Evening star., 1913-02-17
Commissioners Will Object to
Refunding 81, ,003,257.24.
PLAN FOR RELIEF HINTED
Claim Made Organic Act Was In
tended to Cancel Obligation.
CHARGE REPRESENTS INTEREST
Assuming Money Is Owed, District
Heads. It Is Said, Believe Ac-
count Is Invalidated.

| Although inclined to believe. without
| having made an examination of their
| own. the reported discovery by Scott
| Mayes expert accountant of the House
| District committee. that the local govern
ment has failed to refund to the United
States an interest charge amounting to
| 81, COS, ,2J724, the District Commissioners
| will. in all proba ability. oppose any at
tempt on the part of Congress to collect
| this money.
! In the absence of any official notifca-
| ton with respect to the unearthing of
| this old account. or intimaion as TO
what steps Congress may take to ad-
just the situation, the Commissioners to-
day refused to discuss the matter
1t may be said, however. that they have
a plan for relief should the statements
made by Mr.. Mayes be substantiated. Ad-
mittng that the item referred to by the
expert accountant has not been paid, the
District heads it is limited. may oppose
it's payment on the ground that the charge
was contracted before 1873 when the Or
ganic act for the District was adopted.
and that this law was intended to cancel
all obligations between the local and fed
eral governments up to that time.
Charge Was Interest on Bonds.
ne St.pJJ, ~ tHdISe represents tic
interest on the $50 bonds in one special
year. These bonds were authorized June
%, 1874, and interest thereon was paid
three times by distinct acts of Congress.
The fourth payment is the one which
causes the trouble. According to Mr.
Mayes' report. the federal government
advanced 81, ,OO3, - for the fourth in
terest payment July l, 1876. and the
amount was never repaid by the District.
The question arises: How did 1t occur
that the District of Columbia could owe
the United States government the amount
of 81 ,OO3,2o1 for period of nearly forty
years with no claim or demand made upon
the District for the payment of this in
terest money?
7 This is the phase of the situation that
interests the Commissioners. and the
fact that no demand was made for the
money will, in all probability, be ad-
vanced by them as an argument that,
in the adoption of the organic act of
1878. Congress intended that all obli-
cations existing at that time should
be Cancelled and the local and federal
governments enter into a new relation
ship.
Reason for Depleted Treasury.
Another argument which may be ad
vanced is that between the years 1880
and 1876 the people of the District of
Columbia contributed almost twice as
much for the maintenance of the National
Capital as the federal government, and
that this tended to bring about the condi-
ton Of bankruptcy which confronted the
District at that time.
1t is the belief of officials of the local
government who have been examining the
records for this period that Congress in
tended, in view Of the heavy contributions
made by the people of the District up to
1873, to wipe out existing debts includ-
ing the interest charge referred to, when
it adopted the organic act or 'half-and-
half plan for the government of the
District Of Columbia.
1t is well known fact an official of
the District government pointed out to-
day. that the District had contracted an
enormous debt. which had been imposed
upon the local taxpayers by the agents
of the United States and over which the
taxpayer had no control. Congress re-
allied the situation, and. in order to have
an opportunity to consider it. created a
temporary form of commission.
Came to Aid of District.
While the District was in this condi
ton of practical bankruptcy it was
necessary, in order that the ward of
the nation might not default in it's
payments on it's indebtedness, that the
OUltcu otdtcS CAdCtls Id
1t did-authorize the Secretary of the
Treasury to pay the interest on the
debt from time to time when it fell
due.
required that money so advanced
should be reimbursed to the Treasury
out of the revenues of the District
The financial condition of the Dis
trict at this time, 1T Is stated, was set
forth in the report of the Commission
he fiscal an6fpfr lime 20
1878. the report being signed by s. L.
Phelps. J. Dent and w. j. Twining,
Commissioners.
This document shows that the people of
the District. during the period 1880 1876
had contributed $43, 462 72O74, whereas the
United States had contributed only ST.
81 ,95G, the latter sum embracing eX-
penditures for improving public grounds.
Botanic Gardens, and the White House
grounds. together with their keepers
watchmen, labOrers and other current eN-
penses.
Factor in Financial Stress.
Thus it is reasonable to suppose, local
government officials suggest, that this
system under which the people of the
District furnished twice as much money
as the federal government contributed to
the financial stress of the District at that
time.
Congress, it is pointed out. having
studied the situation thoroughly. conclud-
ed that it was only proper and just that
the government of the United States
should contribute 80 per cent of the ex-
penses of the District of Columbia in
view of the fact that the United States
government controlled 30 per cent of the
ia axable area in the District.
1t is logical conclusion, say the Dis
trict authorities. that Congress. knowing
the financial situation of the District of
Columbia, intended, in adopting the or
ganic act. to relieve the local government
from any charges and Indebtedness that
had been previously made due the United
States.
In other words. the passage of the
organic act it is believed, was intended
not only to settle the future relation
ship of the two governments but to
settle any outstanding debts or obliga-
tions then existing.