Detroit evening times. (Detroit, Mich) 1921-1958, 1941-05-30

because of provisions which some
members say would make il pos
sible for the RFC 10 finance
projects like the st. Lawrence
Waterway or the Florida ship
canal without additional legisla-
tion by Congress.
poNDERo LEADS FIGHT
While Pennsylvania members
took pot shots At the proposed
broadening Of authority, Dondert
and Michigan colleagues pointed
out that many municipalities ir
the state would be required under
it's provisions 10 provide fire, police
and other municipal services with
out being able 10 tax properties
financed with government funds
Some time ago." Dondero
said. eve passed q law making
the income on all future issues
OF government obligations SUBJ
Jet to taxation. II this bill he
comes a law we are going
counter 10 the established policy
Of the government, hut exempt
Ing the obligation Of an agency
OF the government from taxation.
This federal gtft horse needs
a little mouth inspection. II will
place Q burden on local COM
munities that have these housing
projects and other properties
requiring municipal services
which VIII he more than they
can bear. II will strain the gov
eminent services If the little
towns. the counties, tho villages
and the school districts In every
state In the country
LETTER FROM GOVERNOR
In his letter IN Dondero. Cover
nor Van Wagner said:
81 am writing you principally
In behalf ~ the local govern
ments In this state-the counties,
townships, schools, cities, and
villsges--which depend largely
on the taxation OF real and per-
sonal property for the mainten-
ance OF essential government
services.
81 realize that this legislation
IS. 1882 does not contemplate
exempting the RFC from real
taNation but local governments
will find small comfort In this
omission.
Already established 10 the
practice Of constructing build
ings to house defense production
machinery and other equipment
on leased land. Under Michigan
Law all these, with the exception
~ the hare land itself. must he
assessed a. personal property.
and personal property held ny
the RFC Ia exempt under the
hill.
ITO date, less than I per cent
Of all loans OF the RFC and its
subsidiaries made for defense
production facilities has been
used for the purchase Of land.
DECREASE TAX BASE
"The removal Of RFC- aided
defense industries from the tax
rolls OF the state will greatly
decrease the tax base OF the
local governments where those
industries are located. The rate
Of TAXATION on commercial and
residential property In these
communities will increase In
direct ratio to the amount Of
RFC aid the defense industries
are receiving.
This IL only one burden 10
he placed on thc local corn
munities by this legislation. II
IL already obvious that defense
industries are putting great
strain on many communities by
their demand and need for those
services which are the funda-
mental functions Of local gov
eminent extension Of water and
sewer mains, police and Are pro-
lection. public health. additional
school facilities, increased hous-
ing and recreational facilities.
q. 1888 would not only reduce
the tax base which provides the
normal demand for these serv-
ices, but require this smaller
base 10 pay for the extended
services essential TO defense In
dustries themselves, and for
which they should pay their
proportionate share"
Governor Van Wagner urged as
an alternative 10 defeat Of the
measure. an amendment removing
the present tax exemption Of
properties Of the RFC mortgage
company. defense plant corpora
ton, defense supplies corporation,
metals reserve company, rubber
reserve company. defense homes
corporation. disaster loan corpora
ton and other RFC subsidiaries.