decrease the school estimates to approximately seven millions of dollars.

They have included, however, proposed increases in the salaries of practically all of the statutory employees. This the commissioners believe to be one of the most important features of their estimates. It is true that all of the employees of the District government, except those receiving in excess of $2,740, have had the benefit of the bonus during the past year, but this bonus is not at all commensurate with the increased cost of living and does not apply to heads of departments who are receiving to-day the same salary that they received prior to the war. In recommending increases, the commissioners believe that they have been very conservative, for in most cases the increases are substantially less than those recommended by the Reclassification Commission. They have asked for few new positions in the belief that if the salaries of the present force are increased, the efficiency of the organization would be so improved that the need for additional personnel would, to a certain extent, be obviated. Some few additional employees are asked for where the needs seem to be urgent; but as between increased salaries and increased personnel, the commissioners are strongly of the opinion that an increase of salary of the present force is of primary importance.

Mr. DAVIS. Did I understand from your general statement that you had reduced the estimate for schools to $7,000,000, or had reduced it $7,000,000?

Mr. HENDRICK. We reduced it from $10,000,000, which the board of education requested, to $7,000,000, and the $10,000,000 asked for is twice the amount appropriated for the current year.

Mr. DAVIS. The reason I ask that question is because in your statement submitted with the estimate there occurs the following: "The estimates submitted by the board of education were in excess of $10,000,000. To fit the needs of the schools into a budget covering all District needs and still keep within the authorized limit, made it necessary to decrease the school estimates approximately $7,000,000.” Mr. HENDRICK. No; to decrease it to $7,000,000. Mr. DAVIS. The word "to" is left out.

Mr. HENDRICK. I did not notice that. What we intended to convey there was that it had been decreased from $10,000,000 to $7,000,000. That is a typographical error. The decrease was about $3,000,000.

Mr. DAVIS. Have you any further general statement to make, Mr. Commissioner?

INCREASES IN SALARIES.

Col. KUTZ. May I submit a statement briefly, Mr. Chairman?
Mr. DAVIS. You may.

Col. KUTZ. On the point of increased salaries for employees, the Congress increased the basic salaries of the school-teachers, more than 2,000 in number; they increased the basic salaries of the police, 1,000 of them, and also the basic salaries of the fire department. Mr. DAVIS. That was done by legislation?

Col. KUTZ. Some by legislation, and the school-teachers in the appropriation bill. The aggregate of those three groups is approximately 4,000. Then all the laborers and mechanics have had their

pay adjusted from time to time since 1917 to meet changes in conditions. They aggregate another 1,500, making a total of 5,500, or possibly as many as 6,000, whose pay has been adjusted to meet changed conditions; but outside of that number there are some 1,500 statutory employees whose pay has not been adjusted except through the bonus, and the bonus applies only to those who receive less than $2,740.

Mr. DAVIS. Will you state right in this connection how much of the increase in the estimate is represented directly by increased pay for employees?

Col. KUTZ. My recollection is that it is about $225,000. I will give you that precisely later.

Mr. DAVIS. Does that include both statutory and lump-sum appropriations?

Col. KUTZ. That refers to the specific increases. We have made. no suggestion for increases of salaries in lump-sum appropriations except to the extent of $20,000 in the case of the $100,000 limitation. There we ask for $120,000 in lieu of $100,000 with the expectation that the employees under that limitation would have their per diem compensation increased by approximately 20 per cent; but from threefourths to four-fifths of the statutory employees of the District have had their pay increased. The school-teachers are receiving with those increases the full bonus. The police and fire departments are receiving a bonus of $120, but the remaining 20 per cent of the employees have not had their pay adjusted and we feel that it is highly important to give them increases that are comparable to those granted to the police, the firemen, and the school-teachers. We do not ask for the salaries recommended by the Reclassification Commission because we think that in some cases extreme salaries were suggested, but we do ask that these 1,500 employees receive treatment similar to that accorded the police, firemen, and school-teachers.

Mr. DAVIS. These 1,500 employees are the clerks?

Col. KUTZ. And the engineers, the technical employees, the inspectors, and foremen.

Mr. DAVIS. It does not apply to the day laborers or anything of that kind?

