The CHAIRMAN. Are there any questions by the committee? We thank you very much, Mr. Brady.

Mr. Kefauver, do you have any other witnesses that you want to call this evening?

Mr. KEFAUVER. Mr. Camp, mayor of Sparta, said he had some statements about the Sparta schools. I do not know whether you want to hear two representatives from one county.

The CHAIRMAN. Oh, yes; if he wishes to make a statement, we will be glad to hear him. Is Sparta the county seat?

STATEMENT OF J. W. CAMP, MAYOR OF SPARTA, TENN.

Mr. CAMP. Sparta is the county seat of White County. The thing that I want to suggest to your committee is this: Under the law as it exists in Tennessee, the city Sparta as a school district is required to levy a 30-cent tax based on the 1935 levy, on the levy as it was made in 1935, for the support of our school district, which we have done and have set up our budget on that basis. The total amount is about $23,000. Out of that the county pays from their levy about $12,000— this is an indirect proposition, but out of that the county pays about $12,000. If the county does not receive this tax loss that they are anticipating, the citizens do not get their money back and our city schools or our special school district must raise the levy and make an additional levy to take care of our city schools.

We have about 500 children in school and about 110 teachers, and it has been operating in that way for a good many years. I just wanted to make that statement so you could have it for your consideration.

Mr. SMITH of Connecticut. As I understand it, the county repays the city school district part of the money which is raised by the school district by taxation?

Mr. CAMP. It is required, as I understand it, under the act that we make a 30-cent levy and collect that, and the county pays the entire balance.

Mr. SMITH of Connecticut. Is the county required by law to pay it? Mr. CAMP. Yes, they are required by law to pay, as I understand it, the remainder of whatever it takes to run the schools.

Mr. COSTELLO. What properties were taken over by the T. V. A. in the city of Sparta?

Mr. CAMP. There was a transmission line and the city lighting system.

Mr. COSTELLO. Only a small percentage of the actual assessed valuation of the city?

Mr. CAMP. Of the assessed valuation, it was about one-tenth of what they owned in the entire county.

Mr. COSTELLO. I mean, so far as the city's assessed valuation is concerned, only about 2 percent of the total assessed valuation of the city is represented by the property taken over by the T. V. A.? That was only about 2 percent of the total assessed valuation of the property in the city?

Mr. CAMP. That is correct.

Mr. COSTELLO. So that the city's tax loss would not be as great as it is in the county? The real loss is in the county rather than in the city.

Mr. CAMP. What the city is worrying about is if the county cannot make up their part we have got to make an assessment to take care of our schools. It is a very difficult proposition.

Mr. COSTELLO. The county takes care of the schools within the city there?

Mr. CAMP. If we make our 30-cent levy and collect it, then the county takes care of the remainder.

Mr. SPARKMAN. In other words, the city of Sparta is a separate school district?

Mr. CAMP. That is right.

Mr. SPARKMAN. And is required under the law to levy the full 31 mills before the county will, and if you levy that 3 mills the county is obligated to match it?

Mr. CAMP. The county takes care of the entire remainder.

Mr. SPARKMAN. Now, I wonder if that 3 mills tax is a State-wide tax?

Mr. CAMP. No, sir; that is a school tax.

Mr. SPARKMAN. I mean, do all of the school districts all over the State have that same privilege?

Mr. CAMP. Yes, sir.

Mr. SPARKMAN. And that is a tax that is levied by the school district?

Mr. CAMP. That is the elementary-school tax. That applies to every place in the State.

Mr. COSTELLO. I think that answers the question you asked awhile ago about the subordinate unit collecting the tax. The county collects the tax, but it is actually levied by the district? 1):

Mr. CAMP. Yes.

Mr. SMITH. But payment to the counties themselves would take care of the revenue loss so far as the school district is concerned, or would there be some additional loss to the school district if the school districts were not paid? If there is a tax replacement, if it is paid only to the county, will there still be some taxing districts which are losing, revenues from failure to collect on property that they used to have revenue from? 2 ba

Mr. CAMP. I think not.

