National Republican. (Washington City (D.C.)) 1872-1888, 1874-03-20

cent. upon the valuation Of the property
under the organic act, and also may levy
specifically on these socalitiees -. ~. :.
must not exceed two per cent, Including Thu
tax for this particular Indebtedness.
Senator Thurman II It required par cent.
in the city of Warrington 70 pay the old In
debtedness, the levy for othsr pafFoses would
be only per cent; but in Georgetown n Il 70
quired half Of per cent. to pay the old indebt-
edness, the levy for other purposes might b
11s per cent. o 90 -, = -
Mr.. Stanton. Yes, cir; the tax Is less IN
Georgetown and In the county than IL Is in
washington on account Of the dsbt Of the city
Of Washington. ---
Senator Thurman. Then they have not been
levying the 3 per cent. in Geofgeaownl
MIR. Stanton. No, sir; was saying that under
this act Of June %, 1879, there occurred . set
Element between the District Of Columhs and
tho corporation of Washington. The account
bonds, expressed on their face to be "Cfty Of
Washington bonds" were turned over TO the
District Of Columbia. In one reapoct this could
not be turned precisely - appeared, because,
after all, It was mere funding Of the fndebt-
edness. The city of Washington was still in
debtcd to the District. Whereas before 4 was
indebted to the District of Columbia on open
account, AFTER Iuc DOuue W6Te I68U0Q u was
debted to the District of Columbia upon the
bonds: the proceeds of the bonds, or the amount
netted from them, could not be applied TO any
particular fund at all until some DISPOSE
ton had been made of the bonds. Either the
boals had been sold or had been redeemed
out of taxes paid by the city Of Wash
ingtoI. There may be some confusion arising
from the use of the term "discharged'. or
"paid." 1t was 3 settlement, but It was the
- - S-A e..
another. 1t will be remembered that the money
out of which the expenditures for the corpors-
ton Of Washington, by the District of Colum-
bia, were made, came from advances made by
the First National Bank of New York: and that
Indebtedness still was due when that settlement
was made. The money went from the First
National Bank of New York to the District OF
Columbia, and thence to the different purposes;
among others, to school purposes for the city
of Washington, Including this $e15, 900. The
bonds which were transferred to the officers Of
the Ds.ric: under this settlement were hypoth-
ecated 10 secure the still subsisting indebted
ness from the First National Bank of New York.
Out Of that loan the school fund had received
its share; and inasmuch as security had to be
given for the loan, bonds, the proceeds Of which
might, If you please, have been applicable to
the school fund, were properly placed there, as
much as the bonds which were applicable to
for this purpose, as well as any other, should
be pledged for security, because, as I said, the
school fund had received fits share out Of the
proceeds of the loan. When the matter shall
be settled, when the bonds shall be settled,
when the Indebtedness to the First National
Bank of New York shall be discharged, then 1t
may be that the school funds shall be entitled
to credit for the net proceeds Of the bonds;
but for the present they were required, they
were demanded as security for this 1oan-a loan
of which the school fund had received more
than its proportionate benefit. 1t had received
not only its proportionate benefit, but 1t had
received q benefit in excess Of its due proper
ton. ...
Senator Thurman. That Is, before any of
this $2l5 900 had been applied.
Mr.. Stanton. No, not before that. Out of
this loan s2l5, 900 had been paid. The First
National Bank of New York, after all, stood
back as the real creditor In the transaction; and
as the real creditor it holds these bonds in
hypothecation. This amounts, then, to the
whole transaction in respect to these bonds.
This Is the wrong that Is complained of here,
and that has been relied upon here,
in mistake as to fact and mistake
as to law. Alter all, there must be remem-
bered this very fact that by no sort of entry
could It be concealed that out Of the revenue
received for school purposes every dollar has
been paid to these purposes and SITS 900 be-
sides. That 10 the great fact which will ask
the committee to remember, that the District
government has exceeded the precise school
tax by S173, 900.
Senator Thurman. Right there let me in
quire If understand your argument correctly.
You maintain that the S215, 900 of bonds were
really not applicable to the school fund, but
are held in hypothecation by the First National
Bank of New York. Am right in that
Mr.. Stanton. Instead of being turned over
to the school fund they were applied to secure
the creditor who had advanced the money to
this school fund; they will be applied doubt
less, suppose, with propriety and legality,
when they shall be sold.
Senator Thurman. was right, was I, in I'M
Outstanding youfhat these bonds were held in
by the First National Bank of
New York as collateral for its loana
Mr.. Stanton. Yes, sir for the loan out of
which the schools received more than their pro-
portion. It is impossible to sell the bonds now.
Senator Thurman. You say the school fund
received more than its share.
Mr.. Stanton. Out of that loan.
Senator Thurman. fthat loan was not ap-
plicable to any particular debt as school, police,
water, gas, or the like
Mr.. Stanton. When I say "more than its
share, do not mean more than its share as
prescribed by law but mean more than the
usual proportion between the school taxes and
the other taxes more than its proportion in
that sense.
Senator Thurman. don't understand you as
arguing that 1t would have been lawful to take
the taxes, supposing there had been no loan at
as belonging to other funds-snd
appropriating II to the school-funda
Mr.. Stanton. No, sir.
Senator Thurman. The defence for using the
$4,000 is, that 1t was the proceeds of this
$4,000,
Mr.. Stanton. This loan was made before the
bonds were received. The loan was made un-
der the act of January 10, 1872.
., Senator Thurman. How, then, came this
Sic, 900 to be applicable to two purposesl
Mr.. Stanton. Under appropriations of the
Legislative Assembly 1t went into the general
fund and was appropriated out Of the general
fund.
Senator Thurman. It comes under the clause
the revenue?
Mr.. Stanton. It was borrowed under the
clause In anticipation Of the revenue, and went
into the general fund for the payment of the
liabilities Of the city Of Washington, and then
specific appropriations were made from time
10 time for paying these various sums.
Senator Thurman. Made out of the general
fund by the legislaturel
Mr.. Stanton. By the Legislature.
Senator Thurman. But without restricting its
application to the due proportion to which
each fund was entitled?
Mr.. Stanton. Yes, sir;l It may be that out of
sympathy for the wants or for the growing
needs of education here-it may be that there
has been an undue Hberality for school pur-
poses, and that it was unwise legislation that
might have been criticised, that there should
have been appropriated 90 large fund out of
The general fund.
Senator Stewart. It was all In pursuance Of
legislationl
Mr.. Stanton. Yes, sir, and every one of these
tens In this SILL, 900 was audited by the comp
trollef and by the auditor, Mr.. Richards, who
was examined here, believe, In behalf Of the
memorialists, and by the sinking fund commits
sioners.
Representative Hubbell. Do I understand
you to say that this loan in New York was
made before these bonds were obtained
Mr.. Stanton. Yes; sir.
Representative Hubbell. And that the bonds
we're subsequently put up - security for the
loani
Mr.. Stanton. Yes, sir. There I leave that
branch Of the matter. There IL another mat
YER which desire to call your attention to,
md that 10 the organization of the colored
schools. did not want to go into the argu-
ment at all, but perhaps It WIN ssve time II I
all your attention to some of these statutes.
At the same time do not want to trespass
upon the time of the committee. There are
several acts Of Congress, and will merely give
he dates of them, referring to them 20 that
hey can be referred to. have digest which