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Mr. DONOVAN. New York has a terrific indebtedness—about one billion eight hundred million, or a billion seven hundred million.
Mr. SABATH. So has my city.
The CHAIRMAN. Do you wish to make a statement, Mr. Commissioner?
STATEMENT OF HON. GEORGE E. ALLEN, COMMISSIONER,
DISTRICT OF COLUMBIA
Commissioner ALLEN. Just one thought. One of the principal reasons, gentlemen, for this is to relieve unemployment. That is the reason we want this now and it is the thing that has been overlooked here in this meeting this morning. It will let us put people to work. Other cities are doing it, and we want to do the same thing. A Public Works loan gives us the vehicle to do this, without hurting our capital structure. That is one of the things I want you please to take into consideration.
Mr. Donovan. I think, in line with what Commissioner Allen says, it might be interesting to the committee to note the fact that here in the city of Washington, the National Capital, we have 25,000 families on relief rolls. That 25,000 families is equivalent to about 100,000 of our population of nearly 500,000; so that there is a large amount of unemployment here in the District.
I do not know whether the Congressman who spoke a moment ago (Mr. Sabath) was speaking seriously, or not.
Mr. SABATH. Yes, I am always serious.
Mr. DONOVAN. All right. I want to say I do not believe there is a city in the United States where you have the honesty of administration and where you get as much value for the dollar as here in the District of Columbia. It is an honest government. I have now been working for the government of the District of Columbia for for 43 years and I believe I am in a position to testify as to the administration of the city government.
Mr. SABATH. I have been down here for a few years myself and I know about some of the expenditures and some of the things that have taken place here in the last 28 years.
Mr. Donovan. Sometime, if the gentleman would be good enough to extend me an opportunity, I would like to have a talk with him and go over those matters and see if I can give him some information on the subject that would probably change his mind.
Mr. Cox. They have at least made a sudden discovery that an emergency is upon them now.
The CHAIRMAN. Is there any other statement you want to make?
Mr. DONOVAN. No, unless the committee desires to ask questions. I do want to leave a concluding thought with the committee, that I believe the District of Columbia, as Commissioner Hazen has said, should have authority, or should be extended a similar opportunity as is extended to other cities to borrow from the P.W.A. and to pay back that money as it will pay it back. The. District has never yet repudiated any of its obligations.
Mr. O'Connor. What would be your choice between having an arrangement similar to the Capper-Cramton bill and the Appropriations Committee providing for these things over a period of years! Would that be satisfactory?
Mr. Donovan. As I see it, of course, after all, it is the money that we are after to carry on these projects and I doubt frankly, I am going to say, in view of the present condition of the Federal Treasury-I doubt very much that we have a good chance to get through legislation.
Mr. O'Connor. This money you are getting is going to come out of the Treasury.
Mr. DONOVAN. It is already out of the Treasury.
Mr. Donovan. I am talking about the money that has been allocated to the Public Works Administration.
Mr. O'CONNOR. It is not yet; there is no money there.
Mr. DONOVAN. I am assuming, of course, that bill will be passed and they will have money; so that it is merely a question of the Public Works Administration being able to advance the District of Columbia, loan the District of Columbia, money in the same way as those loans are made to the other cities.
The CHAIRMAN. Does the District Engineer Commissioner desire to make a statement ?
STATEMENT OF MAJ. JOHN C. GOTWALS, ENGINEER COMMIS
SIONER, DISTRICT OF COLUMBIA
Major GOTWALS. Mr. Chairman, I have no statement, unless in response to specific questions. All of these fiscal problems of the projects I think have been presented here. I will add anything the committee wishes.
Mr. SABATH. What is the first time you have learned that this sewage disposal system is needed so badly?
Mr. Cox. It has been going on for years and years.
Mr. SABATH. Yes, and this is the first time it has been brought to the attention of Congress.
Major GOTWALS. There have been a number of estimates for it. The Public Health Department has made repeated examinations in 1914, 1925, and the last one in 1932. The 1932 one shows, as all the others did, the increasing polution. It is inevitable that the sewage must be taken care of. The average industrial city of the East would not think of taking it out in its present condition. It is not a nuisance at this minute; but, in 10 years, it will be.
