Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-12-18
READJUST|NG OLD
U.S.-D.C.ACCOUNTS
Controllers Ruling Bears on
Federal Obligations in
Capita|-Making.
DEBT-INTEREST AND
PRIOR OBLIGATIONS
A Full Accounting Would Show q
Heavy Credit for the Dis
trict of Columbia.

Controller Dovne.'s decision In the
matter of the miliiOn-dOlIar claim
against the District to reimburse tue
United States In full for advances I"
pay interest the 3.65 bonds In iS''
and 1873 is of vital importance. The
contention thnt this million dol
lars, in accordance with the terms OF
the law under which it was advanced
by the United States, should he now re-
paid In fall by the District. and that
this reimbursement could lawful! ne
made by the Secretary of the Treasury
from District funds In his hands with
out further legislation by Congress.
The Districts response was 90 that
II anything was cOilectible on this ac-
count it wa: only One-half and not the
whole Of the million claimed: (2) that
this claim of the United States was
offset by claims of the District arising
under the half-and-haf arrangement
during the four years between 1874
and 1875, and that in full adjustment
of the account for these years on the
half contribution basis the United
States would be indebted to the Dis
trict; and t3) that If old claims and
equit- prior to 1873 are to be revived
in favor of the United States then they
must also in consistency and fairness
be revived in favor of Washington. The
old claim of the District against the
nation which revives If it not
merged in the bankruptcy settlement
of 1878 amounts to more than $l6,OOO,-
OOG.
The controller decides % that the
half-and-half principle applies to the
debt and thnt only One-haIf Is collect
II
legisiate On the subject before any
thing Is paid. In regard to the Dis
trict's contention Of n merger of the
claim In the bankruptcy settlement of
1873 and of an intention on the part of
Congress not to collect this advance,
because it was offset by claims of the
District against the United States aris-
Ing ON the half-cOntri: ion basis dur
ing the four years from 1874 to 1878.
the controller says the whole question
of the equities In the ease must lie
considered by Congress-, which is not
bound by technicaIities and which cnn
decide the issue on broad principles of
equity.
The claims and eGuities of the Dis
trict in this connection WIKI. .h are to
be considered by Congress In deciding
this question we're xummar arined In edi-
torial correspondence in The Star of
December e. 1s13' ms follows:
Any claim of the United States against
the District Tor advances on interest OF
the 365 bonds between 1876 and 1873
would. in view Of the undertaking of the
United States in 1874 TO contribute pro-
portionately in payment of these bonds
and the fixing of that proportion in 1878
at one half, be only for the surplus over
one-hali of this interest, thus advanced
by the United States.
Irrespective of the conditions under
which 1t was created, this claim. if 1t
survived the bankruptcy settlement of
1873, survived as an ordinary debt of the
District to be met like other interest
and sinking fund payments on the bonded
debt as an expense OF the District and
paid as such under the half -and-llalf
provision OF the organic act. If through
neglect Of the nations agents this claim
was not collected in full prior to 1873 il
could only be collected after that date
on the half-and-half principle as an ex-
pense under the organic act. Since 1878
the nation has been under obligations to
pay one-half of the interest and sinking
fund on all the Districts debts incIud-
ing this debt; and if the nation collects at
all in l9l" it can equitably collect from
the District only cne-half of this debt: or
It must contribute one-half to the pay
ment OF the debt, which amounts to the
same thing.
Between 1874 and 1873 the District
was in the hands of national receivers
rendered bankrupt by the failure of
Uncle Sam. debtor in many millions.
to meet his capital-making obligations
In 1878 the affairs of this bankrupt
were settled by a compromise agree
ment affecting both past and future
Uncle Sans debt TO the District was
discharged by these proceedings in
bankruptcy. except as carried over into
the agreement of 1873. and SO We're all
the debts of the bankrupt capital Any
claim of the United States for any
vance account was thus cancelled by
the equitable compromise or bank
ruptcy settlement of 1873. 1t has been
treated as thus settled or wiped out
executive administration in the thirty
five years since 1873. It was treated as
thus settled by the Treasury Depart
ment in 1886. when the eoI possibility Of
making such claim Tor the United
States was pointed out.
If direct legal proof of such cancel
lation and settlement be lacking after
the lapse of thirty-five years Uncle
Sam, against whom the statute of limi-
tations may not be pleaded by a hostile
litigant. should apply to himself the
spirit of the statute of limitations and
the equitable principle in which it is
rooted. He should say: with control
over the whole affair in my own hands
all the time for thirty-five years have
during the whole period treated this
claim as disposed of in some way in the
compromise or bankruptcy settlement
Of 1878. / will not now. in common
fairness. reverse my position and de-
1913 legal proof of this settlement on
penalty of fine of million dollars II
this proof is not forthcoming. There
was proof which was satisfactory to
me in 1878 and imme mediateIy thereafter, |
whether it can be found after the lapse
of -thirty-five years not. And while
the statute of limitations cannot be
pleaded against me, I will not. in a
matter in which I occupy the position
of trustee. make a claim against the
beneficiary Of my trust, which would
be barred by this statute. If this claim
was not formally and specifically set
tied in 1878 it was all my fault. The
statute of limitations may not. be
pleaded against me, but I will plead it
against myself not to permit my ward
to evade a conceded honest debt but to
spare my ward the demand of legal
proof of hirty-fve-year-old fact
which l have treated as a fact during
these thirty-f1ve years."
III
If old claims and equities prior to
1873 are to be revived in favor of the
United States, then they must also, in
consistency and fairness, be revived in
favor of WASHINGTON.
1t Is not equitable to apply the half
and-half principle in equalizing ex-
penditures between 1874 and 1878, ex-
clusively to the interest on the 3.65
bonds. This same principle, If applied
to the bonds, should be applied to all
other expenditures on the Districts
account between 1874 and 1873, and