million, and the budget estimate of $23 million for 1958 was reduced to $20 million. These reductions represent a present deficiency of $8 million in the Federal payment.

OTHER SOURCES OF DISTRICT REVENUE

INTERGOVERNMENTAL REVENUE-FEDERAL PAYMENT

The foregoing has dealt with revenues from District sources. The District also receives two types of intergovernmental revenue from the Federal Government, namely, grants and the Federal payment. Federal grants received by the District of Columbia amounted to $16.8 million in fiscal year 1958. These grants covered health, education, welfare, Federal highway aid, and urban renewal programs. The District's share of these Federal grants is determined in precisely the same manner as is each State or city's share, except for the program of assistance to education in federally impacted areas, in which the District does not share. The bulk of Federal grants, such as those for highway aid and public assistance, are conditioned upon matching Federal funds with local funds in specified ratios.

Unlike the normal Federal grants in aid, however, the Federal payment received by the District is unique and stems from the special relationship between the Federal and District governments. The District, unlike any other city, is constitutionally designated as the seat of the Federal Government over which the Congress of the United States has exclusive jurisdiction. The following quotation sums up many of the important aspects of the Federal-District relationship:

"The Nation's Capital is necessarily the chief city of the entire United States and its most prominent showplace. Yet it is more than a seat of government. It is the symbol of our great Federal union and has a place in the hearts and the minds of all Americans and of free peoples everywhere. In its essence it gives meaning to the personality and the spirit of a great Nation in a free world society. These considerations impose such special requirements as: subordination of local interests to the Federal interest in matters of planning, zoning, and related activities; maintenance of wide avenues and beautiful streets; dedication of large areas of valuable land to Federal purposes; exemplary standards in its health, welfare, and educational programs; special tax treatment for large segments of the local community; and numerous other factors which, on the one hand, occasion increased costs and, on the other, handicap revenue possibilities." The amounts of Federal funds appropriated to supplement local taxes for financing District operations has not kept pace with the increased needs. (See chart 9-G.)

The ratio of the Federal payment to local taxes was practically the same before 1921, with each contributing an equal share to District financing. However, by fiscal year 1950, as new sources of local tax revenue were developed without a proportionate increase in the amount of the Federal payment, the relationship had been reduced to $1 of Federal payment for every $9 obtained from local tax sources. An increase in both the Federal payment and local taxes in connection with the public works program of 1954 brought the relationship to $1 of Federal payment for every $6 obtained from District tax sources during fiscal year 1955. Increases in local taxes since 1955 with no increase in the amount of the Federal payment again establishes a current relationship of $1 of Federal payment to each $9 obtained from District tax sources. An appropriation of $32 million, the amount presently authorized, would reestablish the 1955 relationship of approximately $1 of Federal payment to every $6 obtained from local tax sources. Since 1955, the District taxpayer has borne a proportionately larger share of the increasing cost of District Government. The amount of Federal payment authorized and appropriated has increased at a lesser rate than governmental costs and therefore falls far short of that which is justified.

Senator MORSE. My reasons for this percentage are based upon (1) the fact that in 1923, the Federal payment, which had previously been set at 50 percent was reduced to 39.5 percent.

Since that time the percentage has shrunk. It seems to me that the 40 percent figure was, and is a reasonable share for the Federal Government to pay.

(2) The percentage of the total value of lands and improvements in the District which are tax exempt for one reason or another for fiscal year 1959 is 40.1 percent.

(3) There is an increasing necessity to replace buildings and to restore areas facing blight.

The increased costs of such programs will necessitate increased revenues. The tax rates within the District must be kept at or below the rates in the adjacent counties, otherwise the flight to the suburbs of middle and upper income groups will accelerate.

Some taxes, such as the sales tax on food consumed in the home ought to be repealed as being unduly harsh and regressive in their application. The conclusion from these factors, I submit, is that since District taxes cannot be increased the Federal payment ought to be raised to accomplish the needed goals.

