I could get you some information, and a specific exhibit which I would like to show you at that point. Mr. BATES. You see what I am driving at? Mr. KELLER. Yes, sir: I see precisely. Mr. BATES. We are trying to find out in the over-all study of the District administration in the last 10 years wherein there is extravagance or lack of economy, inefficiency in the administration of the District that has led to the doubling up of the tax burden of the expenditures within the District, and that is the theme today. Mr. KELLER. If I get it, I will be glad to do it, sir, and I shall be glad to make an investigation. Now, the Highway Department has submitted its highway report, and I have made here an analysis of that report which I would like to have made a part of the record. I do not want to read it at this time, but I would very much like to have it made a part of the record. Mr. BATES. Those are their projected improvements? Mr. KELLER. Yes. Mr. BATES. Then I would suggest again that you keep that until you appear at a later date. Make it a part of your over-all story. Mr. KELLER. I wonder if the committee would allow me to correct one statement or misunderstanding, I think, which might have grown out of the Highway Director's remarks the other day when he said that we had given a wrong figure of 950 gallons. I would like to correct that because I do not want to leave the wrong impression with the committee. The Highway Director claimed that in one of the statements which I had issued I said the consumption figures of 950 gallons per vehicle in the District-he said it was too high. Now, this was on page 68 of the Highway Director's testimony the other day. This figure which I used is based on the Public Roads Administration data. This Federal agency, in its statistical table G-21, published August 1946, shows a highway use of gasoline by private and commercial vehicles, exclusive of publicly owned vehicles in the District, for the 1945 calendar year to be 106,869,000 gallons. Table MV-1, issued in May 1946, shows registrations of private and commercial vehicles in the District for the same year, 1945, to be 110,507. Dividing this number into the gasoline consumption figure of 106,869,000 gives a per vehicle consumption figure of 966 gallons. Well, I used in my statement 950 gallons. Those are public records, and I do not-you see, you can take one little thing like that and make it appear as if all of the other things which we are submitting are wrong, and that is not wrong either, and I am giving you the source of my information. Mr. BATES. You present that at your testimony, I suggest, on the day you appear here against the gasoline tax, if that is what you are going to do. Mr. KELLER. Yes, sir. Mr. BATES. Do you think three bids or two bids are enough in the same manner from the same persons year after year on contract work? Mr. KELLER. I do not. I come from Ohio, Congressman, and we have had some bad highway situations out there, especially under some governors, and I know that that situation-I do not have any specific information on the District. 6 Mr. BATES. How long have you lived in the District, Mr. Keller? Mr. KELLER. I have been here in the District off and on for the past years. Mr. BATES. Is this your domicile here? Mr. KELLER. No; my home is Dayton, Ohio. Mr. BATES. Whom are you representing today? Mr. KELLER. The District of Columbia Petroleum Industries Com mittee; but I do know that in Ohio the highway department work has been very hard on that point to get as many bids in as possible. I think the Congressman put his finger on perhaps the greatest single source of criticism which could be made of the District, and that is the fact that nothing is done by the District's own staff of and in the nature of minor repairs. Mr. BATES. Do you think we ought to have something in the nature of a pilot plant in the District in which at least 20 percent of our expenditures in the District ought to be spent with our own organization, for instance, to establish a basis of cost, and from our own experience in the expenditures of that fund with our own organization, taking in all overhead and everything else as a real basis for cost determination of what the fair contract price ought to be? Mr. KELLER. You have a basis for comparison. I think we all know why that is not done. Mr. BATES. Why is it, in your opinion? Mr. KELLER. In my opinion, it is because the Highway Department likes to keep a small staff and every time they come up to Congress they say they have so many employees; the next year they have so many employees, and they are not increasing, but there is some of that open-end thing on the other side, because you do not know how many people are employed on all these specific contracts; they do not show up on the District Highway Department's permanent roads. I suggest that it may be a reason why it is done in that particular way, sir. Mr. BATES. That is all, Mr. Chairman. Senator CAIN. I have no questions. Mr. Keller, thank you very much. Let me make one suggestion. Whether your testimony is given today or in the future, after you give your testimony, if you would provide the committee with a one-page summary in which you really head up the major items in which you are interested, either adversely or in a positive sense, we would appreciate, it. Mr. KELLER. I already have it in here-a one-page summary. Mr. KELLER. Thank you. Senator CAIN. We should now like to hear from Mr. J. C. Turner, who will represent Mr. C. F. Preller, of the Washington Central Labor Council. STATEMENT OF J. C. TURNER, CHAIRMAN OF THE TAX COMMITTEE OF THE WASHINGTON CENTRAL LABOR UNION, AFFILIATED WITH THE AMERICAN FEDERATION OF LABOR Mr. TURNER. My name is J. C. Turner, and I am chairman of the tax committee of the Washington Central Labor Union, affiliated with the American Federation of Labor. We have tried to prepare a statement in accordance with the statements that we read in the public press as to what we should limit the statement to, and if, in the opinion of the chairman we deviate from that, we hope Senator CAIN. We notice it is rather a brief statement. If you just proceed and not take offense, if we think that some of it is more properly to be given at some other time, we will appreciate it. Mr. TURNER. There is no organization in the city of Washington that is more vitally concerned with maintaining the level of governmental services and of public improvements for the District of Columbia than the Washington Central Labor Union of the American Federation of Labor. This year the 160,000 members of our 200 affiliated local unions joined in celebrating our fiftieth anniversary. During those 50 years we have become an integrated part of the community, with our members and representatives participating in every worth-while activity of the community. As citizens, we share in all benefits derived from the payment of taxes to the District government. We welcome this opportunity to express in a general way our position on the proposed budget and to indicate what we believe a fair and equitable tax program for the District should include. When your committee holds hearings on the various tax bills now before you, we hope to appear here again to voice our specific criticisms. As to the 1948 budget, we do not believe the general fund estimate of $72,200,000 allocates sufficient amounts to education, health, and public welfare. Care of the needy, general health standards, and a sufficient number of well-built schools, staffed by adequately paid teachers, are mandatory in any modern city. As to the highway fund estimate of $9,210,300, we believe that it could be cut back to the 1947 level. Some of the backlog of paving and resurfacing can be deferred to 1949. Such a cut would void the necessity for the proposed increase in the tax on fuel for motor vehicles. Turning to the problem of raising sufficient revenues, we ask that the Congress enact a tax program that will be fair and equitable; a tax program that will recognize the basic democratic aim of placing the heavier burden of taxes on those best able to pay. We wish to make it abundantly clear to the committee that in our opinion the levying of a sales tax is not required. The workers in the lower-income brackets would suffer a reduced standard of living from such a tax, in that they spend all of their income to live. People in the higher brackets would merely experience a reduced rate of savings. In this present period of inflated prices, with many wage earners forced to live at standards only slightly above subsistence levels, the sales tax would be a very great hardship. This regressive tax, of which, incidentally, the proposed public utility tax is in effect a part, violates the generally accepted principle of democratic taxation-ability to pay. This Full employment and economic security in a framework of expanding democracy should be the objective of every American. pernicious sales tax would assist in defeating such an objective. As pent-up consumers' demands are met and the producers are looking for new markets, the sales tax will depress the purchasing power of low-income groups at the very time purchasing power is most needed. Without effective consumer demand there can be no prosperity. In addition to the social and economic shortcomings of the sales tax, it should be pointed out that practically every organization in Washington, at the tax hearing of the Commissioners last September, either opposed the sales tax or suggested that it only be used as a last resort. In a recent poll by the Washington Post, 69 percent of the District. residents expressed opposition to the sales tax. The imposition of |