Evening star. [volume] (Washington, D.C.) 1854-1972, 1911-07-30
Legislation Regarding 3.65 Bonds.

act Of Congress approved June 80. 1874,
at maturity
Legislation Regarding 3.65 Bonds.
Does not that act just read by the
gentleman from Ohio say that these ad-
vances made by the United States gov
eminent shall be appropriated Out Of
the proportional sum which the United
States may contribute toward the ex-
penses of the District Of Columbian
That is as plain as the English language
| can make it, but, Mr.. Chairman, there
is this. In 1874 Congress authorized
| the issue Of these 1865 per cent bonds
to pay the debts Of the District of
Columbia. then amounting to $22,000.000.
discovered that all kinds Of debts were
being paid by these 3.65 per cent bonds.
credited into these 1865 bonds. There
was an old bond issue of 1928 to pay
| q lottery debt of the city of Washing
ton. Then in 1876. March IL. Congress
passed an act saying that no more of
| these bonds should be issued, and no
more of them were issued, until years
afterward, when by implication from an
other act the sinking fund commission
ers did issue more bonds. and under
the sinking fund of 1879. to which the
gentleman from Ohio has just alluded.
it was specifically and emphatically set
forth that in the retirement of these
bonds they should be retired at par.
Yet in the face of the law they have been
continually retired at a premium They
have been retired as high as l2S, and
only during this week, in defiance of
| this law, some of these bonds have been
retired at 105 Under the act of
1885, believe it Island am
speaking only from memory-a million
and a quarter of these bonds were is
sued in denominations of $500 and $1,000
each, when the act specifically said that
they shall be issued in denominations of
say, there is grave and serious doubt as
to the validity of a $1,000 bond. as to
the validity Of $4,000 bond, when the
act says they shall be issued alone In
denominations of $50 and $500.
| ..Wtll the gentleman kindly inform the
committee whether these bonds that have
been retired were retired before matur.
ity?' suggested Representative Kahn of
California
..They were all retired before maturity,
| because none Of them will be due until
1924" replied Mr.. Johnson.
| "Then does not the gentleman think
| that the purpose of paying the premium
was in reality to save INTEREST,"" said Mr..
Kahn.
mo matter what the object was" an
swered Mr.. Johnson, II say that it was In
open defiance of law. There is no law
| for their retirement at a premium. There
! is no law for the issue of a one-thousand-
| dollar bond or of Neutrality-suspicious.
| bond. yet. not by authority or congress
| but by virtue of executive officers, the
| United States government is today being
| compelled to pay one-half of the interest
and one-half of the principal upon the
bonded indebtedness of the District OF
Columbia created as far back as 1928.
| when she has positively and emphatlcaily
| refused to do so by statute
| eff 1t had been the purpose and object
| of Congress-" suggested Mr.. Sims, to
| absolutely assume one-haf of the debt
and interest and there was to be no re-
| District. does
to reason the debt would have been di-
v:ded and the government issued its bonds
for it's half and the District had nothing
| to do with it,
Attorney Generals Opinion.
yes" said Mr.. johnson; land before
these bonds were actually engraved the
| Commissioners laid before the Attorney
| General of the United States tie ques-
! tion as to whether or not they should
engrave upon these bonds that they were
guaranteed by the United States. and in a
written opinion the Attorney General told
| those Commissioners that they could not
write that on these bonds. but instead
of that they did quote the act of 1874
and that appeared upon these bonds now.
making it plain that Congress never In
tended for the United States government
| to pay a cent of either the principal or
| interest upon these bonds The act au-
| thorIzing their issue compelled tie Dis
| trict of Columbia to pay for the printing
and engraving of them"
! Authority Given by Controller.
when l was looking up this matter"
| said Mr.. Taylor II myself was put to
| some trouble to try to find some au-
thority for the purchase of these bonds
at above par when the act Of 1878 spe-
officially stated that they should be retired
at par / found they were being pur-
chased and destroyed at price above
ear. After a good real Of trouble / called
upon the controller, and I found that he
| had rendered an opinion based upon this
statute with which think the gentleman
is probably familiar. Without going into
| II a statute was passed in 1881 stating:
| THAT hereafter the said treasurer as
ex-offlcio sinking fund commissioner as
aforesaid. with the approval Of the Secre-
| tary Of the Treasury, Is hereby author
lied and empowered to purchase any Of
the funded Indebtedness OF SAID District
Of Columbia for the sinking fund author
| lied to be created for the redemption and
| payment Of the indebtedness of sad Dis
| trict of Columbia. as In his opinion may
be for the best interests OF said District
| Of Columbia
| Now, Controller TracewclI, find, rem
dered an opinion that allowed them to
buy the bonds known as the three sixty
Ave bond at prices above par II they saw
fit"
"If the gentleman had only given pa