National Republican. (Washington City (D.C.)) 1872-1888, 1880-01-14
THE SINKING FUND.
Treasurer Gilfllan Pours Some Hot Shot into
the District Government.

Ahh ciNhANN ~ C-NDs
Treasurer Gilfllan Pours Some Hot Shot into
the District Government.
Treasurer Gilfilan has submitted his second
annual report, which shows the following
transactions pertaining to the sinking fund
Since tho transfer of tho powers and duties of
the Sinking Fund Commissioners TO this Office
on July /, 1873, the principal of the bonded
debt of tho District has been reduced $llS,-
326.67, of which $40 97667 was old bonded
debt and $685., $50 was Of the 3.65 loan. The
reduction in the annual interestcharge c0nse-
qucnt upon the above reduction IN the debt
and funding operations fthe year is $50, ,l5i.1l.
There would have been Il greater reduction of
the debt had not the sinking fund been bur
dened last year with the payment of interest
on the water bonds amounting TO S29,6l0.
The credit of the District so improved during
the past fiscal year that the market price Of its
securities advanced from ten to fifteen per
cent, and for the first time after sixty years Of
legislative enactments the sinking fund has
an actual existence. The total am cunt in.
cluded in the two calls for redemption made
under the provisions of the act of Juno 10,
1879 was 5000, 1867, of which $l79,97667 was
redeemed on account of the sinking fund and
SSl0S00 was replaced by tho issue Of fve.per-
cent. bonds of the twenty.year funding loan.
The remainder of the loan, amounting to $751;
500, was issued for the purpose of rembursing
the United States for tho amount advanced 10
redeem the city of Washington ten.year bonds
and tho city of Georgetown steam-torce- pump
bonds.
The bonds of the new loah were disposed of
to the highest bidder by the Secretary of the
Treasury to the amount of 81, ,092, 800, upon
sealed proposals. ut premium ranging from
55-100ths per cent. to II per cent. The
loan, which was neodlesS was recon-
mended by the District authorities without
consultation with or the approval Of the
Treasury 1t saddled the District with an alb.
soluto twenty-year five per cent. loan, while
some of the bonds for the funding of which it
was created bore the same ratio OF interest,
and all of them were redeemable at the option
of tho District, and woald, within year or
two have been absorbed by tho sinking fund.
The rate of interest was too high, which Is
proved by their sale at premium in the tnCe
of the fact that they were not exempted from
taxation in tho District and that the follow
ing condition was incorporated in the author
izing act "PrOrided, That this act shall not
be construed to make the Government of the
United States liable for either the principal or
interest of said bonds, or any part thereof" IL
would be n difficult proposition to sub5tantiate
that the United States is not the obigatOr OF the
bonds. The question Is not, however, vital
one; for, while tho present arrangement con-
tinues under whiCh the Government con-
tributes fifty per cent. to the payment of the
general expenses Of tho District, its cOntribu.
tion is sufficient to pay the annual interest
upon the bonded debt of the District, to
establish n sinking fund for the ultimate re-
demption of that debt, and leave more than
100000 for other purposes. The lower the
rate of interest on District loans the less the
expenses will be, and the less the Government
must contribute as its proportionate share. 1t
is, therefore, to the advantage Of tho Govern
ment to have the loans of the District made
through the Treasury Department at as low
ing to investors, and il is accordingly recon-
mended that that course be pursued hereafter. |
The recommendation Is renewed that per- |
inanent annual appropriation be made for the |
interest on the entire funded debt, and for II |
sinking fund for the old debt, of an amount
sufficient, in connection with the permanent |
appropriation already made for sinking fund |
for the 3.65 loan, to extingulsh the entire |
debt by the maturity of tho 3,65 loan and |
that the same be advanced to the Treasurer |
from time TO time, on his rcquisitiOn. The |
water fund is now indebted 10 the sinking |
fund for two years interest advanced, amount
ing to $50, ,220, besides being $4,000 in arrears |
for the sinking fund on the water stock, and,
as there is no prospect of making this sum
good out of the water rents, the report sug'
gests that the amount required for the siuking |
fund and interest on the water stock be iu-
Cuded in the regular appropriation forE the
sinking fund and interest on tho funded debt.
1t
report says that after taking possession Of the
sinking-fund Office very urgent domand was
made by the Treasurer upon the District
Commissioners, under date of October
26, 1878. for the undellyeTed tax
lien certificates, Up to this time the dc.
nand has not been complied with, nor has any
satisfactory reason been given for their failure
to comply with it, and no attention had been
paid to the demands to sell the property
charged with delinquent special taxes. Re-
ferring TO II plan proposed TO authorizes five
percent. District loan for the purpose Of TAX
ing up the past due certificates Ia question,
the report says that such action should not be
thought Of until thore has been q more vigOr-
Gus and sincere attempt to collect the special
taxes than has yet been made, aud adds that |
" il is the intention of this office, at an early |
day, to call upon tho District authorities again |
to advertise aud SELL MS the law directs, the !
property liable for special taxes, for which !
tax'lien certificates have been deposited with |
the Treasurer"
The report also suggests that the Interests of |
tho government and of the conscientious tax
payers of the District demand that the HssOss-
ment and collection of taxes should be in
trusted TO officers of the Uuited states appoint
ed by the President and accountable to the
Treasury Department through It's Internal |
Revenue bureau. Such q system with such
supervision, cannot fail to increase the rSye'
nues, reduce tho amount in arrears and result
In still further improvement Of tho credit of
tho District Of Columbia"
The report also reviews tho controversy be.
tween tho District authorities and tho Treas.
ury officials regarding the acquisitions
for the sinking funds, aud says
" 1t (the United States) certainly does
not exact too much when II demands that the |
moneys which it appr0pliates nom the public
treasury with such uuexamped libeality |
shall bo rigidly accounted for aud that tho |
funds devoted to the sinking fund, aud tho |
interest on the debt shall be disDursed by ils |
own. fiscal officer"