needs that I referred to on Wednesday, I believe. That has mounted to 1,300 percent in the first 2 months of this year over the corresponding months in 1929. And it is that tremendous increase that makes the problem.

Now, if we turn to the fourth page of that same circular, at the bottom, I want to show that this increase has not been caused by extravagant expenditures of relief funds.

At the very bottom of page 4, in these dry statistical terms, we see for December 1931, November 1932, and December 1932 what the average amount of relief given to the 1,000,000 families on which this is a report has been.

In 1931, which was the period I spoke of Wednesday, when the increase in families was going on at a very much greater rate than the increase in the amount of relief available, the average monthly relief was $18.16. Try and live on it and you will realize what brought about, as I believe, primarily the injection of our Federal resources into this relief problem.

The coming in of Federal relief, however, at the rate of about $50,000,000 a month, which is what the Reconstruction Finance Corporation has been spending, has not made possible any great extravagance.

You see, in November of 1932 we were only $1.30 better off per family, or in November 1932 the rate of relief was $19.92, and in December of 1932, $21.36, and it is being maintained at practically that level. The latest figures which are now available for February of 1933 show $21.31 average amount of relief per family. That is decidedly better than a year ago when it was only $17.47. That is, it dropped off over a dollar in 3 months, going from $18.61 in December to $17.47 in February. And we are practically $4 better off. That is what Federal relief has accomplished.

Mr. Chairman, the spread of that very rapid increase which is due, as you see, not to a doubling of the amount that families got but that families in need multiplied so rapidly that even when the relief was increased, at the rate of 100 percent every year over the preceding year, it has not increased very much the amount per family.

I think that perhaps something I read into the record and that you already have might be interesting, because it does show the very great spread of this relief among the communities of the country. These figures show a comparison between the first 9 months of 1931 and the first 9 months of 1932 and it is these figures to which I referred, Detroit being quite an exception in dropping 25 percent, because of their very drastic rule of people not being eligible unless they had at least two children. The average of these figures is the 101 percent to which I keep referring. At almost any period you take you will find a doubling as compared with the preceding year.

I want to make just one more point, Mr. Chairman. It is these tremendous increases and very rapid increases set over against our rather cumbersome taxation machinery that makes the problem for the States and communities.

I would like to take as an illustration today, not my own present State, but the State where I grew up, Illinois, which has received the largest amount from the Reconstruction Finance Corporation; in round figures $45,000,000, which was the limit of the original legisla tion up till the end of March.

It would be wrong to think that Illinois had just laid down. Illinois, as a State, provided by special legislation some 56 millions of dollars itself of special relief funds; that is, State funds, in addition to whatever the communities themselves may have contributed. But Illinois started a year ago with a $20,000,000 appropriation. It took this form. They have the same difficulties that every State has in balancing their current budget. So they said, "We will make a 20 million bond issue to be voted on in November, but we will issue tax warrants by special legislation against the gasoline tax of the State, so that we can realize money on them immediately." That was last November.

They had to sell those tax warrants to the bankers of Illinois and they nad the greatest difficulty realizing money on them. At the end of June they had sold about $17,000,000, and there were $3,000,000 that they had been unable to sell.

The bankers of Chicago, figuratively at least, took those with pistols held to their heads. Now, I say figuratively, because Congress did the same thing a week ago, when they removed the 15 percent limitation in this Reconstruction Finance Corporation Act. It was because of the Chicago situation, and immediately upon your doing it, the Reconstruction Finance Corporation began appropriating at the rate of $7,000,000 a month, which is what they have been giving to Illinois.

General Dawes and Philip Clark, the president of General Dawes' bank, actually had to tell the bankers of Chicago last June that their own lives were in danger unless they took these tax warrants in anticipation of this $20,000,000 bond issue which the voters would vote in November.

But it is that kind of difficulty that moved Chicago to come down here a year ago and parade so extensively, as you will remember, with their late mayor and Mr. Sargent, president of the Northwestern Railroad. Chicago had reached its own limits and more, in providing relief. You may say it was their own fault, but whatever may be the reason for the financial difficulties of Chicago, I think we are all well aware that with school teachers sleeping in the parks and taking turns in standing guard over each other, because their salaries were so far in arrears, as these gentlemen told this committee a year ago, it is quite surprising to know that in addition to the State action, Cook County, the county in which Chicago is situated, issued at the beginning of this year $17,000,000 worth of relief bonds for which the State had given them special authorization. And they were sold by the Reconstruction Finance Corporation taking them up, as I understand.

