Evening Star Newspaper, January 8, 1937, Page 18

FORMULA REDUCED 10 3 ELEMENTS Establishment of Four New Agencies Also Is Proposed. (Continued From First Page.) appointed last Summer to make an exhaustive study of the subject and determine a fair and equitable basis for its solution. J. L. Jacobs, Chicago efficiency engineer and tax expert, directed the survey, which was au- thorized in the 1937 District appro- priation act. A fund of $50,000 was provided for the purpose. While the proposed formula for measuring each year the proportionate emounts to be paid by the District and the National Government is reduced to three basic elements, the applica- tion of the formula and the accom- panying recommendations will require extensive new legislation, at least 19 new laws or amendments. The establishment of at least four new agencies of government, with varying responsibilities and powers, 15, in addition, proposed. Elements of Formula. Here is the basic formula: First—The annual measurement in dollars and cents of the value of serv- ices rendered the National Govern- ment by the municipal government and vice versa. Contractural relations are to be established between the mu- nicipal government and each depart- ment of the National Government and the cost of each specific service will be ecvered in the respective departmental budgets. In the current budget, for instance, the net amount of $2,533,357 15 found “reimbursable” to the District. Part of it would come from the Na- ticnal Government, part of it from citizens who receive special services for which they do not pay directly now or do not pay, in the opinion of the committee, enough. Second—Establishment of a continu- ing method for determining the extent of Federal and District interest in each public improvement (capital outlay) within the District and for fixing the | amount to be paid by each government. ‘The capital outlays, it was explained, apply to all capital outlays in the Dis- trict of Columbia. The proposed Jef- ferson Memorial, for instance, would be regarded as a capital outlay, the ex- pense of which might be found divisible between the District and the National Government. The agency for deter- mining the “extent of the respective Tederal and District interests” in cap- $tal outlays would be the National Capital Park and Planning Commis- | sion, enlarged and given new powers, with its name changed to the National Capital Planning Commission. ‘Third—the periodic comparison of | $he average cost per capita of supply- ing “normal State and local services” in a group of comparable communi- ties with the cost per capita of supply- ing similar services in the District, When this average cost per capita in the District exceeds the average cost in the comparable communities Con- gress is expected to appropriate the difference for the District. This part of the formula would be applied only “as long as Congress exercises direct and positive control over the District government.” Many Changes Proposed. Numerous recommendations for ad- | ministrative and statutory changes— mcluding rewriting of the District’s or- ganic act and repeal of the 60-40 ra- tio system—are found through the thick volume of 244 pages containing the committee’s findings. The investigators found, for in- stance, that “under the existing system of District government authority is diffused and responsibility decen- tralized.” But the committee’s recommenda- tions include the establishment of the following new agencies of govern- ment: (a) A “permanent municipal survey agency,” charged with the task of re- viewing periodically the contractural relations between the municipal gov- ernment and the National Government departments and with making the necessary comparative studies of the per capita costs of government in the District and in comparable cities. ‘This agency, as long as the Budget Bureau reviews the local budget, would be attached to the Budget Bureau. (b) The powers and duties of the present National Capital Park and Planning Commission would be en- larged to make it “the one responsible agency for physical planning and de- velopmert of the District.” It would snalyze proposed capital improvements and prepare the estimates of the “cap- ital budget” as distinct from the “operating budget” of the District. It would show in the analysis the por- tions of capital outlays in the District of Columbia payable by the municipal and National governments. Its per- sonnel would be enlarged to “include representatives of both governments | and local citizens qualified in plan- ning and engineering.” It would be relieved of its present administrative duties. (c) Pending, in the words of the report, “the granting of broader pow- ers over local affairs,” it is proposed that there be created an “advisory council” consisting of representatives ‘of the Federal and District Govern- ments and “citizens representative of civic groups to be appointed by the President.” The duties of this advis- ory council would be to “advise on the original preparation of the District budget, the determination of tax and revenue sources, and on the operation | and administration of District services | and expenditures.” (d) Provision should be made, the report states, for a “permanent mu- nicipal survey agency that will aid the administrative officials in main- taining the District not only as the most beautiful Federal city but as the model local government.” . () The report further recommends g comprehensive analysis of the ad- ministrative organization and methods of the District government, with a view to developing a well-thought-out and modern plan of municipal gov- ernment adapted to requirements of the District and designed to establish it as the model of municipal adminis- definite principles which should guide in determining equitable fiscal rela- | with Federal payments which will | vary from year to year with the