CITY OF LAS VEGAS, NEV., Hon. WILBUR D. MILLS, Chairman, House Ways and Means Committee, House Office Building, Washington, D. C. DEAR CONGRESSMAN MILLS: It has come to our attention that the Curtis bill, H. R. 8702, will be considered by your committee within the next several days. Since this bill will greatly benefit the issuers of State and local securities, we strongly urge you to support this legislation. Sincerely yours, C. D. BAKER, Mayor. CITY OF BUFFALO, Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, House of Representatives, House Office Building, Washington, D. C. DEAR CONGRESSMAN: One of the most urgent concerns facing my administration is the increasing necessity for capital expenditures in the next and following years and the consequent need for extensive municipal borrowing. This, of course, will be reflected in growing debt service payments. Together with most other cities in the same plight, we will need all of the assistance from the State and Federal Governments which may properly be given. I believe that H. R. 8702 will provide substantial relief in this area by widening the market for municipal bonds, thus reducing interest rates. I therefore join with the American Municipal Association in urgently requesting that the Ways and Means Committee act favorably on H. R. 8702. Very truly yours, FRANK A. SEDITA, CITY OF SCHENECTADY, N. Y., Hon. WILBUR D. MILLS, Chairman, House Ways and Means Committee, DEAR CONGRESSMAN MILLS: I desire to place myself strongly on record in favor of the Curtis bill, H. R. 8702, which extends the provisions of tax exemptions on municipal securities to shareholders of regulated and unregulated investment companies investing in municipal issues. As the American Municipal Association, of which Schenectady is a member, has pointed out, this legislation will greatly assist the marketing of municipal bonds and therefore will play a great part in making it easier for cities like Schenectady to meet the urgent needs of revenue in the future. I hope the committee will give the matter favorable attention. Sincerely yours, SAMUEL S. STRATTON. CITY OF COLUMBUS, OHIO, Hon. WILBUR D. MILLS, Chairman Ways and Means Committee House of Representatives, Washington, D. C. DEAR MR. MILLS: This is to notify you of my hearty endorsement of legislation (H. R. 8702) designed to broaden the market for State and local bonds. If approved, this legislation would reduce the interest rates on municipal bonds by broadening the market for such bonds. The city of Columbus is currently engaged in a recordbreaking capital-improvement program, the cost of which over the next 5 years is expected to total slightly under $200 million. The bulk of this cost must be financed with bonds. It is, therefore, to our distinct advantage that this legislation be approved. I cannot emphasize too strongly the importance of broadening the bond market so that our capital improvements program may be expedited. As cities continue to grow and private employment and business problems increase, the success of our municipality financed projects must be assured. Yours very truly, M. E. SENSENBRENNER, Mayor. Hon. WILBUR D. MILLS, THE CITY OF ERIE, PA. Chairman Ways and Means Committee House Office Building, Washington, D. C. DEAR MR. MILLS: I have learned that the Curtis Bill, H. R. 8702, which will broaden the market for municipal bonds by permitting regulated and unregulated investment companies to distribute the interest on such bonds to their shareholders, without loss of tax exemption, is up for hearings before the House Ways and Means Committee. My commentary on the bill is good legislation, and should have support. We should encourage passage of this bill. Your serious consideration and comment is important, and can be of controlling effect on this legislation. I trust that you will support favorable action on this bill, and may I extend, in advance, my thanks for your interest and cooperation. With kindest personal regards, I remain ARTHUR J. GARDNER, Mayor of Erie. CITY OF PHILADELPHIA, January 17, 1958. Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR CONGRESSMAN MILLS: I understand that your committee will soon consider H. R. 8702, designed to broaden the market for State and local bonds. The American Municipal Association at its recent convention unanimously passed a resolution in favor of this legislation. The city of Philadelphia strongly supports this bill on the grounds that any broadening of the market for municipal bonds will tend to improve the interest rate on our borrowings. We urge your favorable consideration of this legislation. Sincerely, RICHARDSON DILWORTH, Mayor. CITY OF READING, PA., January 13, 1958. Re H. R. 8702. Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR MR. MILLS: The enactment of H. R. 8702 would be a constructive boon to all municipalities in the country. May I urge, with all the emphasis at my command, prompt and favorable action on this bill by your committee. Respectfully and sincerely, DANIEL F. McDEVITT, Mayor. STATE OF SOUTH CAROLINA, Columbia, January 13, 1958. Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, House Office Building, Washington, D. C. DEAR MR. MILLS: As State treasurer and a member of the National Committee for Municipal Bonds, Inc., I am greatly interested in H. R. 8702. I had hoped to appear in person before your committee, but it will be impossible for me to do so on January 31, when the hearing is scheduled. It is believed that H. R. 8702 will provide real and substantial help to States and their political subdivisions without cost to the Federal Government and will relieve some of the pressure on Washington for Federal aid. Broadening of our market will lower borrowing costs considerably and make available additional funds to the States and subdivisions which are badly needed for improvements. On behalf of the State of South Carolina, I strongly urge that your commit tee act favorably on this bill at this session. Sincerely yours, JEFF B. BATES, State Treasurer. CITY OF NASHVILLE, TENN., Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN: As mayor of one of the principal cities in the United States, and as immediate past president of the American Municipal Association, and as an urban citizen having a keen interest in all things affecting the welfare of our local governments, and particularly the governments of our munipalities, I hereby sincerely urge your committee to give favorable consideration to bill H. R. 8702, which proposed to amend the Internal Revenue Code of 1954 with respect to the income-tax treatment of dividends paid by certain corporations which hold the obligations of States and local governments. There is overwhelming evidence to the effect that the cost of interest on the bonds of municipalities and local governments can be considerably reduced when this bill becomes law. Our municipalities, other local governments, and State governments, are being called upon to carry out various public improvement and welfare programs on their own financial resources. It seems clear to me that if we are expected to make any appreciable progress in this direction, any effort such as this H. R. 8702, which is designed to bring about a broader market for the obligations of municipalities and local governments, should be given every possible consideration by you honorable gentlemen of the Congress of the United States. I, therefore, as a representative of my own city, and in the sincere belief that I speak for the great majority of those charged with governmental responsibilities on the local and municipal level, sincerely urge that the bill, H. R. 8702, be given favorable consideration by your committee. I am sure that the passage of this measure will make possible great savings to the taxpayer of the local governments of the United States, whose burdens are already exceedingly heavy. Sincerely yours, BEN WEST, Mayor. CITY OF MADISON, WIS., January 15, 1958. Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR CONGRESSMAN MILLS: I wish to urge most strongly that you and the members of the Ways and Means Committee of the House of Representatives report out favorably H. R. 8702, which is designated to broaden the market for State and local bond issues. I am confident that adoption of this bill will aid considerably in making a better market for the issuance of municipal bonds. We need this assistance from Congress, and therefore I am petitioning your support for the measure. Sincerely yours, IVAN A. NESTINGEN, Mayor. Hon. WILBUR D. MILLS, COLORADO MUNICIPAL LEAGUE, Chairman, House Ways and Means Committee, House Office Building, Washington, D. C. DEAR CONGRESSMAN MILLS: We understand that the House Ways and Means Committee is now holding hearings on the Curtis bill, H. R. 8702. We wish to express the interest of municipal officials in the State of Colorado in the favorable consideration of this proposal. The executive board of the Colorado Municipal League, representing officials in the 190 Colorado cities and towns, formally endorsed the principles of H. R. 8702 last fall. We wish to advise of the interest of municipal officials of our State in any legislation designed to broaden the investment market for municipal bonds. Favorable action by Congress on H. R. 8702 or similar proposals would assist greatly in the financing of many vitally needed local improvements. Such consideration as you and members of your committee may be able to give to legislation which will broaden the market for municipal bonds will be greatly appreciated. DEAR CHAIRMAN MILLS: The National Association of County Officials which represents nearly 6,000 elected and appointed county officials in 47 States has officially endorsed the principles of tax passthrough as outlined in H. R. 8702. As you know, counties have had a very difficult time in the past year finding a market for their bond issues at fair rates interest. In many cases, needed school and other projects have been postponed or delayed because of the unfavorable investment market. In other cases the urgency of the project has forced counties to proceed with the issue with the result that the cost of their facilities have been greatly increased. This is an added burden placed upon the taxpayers. It has also been pointed out that while the recent relaxations of the tightmoney policy may lower the interest rates, these measures by themselves will not solve the long-range financing needs of counties and other State and local units. All estimates point to greatly increased volumes of local issues in the coming years to meet the ever increasing population with its demands for more and better schools and other facilities. We believe that H. R. 8702 will increase the