It is that kind of difficulty, the local tax situation, that can be duplicated in effect, if not identically, throughout the country, and in the face of these tremendous and rapid increases that I have referred to, a situation which is duplicated generally throughout the country, that it seems to me makes it inevitable that the Federal Government with its much more elastic tax possibilities must come to the rescue.

I agree that it would be much cheaper in the long run for New York to meet its own total needs itself. But there are very few people, especially taxpayers, who take that long-run view of things when it comes to taxation.

You take our own situation. We have appropriated and sp about $55,000,000 of State funds for relief already. Last Saturd night our legislature authorized a $6,000,000 bond issue to be vo on next November. But there was not any possibility of the St providing out of current revenues for additional relief expenditur The CHAIRMAN. Why did they defer the vote on the bond iss until November?

Mr. BURNS. Because that is the regular election time, I presur Mr. Chairman. There is no special election.

The CHAIRMAN. No constitutional provision that necessitated t delay?

Mr. WADSWORTH. I think that is to be passed upon in the regu election.

Mr. BURNS. I know it is.

Mr. WADSWORTH. That is provided for under the State constituti Mr. BURNS. Yes; that it cannot be done except at a regular electi That is just typical of the kind of obstacles there are to quick act by our States.

But the State, at the same time, you see, was adding a 1 perc additional gross income tax, was lowering the exemption on inco tax payers from $4,000 to $2,500, was adding a 1 cent gasoline t was adding a 1 percent sales tax, just for the purpose of meeting current budget.

All those things were taking place last week in New York. In face of that, of course, we just paid a double Federal income tax have begun to pay it.

I say, it would have been cheaper if New York could have j put the tax on, in the face of all those other taxes-you know w taxpayers are like-but that is the fundamental difficulty. problem is how States in the face of what is going on with Fed taxes as well as local and State taxes can expend their revenue rapi and adequately enough to meet this kind of a situation.

I think the events and the experience of the States show that e when States like New York and Illinois-New York now hav under way at least $115,000,000 of relief, including this $60,000, that I have mentioned, and Illinois $56,000,000-are unable to for their situations, it shows how inevitable this becomes.

Illinois put on a sales tax in addition to their other actions week that will yield $3,000,000 a month.

Mr. WADSWORTH. A 3 percent tax?

Mr. BURNS. Yes; 3 percent. And yet, the Reconstruction Fina Corporation is giving them $7,000,000 a month. This 3 percent will not yield them but $3,000,000. It is for relief. It is e perhaps to say that Illinois should have put on a 10 percent sales But you know what difficulty there is in putting on even a 3 perc sales tax.

It is that kind of a practical situation to which Senator Wag referred on Tuesday of these overlapping tax jurisdictions, and States take into consideration what the Federal Government is do and their own constitutional limitations and restrictions in borrow money that makes it difficult, so that there seems to be no other through except by a Federal appropriation.

Mr. Chairman, so far as my statement is concerned, that is al

Mr. KOPPLEMANN. Mr. Burns, I spoke to you yesterday and asked if you would prepare an answer to this question. In the event of the adoption of this bill or a similar bill that would carry $500,000,000 of relief through the Federal agencies, what effect would it have upon the community chest organizations so far as the continuance or discontinuance of their work is concerned; and further what you have in mind about private contributions for relief?

Mr. BURNS. Mr. Kopplemann, I do not think you were in when I began, and while I did not answer your question, I did give some facts to indicate that private giving has not proved a slacker.

Mr. KOPPLEMANN. I heard you say that. Now, what will be the future, in your opinion?

Mr. BURNS. We can judge that somewhat by the past. This is not a new thing to have happen. The State of Ohio last April appropriated or passed legislation providing for some $22,000,000 for relief on the very day that the Cincinnati Community Chest, our largest spring drive, opened its drive for two and a half million dollars.