size | Government or to individuals who re- | resident pupils in the District, free | services it received from the National T $452,000 Asked for Starting Of Two New District Bridges $3,382,880 Highway Program Is Recom- mended—W ater Budget Contains Two New Mains. Funds for starting of construction of & new Pennsylvania Avenue Bridge over the Anacostia River, at an au- thorized cost up to $1,250,000, and for completion of the new Chain Bridge over the Potomac, are proposed in the highway section of the 1938 Dis- trict supply bill. ‘The Budget Bureau proposes & high- ‘way program costing in all $3,382,880, or $645,400 more than the current year total, but $785,000 less than the sum sought by the Commissioners. The Water Department budget items call for expenditures totaling $1,988,- 970, or $313,000 more than appropria=- tions made for the current year. This program proposes two large water main projects and an item of $120,000 to complete the installation of meters and provide other improvements to the distribution system. Continuation of the 25 per cent re- duction in water rents and the in- crease in the metered allowance from 7,500 to 10,000 cubic feet, adopted sev- eral years ago, also is provided by the bill $325,000 for Bridge. For starting the building of the new Pennsylvania avenue span, long sought by business and civic interests and the Southeast section, the bureau proposes | appropriation of $325,000. Plans for | this structure now are being prepared by the District Engineer Department. For completion of the new Chain Bridge, to be started this fiscal year an appropriation of $100,000 is asked, completing the total authorization of $350,000. The following five major streete paving projects are listed for execu- tion under the gasoline tax fund: Branch avenue southeast, from Ala- bama avenue to Denver street, $26,000; Minnesota avenue southeast, from Pennsylvania avenue to Twenty- seventh street, $10,000; Fenwick street northeast, from New York to West Virginia avenues, $18,000; Franklin street northeast, from Michigan ave- nue to Lincoln road, $16,500, and New Hampshire avenue, from Buchanan to North Capitol streets, $96,000. In addition, the roadway of Seven- teenth street from Pennsylvania ave- nue to H street would be widened to | 70 feet and 40 per cent of the cost would be assessed against the abut- ting property owners. | | | ‘The bill carries the usual items of $50,000 grading streets and alleys, $5,000 for paving center strips of road- ways, $5,000 for minor changes in roadways and sidewalks, but increases from $200,000 to $225,000 the item for construction of curbs and gutters and increases from $400,000 to $500,000 the sum for street surfacing and re- surfacing. $900,000 for Street Repairs. There is a heavier increase in the item for current repairs to streets, the present figure of $765,000 being boosted to $900,000, in answer to the plea of Capt. H. C. Whitehurst, di- rector of highways, that street main- tenance work will fall behind other- wise. An item of $150,000 is proposed for the prcgram extension of streets on the highway plan, this being $50,000 below the appropriation for the present year, The bureau allowed no increase in the $3,000 appropriated for this year for repair and maintenance of wharves, nor in the $126,000 appropriation this year for the personnel and work of the Department of Trees and Park- ings. The Water Department estimates | propose an item of $256,000 for con- struction of a large trunk line main | to run from the vicinity of First and L streets to East Capitol and Second streets, and for construction of a large trunk main in the vicinity of Wash- Ington Circle. For the replacement of old mains the bureau proposes an item of $135,- | 000, the same as appropriated for this year, and for the installation of public and fire hydrants, $22,500, and for the paying of service mains, $300,000, an | increase of $50,000 over this year. | ‘The item of $120.000 for installation of meters is the first of a proposed three-year program designed fo elim- inate all of the regular water useu} who now are on a flat rate basis be- cause of the past insufficiency of funds to provide meters. The item for maintenance of the; water distribution system was placed | at $372,300, an increase of $12,300 | over the current year, and for the ‘Washington Aqueduct, the water sup- ply system, the bureau proposes $500,- 000 as against $470,000. poses, as do the citizens of com- parable cities. That until District residents have i a “direct and formal part” in deter- mining the character and extent of local services and expenditures, they should not be expected to bear costs in excess of those borne normally by residents of other comparable com- munities for similar services. That as long as congressional con- trol is direct and exclusive, the National treasury should bear any costs in excess of those borne nor- mally by taxpayers in communities comparable with the District. New Conception of Capital. In general, the report conceives the | Capital City as being maintained ex- clusively by the local taxpayers with no fixed Federal contribution, but and the nature of the District budget, computed according to the three-point formula. All services—either to the National ceive certain extraordinary services— will be paid for. Free tuition for non- public library service to non-residents, would be ended and fees for such serv- ices exacted. On the other hand, the District | would pay in cash for all measurable Government. The services of the Budget Bureau in handling the Dis- trict budget would be paid for. The Treasury would be paid by the Dis- trict for handling its accounts. The General Accounting Office would be paid for its post audits of District funds. The District residents would pay the salaries of the Army’s Corps of Engineer officers assigned here as Engineer Commissioner and assistants. The