market for county issues and that the resultant competition will decrease the cost of financing these projects. This is the more remarkable since most of the financial experts indicate that this can be accomplished with little or no loss of revenue to the Treasury since interest from these issues would have been exempt from Federal taxation in any event. We respectfully request that this letter, together with our policy statement 1-9, be included in the record of the committee hearings. Sincerely yours, In order to vastly broaden the market for county and other State and local government bonds, we favor the passage of Federal legislation which would allow investment funds which invest their money in State and local government tax-exempt bonds to pass this Federal tax exemption on to their shareholders. Hon. WILBUR D. MILLS, DEPOSIT GUARANTY BANK & TRUST Co., Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN: I am writing of my strong support for H. R. 8702, which in my opinion, as a former comptroller of the State of Mississippi, will bring much-needed help to the growing South. Areas, such as ours, which are becoming increasingly urbanized have a relatively large volume of bonds to sell. Assistance in selling these new offerings is badly needed. This bill will broaden the market for our bonds by attracting the funds of the investment companies. The incentive is the preservation of the tax exemption when the interest is distributed to the stockholders. This is a broad bill and only a broad bill will give us the help we need. H. R. 8702 will cost the United States Government nothing, or at least very little, since the bonds are tax-free anyway. Moreover, anything that will help the States to better support themselves should be sanctioned by Congress, if only on the ground that it will relieve the Federal budget. Finances are growing worse all the time for the lower levels of Government and this type of legislation is not only cheap aid but very commendable in that it will stiffen local independence of Washington. I urge the approval of this bill by your committee. Respectfully yours, J. W. LATHAM, Vice President. The CHAIRMAN. Our next witness is Mr. Austin J. Tobin. Mr. Tobin, will you please come forward and identify yourself for the record by giving your name, address, and capacity in which you appear. STATEMENT OF AUSTIN J. TOBIN, EXECUTIVE DIRECTOR, PORT OF NEW YORK AUTHORITY, NEW YORK CITY Mr. TOBIN. Mr. Chairman, my name is Austin J. Tobin. I am executive director of the Port of New York Authority. I have a statement which, if the committee will grant me the privilege, I would like to submit and I will attempt to shorten it down as much as possible. The CHAIRMAN. Without objection the statement will be included in the record and you are recognized for 10 minutes, Mr. Tobin. (Mr. Tobin's prepared statement follows:) STATEMENT OF AUSTIN J. TOBIN, EXECUTIVE DIRECTOR OF THE PORT OF NEW YORK AUTHORITY, IN OPPOSITION TO H. R. 8702 I am the executive director of the Port of New York Authority, the joint instrumentality of the States of New York and New Jersey which is responsible for the financing, construction, and operation of public transportation and terminal facilities in the port district of New York and northern New Jersey. Our projects must be self-supporting and are financed by the public sale of revenue bonds which are based upon the pledge of the revenues we receive from the operation of our terminal and transportation facilities. We have no power to tax nor to pledge the credit of the two States. Over the past 30 years we have sold over a billion dollars worth of revenue bonds. Last year we sold 125 million; and this year we will have to market some 150 million, of which the first 40 million were sold just the day before yesterday. I appear here in opposition to H. R. 8702. In expressing that opposition I wish to make a sharp distinction between H. R. 8702, which I oppose, and H. R. 8810, 8811, and 8812 to which I have no opposition. My objection to H. R. 8702 is that it singles out personal holding corporations for special and beneficial treatment for which they have no equitable claim and which will nevertheless result in a heavy loss of Federal revenue. No such loss of Federal revenue is involved in H. R. 8810, 8811, or 8812. Over the past 20 years I have had the privilege of appearing before this committee in support of the continued exemption of the interest on State and municipal bonds. This is unqualifiedly my position here today. In fact, I am here today because I believe it is in the national interest and in the interest of the States and the cities that our State and local securities maintain their position of constitutional immunity from Federal taxation. I had the privilege of submitting the case of the States and cities in support of that immunity not only to this committee but also to the Senate Finance Committee in 1939, 1942, and 1951. I was of counsel in the test cases which went to the Supreme Court of the United States in 1945 and in which the constitutional immunity of our State and municipal bonds was confirmed. Over the period of the past 20 years I have served as secretary and now as chairman of the conference on State defense which, throughout that time, has coordinated the efforts of State and municipal officers in defense of that basic immunity. |