Mr. ELSTON. Did you say there were 110 teachers in the county? Mr. CAMP. Yes, sir.

1

Mr. ELSTON. And how many pupils?.

1

Mr. CAMP. About 450 in the city schools. That is in the elementary schools; and then there are about 19 rural schools in addition to that that have from 1 to 3 teachers.

་་

The CHAIRMAN. Thank you very much, Mr. Mayor. I think that is all the gentlemen who are here this evening-and the committee, I suppose, would like to adjourn until next Tuesday, the regular meeting day. Mr. Kefauver, I believe you want to withhold your statement until Tuesday?

Mr. KEFAUVER. Mr. Chairman, I have had a number of letters and telegrams from others interested-other counties in Tennessee-saying that they would like to come up if they could do any good or if you would like to hear them, and I did not know whether the committee wanted to have other county representatives or what are your wishes about the matter. I would like to have you tell me so I can let them know.

The CHAIRMAN. Well, I can state what the views of the chairman are. Possibly members of the committee present may have other views; and, if so, they can express them freely.

I think most of the testimony we have already had has been largely cumulative and repetitious. As I have said from the beginning, I thought the problem was first to establish the fact that there was a need for the revenue, and then it would be the task of the committee to figure out whether to give it or not; and, if they did, how they would provide for it. That is the reason I ordered that all of the bills under consideration and relating to this subject be taken and considered together, so that the committee would have plenty of latitude in determining just how they would view the thing; and it is my view of the matter that we should not bring anybody else up here from Tennessee at expense for something that is unnecessary unless other members of the committee feel that they would like to have them, or if you feel that you would like for them to come.

Mr. KEFAUVER. They take this position, Mr. Chairman, that they do not want to leave any stone unturned to present their cause, or fail to give any information that this committee wants. Of course, I can see that the information applicable to other counties is about the same as has been presented here today, only the figures are different, and the burden is the same, to a lesser or greater degree in some cases. But the situation is pretty much the same in quite a number of other counties. I had one witness from Bradley County that I think has already started up here, but the others do not need to come unless the committee wants them.

The CHAIRMAN. We will be very glad to hear him. The gentleman can be here next week, can he?

Mr. KEFAUVER. Yes, sir.

The CHAIRMAN. I did not want to ask the committee to sit on Saturday, since we have had 5 days of hearings this week; and if there is no objection, I am going to adjourn the committee to the regular meeting day on Tuesday, for consideration of any matters that may come before the committee relating to national defense and other matters within its jurisdiction, and then on Wednesday we can hear your witness and anybody else that happens to be here that wants to be

heard.

On Thursday I have agreed to hear Mr. Lilienthal in pursuance to the request of some of the members of the committee; and, of course, that means that we will be in session Tuesday, Wednesday, and Thursday, and I do not know whether we will complete the hearings or not. It may be that we will leave them open for the next week following that in order to give Members of Congress an opportunity to be heard. Any time that suits the gentleman's convenience we will be glad to hear him.

Mr. KEFAUVER. Thank you, Mr. Chairman; and on behalf of my constituents who have come here representing their counties, I want to thank the committee for the courtesy and the sympathetic hearing you have given them.

The CHAIRMAN. I want to thank you, Mr. Kefauver, for your cooperation. If there is no further business, the committee will stand adjourned until next Tuesday morning at 10:30.

(Whereupon, at 4 p. m., the committee adjourned until 10:30 a. m Tuesday, February 6, 1940.)

TO AMEND THE TENNESSEE VALLEY AUTHORITY

ACT OF 1933

WEDNESDAY, FEBRUARY 7, 1940

HOUSE OF REPRESENTATIVES, COMMITTEE ON MILITARY AFFAIRS, Washington, D. C.

The committee met at 10:30 a. m., Hon. Andrew J. May, chairman, presiding.

The CHAIRMAN. The committee will please be in order, and we will proceed with the hearings on the Norris-Sparkman tax proposal.