investigators found that the Federal Government is performing 39 special services for the District. The District government is performing 30 special services for the Federal Gov- ernment. Reimbursement is effected now by special arrangement in the case of some of the services, but not in others. All would be paid for under the plan. The recommendation is made that the Federal Government pay for water it consumes on the basis of the stand- ard rate schedule. That would in- crease water revenues by about $250,- 000 a year. In addition, it is proposed that the assessment rates for service main extensions to water users be increased to cover the entire cost of such extensions. That would increase the water revenues by $150,000 and the two items together would account for $400,000 additional water revenues, despite an existing surplus in the ‘Water Department now. Congress Control Remains. As for the exclusive control of Con- gress over the District, it would, of course, remain under any arrange- ment. Some form of local suffrage is recommended for the District, but the report is not specific and whether suffrage would be granted would de- pend upon a referendum. ‘The report goes farthest in outlin- ing a plan of local suffrage when it states: “The section of the statute granting local suffrage to the District residents might include the power to elect a municipal council to legislate on mat- ters concerning the plan and structure of local administrative organization, authority for the formulation and ad- ministration of the operating and capital improvement budgets, revenue and expenditure control and the enact- ment and enforcement of local regula- tory ordinances. By these means, con- trict government itself and the power and right to maintain or government would in of the District.” dents of the question have contended just the reverse, namely, that the greatest hope for fiscal equity lies in national representation, not the lim- ited local suffrage proposed by the report, which would leave the District unrepresented in the all-powerful Congress. Under the system proposed by the report, the Commissioners would still initiate the annual estimates for maintenance and capital improve- ments. But a new and powerful agency, the National Capital Planning Commission — “the one responsible agency for physical planning and de- velopment of the District”—responsible only to Congress, would prepare the | programs for development of the Cap- ital and divide the cost, on the basis of the benefits received, between the | District and the National Government. | value with a rate of $15 per $1,000. | tive purposes. Even where such data | tax rates but serve no other purpose.” | private property values have been in- creased through Federal acquisitions of property and that the District has | Mu benefited therefrom. The report ap- parently ignores the argument that if Federal acquisitions of property in the District continue, the tax load on a diminishing area’ must increase. Comparable Tax Load. Special attention was called by the President in his letter transmitting the fiscal relations report to three sec- tions which, he said, show “that while the extent of local governmental services in the District of Columbia is substantially equal to that in 17 cities comparable in size, both the property tax and the total tax load in the District of Columbia are lower than in any of these cities.” The 17 cities, which the report ex- plained, are “roughly” comparable in size with Washington, are Pittsburgh, San Francisco, Milwaukee, Buffalo, Minneapolis, New Orleans, Cincinnati, Newark, Kansas City, Seattle, In- dianapolis, Rochester, Jersey City, Cleveland, St. Louis, Baltimore and Boston. To reach its findings, the committee scrapped the customary method of measuring and comparing tax loads in one city with those in another, and adopted a field survey plan of its own whereby the actual taxes on typical properties in the 17 cities were compared with those in Washington. The committee said the practice of comparing the tax rates of various municipalities without relation to competent and uniform appraisal of property values “has long been con- demned.” “It is an acknowledged fact, it declared, “that assessing offi- cials, irrespective of the laws defining the methods of assessments procedure, assesses property at something dif- ferent from the value. Assessments of property do not necessarily reflect the value, even though the statute requires that the assessment should be based on the value of property. It is obvious that a tax rate of $30 per $1,000 of assessed value that repre- sents 50 per cent of actual value does not cost the taxpayer more than an assessment that represents the full “Property assessments and general | property tax rates are therefore at | best'of limited usefulness for compara- are supplemented by detailed de- scriptions of State and local tax struc- tures, assessment methods, and tech- niques, any comparisons of total or per capita figures are misleading and confusing. Such figures running over a number of years may be of value as indicating trends in assessmerts and | Typical Properties Appraised. What the committee did to reach | its comparative figures was to measure | | what it decided was the actual prop- | erty tax load by appraising typical properties and determining tax rates | from the amount of money paid as taxes per $1,000 of the appraised valu- | | ation. Taxes of all other kinds were | added to show the actual money pay- | | ments by taxpayers to meet govern- | | mental needs in the respective com- | | munities. In this study special appraisals and | analyses were made of actual money | outlays by typical taxpayers in the District and each of the 17 other | cities. This involved the determina- tion of actual aggregate State and local taxes of various kinds which are | paid by owners of similar typical prop- erties