Evening star., 1937-01-26
FISCAL PLAN STUDY
|BY SUBCOMMITTEE
|STARTS THURSDAY
Jacobs Three-Point Formula
to Be Taken Up by
House Group.
CONSIDERATION DELAYED
ON STATUTORY CHANGES
Nichols Does Not Believe Basis for
U. S. Share as Urged in
Report Is Proper.
BY JAMES E. CHINN.

Actual study of the Jacobs three
point plan for solving the fiscal rela-
tions controversy between the Federal
and District governments will be start
ed Thursday by one of the two special
subcommittee of the House District
Committee selected for that purpose.
Representative Kennedy, Democrat,
OF Maryland, chairman of the sub
committee that will consider proposals
in the Jacobs report for raising addi-
tional revenue to offset part of an
anticipated $10,000,000 deficit In the
coming fiscal year If the plan is ap-
proved by Congress, has called a meet
ing Of his group Thursday to map out
program Of procedure for its part
of the study.
Nichols Plans Uncertain.
No definite plans have been made
by the other subcommittee, headed by
Representative Nichols, Democrat, Of
Oklahoma. His group will handle the
19 proposed statutory changes in the
Jacobs report.
Nichols, however, in advance Of the
study, indicated he does not believe
the complicated three-point formula
proposed by Jacobs is the proper basis
for attempting to solve the fiscal rela-
tions problem. He thinks the simplest
method would be to tax the United
States as an ordinary taxpayer for the
assessed value Of the property it owns
in the District, which has been with
drawn from the tax rolls.
Il have not studied the report" said
Nichols. "It's thick, bulky docu-
ment. But from what I have read
in the newspapers and from the dis
cussions have heard, am confident
there is simpler method of solving
this fiscal relations controversy, that
will be fair and equitable both to the
District and the United States. 1t
seems to me that method would be
to tax the United States on the prop
erty 1t has withdrawn from the tax
rolls, and not have it pay anything
else toward the support and mainte-
nance Of the District"
U. S. Property Value $64s,7s1, 900.
The aggregate valuation Of Federal
owned property, as reported by Tax
Assessor Fred Allen in 1886. was $685.
791, 900, comprising $342, ,161 900 for
land and S306, 900 for improve.
ments. On the basis Of Nichols pro-
posal the Federal Government would
have been required to pay the District
in taxes in 1886, under the prevailing
s1.50 tax rate, a total Of more than
$4,000, 900.
The attention of Nichols was called
to a statement in the Jacobs report
pointing out that under Supreme
Court decisions of long standing, "in-
strumentalities of the Federal Gov
ernment may not be taxed by any
State or other political subdivision
without express consent by Congress.
Such consent has been given in the
case Of real estate owned by various
Federal credit agencies"
That's all right" declared Nichols.
There isn't anything to prevent Con-
gress from authorizing the District to
tax Federal-owned property"
Kennedy said he plans to start pub
lie hearings next week, and Nichols
indicated his subcommittee probably
would be prepared to proceed about
the same time.
Jacobs First Witness.
J. L. Jacobs, Chicago efficiency en-
gineer and tax expert who directed
the fiscal relations study, is expected
to be the first witness called before
Kennedy's subcommittee. Kennedy
also plans to summon members Of
Jacobs Advisory Committee as well as
certain members Of his research staff.
The Advisory Committee was COM
posed of George McAneny, chairman,
who Is president of the Title Guaranty
& Trust Co. of New York City; Clar-
ence A. Dykstra, city manager Of
Cincinnati, and James w. Martin,
chairman Of the Kentucky State Tax
Commission. Members of Jacobs re-
search staff included George C.
Chesney, Edward P. Cole, Paul A. Gill
crest, Millard Klein. I. M. Labovitz,
Stephen M. Loebel, Herman G. Loef-
fer, Chester B. Pond, Rollin 3. Posey,
John s. Rae, Cuthbert e. Reeves, Her
bert D. Simpson, H. o. Walter and
John F. Wilmott.