CLAIMS OF THE CITY OF HOBOKEN, N. J. is HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON CLAIMS UNITED STATES SENATE SIXTY-SEVENTH CONGRESS PURSUANT TO S. RES. 254 TO INVESTIGATE THE CLAIM OF THE CITY OF OF THE OCCUPATION BY THE UNITED P104-65 STANFORD LIBRARIES COMMITTEE ON CLAIMS. ARTHUR CAPPER, Kansas, Chairman. SELDON P. SPENCER, Missouri. RICHARD P. ERNST, Kentucky. JOSEPH S. FRELINGHUYSEN, New Jer- ROBERT N. STANFIELD, Oregon. sey. HARRY S. NEW, Indiana. JOSEPH T. ROBINSON, Arkansas. FRANK R. GOODING, Idaho. II EDWIN S. BROUSSARD, Louisiana. WILLIAM H. SAUDERS, Clerk. CLAIMS OF THE CITY OF HOBOKEN, N. J. SATURDAY, JULY 15, 1922. UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON CLAIMS. The subcommittee met pursuant to call at 10 o'clock a. m., in the court room of the City Hall, Hoboken, N. J. Present: Senators Spencer (chairman) and Broussard. Present also: John J. Fallon, Esq., corporation attorney for the city of Hoboken; Horace L. Allen, assistant corporation attorney of the city of Hoboken; Hon. J. Raymond Tiffany, for the Hoboken Chamber of Commerce. The Committee then proceeded to the consideration of the subject matter of Senate Resolution 254, which is printed in full as follows: "Resolved, That a committee composed of three Senators of the Committee on Claims, to be appointed by the chairman of such committee, is authorized and directed to investigate the claims of the city of Hoboken, N. J., for losses and damage sustained by such city as a result of the acquisition and retention by the United States of certain docks, piers, warehouses, wharves, and terminal equipment and facilities, including all leaseholds, easements, rights of way, riparian rights, and other rights, estates, and interests therein or appurtenant thereto, on the Hudson River, formerly the property of the North German Lloyd Dock Co. and the Hamburg-American Line Terminal & Navigation Co., and to report its findings to the Senate, with such recommendations as it deems proper. Such committee is authorized to hold hearings and to sit during the recesses or sessions of the Sixty-seventh Congress at such times and places as it may deem advisable, to send for persons and papers, to administer oaths, and to employ a stenographer to report such hearings and finding at a cost not exceeding $1,25 per printed page, the expenses of such investigation to be paid from the contingent fund of the Senate." Senator SPENCER. We are here to conduct the hearing on the Senate Resolution 254. Judge TIFFANY. If the committee please, it is our purpose representing the chamber of commerce to assist in every way possible to give the committee information for its enlightenment, and Mr. Fallon, the city counsel, will proIceed with the introduction of evidence. Mr. FALLON. Now, gentlemen, in order that you may have some fair idea of the matter that is desired to be brought to your attention, I think it might be well for me to make a brief statement-I do not want to say insistment—about the contention of the city of Hoboken with respect to this matter. These piers which are the subject of inquiry, the piers property, are said to be and have been testified to be by experts in valuation hearings before the State board of taxes and assessments of this State, the choicest parcels of water front property along the Hudson River. It consists of four piers formerly of the North German Lloyd Dock Co. and two piers formerly of the HamburgAmerican Steamship Co. (Note: Should read 3 of North German Lloyd and 3 of Hamburg-American Co. See page 172 and 173 of typewritten report.) The three piers of the North German Lloyd are absolutely fireproof. The other three are of frame construction. Two of the latter piers were burned severely some time ago. A memorandum of that will be offered to you. Now, the city of Hoboken, of course, concedes, as we are obliged to concede, that public-owned property should be exempt from taxation ordinarily—that is axiomatic; but the principal contention that we have made, and do make respectfully to this committee and through this committee to Congress, is that that exemption from taxation is only because of the devotion of the property to public use. 1 We submit that where the property is diverted from public use then that property should pay its proportionate rate of taxation in the community in which it is situate, just the same as any other property. In other words, the theory of the exemption of property from taxation we concede to be the public use to which the property owned by the Government is ordinarily put. In this particular instance our grievance is that this property which is the subject of inquiry is not devoted to public use. This property after the war services had been rendered was devoted to private interests, has been leased by the United States to various steamship companies, for which rentals have been received which exceeded $1,000,000 per year. Now, that is a tremendous sum of money for the United States Government to obtain through rentals of property the title to which is in it, without paying any recompense to the municipality in which the property is situate for the benefits which the Government derives from the property. Senator SPENCER. Will it inconvenience you at all if we interrupt with a question? Mr. FALLON. Not at all. Senator SPENCER. There are 795 feet frontage? Mr. FALLON. One thousand seven hundred feet frontage. Senator SPENCER. One thousand seven hundred feet frontage of these properties, six docks? Mr. FALLON. Of these six piers. Senator SPENCER. That is, the three North German Lloyd and the three Hamburg-American? Mr. FALLON. They occupy practically one-third of a mile; and, as I have said, the property is said to be-by others than ourselves, witnesses in court proceedings-the choicest water-front property along the Hudson River. Senator SPENCER. Now, how much of that 1,700 feet, or how many of those six piers are rented by the Government on leases for income and not used exclusively for Government purposes? Mr. FALLON. Every one of them, to my best knowledge at this time. One of them had been kept in the use of the Government up to perhaps nine months ago while they were bringing bodies in from France. They were using one pier for that purpose; but all of the other piers have been rented out for a long period of time. Now, I have here a copy of one of the leases, the lease relating to Pier 2, which was made on January 29, 1920. That will indicate to you how long they have been renting these piers out. Senator SPENCER. What is the average term of the lease? Mr. FALLON. Well, they are subject to revocation on 10 days' notice, as I recall it. Senator SPENCER. Yes, as you remember it. All the leases could be canceled by the Government on 10 days' notice? Mr. FALLON. Yes, sir. I am quite sure that is the fact. There is a provision of that kind in each lease. Senator SPENCER. Could you tell us whether there is in the leases any provision with regard to taxes-local and State taxes? Mr. FALLON. There is none. There is nothing contained in there with respect to taxes. It is silent on the subject. This lease, for instance, that I refer to of Pier 2, between the United States of America and the Cosmopolitan Shipping Co. (Inc.), 42 Broadway, was dated January 29, 1920, and became effective January 8, 1920. That lease was assigned to the United States Shipping Board, effective January 1, 1921. Under the terms of that lease the lessee was required to pay $15,000 in cash per month, payable on the first of each and every month in advance. Senator SPENCER. I think it would be helpful if you put that in the record, because it probably is a sample of the leases. Mr. FALLON. I will offer a number of records, this being one of them. (The lease in question is printed in full as follows:) LEASE. [Contract No. 3200-24. Pier No. 2, Hoboken, N. J. Lease between the United States of America and Cosmopolitan Shipping Co. (Inc.), No. 42 Broadway, New York City, dated January 29, 1920, and effective January 8, 1920. Assigned to United States Shipping Board, effective January 1, 1921.] This lease, made by authority of the Secretary of War, between the United States of America, of the first part, and Cosmopolitan Shipping Co. (Inc.), a Delaware corporation, having an office for the transaction of business at No. |