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February 20th, 1951.
<br />
<br />At a called meeting of the City Council, held on February 20th, 1951, there were
<br />
<br />present:
<br />
<br />Fred A. Duke, Frank N. Bilisoly, Jr., Car. C. Houghton,Jr., James N. Howard,
<br />R. Irvine Smith, E. Robie Sturtevant, C~ E. Warren, H. Earl Weiseman, Pearle
<br />J. Wilson, I.G. Vass, City Manager, amd R.C. Barclay,City Attorney.
<br />
<br />The following call for the meetiug was reed:
<br />
<br /> "You are requested to attend a special meeting of the City Council, in the Council
<br />Chamber, at 7:00 P.M., on Tuesday,February 20th, 1951, to consider the resolution 9pposing the Federal Government
<br />placing a taxon municipal bends~ and for amy other Business that mayproperIy come before the Council.
<br /> By Order of the President."
<br />
<br />The President read the following letter:
<br />
<br /> "Following up m~ commmnication of February 5th (summary of which is attached) on the
<br />above subject. Out of a clear sky the House Ways and ~eens Committee scheduled hearings on the proposal 'recently
<br />advanced by the Secretary of the Treasury for next Monday (February 19). Whetl~er or not this was a matter of
<br />strategy designed te catch all of the cities off guard, I do net know. As can well be understood, it would have
<br />simply been impossible to prepare and organize testimony from all sections of the couutry on such short notice.
<br />Consequently, ~ayor David L. Lawrence, President of the Conference of Nayors, took steps~ seeking a reasonable
<br />postponement by the Committee of the Monday hearing. Late yesterday, the Ways and Means Committee did act favor-
<br />ably on our request by giving a weekte further extension so that now the hearing is fixed for Monday, February
<br />26th.
<br /> Thus again it becomes necessary, as wa~ the case in 1939,19~0 and 19~2, to go before
<br />the House Ways and Means Committee and battle out this threat to local self-government.
<br /> The basic amd underlying issues are indicated in the attached. Since the states are
<br />as gravely affected as the ci~ies~ the Governors and St~teAttorneys General, the C~uncil on State Defense and
<br />other municipal groups have been alerted as to this latest effort to impair and control the finances of our ci-
<br />ties and states. If the measure is to he defeated it will take the co-o_~iinated effort of all those who serve
<br />our cities and our states.
<br /> To date, I do not tb~nk most city officials have realized the seriousness of the Sec-
<br />retary' s recommendation. Only a few letters of protest have reached the Committee or individual Members of the
<br />House. Unless all cities act, and act promptly, it is entirely possible that under the guise of defense revenue
<br />requirements, we may wake up and find ourselves saddled with Federal taxation of future issue of bonds - with the
<br />consequent tax levy increases which w~uld inevitahly have to follow to pay the increased interest costs.
<br /> It is urged, therefore, that prompt and strong protests against this. proposed inva-
<br />sion of the constitutional rights of our city governments be transmitted to all members of the Committee and all
<br />Congressman from~ou~ State. Individual letters from all key city officials are important. Official action of
<br />the City govenmaent can appropriately be effectuated by City Council Resolution.
<br /> Not only will the Conference of Mayors present testimony at the forthcoming hearing
<br />but all city officials who requested an opportunity to be heard, in accordauce with the suggestion incorporated ~
<br />our last letter, have been notified by the Committee to be on hand.
<br /> I again emphasize. Testimony before the Committee is important and necessary. But
<br />unless the Committee and all members of the House are advised at this time by you and your administration there
<br />is no telling what might happen.
<br /> Please send copies of your commmnications to me so that we are ~,11y advised as to
<br />all actions taken. I shall, ef course, keep you promptly informed as to all developments.
<br /> With best personal wishes, I am,
<br /> ~aithfully yours,
<br />
<br />Paul V. Betters, Executive Director."
<br />
<br /> On motion of ~r. Howard, the following resolution was adopted, and the Clerk was
<br />instructed to send copies to e~ch member Of the Ways and Moans Committee and to the two Virginia Senators end
<br />Congressman from our District, vigorously prote~sting the p~oposed legislation, and the Nayor was authorized to
<br />attend the Comm*ttee henring in W~shington:
<br />
<br />"RESOLUTION
<br />
<br />WHEREAS, it has come to our attention~ that a proposalS'has gone to Congress
<br />that future issues of State and Municipal bonds be subjected to Federal
<br />income taxation, and
<br />R~E~EAS, never in the history of the Supreme Court has a single case been
<br />cited which supports the view that the Federal Government has the right to
<br />tax State and Municipal bonds, but that the only proper way to effect such
<br />taxation is through Constitutional amendment, and
<br />WHEREAS, aside from the legal phases, imposition cf the Federal tax on muni-
<br />cipal bonds would result im~,edtately in am ~.mucrease in the interest rates
<br />which cities and states would halve to pay on ~uture borrowings, which
<br />b~rden would, in most cities, fall on the real estate or property taxpayer,
<br />NOW, TRV~EFOBE, Be it Resolved that the Council of the City of Portsmouth,
<br />Virginia, go on record as opposing the proposed legislation and that copies
<br />of this resolution be sent to members of the House Ways and Means Committee,
<br />to the two Virginia Senators a~d the Congressman from our District."
<br />On motion adjourned. ~Ci/~l~//]l~t~ty~1~~-
<br />
<br />Approved
<br />
<br />
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