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THE NEW YORK TIMES, WEDNESDAY, JUNE 15, 1960.

Excerpts From Rockefeller Speech Here

Following are excerpts from Governor Rockefeller's speech last night at the annual dinner of the New York Republican State Committee in the WaldorfAstoria Hotel:

The New York State Republicans have a great party organization and a great record of teamwork accomplishment to present to the voters in November.

We have achieved pay-asyou-go financing; a vastly Improved business climate producing more and better Jobs; a record-breaking increase in aid to education; tax simplification and substantial tax relief, including important assistance to small business; a significant advance in providing medical care for our senior citizens; ·

bold new middle-income housing program; an outstanding highway safety program; a pioneering endeavor to provide parks and recreation areas for the long-term future; increased unemployment insurance, workmen's compensation and disability benefits and a dollar-an-hour state minimum wage; an outstanding consumer-protection program; a comprehensive attack on the problem of juvenile delinquency; strengthened law enforcement including a crackdown on gambling syndicates, and a wide variety of other progressive moves to improve the cultural life, health, safety and future prosperity of the people of New York State.

Fiscal Integrity Cited

Most important of all, in my opinion, was the restoration of the fiscal integrity of New York State. Our return to fiscal integrity has restored the confidence of business in New York State.

The elements of the fiscal integrity which we have achieved are: first, rigid econTomy without sacrificing social gains-thanks to the major progress we have made toward greater efficiency in government; and second, a realistic tax program based upon unflinching praisal of the danger of fiscal chaos this administration inherited when we took office.

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These two steps put the

state back on a pay-as-you-go basis, ended deficit financing and put a stop to the practice oncoming generations. of passing on today's bills to

The improved business, increased job opportunities and higher incomes resulting from the restoration of business confidence have, in turn, produced increased revenue for the state beyond previous expectations. As a result, the latest estimates just released today indicate that New York State will have a surplus at the close of the present fiscal year of approximately $90,000,000.

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If this improvement in the state's fiscal outlook tinues, I plan to recommend to the Legislature next January a retroactive 10 per cent abatement in state taxes on 1960 personal income. My plans to make such a recommendation are conditioned upon continuance of present levels of state income. In this connection, it should be noted that the New Jersey Legislature presently is considering & commuter-tax program which, if enacted, would cut by an estimated $38,000,000 New York's revenue from taxes on nonresident income. Lehman and Dewey Noted

My recommendation for this form of a personal income tax cut is based upon the pattern instituted near the close of the administration of Governor Lehman and continued throughout the twelve years of Governor Dewey's administration,

I also hope to be able to recommend repeal at the next session of the 15 per cent special tax on cigars and tobacco, which has caused a 20 to 30 per cent reduction in sales in this field. This has adversely affected 142,000 New York enterprises, the great majority of which are small businesses.

I will only advocate these 'steps, however, within the framework of continued payas-you-go financing and after meeting the requirements of our people for state services.

We have a great recordand we have great leadership. What are we going to do with all this in November? Let me tell you what I want to see us do:

I want us to do everything possible to see to it that when they add up the score to determine who shall succeed our great President, Dwight Elsenhower, New York's crucial forty-five electoral votes will be in the Republican column. I want to see Walter Mahoney [State Senate majority leader] re-elected by the biggest majority he has ever had. I want to see Joe Carlino [Assembly Speaker] and Charlie Schoeneck [Assembly majority leader], re-elected by the biggest majorities they have ever had. I want to see the Republican majorities in the State Senate and the Assembly not only maintained but increased. I want to see the Congressional strength of New York Republicanism improved not only in New York City but in those few pockets of resistance upstate. I want to see New York strengthened substantially in its claim to being the most Republican and the best governed state in the union.

Victory in '58 Recalled

We New York Republicans, working together, proved in 1958 that we know how to win, that we can be worthy heirs of the long tradition of Republican strength in this state.

We know how to win because we do not fall into the error of creeping complacency or drowsy conformity. We know how to win because we look on Republicanism as a vital, responsive, forwardlooking philosophy, firmly grounded in the principles, integrity and courage of our great leaders from Lincoln to Eisenhower, deeply rooted in American tradition and beliefs, yet insistent upon changing with the times and keeping pace with the hopes and aspirations of the people.

Let us go forth then, to battle-proud and confident. Let us make 1960 a banner year in the history of New York Republican triumph-to the end that we shall make our full contribution to the welfare of the people of New York and of the nation.

To this cause, I dedicate myself; to this cause, I summon each one of you. Together we shall achieve victory.

THE NEW YORK TIMES. MONDAY, APRIL 11, 1960.

A KOREAN BONUS
URGED BY WILSON

Rockefeller Adviser Also
Favors Tax Cut and Relief
on 15% Tobacco Levy

By DOUGLAS DALES Lieut. Gov. Malcolm Wilson expressed the hope yesterday that the Legislature and the voters would authorize a bonus for veterans of the Korean conflict.

He also declared that he would like to see the Legislature grant relief from the "harmful" effects of the state's 15 per cent tax on tobacco and cigars. He said he would be in the "vanguard" of those favoring an income-tax cut if such action appeared possible next year.

The Lieutenant Governor, one of Governor Rockefeller's closest advisers, is the first top administration official to come out in favor of a Korean War bonus,

His views were expressed as guest on the WRCA-TV "Direct Line” program, in which ques. tions are telephoned to the studlo by viewers.