in the District and in the other cities. Short of actually moving the typical properties with their own: from city to city, the committee sai uniform assumptions and appraisals | were made so that the property and | other taxes paid on typical properties | were obtained from each city. | “Obviously, the most important The Commissioners would have the power of veto of projects submitted by this new agency for inclusion in the budget. But the new agency would determine the division of cost between the District and the Na- tional Governments, and its decisions would be binding. Budget Bureau Control. ‘The Budget Bureau would still have control over the Commissioners’ esti- mates, until that control were re- moved in favor of control by local citizens, a remote possibility as seen at present. The safeguard against excessive taxation of the unrepresented Wash- ingtonian, as envisioned by the re- port, lies in the fact that when the local costs of government exceed those of comparable communities— the comparison to be made by an agency under the Budget Bureau— the National Government would pay the excess. This process of paying the excess is described as follows: “. .. If the data show that general governmental cost payments per cap- ita were higher in the District than the average of the comparable cities in the latest fiscal ycar for which comparison can be made, the excess shall be paid from the Federal Treas- ury. The actual amount to be ap- propriated for this purpose shall be determined by multiplying the excess over the average cost per capita by the number representing the popula- tion of the District at the end of the fiscal year compared, the population to be determined from official census estimates . . .” This payment for additional costs, however, would last only as long as “Congtess exercises direct and posi- tive control over the District govern- ment.” Under this plan the Budget Bureau would doubtless have the in- centive to keep the costs of local gov- ernment down to the level of costs in other cities, thus avoiding additional Federal payments. In computing the cost of local gov- ernment the report says that “the actual costs of general departmental activities of the District government at present are not comparable with those of other cities,” and this “actual cost” is higher. To make such costs comparable, the report recom- mends that expenditures of the Dis- trict for the direct benefit of the Fed- eral Government be deducted, along with the deduction of expenditures made to meet unusual requirements imposed upon the District by Congress, such as—education of non-resident children; excess payments for public improvements to enhance the District s the Capital and the excess costs ot ordinary services occasioned by meet- ing the relatively higher Federal stand- ards of employment. On the other hand, additions are to be made to the cost to represent services ren- dered the District by the Federal Government which in the States are rendered by the States. The report takes recognition of the exceptional amount of Federal prop- erty in the District that is exempt from taxation, but recommends no allow- ances to the District on this account. |ph.|.ue of this study,” the report de- | clared, “was the appraisal of the value | | of typical properties in all the cities | on & uniform and sound basis. In addition to obtaining the sound opin- | lons of value and the totals of taxes paid on properties representing a cross section of the improved properties in each city, the study also involved de- termination of actual amounts of State | and local taxes which are paid by such property owners in the respective cities. i The combined property taxes and | other taxes represent aggregate lax payments made by owners of similar properties in the cities of roughly com- parable size.” As a result of this study of tax loads, the committee announced the follow- ing findings: “1. That thé 1935 effective tax rate on real estate per $1,000 of value is lower in the District of Columbia than in any of the other 17 cities of com- parable size. “2. That the total tax load on prop- erty owners, including all taxes paid by them, is lower in the District than in any of the comparable cities. “3. That the sum of various taxes paid, exclusive of the real estate tax, is lower in the District than in any of the other comparable cities. “4, That the tax load in the Dis- trict, even if there were no .Federal | Government contribution and an equivalent amount were added to tax levies, would still be lower than in | any of the 17 other cities. Even Greater Difference. In regard to the total tax load— that is, real property taxes plus other types of taxation—there is an even greater difference the committee said, between the District and the 17 other cities than in the case of the real property taxes. In Washington, it pointed out, the owner of a $7,000 home pays annual real estate and other taxes of approximately $101; in San Prancisco, $173—and in Cin- cinnati, approximately $178. In all the other cities, the committee de- clared, the property owner pays more than twice as much as in Washington, Exclusive of the real estate tax, the committee pointed out, the tax load in the District on the owner of a typical $7,000 home is approximately $27.50; in Pittsburgh and Minneapolis it is approximately $36; in Baltimore, about $44; in Milwaukee, Rochester and Buffalo, approximately $47; in Boston approximately $49; in San Francisco, approximately $54¢. In the remaining nine cities, the committee said, it is more than twice that in ‘Washington. ,” the committee said, “either with or without the present annual Federal contribution to the District of Columblia, the citizens and taxpayers in Washington actually have & lower tax-load than the correspond- ing citizens and taxpayers in any of the other 17 comparable cities.” One of the tables included in the