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As we have noted, more than five and one-half months elapsed before Congress convened. No special session was called to consider this

Congress assembled Monday, December 7, 1931, and the Democratic members of the Ways and Means Committee were duly elected on that date. The administration measure was forwarded to Chairman Collier and immediately introduced by him on Monday, December 14. The hearings begun on the 15th were had in the mornings and afternoons of the 15th, 16th, and 17th. The bill was reported out, introduced in the House a few minutes before its adjournment on this date, December 17. It will be printed to-night and will be made available with the reports thereon to the Members to-morrow.

The hearings, while not so extensive in the testimony of the witnesses appearing before the committee, are not available at this time to the members of the committee nor to the Members of the House. There were considerable references made to documentary evidence which was agreed to be filed as a part of the evidence in support of this measure. These were not made available to the committee, and we are completely at a loss to know their contents.

We are in hearty accord with the dispatch of business. We have no criticism whatever of the manner in which the distinguished chairman of this committee has conducted the hearings, but we do submit that the membership of the committee should have had time to read the evidence and the documents called for by the evidence before preparing the reports, and the membership of the House should have had the opportunity to read the record and to digest it before being called on to vote on this momentous question.

CHANGE IN TERMS OF PROPOSAL

The final agreement reached on July 6, 1931, differed materially from that announced by President Hoover on June 20, 1931.

The initial proposal of the President, concerning which he sought the position of Members of Congress subsequent to the time when he had reached his conclusion, provided “postponement for one year of all intergovernmental debts."

It is patent that the postponement sought in this legislation is not for one year. It is true that the legislation treats of the payment of the debts for a one year period, but this deferred payment is strung out over a period of 10 years. It was admitted by the spokesman for the administration, Mr. Mills, that the President did not have in mind on June 20, 1931, the payment over a 10-year period of the indebtedness due for this fiscal year.

Further, as evidenced by the above quotation, the postponement was to be “of all intergovernmental debts.” In the agreement finally reached, France refused to accede to that proposal. All unconditional reparations due France from Germany are to be paid. There can be no doubt but that such condition is a deviation from the President's proposal. France is given a decided advantage in this respect.

In conclusion we desire to call the attention of the Members of the House to the fact that our revenues amount to only about one-half the amount of the expenditures of the Government; that we have a large deficit and it is growing by leaps and bounds and to withhold

the collection of this $252,000,000 means that it must be raised in
taxation from the people of the United States, amounting to more
than $2 for every man, woman, and child in the United States. We
commend the equitable maxim known to every lawyer-we should
be just to the American people before we are generous to the peoples
of Europe.
Respectfully submitted.

MORGAN G. SANDERS.
E. E. EsLICK.

FRED M. VINSON.
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FISCAL RELATIONS BETWEEN UNITED STATES AND

THE DISTRICT OF COLUMBIA

DECEMBER 18, 1931.—Committed to the Committee of the Whole House on the

state of the Union and ordered to be printed

Mr. Mapes, from the Select Committee to Investigate the Fiscal

Relations Between the United States and the District of Columbia submitted the following

REPORT

(To accompany H. R. 6285)

The Select Committee to Investigate the Fiscal Relations Between the United States and the District of Columbia report the bill (H. R. 6285) relating to the contributions of the United States toward defraying the expenses of the District of Columbia, and recommend

that it pass.

The law providing for an equal contribution toward the expenses of the District of Columbia from the Federal Treasury and from the revenues of the District (commonly known as the “50-50 law") was in effect from July 1, 1878, to July 1, 1920, when a change was made from a 50 per cent proportion to a 40 per cent proportion of the total District expenses contributed by the Federal Government. This 60–40 plan continued until July 1, 1925, when Congress changed from the proportionate contribution to an annual contribution of $9,000,000. The Seventy-first Congress provided a lump-sum contribution of $9,500,000.

There has been a great deal of controversy from time to time as to the wisdom of changing from a proportionate plan of contribution to a lump-sum plan. Several of the civic organizations in the District have protested the change, setting up the claim that as the expenses of the District grew, it would be only fair that the contribution of the Federal Government should increase accordingly, and that this could only be fairly done by fixing definitely the proportion of the total expenses of the District that should be paid by the Federal Government.

The advocates of the lump-sum plan claim that it has the advantage of aiding rather than curbing the carrying out of public improvements in the District; that it tends to moderate local demands for appropriations through a realization that the increase must be locally borne; that being a definite and fixed amount it can at once be set down in the Budget, thus simplifying budgetary procedure; that it makes possible an increase of appropriations needed for public improvements in the District within the limits of fair taxation without any increase of the burden upon an already overburdened Federal Treasury; and furthermore, that the economic condition of the country, together with the extraordinary burden of taxation, carried by the people in the States and the condition of the Federal Treasury, is the answer to the demands for increased Federal aid to the District Government.

A prominent member of the District bar and one of Washington's foremost citizens, Mr. George E. Hamilton, in a communication addressed to the joint select committee of Congress in 1915, expressed himself as follows:

My observation of, and contact with, the affairs of the District forces me to the conclusion that the half-and-half plan has hindered rather than promoted the growth and development of the National Capital.

It has tended to create in the minds of Congress the feeling that the interests of the District and the interests of the Government are separate and distinct, and even, at times, opposite if not antagonistic, and that in the matter of District appropriations the Government needed to be protected against the efforts of the citizens, who, in the opinion of some Congressmen, were paying too little taxes and seeking always to avoid proper taxation.

It has created in the minds of some citizens the fear and feeling that Congress intended to overtax the citizens of the District to a point where Government contribution will cease, and these countertendencies thus created have been productive of criticism, of charge and recrimination, at times unseemly and always injurious.

Fundamentally I believe the half-and-half plan is unjust.

I believe, and have for years believed, that the growth of Washington along the lines intended by its founder, desired by the Government and hoped for by its residents, has been delayed, if not dwarfed, by the half-and-half rule, and the feeling and contention by it engendered between Congress and its citizens; and I believe that further limitation to growth and prosperity will follow a continuance of that rule, or any other rule, of fixed proportions in contribution to the expenses of government.

If Congress can be relied on to fairly consider, protect, and sufficiently appropriate for the ger and more important national interests and purposes, may it not be relied upon to consider and protect, to provide and appropriate for the support of the Nation's Capital, and its development, especially if the full responsibility for the same is committed to, and assumed by it, and if Congress is determined not to give a fair and liberal treatment to the District, can it, in its absolute power, be coerced and driven thereto by a rule which may be repealed at its will and pleasure?

Protect the District by providing a fair and equal assessment and a full, but fair, rate of taxation, to be levied only on privately owned real estate and improvements and on tangible personal property; avoid proportionate contribution to the expense of government, which of necessity creates a division and separation of interests and views and breeds contention; and let Washington be in fact what the framers of the Constitution intended it to be, the great Capital of a great Nation, to be nourished, expanded, and made beautiful by and for all people of the United States, the people of the District of Columbia contributing their fair share only.

At best, as was well stated by the joint committee of Congress in 1915, the half-and-half plan “was conceived as an economic necessity to lift the burden of debt from the oppressed District and its taxpaying citizens." And again, "This arbitrary rule--a rule of then seeming necessity---need no longer be applied to District appropriations." The committee has given careful consideration to all arguments used for and against the lump-sum plan and has come to the conclusion that it is the preferable one.

Accordingly, the bill which the committee is reporting provides that the law establishing the 60-40 ratio of contribution be repealed and that there be substituted therefor a provision which specifies that the contribution which shall be made by the United States to the expenses of the District shall be that which is fixed in the appropriation acts.

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