Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-11-30
Larger Sum Than Usual for
Sinking Fund Proposed by
Commissioners,
SUGGEST THE DEPOSIT
:. OF THE TOTAL SURPLUS
Belief Expressed That Appropriation
Act Will Maintain Half-and-
Half Principle.

1t became known at the Capitol today
that the estimates of the Commissioners
for the District of Columbia appropria-
ton bill contain a proposal to use the
surplus revenues of the District to pay
on q larger proportion than usual of its
funded debt, and that the Commission
ers' proposal is couched in the following
words:
Amy balance of revenues of the Dis
trict of Columbia remaining to its credit
after its share of the appropriations con-
tanned herein has been paid and after its
share of any other appropriation TO
which it is required to contribute in the
fiscal year 1916 has been paid, shall be
credited to the interest and sinking fund
for application toward the funded deot
of the District of Columbia.
Upon this recommendation of the
Commissioners the appropriations
committee is now at work and there
seems to be no doubt that the pr1nclpie
contained in the recommendation Will
be followed in the draft of the bill.
In the opinion of those who are ac-
ouainted with District legislation and
. finance. this proposed LEGISLATION would
provide that whatever balance re,
would be turned into the sinking fund
to be matched by the federal govern
rnent dollar for dollar. not necessarily
this year or next, but before 1924, when
the funded debt is due.
Based on the Law of 1874.
This opinion is based on the law of
1874 authorizing the sos bonds. which
constitute the funded debt of the Dis
trict. supplemented by later legislation
in 1873. and clearly expounded by the
opinion of George E. Downey, con-
troller of the Treasury, January 3,
1914
However. to make the matter perfect
ly clear, it is urged that the proposal
Of the Commissioners should carry
whatever language is necessary to
show that the surplus from the 1916
funds thus turned over to help pay the
Districts funded debt is to be applied
In part payment of the Districts half
contribution to the payment of the
$22,e00,000 debt which the United States
assumed in partnership with the Dis
trict in 1874. This, in the opinion of
oficials of the District and other ex-
perts, would make this proposed law SO
and relieve the situation from any pos
sible doubt.
AS has been shown in The Star pre-
viousiy. the funded debt OF the Dis
act occurs the words "and the faith Of
the United States is hereby pledged
that the United States will, by proper
proportional appropriations as con-
templated in this act, and by causing
to be levied upon the property within
said District such taxes as will pro-
vide for the revenues necessary to pay
the interest on said bonds as the same
may become due and payable, create
sinking fund for the payment of the
principal thereof at maturity"
fishing the present form Of District
government, became the starting point
for all District matters, and that act
contained the promise of the United
States government to pay one-half Of
the Districts expenses.
Affirmed by Controller Downey.
The opinion of Controller Downey
says on this point:
The proper proportion of appropria-
tions having been determined by the
act of 1873 as contemplated by the
act of 1874. the pledge became
pledge to appropriate so per cent out
OF the Treasury of the United States
ana 90 per cent out of the revenues of
the District"
So it is fundamental principle that
the District of Columbia revenues when
placed IN the sinking fund to meet the
maturity of the 1865 bonds in 1924 must
at some time be matched dollar for
dollar by the federal government.
s,stas ST. IS iS not necessary that the United
equal sum to the credit of the sinking
fund In the case of this proposed use
or surplus. but unless it is eventu-
ally done there is clear violation of
the pledge which is indelibly written
IN the organic act and forcibly ex-
planned in the controllers decision.
Inc District appropriation bill for
the coming fiscal year will contain an
item of $S07.4QS- to be placed in the
sinking fund on the half-and- half prin-
cipls as all District bills have for years
past rms sum Is the amount called
for by an exact actuarial computa-
tton as to what cash should De lard
aside annually to meet all interest and
principal by 1924. when the bonds ma
ture.
Reduction Of Debt Shown,
This funded debt was originally 60
1es.s50 In 1874. 1t is now approximate
1y sS.533,000. The total amount of
money. interest. principal and pre-
miunas, which has been placed in the
sinking fund since the beginning is over
S4s.000,0o0. This includes some paw
ments on a few random debts which
have been cleared up-and all this
money has been on the haIf-and-half
plan This large sum. expended during
forty years, shows the history of the
bond issue and its retirement under the
half-and-half plan.
While on paper the sum to be placed
by the District i'll the sinking fund at
the end OF the fiscal year 1916 appears
TO be about s1,500.O00. the actual sum
may shrink to s240, 900. This occurs be-
cause OF shortage in the receipts of
the District.
Actual receipts in the past two wears
DID not reach the expectations of the
District officials. and projects to be paid
Ior consumed more money than the
District actually received Because of
the increased taxation and the slashed
estimates of the fiscal year 1916, these
1ormer shortages will more than be
made up ana the prospect is that an
actual cash balance of $40. 000 vii, ha
turned Into the sinking fund. This
could remain there as the District's
snare OF Its payments toward tho n'ti-
mate wiping out of that debt which tba
United States has promised to assune
IN equal portion with the Nationa,