report showing local and State taxes paid by an individual owning a $7,000 home in each of the 18 citles, in 1935, follows: Rea! estate £ &5 it S5 Fa R ANT SRR 25 5””\!7@3 o S5 SIRFER, SEh JXIEIS SRR 3 .74 . st. of 3.08 27.60 100.68 1 “Other taxes” include personal prop- line and motor registration taxes, income retail sales tax, etc.. Where they were in effect in these cities in 1035, The basic assumptions for the salaried individuals owning the above hcme are as follows: Married man, two children: in- come per year. Owns automobile, yalue "SK00. welght i e- es. $800 $500 intangible personal property. Makes merchandise purchases in amount of $1.200 annually. In its study of real estate and other taxes on typical clases of property in the District and other cities, the com- mittee also made appraisals on typical properties in Alexandria, Va., and in nearby Montgomery County, Md. These appraisals and reports show that for 1935 the real estate tax rate per $1,000 of assesment was about $2462 in Montgomery County and $25 in Alexandria. Assesment rates, the committee said, were relatively low, at about 50 per cent, so that the | effective real estate tax rate per | $1,000 value averages between $10.50 and $11 in these Washington suburbs. ‘These effective property tax rates, it sald, are slightly higher than those | found in the District. Comparative Services: In a section devoted to comparative | governmental services in the District and the 17 other cities, the committee | said that fleld observations and avail- able statistical information indicate | that residents and property owners here are receiving services roughly equal to the average of the other cities. It pointed out as noteworthy two | variations: (1) the relief burden of the District is half that of the other cities, on an average; (2) that park facilities and services of the Disirict are considerably above those of the other cities. | ‘The summary of this study of com- parative governmental services re- sulted in the following conclusions: “The District is considerably higher than the average in number of em- ployes. | “Washington retains a relatively | large number of children into the high school period of instruction. The elementary school situation in the District is quite normal. A heavier teacher load balances heavy high school enrollment. The number of schools is relatively large and school plant costs are relatively high. ; “The District has a comparatively | small relief problem, both in number | of cases and expenditures therefor. “Liberal H Traffic fatalities are above average. | Police personnel assigned to traffic | boards, commissions and officers had | ditional $17,500 for power and lighting duty is nearly average. { “Fire personnel is relatively large. | Fire equipment and frequency of fire | stations are below average. The in- | surance rating of the District is very good. Very low losses reflect credit upon the department, despite condi- | tions .which automatically help to reduce the number and size of fires. “The public health record of the District is consistently poor as to birth rates, death rates and infant | mortality. The record is mixed as to | the prevalence of communicable dis- | ease cases reported. | tion and area bases. “The District provides. more ex- tensive park facilities than the other 17 cities. “The average citizen of the District has available and enjoys recreational | facilitles above the average available | in comparable cities. i “The local public library system is smaller, used less and manned with fewer employes than in the other | cities.” With respect to garbage collection, the committee said, Summer service in the District is above average and Win- | ter service is*below average. As to street lighting, it said Washington is comparatively - well lighted at about average cost. The committee also declared the | business section of the city is cleaned as frequently as the average, while the cleaning of residential sections is below the average of cities compared. Discussing sewage disposal, the com- mittee explained, practically the entire Ppulation of the District is served by a sewer system and explained that a sewage disposal plant is now under construction. Social and Eccnomic. A section devoted to social and eco- | nomic characteristics of the District and the 17 other cities points out that | the costs of living here are higher than the average of the other cities and that housing rentals are highest of all the cities by a considerable mar- | gin. The report declares that hous- ing vacancies are almost non-existent and that higher returns to property owners indicate a greater ability to pay property taxes. Statistics reviewed in this section | of the report, the committee said, ap- pear to support the following findings: “Real wealth in the District in pro- portion to population is distinctly above the average of cities of com- parable size. Second, incomes are higher than the national average. ‘Third, there are about twice as many income tax returns filed in the District in proportion to population as in the | typical comparable city. Fourth, sal-; aries are a larger source of income in the District.” | The report also declared that the | economic advantages to the District as the Capital of the Federal Govern- ment “far outweigh the penalties at- tending its physical presence.” All these facts, it sald, indicate that the District as a community has greater economic ability to pay for govern- services than has the typical | comparable city. Manager Rule Discussed. The committee, in its discussion of fiscal reorganization of the District government, spoke favorably of the managerial form of government, al- though it did not go so far as to rec- A complaint was made by the com- mittee, however, that there has been years although in recent decades “great advances have been made in HE EVENING STAR, WASHINGTON, D. C., FRIDAY, JANUARY 