Evening star., 1914-01-22
The Districts Overbalancing Credit.

The Districts Overbalancing Credit.
The Washington Board of Trade has
taken a strong and sound position re-
.arding the alleged debt of the District
10 the United States in the sum OF
Si.oG;. 900 for interest on the 3.6o bonds,
which it is now sought by bill passed
ny the House in December to collect from
lucal revenues. The report of the COM
ruittse on municipal finance. of which
Col George Truesdell is chairman, which
was presented to the Board of Trade last
night at its meeting and was unanimously
adopted. states the Districts case IN
terms that permit no room for DOUBT
that if the case is viewed in spirit OF
equity il will be found that instead OF
the District owing the United states
ST no:: 600 the United States owes the Dis
trict 81 $50 coo To understand the basis
for the Districts contention that the
balance of the account is in its favor
instead of that of the United States the
conditions prevailing here forty years ago,
with reference to the federal government,
must be considered.
In the. interval between 1874 and 1875
the Districts affairs, taken away from
the previously existing territorial form
of government, We're i'll the hands of Of
tiCials of the United States, receivers in
bankruptcy, the so-called temporary
Commissioners of the District, to wind
up the affairs of the pre-existing mu-
nfcpal government. The moneys of the
District were in the possession of the
Secretary of the Treasury, subject to the
direction of Congress. The United States
al in tS
pay an unsettled percentage of the So
called District debt The four years be-
tween 1874 and 1878 were spent by Con-
sress as constitutional legislature of the
District in working out an equitable re-
adjustment of the so-calied District in
debtedness (Which was in truth national
indebtedness), in fixing as q part of this
readjustment the percentage of payment
to be made by the United States on capt.
tal-making expenses past and future, and
i'll establishing for the future a wise
permanent form of government of the
District Final action was taken by Con-
sress in 1878 on the facts reported by the
national receivers placed in temporary
control of the affairs OF the bankrupt
District. Pending the permanent read
justment of the Districts affairs, attained
in 1878. Uncle Sam in absolute control as
receiver of the District, and under obli-
CATION by the legislation of 1874 to meet
some portion of this so-called District
debt, including the 3.65 bonds, could have
paid all of the 365 bonds interest or
none of it, as he pleased, under a strict
construction of the statute and its literal
application In accordance with the facts.
In either case the final division of this
interest expense would naturally be set
tied in the final adjustment of the Dis
tricts finances and in accordance with
the terms of proportionate contribution
then fixed.
The Board of Trade committees report,
adopted last night, confines itself to the
receivership era between 1874 and 1878.
The United States had undertaken by the
legislation of 1874 to take under its regu-
.,,tion all the concerns of the District and
had recognized its obligation to contribute
jroportionately to its expenses, including
the debt or debts of the District. During
tie interval between 1874 and 1878 the
expenses Were met as was most conven-
eut from District taxes or by appro-
:riations by Congress in varied phrase
Ology.
II is iInmaterial as to the shape in
which the advances for the maintenance
If the District during this period were
made and from what side they came,
since the whole matter was TO be adj
Justed in conformity with the act Of 1874,
wnen later Congress had fixed the pre-
Else figures of contribution by the MEM
bers of the National Capital partnership
The vital question is whether the act of
lit-ihl fo c.
sumo future obligation or the definite
assumption of a present obligation, the
precise amount of this obligation to be
ater fixed. The District has always con-
tended and now repeats the contention
hat the latter was the purpose and ef-
iect of the statute, and that the act of
1878 was but the formal statement of the
precise figures of proportionate contribu-
ton which became operative in 1874 un-
der the legislation of that year.
After the enactment of the act Of 1873
the duty arose, no matter how the Dis
trict's expenses had been met in the in
tervaI, to readjust the entire matter so
that the burden should rest evenly on
the two parties for the receivership era.
The 1ruesdell report, which the Board
OF Trade adopted last night criticises the
accounting upon which Is based the
Prouty bill for the collection of 81, ,OO3, 600
from the District, for taking out certain
TENS of the account between 1874 and
1875 and causing them to survive and
bringing them over for settlement and
objection after thirty-five years, while
ueglecting to consider the general ac-
count for that period. This report figures
up what was paid in District taxes and
what was paid or advanced by the United
States and, applying the principle of equal
partnership participation adopted by Con-
sress in 1878, and equitably and in ac-
cordance with the act of 1874. to be
viewed as intended to cover the entire
receivership era, divides the aggregate
amount of expenditures on the District $
account by two, to find out what each
side should have paid and yields the re-
suit that during this period the United
States paid S1.3s2 COO less than its half.
Thus il appears, from a careful exam
nation of the accounts of the bank
United States was under an undeniabie
obligation to put up u certain proportion
of the Districts expenses. that instead OF
the District owing the government
S1,uO3. 600 for interest on the 3.65 bonds
tie government owes the District ST.
So, eco in moneys which it should have
paid ON the subsequently established half
and-half basis. No other conclusion is
tenable than that Congress designed tc