Mr. O'Connor. I personally know of one lady who died from typhoid from bathing in the Potomac last summer. I do not know how many
similar cases there are, but that is one case I personally know of.
Major GOtwals. It is just on the verge of becoming a danger. I always present the point that the Potomac and its estuaries should be made suitable for swimming and bathing, which they are not now, as in our establishment of a great national park. And we are doing that in our eastern rivers, and I speak with knowledge of the eastern rivers—and it might be considered to be a similar thing to the establishing of the parks in our western States. And we should not do it right in the midst of the dense population of the East.
The CHAIRMAN. Now, does Mr. Palmisano desire to make a brief statement ?
STATEMENT OF HON. VINCENT L. PALMISANO, A REPRESENTA.
TIVE IN CONGRESS FROM THE STATE OF MARYLAND
Mr. PALMISANO. Mr. Chairman, in the absence of Mrs. Norton, I am here to represent the District Committee of the House.
I want to say that on this bill we held joint sessions of the Senate committee and the House committee, and we all feel, as the Members of Congress feel, that the District ought to be responsible and it was with that understanding that we recommended this appropriation.
Now we hear the discussion about the tax rate here. I differ with some members of the committee. The tax rate here, I think, is just about as high as the tax rate in Baltimore City, when you take out the sinking fund. We have about $1 of the tax rate for the sinking fund for improvements we have made in the last 10 or 15 years, and our tax rate in Baltimore is $2.45. I feel that the District is in an excellent position, with a rate of $1.50, to raise it 10 or 15 or 20 cents, if necessary, to take care of whatever money they will be loaned by the P.W.A. And we feel they ought to be permitted to go on with these improvements.
Of course, they have not the last say. The P.W.A. would naturally, as they have done in Maryland and every other State, go over the projects that they propose and, if they say they are not needed, they won't lend the money. And while we may auothrize $20,000,000, in the last analysis they may not get $10,000,000, and they may just simply take care of the sewage disposal plant, the hospital, or some other more urgent project.
The CHAIRMAN. Is this a unanimous report from your committee?
Mr. PALMISANO. It is. I do not know of any one who objected to it, and we had a joint hearing and it was so over in the Senate.
The CHAIRMAN. I want to read into the record a brief statement sent up by Mr. Frederic A. Delano, Chairman of the National Park and Planning Commission:
(1) We are not asking for an appropriation, but we are asking Congress for permission to borrow for the District of Columbia from the Public Works Administration money that has already been appropriated to that body. The terms of the borrowing are certainly very liberal, but similar to those that other cities in the country are enjoying, to-wit, 30 percent outright gift from Federal funds, and 70 percent carrying no interest for 3 years, thereafter at 4 percent until amortization.
(2) The money is to be spent mostly on construction work which will give relief for unemployment, not only in the District but in other parts of the country from which material is acquired. Analysis has shown that in some cases as high as 26 States in the Union have contributed material to Washington City projects.
(3) A very large part of the proposed allotment is to be spent for a sewagedisposal plant which has long been contemplated, and studies for which have been made. Other building allocations are for a tuberculosis hospital, which need not be in the District of Columbia, but outside on high ground. Municipal center buildings and schools are also authorized. Two million dollars is authorized for the completion of land purchases on park and playground projects already in hand. In the case of some of these projects a considerable share of the land to be purchased to complete them has already been secured, as much as 80 percent in a number of instances. Submitted by Frederic A. Delano, chairman.
Mr. O'CONNOR. When you get down to the facts, you will have to pay back about $14,000,000, won't you, and it would take a little time, but it is easy to figure out how much it would cost each year to amortize that, and what additional tax rate it would take, if necessary, to meet that additional expense? That ought not to be difficult to figure out.
Mr. Donovan. I can tell you that offhand. Assuming we pay back $1,300,000 a year on the principal and around about $500,000 a year in interest, or say $1,800,00 a year, and that would require 15 cents on the tax rate, or an increase of 15 cents if the tax rate had to be increased for that purpose. We are not saying it would be necessary to increase the rate, but $600,000 is raised on each 5 cents.
