against the revenues of the District of Columbia were to be included in the estimates. The relations between the District of Columbia and the Federal Government were very amicable.

However, shortly after 1910 the District began to accumulate a revenue surplus, and the efforts to reduce the ratio began. The debates upon the question were persistent and vigorous even though no national issues were involved, and a Joint Select Committee of 3 Senators and 3 Congressmen was appointed in 1915, which delivered majority and minority reports. But no reduction was made until 1921, when the ratio changed to 60 percent payment by the District of Columbia and 40 percent Federal. This did not expressly repeal the 50-50 provision of the organic act, but provided for 60-40 for 1 year. The 60-40 method was made permanent in the Appropriation Act for 1923 and continued until 1925. Beginning with the fiscal year 1925, Congress began ignoring its definite obligation under the organic act, and its own substantive law, and commenced appropriating the Federal share in a lump sum each year to and including the fiscal year 1939. These lump-sum appropriations varied from $9,500,000 down to $5 million. The lump-sum idea was made permanent in the District of Columbia Revenue Act of 1939, and beginning with that year an annual payment of $6 million was authorized. For the fiscal year 1947, the payment was increased from $6 million to $8 million. Under the District of Columbia Revenue Act of 1947, the authorized annual payment was set at $12 million, of which $11 million was for the general fund and $1 million for the water fund.

On March 5, 1946, Senate Document No. 203 was approved. It was entitled, "Fiscal Relations Between the Government of the United States and the District of Columbia, Report of the Subcommittee on the District of Columbia of the Committee on Appropriations as Approved by Said Committee on Appropriations." It is a very illuminating report. It gives a history of the relationship between the District and Federal Governments and indicates how those investigators felt this matter should be handled.

Under the head of "Suggested Recommendations," the report stated:

"It is believed that it is the desire of the Federal Government to assume its proper share of the expenses for the upkeep and operation of the National Capital. This finding is based upon the following facts:

"1. The District of Columbia is the seat of the Federal Government set aside for Federal purposes, with full legislative powers retained by the Congress. "2. The area of the District of Columbia is fixed. It cannot expand. Therefore, when the Federal Government purchases property the tax revenue previously received on such property is lost to the District and cannot be replaced. The residents of the District in fairness should not be expected to make up such loss in revenues by increased taxes.

"3. The enormous increase in the expenses of the District of Columbia during the past 10 years has been occasioned by the tremendous expansion of the Federal Government, with no commensurate increase in the payment by the Federal Government. During the past 6 years there has been no change in the amount of the annual payment.

"4. The residents of the District through increased taxes have adequately, fairly, and cheerfully provided their share of the cost of operation and upkeep of the National Capital."

Mr. Chairman, in our thinking this city is something far beyond the concern of the people of the District of Columbia because it is a Federal city established by the Constitution as such and as the seat of the Federal Government. The Senate has always recognized the obligation of the Federal Government toward the District and we respectfully request that this $3 million be restored.

FEDERAL PAYMENT

Senator PASTORE. We thank you very much, Commissioner. Now, the clerk of our committee here has pointed out in your statement the reference to Federal payment. Do you wish to have that incorporated in the record?

Mr. MCLAUGHLIN. Yes; I have that statement here, Mr. Chairman. Mr. FOWLER. May we ask leave to introduce at the proper time the budget justification as we go along? If we have that permission, the first item would be the Federal payment which for 1957 was $20 million.

(The statement referred to follows:)

Page 2, line 4, strike out "$20,000,000" and insert in lieu thereof "$23,000,000" or an increase of $3,000,000 in the appropriation.