The 40 percent figure, in my judgment, will do that for some decades to come. It should provide the wherewithal to make and keep Washington a beautiful and a pleasant place in which to live.

In essence, what it shows, Mr. Chairman, is that for a long, long time in the history of the District the contribution was 50 percent. I have fixed the figure of 40 percent.

I think it is an equitable figure, it is a workable figure, and the percentage of the total value of lands and improvements in the District which are tax exempt for one reason or another for fiscal 1959 happens to be 40.1 percent. Only a brief word on this tax exemption problem, which really raises the Congressional obligation to help finance the District of Columbia.

A tremendous service is rendered 174 million people by the District of Columbia citizens. This is the municipal seat of our National Government.

But we have no right, in my judgment I think, Mr. Chairman, no moral right in my judgment, to expect the citizens of the District of Columbia to subsidize the rest of the citizens of the Nation.

I respectively say that to a degree they are doing just that, and to that degree in which the Congress of the United States feels to appropriate, a fair, equitable amount for running the costs of the District of Columbia government, in view of the fact that 40.1 percent of the property in the District of Columbia is tax exempt because it is federally owned.

Lastly, Mr. Chairman, I want to say that I have tried in this presentation this morning to give a summary of the position that I and others have taken over the years for true home rule bill.

I could not have received finer cooperation and a more courteous and attentive hearing than you, sir, have extended to me this morning. I have been speaking to you, yes, but to the record too, because I thought it so important that this record be made for future reference by your subcommittee and by the full committee and for the debate. that is most certain to take place on the floor of the Senate, and I

want to thank you very, very sincerely for the courtesy that you have extended to me and I ask only for one grant, and that is that you grant me permission before the record is closed to file any supplemental statement that I would like to file that I did not take the time to read this morning.

Thank you very much.

Senator HARTKE. We will certainly do that, and of course the record will be held open for that, and I want to say that your statement was exceptionally well prepared and I want to compliment you upon the fine testimony you have given here this morning in your exposition.

I am sure that the subcommittee will benefit greatly from these remarks that you have given us and from the information and background and history that you have given us on this matter.

You have some suggestions, Senator Morse, in your testimony, and I am now formally requesting the staff to follow up on those suggestions for certain material and they will be included also. Senator MORSE. Thank you very much.

May I be excused, Mr. Chairman? They have called me from the floor and I am wanted over there.

Senator HARTKE. Yes.

I want to thank you for your time and for your patience.

We have some statements which I want to include as a part of the record this morning.

A statement by Senator Hubert H. Humphrey in support of S. 659; a letter from Mrs. Ila Gray Packard, secretary of Burleith Citizens Association, opposing home rule; a letter from Mr. Ladislaus J. Esunas, legislative representative, Andrews Air Force Base, Local 1287, National Federation of Federal Employees, supporting the Territorial home rule bill; a letter from Mr. David Darrin regarding the quasi-statehood status of the District of Columbia; and a letter from Mr. Irving Brant supplementing his testimony on May 1, 1959, on home rule legislation.

(The documents referred to follow :)

Senator VANCE HARTKE,

Senate Office Building, Washington, D.C.

Washington, D.C., May 13, 1959.

DEAR SENATOR HARTKE: With your permission, I would like to supplement my testimony of May 1 on a point briefly mentioned in it. In past discussions of national representation for the people of the District of Columbia, it seems to me that entirely too much stress has been laid on Supreme Court decisions defining the status of the District under the existing arrangement, and too little on the constitutional power of Congress to admit new States into the Union, a subject to which the court decisions are irrelevant.

Article IV, section 3, on the admission of States, falls into two distinct parts: a grant of power, and specified limitations upon it. The grant is made in the following words: "New States may be admitted by the Congress into this Union." The remainder of the section protects existing States from being divided or joined together against their will. Apart from that, no limitation whatever to the State-making power is set forth in the Constitution.

