all told. There is practically little professional skiing. It is practically all amateur. Due to the spectacular show made in the movies, it has a great deal of publicity, but actually the skiing is done by amateurs and not by professionals. (Data submitted by Mr. Morton follow :) Mr. CLARENCE MORTON, South Paris, Maine. DARTMOUTH SKIS, INC., Hanover, N. H., August 1, 1953. DEAR MR. MORTON: Unfortunately I cannot be in Washington on August 4 at your meeting of the Ways and Means Committee of the House of Representatives. Will you be good enough to present the following facts for me. Over 75 percent of the ski equipment sold in this country is for children, high school, and college students. We have been the prime factor in promoting skiing for these particular groups. We have promoted skiing as an outdoor health promotion. The growth of the sport in the last 15 or 20 years shows that we are absolutely correct in our plan. Parents in America appreciate the fact that if we can keep our children outdoors and exercising there will be less family colds, better appetites, and better sleep. Ski equipment, like everything else in the past 10 years, has become more expensive. Since the 15 percent excise tax was added onto all equipment there has been a tremendous falling off of all sales in the children's and youths' field. Fifteen percent does not mean much when you think in terms of $30 skis, but when you are trying to equip children with an $8.50 outfit or a high-school boy with a $16 or $18 outfit, the 15 percent is prohibitive and will prevent the sale of replacement equipment or new equipment. Further, to leave the 15 percent tax on ski equipment and to take it off baseball, football, and skates is, in my opinion, a definite discrimination against the children who ski. The tax should be removed. If I can be of further help in any way, do not hesitate to call on me. JOHN M. PRANE. NORTHLAND SKI MANUFACTURING CO., Mr. CLARENCE MORTON, Parts Manufacturing Co., South Paris, Maine. DEAR MR. MORTON: With regard to the discussions the ski manufacturers have had on the effect of excise tax on sales, we wish to confirm our views. Our volume of sales is only 25 percent of what it was a few years ago. We know that the entire industry is in a depression and we believe our experience and lack of volume is shared by all of the industry. Most of our production in skis and ski poles is and has always been for children. The junior skis have had the sharpest sales decline. We believe the interest in skiing is as great as ever, but that most of the people cannot afford to buy expensive ski equipment for their children. Sales of ski equipment can again be increased to normal volume if prices can be reduced by means of the removal or substantial reduction of the war emergency excise taxes. Strong efforts should be made to remove this tax. It is, unquestionably, crippling the ski industry. Excise tax has been removed from most other equipment for children and we feel that the tax authorities have failed to give due consideration to the tax on skis and ski poles. It should be stressed that skiing is a beneficial health-building outdoor sport. Skiing for children should be encouraged and promoted by the Federal Government as it is in other countries, and to some extent by State and municipal governments in this country. Removal of the excise tax is a necessary first step. Yours very truly NORTHLAND SKI MANUFACTURING CO.,. SKIS AND SKI POLES REASONS FOR EXEMPTION OF 15 PERCENT EXCISE TAX The American ski manufacturers and the entire ski industry are greatly concerned over the fact that skis and ski poles are subject to a 15 percent excise tax while baseball, football, hockey, boxing, wrestling equipment, and skates are exempt from such a tax. Obviously, this is very unfair to discriminate against ski manufacturers who are all small business concerns, who not only have to continually face the disastrous effect of mild winters and diminishing snowfall, but experience ruinous competition from European manufacturers employing cheap labor. The yield to the Government from this tax is small compared with what it would receive from a tax on some of the above-mentioned equipment that is exempt. Also, we believe skiing is more free from professionalism than the other activities. The ski industry is in a serious financial condition as the 15 percent tax is pricing their product beyond the reach of the beginner skiers, who are the American boys and girls in grade and high schools who use the majority of the skis and poles and are penalized seriously by this tax. No sport furnishes more health-building exercise than skiing, and it comes in the winter season when the American youth can best profit by invigorating outdoor exercise. The Army bas spent large sums of money to teach many of its soldiers, who never had an opportunity to learn to ski when they were young, to become ski troops. It seems practical to allow a larger proportion of American youths to become proficient themselves by eliminating this tax, and thereby making the equipment more readily available to those of limited means. As an illustration of the small tax yield to the Government as compared to the consumers cost, we submit the following example: We trust that your committee will see the justice of our claim and will exempt skis and ski poles from this ruinous tax. AMERICAN SKI MANUFACTURERS ASSOCIATION. Committee. The CHAIRMAN. Without objection, a letter from the Honorable Winston L. Prouty, of Vermont, will be inserted in the record at this point. (The letter referred to follows :) CONGRESS OF THE UNITED STATES, HOUSE OF REPRESENTATIVES, Washington, D. C., June 22, 1953. Hon. DANIEL A. REED, Chairman, House Ways and Means Committee, MY DEAR COLLEAGUE: Under the provisions of section 3406 of the Internal Revenue Code, snowshoes are classified as sporting goods and are subject to a 15 percent manufacturers' tax. Years ago snowshoes were used to a great extent for sporting purposes but today about 95 percent of all the snowshoes manufactured in this country are sold to individuals or organizations for use in their civilian or military work. I am enclosing copies of more than 30 letters from snowshoe retailers across the Nation which