VI

CIGAR TAXES HAVE PROVED DIFFICULT AND EXPENSIVE TO ENFORCE

"An administrator's nightmare" is what the Michigan Deputy State Revenue Commissioner called his State's cigar tax.

"The history in other states shows that bootlegging cannot be properly controlled, which not only loses the tax for the state, but also takes business away from legitimate Michigan retailers and wholesalers."

See following pages for detailed documentation

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State Levy on Cigars Brings
Bootlegging and Dip in Profits

Continued From Page 1 ment of Taxation and Finance on the fifteenth of each month

for purchases made in the previous month. However, the bootleg merchants, who are in a minority, just do not file.

Tax Revenues Down The illegal traffic has made great inroads into the expected New York tax revenues, according to trade sources. They expect that revenues from the state cigar tax in the fiscal year ending March 31 will amount to approximately $3,000,000, considerably less than the $5,000,000 or more predict ed when the tax went into ef

fect.

Another declared, "We're Sales Were Up 10% counting on the Christmas business to keep us out of the red."ous state taxes on cigars in Until the imposition of variAnother result is that the tax the last half of this year nahas led many smokers to switch tional cigar sales were running to cheaper brands of cigars. A about 10 per cent ahead of last 10 cent cigar is now 12 cents, year. Some 6,400,000,000 cigars a 25-cent cigar now sells for were consumed in 1958. 29, and a box of cigars that retailed for $10 has risen to tuted a 20 per cent tax on On July 1, Vermont insti$11.50.

cigars and Washington State a 'Retrogression by Taxation' 25 per cent tax. Also in July, One retailer in the Times tax to 20 per cent of the wholeMinnesota increased its cigar Square area said:

"I'm selling more 5-cent ci- increased its tax brackets on sale price and South Carolina gars now than ever before. My the smoke by 60 per cent. Texas customers who used to smoke the 15-cent brands have switched and Alabama also have state to the 10-cent ones and many taxes on cigars. of my old quarter-brand buyers omist of the Cigar ManufacClarence M. Weiner, econ

now insist on 20-cent smokes.

These sources say that state tax investigators have visited various cigar retailers and job-mented:

It's retrogression by taxation." turers Association of America, Another large retailer com- cigar sales actually began in Inc., said the sharp decline in bers in recent weeks and spot- "The cheaper cigars are go- with the imposition of new and July, 1959. He said it coincided checked their inventories and ing over big. But business as a sharply increased state taxer

tax records.

whole is so damn bad we don't

However, it was pointed out even post the various changes on cigars.

that the task was practically in prices any more because of Mr. Weiner said that cigar an impossible one because of the tax-it scares the customers sales in the conntry had fallen the thousands of cigar mer-away." each month since July 1 from

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chants in the state and the lim- Some of the large cigar re- figures of a year ago. He said ited number of investigators tailers in the garment center that the 8 per cent decline in available. They added that most have been especially hard hit. the third quarter had canceled of the state's checking must be The district is the world's larg- more than half the gains of the concentrated on such high tax-est user of fine cigars. One dress preceding six months. producing items as gasoline, cig- manufacturing company, which However, he said, volume arettes and race-track betting. used to purchase thousands of was so strong during the first The thousands of merchants expensive cigars for the conhalf of this year that sales in handling cigars in this state venience of its customers from 1959 will still exceed last year's have also been hurt in another a Seventh Avenue dealer, now figure and amount to about way by the cigar tax. The vol- buys its cigars in New Jersey. 6,800,000,000 units. ume of their total business, The cigar manufacturers have volume since 1924, when 7,002,This would be the highest which normally includes ciga- fared better than the retailers rettes, candy, smoking tobacco and jobbers. Their sales are es582,000 cigars were consumed. and other sundries, has declined. timated to be down anywhere in the decade following World For example, it is estimated from 20 to 40 per cent in New War II, cigar sales hovered be that thousands of commuters York State. But their volume tween 5,500,000,000 and 6,000,from New Jersey and Connecti- has risen enough in New Jer-000,000 a year. In 1957, concut working in New York now sey, Connecticut and Pennsyl000,000 units. The record year sumption moved to 6,100 buy daily cigars and sundries vania to erase their New York for the industry was in 1920, in their home states that they iosses. formerly purchased in New when 8,500,000,000 went up in York. smoke. A survey just completed by have increased their purchases recent years because of many Sales have been rising in the National Association of To- more than 50 per cent in recent factors. The industry is spending nearly four times more this

bacco Distributors of 221 retail

Some jobbers and retailers in
New Jersey and Connecticut

stores in New York State months. showed that stores' cigar sales The sales of one cigar manu-year for advertising than it since July 1 were off 34.9 per facturer for northern New Jerdid five years ago. Its fivepacks have raised volume cent in the state and 36.3 per sey are up during the first ten greatly, and it is directing cent in New York City. months of this year by 22.1 per more of its advertising to the Harden E. Goldstein, associ- cent over the same period last "image of masculinity" that ate director of the association, year. In contrast, his sales for smoking a cigar is said to give. said the survey also disclosed New York State rose only 1.8 that cigar sales for wholesalers percent during the same period. in New York State had declined The fact that the manufac38 per cent and 41 per cent in turer was able to show a slight New York City since the tax profit at all for New York re went into effect. sulted from the heavy sales One large jobber in New York made during the first six City said last week, "Our cigar months of this year-before the and sundry volume has dropped tax went into effect.

so much since the tax that we

had to lay off a few of our salesmen."

Reprinted from The New York Times, Sunday, November 29, 1959.

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