8 1937. SHIFT IN FEDERAL EXPENSES SHOWN $1.82 Cost of Regular Oper- ations to $1 “Emergency,” Says Treasury. By the Associated Press. ‘The Treasury reported today & ma- Jor shift in the relative size of Gov- ernment expenditures classifications of “regular” and *“emer- gency” activities during the last fiscal year. between its The department’s annual report showed that for every $1 paid out for “recovery and relief” in the 12 months ended June 30, $1.82 was spent on “normal” Government op- erations. In the previous year $1.08 went for emergency activities for each $1 go- ing to general departments, while in 1933-4 emergency spending overbal- anced regular outlays in the ratio of $1.35 to $1. Citing a $366,300,000 climb in regu- lar expenditures to $3.276,900,000 last year, the Treasury attributed person- | nel in civil departments and agencies and restoration of a 5 per cent salary cut to Government workers. ‘While these expenditures were climb- ing, the report said, emergency spend= ing declined $293,900,000 to $2,776,- 800,000. The total, however, was a net figure- after deductions of earn- ings and repayments of various agen- cles. Aggregate expenditures were set at $8,879.800,000, of which 56 per cent | went for regular activities, 31 per cent for recovery and relief, 8 per cent for interest and 5 per cent for debt retirement. In the previous year regu- lar departments accounted for 39 per cent, emergency activities for 42 per | cent, interest 11 per cent and debt retirement 8 per cent. On the revenue side total receipts rose $315,500,000 last year to $4,116,~ 000,000. form has been eclipsed in the last 20 years by the more effective managerial type of government.” Supporting suggestions for changes | in the form and operation of the Dis- trict, the committee found there was diffusion of responsibility and lack of cohesion in the existing structure. In police man power and its conclusions in a section on the | Was made for the current year. equipment are provided although the | organization of the city government, | 2 . ot latter is relatively less modern. The it said the original commission gove:n- | administration building at the District 1935 crime record is relatively high. ment established in 1878, apparently | Training School for Feeble Minded, was the nucleus to which various been added from time to time. “Detailed criticisms of the existing organization had been made oy several agencies within the last 15 years,” it said. tion and internal diffusion of responsi- bility in some departments the District government suffers under division of responsibility for local affairs between the Commissioners, semi-independent boards and Federal authority.’ District Unitary Organization. The committee said, however, that |in comparison with local and State the gasoline tax fund, $1,405,000; for | “The District has more of its street governments in other jurisdictioms, the | alleys and sidewalks, under the gen- | mileage paved than have the other | District has “the special merit” of |eral fund, $150,000. comparable cities. The amount of hard | being a unitary organization, combin- | F¢ 5 surfacing is about average on popula- | iNg in one corporate body interest and $675,000, consisting of $100,000 for | activities ordinarily split between the /main and pipe sewers, $175,000 for | States and several layers of overlap- | Suburban mains and $400,000 for serv- ping independent local governments having costly duplications of powers and services. It made also this finding: “Since the District government has broader scope than ordinary city governments, its finances are not directly compar- able with those of city governments in other communities. Some adjust- ments of figures for revenues 2nd ex- nditures are necessary hefore ac- pe: | curate and valid comparisons with other municipalities can be made.” In the section devoted to adminis- | trative and fiscal reorganization of the | District government the committee also said recommendations of past sur- veys indicate there is a fertile field for an intensive and comprehensive analy- sis of the organization and adminis- tration with a view to developing a | well-thought out and modern plan of administrative government adapted to the requirements of the District and designed to establish it as the model of municipal administration. The committee suggested such an investigation should take up the fol- lowing major points: 1. Co-ordination of administrative departments. Consolidation of like | services and elimination of unneces- | sary positions. 2. Transfer of various local func- tions from agencies of the Federal Government to eliminate overlapping organizations. 3. Application of an effective merit system to the entire District service. 4. Effective budgetary procedure. 5. Simplified and improved adminis- trative techniques. 6. Unification of accounting and financial control. 7. Centralized purchasing in a single District agency. 8. Periodic and unified reporting of services and costs. Joint Advisory Committee. Studies of this character might be | made in the first instance, the com= mittee said, by a staff connected with neither the District nor the Federal Government, but operating with the assistance and co-operation of a spe- cial advisory committee representing both governments. mit employment of specialists familiax with recent developments in govern=- mental throughout the country, and whose' conclusions, it was explained. wouid not_be affected by their relationships with officials of the two governments. This would per- organization and procedure This comprehensive survey, the committee said, should be followed by continuing analyses by & perma- nent staff agency that will aid the administrative officials in maintain- | ing. the District nof only as the most beautiful Federal city, but also as the model local government. As long as the Budget Bureau con- tinues under its present obligation to ‘scrutinize details of the District budget, the committee suggested that any agency which may be established should be a section of that bureau. permanent municipal survey One section of the report -deals with the relationships of foreign gov- ernments with their capitals. pointed out that no government recog- nizes u legal responsibility for the L “Apart from lack of vo-ordina= | Trail of Money Produces Honesty; Loser Surprised Finders Pursue Man Who Had $911 and Hole in Pocket. By the Associated Press, JOLIET, Ill., January 8.