All though our national history, attempts have been made to find implied limitations on that power. On October 25, 1803, the Federalist leader in the House of Representatives, Roger Griswold, of Connecticut, denied that Congress had power to admit States carved out of the vast Louisiana Territory. "Congress may admit new States," he said, "but according to my construction of this article, are confined to the territory belonging to the United States at the formation of the Constitution, to the territory then within the United States."

In 1845, Congress wrapped annexation and statehood in a single package and offered it to the Republic of Texas, an independent foreign country. Unconstitutional, cried the minority. Senator Crittenden of Kentucky quoted the clause, "New States may be admitted by the Congress into this Union," and asked:

"Was it to be supposed that the wise, jealous, and cautious men who weighed and deliberated so long and so carefully, would, if they intended that foreign states and foreign territory should be admitted by Congress at its discretion, have forborne the expression of their intention in clear and explicit terms which could not be misunderstood?"

If they had such an intention, they probably would have done exactly what they did. The fewer the words, the broader the power. But the objectors in 1803 and 1845 were not thinking in pure terms of constitutional theory. Griswold was fighting to protect New England's political supremacy against western dilution. Crittenden was opposing the spread of slavery and slave-State power. Their strategy was like that of the people who argued that distance and noncontiguity made the admission of Alaska and Hawaii a violation of the spirit (at least) of the Constitution. One does not need glasses to discover nonconstitutional motives for the constitutional argument against statehood for the District of Columbia.

Putting together the admission of Texas, a foreign country, and Hawaii and Alaska, each of which extends farther from Washington than the distance from Washington to Greece or Uruguay, it becomes evident that statehood is limited neither by geography nor prior sovereignty, but only by the mutual desires of the people and governments concerned. When this is fully understood, the search for an implied bar to statehood for the District of Columbia becomes almost ludicrous.

Supreme Court decisions commonly cited as barriers to national representation of the District offer none whatever to statehood for it. Chief of these are: Hepburn v. Ellzey, 2 Cranch 443 (1804), in which Chief Justice Marshall held that the District of Columbia is not a State within the meaning of the constitutional clause opening Federal courts to controversies "between citizens of different States." The rightness or wrongness of that decision has been disputed ever since. Be it right or wrong, make the District a State and the objection will vanish.

Thompson v. Roc ex dem. Carroll, 22 Howard 422 (1860), in which it is held that Congress may delegate municipal but not general legislative authority to a District of Columbia governing body. Admit Columbia as a State and no such issue will exist. State powers are not received by delegation.

De Geofroy v. Riggs, 133 U.S. 258 (1890), in which the Court held that the District of Columbia is a State within the meaning of a treaty referring to "all the States of the Union." This veers in the other direction, contradicting the reasoning though not the application of the Hepburn decision.

National Mutual Insurance Co. v. Tidewater Transfer Co., Inc., 337 U.S. 582 (1949), in which the Court split four ways on the constitutionality of a law extending the "diversity clause" to citizens of the District. Two justices denied its constitutionality for one reason, two for another. Two contended that the District is a State on the issue involved, and wished to overrule Hepburn. Three upheld Hepburn (as did the dissenters) but found the law to be a valid exercise of the exclusive jurisdiction of Congress over the District. The five united in an affirmative decision on conflicting grounds.

In none of these cases is there the slightest implication of lack of power in Congress to admit the District to statehood. If an implication of any sort exists, it tends to affirm that power. In the National Mutual case, speaking for himself and two other members, Justice Jackson gave this reason for reaffirming Chief Justice Marshall's decision that the District was not to be regarded as a State:

"The District of Columbia being nonexistent in any form, much less as a State, at the time of the compact, certainly was not taken into the union of States by it, nor has it since been admitted as a new State is required to be admitted."

Had those words been written by Marshall in 1804, they would be taken as an implied affirmation of the power to admit to statehood. I do not suggest that Justice Jackson had that thought in mind. The constitutional case for statehood is much too strong to need any such prop.