Mr. O'CONNOR. And the sole question here that has troubled some people has been whether you would raise that money by taxes, or whether you would come to the Federal Government and ask for an out-and-out contribution in addition to the present lump sum you are getting
Commissioner HAZEN. It would not make any difference what we asked for; it would be up to you to give it to us, or not. We do not think we would.
Mr. O'CONNOR. Is it your intention to take care of it out of taxes?
Commissioner Hazen. Absolutely-out of the regular budget every year.
The CHAIRMAN. Now Judge Smith wants to make a brief statement.
Mr. SMITH. Mr. Chairman, the statement has apparently been made hereby several parties that if the taxpayers of the District of Columbia knew they would have to pay back any of this fund they would probably not be enthusiastic for it. I want to state for the record that there are here this morning desiring to appear Mr. Littlepage, representing the Chamber of Commerce, and Mr. Rufus Lusk, representing the Washington Taxpayers Association, and several other individuals who would like to appear.
I have explained to them that under the rules of this committee we hear only Members of Congress and Government officials; therefore, it would not be possible for them to be heard. But I think the record should show their names and for what purpose they appeared. The CHAIRMAN. Now, Mr. Blanton, we will give you five minutes.
STATEMENT OF HON. THOMAS L. BLANTON, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. BLANTON. Mr. Chairman, I do not believe that the taxpayers of the District of Columbia are in favor of this 20-million-dollar loan.
I have a stack of letters from the leading citizens of Washington stating that they do not want this loan and do not want to be burdened with this loan.
Now, in 1878, when this District ran wild with loans and Congress had to step in and pay off the indebtedness, this Congress passed a law forbidding the District to ever borrow any more money. That has been the law since 1878.
Now this last year, in addition to reducing the tax rate from $1.70 to $1.50, they reduced the valuation assessments 80 million dollars on the property of this District. That is true. They reduced the valuations 80 million dollars here, and they reduced the tax rate from $1.70 to $1.50, and still had $5,000,000 surplus. Now in the Committee on Appropriations we have never yet turned down a Budget recommendation, except as to a few little minor items of which we had absolute personal knowledge. We have allowed the Budget estimates. All of these matters were not contained in the budget.
They talk about a tuberculosis hospital. I want you gentlemen to look at this tremendous, fine, $625,000 plant (exhibiting photograph) that is just being completed right now.
It will be open July 1st. Six hundred and twenty-five thousand dollars is what that cost. Does that look like Congress is careless about tuberculosis in the city of Washington? And I want to say this, that insofar as extra additions are concerned, if the Bureau of the Budget had recommended that to us, we would have allowed that and, so far as additional representations have been made in the Senate, I am one of the conferees who is going to vote to carry out that idea. So that that disposes of the tuberculosis proposition.
Now, about this sewage-disposal plant: There has been no contamination or epidemic in the last 150 years from the Potomac. We have the finest water in the world right here in Washington, right now; it is the most sanitary.
The CHAIRMAN. Yes; but we do not drink water out of the Potomac.
Mr. BLANTON. No; but I want to say this to you, that the whole project has been raised by people down the river wanting to have swimming holes and various things. And what would be the good of Washington taking its sewage disposal out of the Potomac and allowing every city and village down the river to continue with their sewage disposal in the Potomac! You would have to stop that. Eventually, I am in favor of stopping it; eventually, I am in favor of doing it. And they can do it right now for 20 cents extra in the rate of taxation. If they will raise their tax rate 20 cents a hundred, they can attend to that sewage business. And we will help them to do it in our committee.
And now it would be the most unwise proposition in the world for Congress ever to allow the District of Columbia to borrow money again. This is the Nation's Capital. The people who come here, come here with the knowledge that this city is controlled by Congress. It is set apart for the Nation's business; it is not a commercial city. These people who come here have come here with that knowledge. They are bound by the knowledge that Congress is going to run this city. Now the idea of a Commissioner getting up here and telling the Rules Committee that he thinks the Government of the United States ought to pay the same rate of taxes on the property here that Congress has provided for this District
The CHAIRMAX. To be entirely fair, I do not think the Commissioner made that statement.
Mr. Cox. That was his remarks.
Mr. BLANTON. And we see that argument in the papers. Why, the Government of the United States right now is spending $100,000,000 in Washington on a building program! Carpenters and painters are getting $10 and $12 a day; artisans are paid at the very