HOUSE REPORT

The bill provides a Federal payment of $22,504,450, a reduction of $3 million in the budget estimates, which is allocated as follows:

The District of Columbia Public Works Act of 1954 amended the District of Columbia Revenue Act of 1947 to provide a Federal payment of $20 million of which $7 million shall be available for capital outlay only. The District of Columbia Revenue Act of 1956, approved March 31, 1956 (70 Stat. 68) further amended the 1947 act and retained the amendment of the Public Works Act substantially as follows:

"There are authorized to be appropriated as annual payments by the United States toward defraying the expenses of the government of the District of Columbia, the sum of $20,000,000 for each of the fiscal years 1955 and 1956, and the sum of $23,000,000 for the fiscal year 1957, and for each fiscal year thereafter: Provided, That so much of the aggregate annual payments by the United States appropriated to the credit of the general fund as is in excess of $13,000,000 for each of the fiscal years 1955 and 1956, and $16,000,000 for the fiscal year 1957 and subsequent fiscal years, shall be available for capital outlay only, and then on a cumulative total basis only to the extent of not more than 50 per centum of the cumulative total of capital outlay appropriations payable from such general fund which becomes available for expenditure on and after July 1, 1954. If in any fiscal year or years a deficiency exists between the amount appropriated and the amount authorized to be appropriated, additional appropriations are authorized for subsequent fiscal years to pay such deficiency or deficiencies."

The budget estimate of $20 million for 1955 was approved by the Congress. The budget estimate for $20 million for 1956 was reduced by the Congress to $18 million while the budget estimate of $23 million for 1957 was reduced to $20 million. As a result of these reductions the Federal payments for 1956 and 1957 were $5 million less than the authorized amounts. Consequently, in accordance with the above provisions, this deficiency can be requested in subsequent years.

Although the House action is a reduction in the Federal appropriation, the effect on the District of Columbia is to reduce the revenues of the general fund by $3 million.

1958 ESTIMATE AND AMENDMENT REQUESTED

Mr. FOWLER. The estimate for 1958 is $23 million.

The House allowed $20 million which was reduction of $3 million. The amendment that we request is this:

Page 2, line 4, strike out $20 million and insert in lieu thereof $23 million or an increase of $3 million in the appropriation.

The Chairman of the Board of Commissioners has a statement on the Federal payment. He would like to read that at this time, with your permission. It would supplement what he has already said about the Federal payment.

Senator PASTORE. Do you want to read it, or do you want to have it inserted in the record?

sir.

Mr. MCLAUGHLIN. Mr. Chairman, it runs to nearly seven pages,

Senator PASTORE. I think he has pretty well developed his argument in his main statement. This is a brief in more particularized fashion. Mr. MCLAUGHLIN. We are anxious, Mr. Chairman, that it be considered.

Senator PASTORE. We will have it included in the record at the termination of your statement in chief.

Now, if you want to highlight it in any way, you may.

FEDERAL PAYMENT SITUATION SINCE 1946

Mr. MCLAUGHLIN. Now, we developed here, Mr. Chairman, the situation with respect to the Federal payments since 1946--I think showing quite effectively the fact that there has been a balance intended by the Congress; generally coming, of course, from the hearings that are held in connection with the authorizations for the Federal payments.

There has been a balance intended between the Federal payment and the ever-increasing tax burden that is being placed on the citizens of the District of Columbia.

So I would like to mention here at this time that we have at this time a balance of $5 million unappropriated of the Federal payment, up to this year we are considering, and at this point the House has also disallowed $3 million.

In other words, if the Senate does not restore or the Congress does not restore that $3 million, we shall be standing in the position of having a balance of $8 million unappropriated, of authorized Federal appropriations.

However, we are at least $8 million behind in our public works construction program. Dollars have been appropriated and spent, but we are down about 20 percent in the construction of buildings and public works that were covered in our program.

So we feel very earnestly at the District Building that the Congress is letting us down in not appropriating the full authorized amount. I think you will find that sufficiently documented in the statement. Senator PASTORE. We have a chart here that indicates the amount and the percentage, starting with 1924 and coming down to the estimate of 1958. We will have that inserted in the record at this point.