Col. KUTZ. No, sir; it does not apply to the laborers and mechanics at all, but largely to the employees of the District in the District Building, and the technical employees, some in and some outside of the building. But notably in the surveyor's office, the turnover has been such that the efficiency of the office is very materially decreased. We can not hold employees at the salaries that are now authorized. In the case of the District Building itself, we have assistant steam engineers at $1,200 where we have found it extremely difficult to obtain anybody who was licensed, much less obtain a competent assistant steam engineer. The law requires that the man occupying that position shall hold a license as a steam engineer, but for $1,200 he can not be obtained, except the poorest of them, and for some weeks we were without an assistant engineer because we could not get anybody who was licensed.

Mr. DAVIS. Do you think your turnover is going to increase or decrease from now on?

Col. KUTZ. We think it is going to decrease. We believe the crest has been reached or has been passed and we are going to have less difficulty in the future than in the past.

Mr. DAVIS. What do you base that on?

Col. KUTZ. On the number of applicants for employment in the different grades, and that was the reason why we recently refused to grant an increase of compensation to our laborers and mechanics who were asking for the same scale that had been authorized for the navy yard in August of this year.

Mr. DAVIS. Why do you omit them and still ask for increases for the statutory employees?

Col. KUTZ. Their pay is not fixed by Congress, but is adjusted from time to time by the commissioners, and we feel that they have had their pay increased in a manner commensurate with increases granted to the policemen, the firemen, and the school teachers.

Mr. DAVIS. I saw something in the newspapers about that and I will ask you if their pay heretofore has not been fixed along the line. of the laborers in the navy yard here?

Col. KUTZ. For a number of years, the two salary scales ran parallel or very close. They did, in fact, until July 1 of this last year, when the wages of all the employees at the navy yard were increased through legislation which gave the bonus to all employees of the navy yard. Prior to that time, only a few of them had had the bonus. This resulted in an increase of 76 cents a day to a great many of the navy-yard employees. We made a slight adjustment of our wage scales at that time, granting increases of from 32 to 40 cents a day, increases which took effect on the 1st of July. Those increases were not satisfactory to our employees, who were organized as the City Employees Association and they appealed for relief. We declined to reconsider the wage scale at that time, but said that if the Navy Department readjusted wages we would reconsider the matter.

In the latter part of August the navy yard, through the recommendation of a wage board, increased the compensation of employees still more and at the same time gave them a Saturday half holiday without pay, so that their pay was actually increased to a small extent and their hours of labor were shortened. We then took up the problem to see whether we should make a similar adjustment of our wage scale, but decided that it was inadvisable to do so at that time: that it was unfair to our other employees whose wages we could not adjust, and that it was not justified by conditions in the local labor market.

RATE OF TAXATION AND REVENUES.

(See p. 14.)

Mr. DAVIS. Mr. Commissioner, I notice from your statement that we are receiving your estimates on the 60-40 basis.

Mr. HENDRICK. We conceived, as stated there, that it would be inadvisable to presume otherwise, and that we would proceed on that basis.

Mr. DAVIS. Are we proceeding, then, with your approval as to page 2, which contains the taxation proposition? You will remember that we raised your tax rate last year from 15 mills to 20 mills? Mr. HENDRICK. Yes.

Mr. DAVIS. That is now written in the bill and I did not know whether you had any objection to it or not.

Mr. CRAMTON. Will that rate be sufficient to take care of the appropriations you ask for on the 60-40 basis?

1

Mr. HENDRICK. I would rather have Col. Kutz explain that. He can explain it a little more clearly than I can.

Col. KUTZ. No, sir; it will not.

Mr. CRAMTON. What rate would be necessary?

Col. KUTZ. If the total sum asked for by the commissioners and by the Federal departments who also submit estimates chargeable in part to the District fund are made by Congress, aggregating $27,000,000, and the District is to pay 60 per cent of that, it will require an increase in the rate of taxation.

Mr. DAVIS. How much of an increase?

Col. KUTZ. I can not give it to you in rate, but the amount in dollars would be about $3,000,000 in excess of the amount that would be raised under the 60-40 basis and the 20-mill rate.

Mr. DAVIS. What amount will the 20-mill rate raise?

Mr. DONOVAN. At a $2-rate on the estimated assessment of the real and tangible personal property it would produce about $11,175,000.

