Memorandum of Disapproval of Bill for the Relief of the City of Elkins, West Virginia.

I HAVE WITHHELD my approval from S. 2182, a bill "For the relief of the city of Elkins, West Virginia." This bill would relieve the city of Elkins of all liability to repay a $75,000 loan (and all unpaid accrued interest) which it received from the Reconstruction Finance Corporation.

The facts on this bill are clear. Under the World War II Defense Area Landing program, the Federal Government undertook, under certain circumstances, to build airports for communities which would provide appropriate land. In July 1943, the city of Elkins agreed with the Civil Aeronautics Administration to furnish land for an airport. The United States Government agreed to pay the cost of constructing the airport. Elkins then applied to the Reconstruction Finance Corporation and was granted a loan of $75,000 to purchase the land. The loan was evidenced by $75,000 of 4 percent Airport Revenue Bonds issued by the city. The city has made no payment on principal and is now in default on bonds aggregating $24,000. Some interest payments have been made but the accrued and unpaid interest as of May 1, 1956 amounts to $22,400. Through the Civil Aeronautics Administration, the Government has expended over $1,000,000 on the airport.

The issues involved in the bill are likewise clear:

(1) The original agreement was fair and Elkins has received and will continue to receive benefits at least proportionate to its relatively small share of the airport's total cost.

(2) The bill would give special treatment to a single community and thereby discriminate against other communities which built airports during World War II with Federal assistance. Of over 500 municipalities, representing every one of the forty-eight States, which entered into similar contracts with the Civil Aeronautics Administration, the city of Elkins is the only one which applied to the Reconstruction Finance Corporation for a loan to finance the purchase. The proposed legislation would relieve the city from any obligation to repay the loan. Thus, in effect, the Federal Government would have both constructed the airport and provided the land. No other municipality has received such special treatment.

(3) The bill would set a precedent which could be used by many other communities to urge cancellation of their obligations held by the Federal Government. In all, the Reconstruction Finance Corporation made loans to over 6,000 municipalities and other public bodies. Of these, there are still outstanding 75 issues of municipal obligations totalling approximately seven million dollars. To relieve Elkins as provided in this bill would be to give that city a preference which was not given to any other city granted loans by the Corporation. Undoubtedly, special circumstances exist in many of the communities whose obligations remain unpaid. Testimony presented to the House Committee on the Judiciary suggests that the case for relief from their obligations might be as persuasive as in the case of Elkins. The precedent set by this bill could, moreover, adversely affect collections on loans to local governments under several other continuing Federal programs.

This bill involves one community and a relatively small amount of money; but it would establish undesirable principles and precedents affecting many other communities and many millions of dollars. I have, therefore, withheld my approval of S. 2182.

DWIGHT D. EISENHOWER