(The chart referred to follows:)

General fund appropriations for the fiscal years 1924-58 and the amount and percentage between the United States and the District of Columbia

1 Prior to 1923 the percentage of the United States share was set at 50 percent.

2 The Federal payment authorized for 1956 was $20 million.

The Federal payment authorized for 1957 was $23 million.

As passed by House.

As requested restored in Senate.

PRIOR APPROPRIATION

Senator BEALL. Mr. Chairman, was it not last year that the House passed $16 million and the Senate increased it to $20 million, or $23 million?

Mr. MCLAUGHLIN. Yes; the year before last.

Senator BEALL. The Senate asked for $23 million?

Mr. MCLAUGHLIN. It was left at $20 million last year, however. Senator BEALL. The House has passed it at $16 million.

Mr. Chairman, you will recall in the last budget the House passed $16 million and the Senate had $23 million in there. Then we compromised in conference on $20 million.

Senator PASTORE. Another very significant thing that Mr. McLaughlin brought out is that the law itself has a cumulative effect.

The authorization merely goes on, but that will develop as these proceedings progress.

INCOME TAX COLLECTIONS

Now, I should like to ask you this question, sir: What have been the actual collected amounts of your income tax through April 1957? Mr. MCLAUGHLIN. Do you mean our very latest figures on this? Senator PASTORE. Yes.

Mr. MCLAUGHLIN. Mr. Lowe can give that to you best.

Mr. Lowe. Mr. Chairman, through the current date the actual collections on the individual income tax have been $16 million. Senator PASTORE. That is as of the end of April?

Mr. Lowe. No, sir; as of the end of April we had only collected $11,015,000. You see, the income tax comes in, you might say, a rush at the end of the filing period and there is always a lag in getting the money deposited. So the report we are giving you, of $161⁄2 million, is up through the current date.

LETTER TO SUBCOMMITTEE

Senator PASTORE. Now, I have a letter here, Mr. McLaughlin; it is dated April 22, 1957. It is addressed to me as chairman. going to have it incorporated in the record at this point.

Mr. MCLAUGHLIN. Yes, sir.

Senator PASTORE. The letter reads:

This is in reference to revised estimates of costs for public school projects included in the District of Columbia Appropriation Act, 1957, and the appropriation title "Capital outlay, public buildings construction."

A review of the estimates of construction cost of the fund appropriated in the fiscal year 1957 for certain school construction projects has just been completed indicating an overall increase in cost of approximately $1,100,000 over the available funds. This overrun is developed as follows:

Revised estimate March 1957,

New health school, original budget estimate $940,800. Construction fund authorized, $940,800. $1,305,800, increase over funds $365,000.

Elliot Junior High School. Original budget estimate $825,600. fund authorized $805,600.

Construction

Revised estimate March 1957, $998,000, increase over funds, $192,400. Fifty-Sixth and Eads Elementary School. Original budget estimate $82,707. Construction funds authorized $818,400. Revised estimate March 1957 $1,025,000. Increase over funds $206,600.

Sixth and Chesapeake Elementary School, original budget estimate $892,800. Construction funds authorized $857,030. Revised estimate March 1957, $1,110,000. Increase over funds $252,970.

Kenilworth School addition, original budget estimate $697,500.

Construction

fund authorized, $697,500. Revised estimate March 1957, $770,000, increase over funds, $72,500.

Then you have the total:

In all cases this increase is attributable to the following factors—

and then you recite them.

(The letter referred to follows:)

APRIL 22, 1957.

Hon. JOHN O. PASTORE,

Chairman, Subcommittee of the Committee on Appropriations for the District of Columbia, United States Senate.

DEAR SENATOR PASTORE: This is in reference to revised estimates of costs for public school projects included in the District of Columbia Appropriation Act, 1957, under the appropriation title "Capital outlay, public building construction.' A review of the estimates of construction cost of the funds appropriated in the fiscal year 1957 for certain school construction projects has just been completed