—Matthew Plese learned more in 15 minutes yes- terday about the honesty of the hu-| man race than he had learned before | in all of his 61 years. He acquired the knowledge after he had sold a bond for $911, and, happy over the sale, had set out to buy some- thing to eat. He knew he wanted a hot dog, but what he didn't know was that there was a hole in his pocket. Behind him hurried honest citizens, picking up a $100 bill here and chas- ing 50s and 20s wherever the wind | blew them. | ‘When they caught up with him he | was sipping coffee in a restaurant. They asked him to guess what he had in his pocket and it turned out to be | the hole. Then they began to give him back his money and asked him to wait for the others who were still chasing bills. Before he left the restaurant Plese had all his money back but $140. Tax 'I:hreat CANADIAN ENVOY LAUDS PRESIDENT Sir Herbert Marler Praises Roosevelt’s Declaration at Rio de Janeiro. By the Assoclatea Press. NEW YORK, January 8.—Sir Her= | bert Marler, Canadian Minister to the United States, said last night tha’ while men in the foreign service of Canada had “no politics,” they could not “overlook or be unmindful of th3 great and courageous labor which tie President of the United States has particularly undertaken in recent months.” At a dinner in his honor, given by the Pilgrims of the United States, Sir Herbert spoke in agreement with this declaration of President Roosevelt a. Rio de Janeiro in November, as quoted by the Minister: “The people of each and every one of the American republics—and I am confident of the Dominion of Canada as well—wish to lead their own lives free from desire for conquest and frez from fear of conquest—free at the | same time to express their cultural and ! intellectual relationships and to take | council together to encourage the | peaceful progress of modern civiliza~ tion.” (Continued From First Page.) Library Trustees. An appropriation | of $695802 was sought by the tius-| tees, but the city heads cut this to $555,840, and the bureau made no further change. | Capital improvement items included | in the proposed budget call for an ex- | penditure of $6,850,600. Major items in the Budget Bureau program would be: For the construction of a new health | center, including cost of a site, | $150,000. $1,500,000 for New Schools. For new school construction, $1,- 075,000, plus $425,000 for the purchase of edditional school sites, making & total of $1500,000, as against nearly | $6,000,000 requested by the Board of | Education as the first year of a five- year $30,000,000 school extension plan. For completion of the new Police Court Building now being erected in | Judiciary Square, $450,000, for which | & starting appropriation of $1,000,000 | For construction of a hospital and i at Laurel, Md., $160,000, and an ad- | facilities. | The largest construction items were | for extension and improvement of the | } water, highway and sewer systems. | For the construction of new service mains for the water distribution sys- tem, $300,000; for completing of in- | stallation of water meters, $120,000; | for fire and public hydrants, $22,500; for replacing old water mains, $135,000, | and for the laying of two new trunk | line mains, $256,000. Gas Tax Fund Earmarked. | For highway improvements under | For extension of the sewer system, | ice sewers under the assessment and | permit system. For new apparatus and other fa- cilities for the Fire Department, ; $69,600. | For continuing construction of the | protection wall at the reformatory at | Lorton, Va., $40,000, and for continu- ing construction of the new dormi- | workhouse at Occoguan, $45,000. | For construction of a new vocational building at the Industrial Home School for Colored Children, at Blue Plains, | $15.000, and for installation of a new | | boiler in the heating plant of the Home for Aged and Infirm, $15.000. $25.000 for New Traffic Lights. For installation of additional traffic | lights, $25,000. In addition to these new items of | construction, the District will have to pay into the Treasury in the next fiscal year $1,000,000 as another ine stallment of reimbursement for P, W. A. loans for District construction proj- ects and $300,000 of reimbursement required by the Capper-Cramton law for park improvements. There are two major bridge items | in the estimates: For the starting of & new Pennsylvania Avenue Bridge, $325,000, with authorized limit of $1,250,000, and for completion of the new Chain Bridge, $100.000. Deficit of $9,954,178 Faced. Estimating that the District would | be facing a $9,954,178 general fund deficit, to be met by added taxation, | if the budget total is approved along with the reduced Federal payment, District officials explained the city's financial crises as follows: The estimated local revenue collec- tions for next year, on the basis of the present tax rates, not counting the Federal payment here, would total $30,975,000. This would be drawn from the following sources: Real estate, $17,525,000; tangible personal prop- erty, $1,100,000; intangible personal $2,525,000: public utility, | | $675,000; penalties and interest, $350, 000; alcoholic beverage taxes, $2,000,- 000, and miscellaneous collections, $4,400,000. From this gross total of $30,975,000, however, must come first of all an est! | mated deficit of $1,468,000 expected Lo | occur at the end of the current year, together with $160,000 the District must pay as its half of the expenses of Freedmen’s Hospital and estimated claims and deficiencies of $350,000. These deductions bring the city’s net revenue available for application to the general fund charges down to $28,997,000. | $11,647,035 Short. | Against this available revenue, the budget submitted today calls for $40,~ 644,035 of appropriations to be met from the general fund. Therefore, the District would be $11,647,035 short of the amount requircd without con- sidering the Federal payment. ‘While the formula in the Fiscal Re- lations Committee report would repre- sent a Federal payment of $2,533357 for 3938, this sum would be broken down into separate allotments to the three major financial accounts of the District—namely, general fund, gas tax 4 | | tories for women prisoners at the | : figure in the present discussion of Sir Herbert paid compliment, too, to Secretary of State Cordell Hull, calling him “that other great American.” He spoke at length of United States- Canadian amity, bespoke a similar amity with the rest of the Briti.n empire, and added that Canada “de- sires before all else the preservation of the unity of the British common- wealth of nations and the British LOBBY TO DISCUSS CONGRESS PROGRAM Chester M. Wright, Editor of A. F. of L. Weekly News Serv- ice, Among Speakers. A full day’s conference will be held tomorrow by the People's Lobby at the Ambassador Hotel to discuss the program for the new Congress. In the morning session the group will hear Chester M. Wright, editor of the A. F. of L. Weekly News Serve ice, Dr. John H. Gray, former presie dent of the American Economic As= sociation, and Dr. Harry W. Laidler, | director of the league for industrial democracy and former president of the National Bureau of Economic Research. At the luncheon session at 12:15 the group will hear Irving Brant, author of “Storm Over the Constie tution.” and Dr. Colston E. Warne, president of the People’s Lobby and the Consumers’ Union of the United States. The afterncon session, which starts at 2 pm, will hear Henry T. Hunt, Brant, Gardner Jackson, former ase sistant consumers’ council for the A. A. A; Fred Brenckman, Washe ington representative of the National Grange and Chester Gray, Washing« ton representative of the American Farm Bureau Federation. At 8 pm. Dr. Abraham Epstein, secretary, and Richard W. Hogue, Washington representative of the American Association for Social Se~ curity will speak. Dr. R. A. Mac- Gowen, associate director of the Na- tional Catholic Welfare Council, and Webster Powell, director of Far Re- search, Inc., are also on the program. The public is invited to all sessions. the general fund deficit. Of the $2,533,357 Federal payment proposed, only $1,692,857 would go into the general fund. Deducting this | from the anticipated general fund deficit of $11,647,035 previously stated, leaves the net deficit of $9,954,178, which Washington residents would have to produce through new taxes unless Congress fixes fairer Federal payment. How to produce this much new rev- enue in the event the estimates and the fiscal report stand had District officials deeply worried today. If they had to raise this additional revenue entirely from real estate and the tane gible personal property, it would be almost a 53 per cent boost in the rate, hiking it from $1.50 to $2.30 per $100 " of assessed value. New Revenues Not Enough. If they had to turn to new sources of revenue, all of the additional tax levies that have been discussed in the last year, together with an increase of $1.70 in the realty tax rate, would only produce $6,500,000, instead of the $9,954,178 that would be needed. The Commissioners’ Tax Revenue Committee has considered the pa=— sibility of a motor vehicle weight tax, a higher tax on utilities, an inheri- tance or estdtes tax and an income tax in lieu of the present intangible personal tax, but all of these plus a 20-cent raise in the realty rate would bring in only the $6,500,000 additional revenue referred to above. The radical departure in the new fiscal formula of splitting the Federal payment between the general fund, the water and gas tax funds, produces the strange result of lerge surpluses being left in the gas tax and water funds while calling for & huge tax increase for the general fund. 2 Departments Self-Sustaining. Heretofore, the Highway and Water Departments have been more than self-sustaining on gas tax and water rates, and all of the Federal payment went to help meet the general fund charges. Under the proposed formula, $440,500 of the total Federal payment is allotted #o the gas tax fund, despite the fact that on the budget estimate of $3,103,280 for gas tax expenditures the fund would still have a balance of $9,000 at the end of the next fiscal year. If the new formula stands, the effect would be to leave $449,500 un- spent in the gas fund. A similar anomalous situation would be created in the water fund where there would be a balance of $360,595 at the end of 1938 even after meeting the proposed budget items. The new fiscal formula nevertheless allots $400,000 to the water fund, the surplus in the water fund to $760,595. Thus $840,500 of the Federal pay- ment would be diverted to special funds, which under existing law can- highway fund and the water fund. development and maintenance of i.s capital unless it owns all the land and controls all business activities of that cityyas in Canberra or Moscow. - not be spent for other than the stated Since gas tax and water fund collec- | specific purposes, which funds already tions can be used only for the Highway | are more than ample to meet the pro- ang Water Departments, they do not ,pd appropriations. ) tions are: ‘That District residents and taxpay- It recommends specifically sgainst | any ad valorem taxation of the Fed- ¥ Lo &