The Chair would like to state for the benefit of those present that this is the day when Mr. Lilienthal was to appear for questioning by some members of the committee who were interested in the matter. I believe the member of the committee who made the request is not present at this time, but Mr. Lilienthal is present, so the committee member will be in later, I assume. That gives me an opportunity to ask the indulgence of Mr. Lilienthal until I call some of the gentlemen who represent the County Judges Association of the State of Tennessee. They have agreed to be rather brief in their statements and to the point, and in order that we may expedite matters, having no permission of the House to sit during the sessions, I would like to conclude the hearings at 12 o'clock and go over and secure permission if we have to sit this afternoon. But I do not want to be in session tomorrow.

I would like to call first Mr. J. B. Templeton, county judge of Franklin County, Tenn.

Judge Templeton, would you give us a brief statement now about what you care to say on this question of tax replacement in the State. of Tennessee?

STATEMENT OF HON. J. B. TEMPLETON, COUNTY JUDGE,

FRANKLIN COUNTY, TENN.

Mr. TEMPLETON. Mr. Chairman and gentlemen of this committee, I want to say to you in the very beginning that I am not here so much in the interest of Franklin County, Tenn., as I am in the interest of the State of Tennessee, my friends and neighbors, north, south, east, and west, because we are not so vitally affected in Franklin County, perhaps, as some of our friends and neighbors are, and I want to say to you in the very beginning that Franklin County will not repudiate their indebtedness nor will we close our schools in the event that you gentlemen do not accede to our wishes in this tax-replacement matter. We have struggled since the Civil War to take care of eventualities which have confronted us, and we have managed so far to take care

of those things which have confronted us. However, we feel that you gentlemen owe us a certain duty, in view of the fact that you have encouraged us, to a large extent, in some of the expenditures which have been made in our county, as well as the various counties throughout the State of Tennessee.

The press has perhaps criticized us unjustly on our bonded indebtedness, on our expenditures in the past, but I feel that we are justified in supporting those expenditures, in view of the fact that you gentlemen have encouraged us to spend money, in that you have offered us a mere pittance, as it might be, from governmental relief, in that we might incur liabilities on the part of the various counties of the State of Tennessee.

The CHAIRMAN. In other words, Judge, the proposition, brought right down to the crux of the thing, is that you take the position that inasmuch as the Federal Government has encouraged States, counties, and municipalities to involve themselves in public debt by grants and gifts and by the enactment of the Tennessee Valley Authority Act with respect to your community and authorizing it to take over taxable property, we are, in a way, morally bound to give you some kind of relief?'

Mr. TEMPLETON. Mr. Chairman, you are eminently correct. I have a living example of that over in my home county, in that a courthouse in Franklin County has been the dream of my existence for the last 20 years. The Federal Government was good enough to give us $40,000, and we built a $152,000 county building over there, and we are justly proud of it. Had it not been for the Federal grant of $40,000, we perhaps would not have had the advantage of that building.

The CHAIRMAN. What is your county-seat town?

Mr. TEMPLETON. Winchester, Tenn.

The CHAIRMAN. What is the population of the town?

Mr. TEMPLETON. About 4,000. But I say that with reservations and with apologies, for the reason that you can stand on the public square of Winchester and cast a rock outside of the corporate limits of the town of Winchester.

The CHAIRMAN. Does it have a contract with T. V. A. for electricity furnished from the generating plant?

Mr. TEMPLETON. Yes; the city of Winchester took over the distribution of the current within the municipality of Winchester. That is taken care of, Mr. Chairman, in their contract with the T. V. A., whereby they took over the distribution plant within the municipality of Winchester, and they are collecting 122 percent of current bought from T. V. A. and sold to consumers but claim they can't pay same over with State legislation.

The CHAIRMAN. Yes; we understand those contracts. They are set out in the annual report of the T. V. A., but what I had in mind was the possibility of eliciting from you an expression of your views with respect to the power of the State of Tennessee to levy a tax on the consumers of electricity in these municipalities, if they are making a considerable profit, as it seems they are now, and replace these taxes from that source.

Mr. TEMPLETON. The State, in my opinion, could levy a tax equivalent to the 121/2 percent now collected by distribution systems, but no

more.