The Cincinnati people told me and I think Mr. Hollister will bear me out that they failed by $100,000 of realizing their two and a half million dollars, largely because of that action. And yet they would by no means have opposed the action.

They had been to Columbus urging it as the only possible way that Cincinnati and the rest of Ohio could get on. It makes it harder to raise money.

Last spring, in New York State-and the chest drives in New York State are largely in the spring-their drive came on just after we had paid our first double income tax. It made it harder to raise money and it will make it harder to raise money when this bill is passed, because you have to explain that this covers only the material relief needs and hospitals and child welfare institutions and many other charities that have developed in our American form of civilization have still to be supported.

But that is part of the job of a community chest, and the leaders of philanthropy in this country must overcome that difficulty. And no matter what the difficulty might be, we are more concerned with having the starving fed than with the difficulties that manifestly and admittedly are created for private giving by this kind of legislation.

We have been facing it, as you see, for at least a year, and we think that with only so far a 6 percent slump as compared with the last full year of prosperity when taxable incomes were greater by at least 60 percent than they are now, we are doing fairly well. But we admit that it makes it very much more difficult.

May I say, as I think most of you will recall, that we conducted a national campaign last fall, in which we tried to point out this very difficulty and the continued obligation of the private citizen to do his share. That campaign was led by Mr. Newton Baker of Cleveland. I am sure that recalls it to your mind.

Even in the midst of the inevitable political difficulties and differences of last fall, both the then President and the current President joined in that effort to point out to citizens their continued obligation to do their utmost to meet these ordinary responsibilities.

I do not know anything that summarizes that situation better than the national broadcast-I would like to read just one paragraph of

it-made by President Roosevelt from Groton, on October 30 last It is the kind of thing that the leaders of the country helped th private philanthropies to propagate throughout the country, and i the only method of doing the thing as well as private philanthropy has been doing it.

The President said:

As Governor of the State which more than a year ago took the lead in bringin State funds to the aid of local relief and one who has consistently favored Federa relief where other agencies cannot carry the burden, I want to tell you definitel and clearly that it would be nothing short of a calamity to have private socia and relief work collapse at this time. The splendid task of private social an charity agencies must not only be kept up to their highest previous standard bu must be increased during the months to come. I do not use the weasel word "ought to be." I use the strong word "must." I ask a definite self-denial on th part of those who have more than the actual necessities of life to share an eve greater part of their means with those who so greatly need it today.

It is only by dint of the assistance of our national leaders to main tain that point of view that we can do anything. But we have got t do it.

Mr. KOPPLEMANN. Are you and your organization, so far as yo are able to say, are of the same mind today, in the event of th passage of this bill, as the President was when he made that state ment?

Mr. BURNS. Absolutely. That reflects our point of view.

Mr. BEEDY. Then your position is not what this bill calls for, you take the President's statement. You believe that we ought t have Federal aid only when other agencies cannot carry the relie burden?

Mr. BURNS. I believe that absolutely.

Mr. BEEDY. Not when they find it difficult to do so, not when the are doing a good deal and might do more, but when they cannot carr the relief burden. That is your position. You have just said it an that is the statement that you have just read from the President.

Mr. BURNS. I have tried to explain that that "cannot" is a rels tive term in the face of all our tax difficulties and overcoming ol stacles, etc. In an absolute sense, I do not agree. Let us take Ne York, for example. New York could today take care of its relief i any absolute sense, but from a practicable realistic standpoint, i the way that taxpayers look at it and in the way that they react t taxes, when their Federal income taxes are doubled and when the State income taxes are doubled and many other extra taxes are in posed, the only way we will get the money and that is the only thin that will feed people is to appeal to the Federal Government.

May I say this other thing about private giving, finishing m answer to Mr. Kopplemann's very pertinent question; that even if did make private philanthropy suffer to pass such legislation-and has been more difficult because of this past legislation, both Stat and National-it would not suffer anywhere nearly as much as these public funds were not provided. Because what that woul mean would be that all the funds from our hospitals and child-welfar institutions and other philanthropies would be drained into this on channel of supplying the absolute necessities of life.

There is no choice in a community when the issue is betwee starvation and other charitable efforts. Therefore, the other philar thropies are very much better off with the public funds provide than if they were not provided at all.