confirm this point of view. For example, Snowcraft, Inc., of Norway, Maine, is presently making 17,000 pairs of snowshoes for use by our Armed Forces on which there must be paid the "sporting goods" excise tax. A survey reveals that the principal users of snowshoes are the people in the logging and timber business, conservation and reforestration workers, fish and wildlife men, telephone linemen, the United States Engineer Corps, trappers and miners. By no stretch of the imagination could it be deduced that the purchases of snowshoes by these important occupational groups were for anything which resembled athletic activity. I am advised that the annual gross sales of all manufacturers in the snowshoe industry are very small. Thus it is apparent that the net revenue derived by the Federal Government from the taxing of snowshoes is negligible. Yet to the small-business man engaged in the manufacturing of this product the tax amounts to a burden causing great inconvenience. Some of the items in addition to snowshoes classified as sporting goods for excise-tax purposes are as follows: croquet balls and mallets, polo equipment, billiard and pool tables, badminton equipment, table-tennis equipment, decktennis equipment. No reasonable man can deny that all these items included under the heading of sporting goods, with the exception of snowshoes, are used either primarily or exclusively for recreational games. In the past the Ways and Means Committee has worked diligently to remove inequities in the excise-tax field and, for the above reasons, I respectiully request the committee to give serious consideration to the repeal of the excise tax on snowshoes. I shall be glad to submit a more detailed statement or appear before the Ways and Means Committee should you desire me to do so. Sincerely yours, WINSTON L. PROUTY, Member of Congress. ADMISSIONS TAX The CHAIRMAN. Now we are beginning with the admission-tax witnesses, and I move that the statement of Hon. Laurie C. Battle and Hon. A. S. Herlong, Jr., be incorporated in the record at this point in lieu of personal appearance. There being no objection, it is so ordered. (Statements referred to follow :) TESTIMONY OF HON. LAURIE C. BATTLE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ALABAMA Mr. Chairman, we are all aware of the burden that our people have been carrying for the past 10 years as a result of the wartime excise taxes on so many products and services. These taxes are probably felt more often than any other by the average consumer as they are on practically every item or service necessary in our daily living purchased. I realize this committee has the grave responsibility of providing ways to obtain the needed revenue for the operation of our Federal Government, but I do believe that careful attention should be given to the question of whether we have already reached the point of diminishing returns on some of these taxes. Many small businesses are being forced to close their doors as they cannot meet the competition of big business and the heavy tax load. The small businesses are the backbone of our free-enterprise system and our economy is healthy and prosperous only so long as we encourage this use of individual initiative. Mr. J. H. Dickson, owner of the Cascade Plunge swimming pool in Birmingham, Ala., is appearing before this committee today to outline the serious hardships facing swimming-pool operators. As you know, there are municipally owned pools in most cities that enjoy exemption of the admission tax and this places privately owned pools in an almost impossible competitive situation. I would appreciate your carefully considering the facts which he presents to you that are typical of the majority of the swimming-pool operators. 1 Letters on file in Committee on Ways and Means office. I recently received a communication from Mr. Brooks Whitton, the owner of a bowling alley in Birmingham, Ala., concerning the effect of the excise tax on this industry. He enclosed a copy of a letter written to this committee which I believe tells the story of the plight of a small businessman far better than I could express it. I would appreciate this letter being included in the record of these hearings for consideration. “GENTLEMEN: I have noted in the papers that your comittee are considering the elimination of taxes on theaters, that was imposed during World War II. "I respectfully call your attention to the tax that was put on bowling alleys at the same time, which was changed from a percentage to a flat $10 per alley, then during the war they put an additional $10 per alley which made a total of $20. Now that does not mean that is $20 for a bowling alley, that means that is $20 for each bowling lane, say an establishment like mine of 24 alleys there is a tax of $480 and we are blessed with more than that in city and State and county tax, which means that we are just about taxed out of business. "This tax is due this month and if I pay them I will have to borrow the money, and this is the first time that I have had to do a thing of this kind in my entire business career of 23 years. I bought this bowling alley out in 1947 after leasing a building that I formerly had to the Federal Government for their occupancy, and I have worked every day and Sunday, too, from 8:30 in the morning to 11:30 p. m. or whatever time we closed-me and my wife both-and I have yet to draw the first penny in salary during these 5 years. There has been no salary for me, and I paid cash for it too, when same was purchased. So I don't think that the Government needs any such heavy tax from an industry that is sick as this one is. "There were 7 other bowling alleys in this county at the time of my purchase of this establishment that have now closed their doors; 3 closed last year, and I have found business worse since they have closed. There is so much other entertainment-TV, night baseball, night football, and everybody now has auto mobiles. "I have consistently lost money for every day that I have operated since the month of April, and same will continue until the 1st of September which we might break even, and that is with me and my wife working day and night without getting 1 lonely dime. She does draw a $25-a-week salary for keeping