Col. KUTZ. I think what you had in mind was this, Mr. Chairman: If $27,000,000 was appropriated, 60 per cent of that will be $16,000,000 in round numbers, and the estimated revenues of the District are about $13,500,000 at the present tax rate, which is about $1.95, so there will be a difference of nearly $3,000,000.

Mr. CRAMTON. I do not want to embarrass you, Mr. Commissioner, but I infer that the amount of appropriation which you estimate for is not as large as you would like to have made it by reason of the law which restricts the sum total of your estimates; that is correct, is it not?

Col. KUTZ. Yes, sir.

Mr. CRAMTON. In other words, you have been obliged in this bill to request not everything that you think desirable for the District, or even perhaps necessary, but request that which you think is most necessary for the District.

Col. KUTZ. Yes, sir.

Mr. CRAMTON. Then the question I want to ask, and which you will not need to answer if it is in any way embarrassing, is whether you feel it better for the District, in your judgment, that the rate of taxation be increased to make it possible to pass such a bill or that your estimates you have asked for be reduced to come within the $2 rate.

Col. KUTZ. We feel that some of the items included in our estimates, as well as some of the items which were presented to us and not included in the estimates, are items that ought not to be paid for wholly by the present generation but ought to be spread over a term of years. We are called upon now to make very large expenditures on behalf of the schools, due in part to work that was deferred during the last three years and in part to a large increase in population. There should be large sums spent for the schools, but we do not believe that the taxpayers of to-day ought to pay that entire cost this year or the next year. It ought to be spread over a period of 10 or 15 or 20 years, and we suggest that that same reasoning would apply to large expenditures in behalf of the parks or playgrounds. We are confronted with some pressing needs now, and to answer your question specifically, I believe it would be better to increase the tax rate rather

than not supply those needs, yet I feel that that would be rather unfair.

Mr. CRAMTON. Do I understand that you would recommend or urge authority to bond for school buildings and so forth?

Col. KUTZ. Yes, sir; or what is similar to a bond issue, the advancement of funds by the United States on which the District would pay

interest.

Mr. CRAMTON. Most of those needs that you refer to are caused, are they not, by the rapid growth of the city?

Col. KUTZ. By the rapid growth of the city proper and by the fact we must rovide school facilities for a great many children whose parents live in the adjoining counties of Maryland, and the porulation of those communities has largely increased as well as within the District.

Mr. CRAMTON. Very largely your school proposition is based on large areas in the city being recently built up and developed. Col. KUTZ. Yes, sir.

Mr. CRAMTON. And you anticipate that the growth will continue although, perhars, not as rapidly as in the last two or three years. Col. KUTZ. I believe a large part of the growth is permanent and that we will continue to grow.

Mr. CRAMTON. And the policy that you suggest would then be practically a permanent policy, and future needs would have to be taken care of in the same way, or otherwise that generation would have to take care of their own troubles and the troubles of this generation as well. It would be a permanent policy which you recommend.

Col. KUTZ. Yes, sir; but it is not a new policy. The District has been financed in that manner several times in the past. We have a debt now that will be extinguished in the course of a few years, a debt on which we are ma' ing an annual payment for interest and sin ing fund of $975,000. That debt will be wiped out in 1923. Mr. CRAMTON. That comes down from a rather unpleasant past, does it not?

Col. KUTZ. Well, I am not familiar with the entire history of the past, but it is the only debt that the District has; and in another case, there was something like $4,000,000 advanced to the District on which the District raid interest, and that fund has already been repaid. The commissioners have no special reason for favoring a bond issue as against a direct loan. They feel that that is a matter for Congress to determine, but they do feel that the present situation calls for large expenditures which should not be borne entirely by the taxpayers of to-day.

Mr. CRAMTON. Of course, the problem for the committee, as a practical question, whatever may be our view as to the suggestion you make for a new policy, is that it is quite likely that with our present condition of Federal finances the Congress would not indulge that, so that the practical question before us in handling your bill must be whether to cut down radically your requests or to increase the tax rate.

Col. KUTZ. Of course, if we assume that the fiscal relations of the past were equitable, then the District has contributed in years past more than its proportion of the cost of maintaining the District, and