the book the months that we make that much. "Now, gentlemen, I don't think any sane man would tax an industry to the extent that the bowling alleys are taxed presently, if they knew the facts, and this is the reason that I have undertaken to do this. I think some of the larger cities that have bars fare a little better, and where the winter season is longer. But they quit bowling here in March, and Mr. President could not get them back until it gets cold. "I cannot even afford to have some letterheads printed, you will note from this stationery. So please include the relief of the destitute bowling alleys in this bill. I am "Respectfully, BROOKS C. WHITTON, "Owner of Downtown Bowling Center." Mr. Chairman, it is my hope that this committee can report a bill which will provide a sound structure for obtaining necessary revenue without penalizing initiative and which will relieve our people of the wartime excise taxes. CONGRESS OF THE UNITED STATES, HOUSE OF REPRESENTATIVES, Washington, D. C., July 13, 1953. Hon. DANIEL A. REED, Chairman, Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN: Now that your committee has reported out the bill to repeal the admissions tax on theaters, I would like to call attention to my bill for similar relief for minor-league baseball, H. R. 5105. I am enclosing herewith a study of the financial picture of the minor-league clubs which shows that during the year 1952 it cost each minor-league team $0.2492 for each person who passed through the turnstile into the ball park. It is interesting to note that $0.173 of that amount was Federal admission tax. Minorleague baseball clubs lost over $4 million last year and paid in a total of over $12 million in Federal admissions taxes. The total number of clubs has dropped off some 30 percent, which is a considerably higher percentage of loss than the theater industry has lost. Please do not misunderstand me. I am for the theater tax-exemption bill; but I believe if anyone in the world can make a good case for exemption it is baseball. It is not a private enterprise but one in which the entire community engages. This continued high admission tax can only result in destroying minor-league baseball a great American institution. I will appreciate being heard on this at your earliest convenience. Most sincerely, A. S. HERLONG, Jr. SOME FACTS AND FIGURES ABOUT THE MINOR LEAGUES, PREPARED BY THE NATIONAL THE NATIONAL ASSOCIATION OF PROFESSIONAL BASEBALL LEAGUES, To Major and Minor League Club and League Officials. GENTLEMEN: As you all know, much has been said and written during the past few years about the trials and tribulations of professional baseball, particularly the minor leagues. The three studies appended to this letter are submitted to you as evidence that conditions at present are such as to warrant the attention of all of us. Most of what has been said and written has had to do with the effects of existing radio and television policies upon baseball-and, again, particularly upon the minor leagues. The attitude of this office on this subject surely should be well known to all by this time, but, on the chance that a few of you might not be familiar with it, I am going to restate it below. We believe that radio and television can make tremendous contributions to the game if a reasonable measure of control is exercised over them. We do not believe that the interests of the many should be jeopardized by unreasonable utilization of these agencies by one or by a few. We believe, therefore, that radio and television broadcasting should be confined to stations within the home territory of the home club, with the visiting club being permitted to authorize the airing of the game from its home territory, provided this would not conflict directly with the playing of a home game by any other club which might also be located in the visiting club's home territory. We believe, further, that there exists today the opportunity of tapping an unexplored field that can take baseball to the four corners of the world and still not be harmful to any individual club's interests. A word or two on the three attached studies: Study one: So much speculation has been going on as to the effect of radio and television that this office undertook to gather evidence with a view to establishing definitely whether or not we are experiencing a decline in attendance this year. Twenty-five of our thirty-eight leagues responded to our request, and a tabulation of their reports is set forth in this study. Study two: As further evidence of the condition in which some minor-league clubs find themselves, I am including a "Financial picture of minor-league clubs. in 1951 and 1952." This presentation was prepared for use in connection with our attempt to obtain Federal admission-tax relief, which now appears impossible for 1953. The chart is self-explanatory and, I believe, startlingly informatory. For example, column 18 indicates that only 1 classification, namely AA, was able to bring patrons through the turnstiles at a per capita profit, on average, and that even this showing was confined to a single year. In all other instances, the clubs put patrons into their parks at a substantial net per capita loss, on average. You will also note by comparing column 18 with column 19 that the average loss per capita is equal, almost exactly, to the average per capita Federal admission tax. If baseball is a business and not a sport, as some contend, surely that fact is not reflected by such a financial picture. Study three: Last April I requested our clubs to send us a report on the major and minor-league radio and television programs coming into their territory, as well as on the use, if any, the reporting club was making of these mediums for its own games. The result of that inquiry is contained herein. Much time and effort has been devoted toward gathering the data mentioned above and contained herein for use in connection with the radio and television legislation now being considered by the Congress of the United States. We hope that you will give this information the study it deserves and would be glad to hear from all of you as to what you think of any phase of the studies. Very truly yours, G. M. TRAUTMAN, President. 37746-53-pt. 4——20 |