Evening star., 1915-11-05
FOR ABANDONMENT
Of FHALF-AND-HALF
Commissioner Newman Advo-
Gates New Plan of Finance
for the District.
WOULD HAVE CONGRESS
TAKE ON RESPONSIBILITY
Money Derived From Local Taxation
Would Be Turned Into Fed
eral Treasury.

| District Commissioner Newman today
made a statement before the joint Sc
| lect committee of Congress Investigate
| ing the fiscal relation between the
| United States and the District. urging
| the abandonment of the present half
| and-half plan and the substitution OF
| the so-called Works plan, providing
| that the federal government pay all of
the expenses of the District and that
| the citizens of the District be taxed a
| reasonable amount, the taxes to be paid
| into the federal Treasury.
Mr.. Newman said that District Com
missioner Brownlow agreed with him
| in regard to the solution of the prob
| lem.
| In 1878 Congress-" said Mr.. New
| man, "as is now well known, adopted
an act establishing a form of gov
eminent for the District of Columbia
and laid down in that act a principle
which has since become widely known
as the ha1f-and-half. l believe that
a great deal of the friction which has
arisen in the last few years is due to
a misunderstanding as to Just what
Congress in the act of 1873 agreed to
do. In the minds of a great many
people in the city of Washington and
III lHe HllHuS OIL d great many TlGfH-
bers of Congress l have found an i'm
preston that Congress not only agreed
to pay half of the expenses of the Dis
trict of Columbia, but that it agreed
to match dollar for dollar the reve-
nues raised by the District of Column
bia. Even casual reading of the
act of 1878 shows that Congress did
not agree to or propose to do any
such thing What Congress did be-
ieve the United States should do was
nf fbn
account of the District of Columbia.
What Congress Provided.
The act of 1878 provided that the Com
missioners of the District of Columbia
each year should make an estimate of
the expenses of the District of Column
bla for the next fiscal year. Then Con-
sress said paragraph 16 of the act of
1SiS), to the extent to which Congress
shall approve of said estimates Congress
shall appropriate the amount of 80 per
centum thereof
Il think the reason for the impression
that Congress agreed to match dollar
for dollar the money raised in the Dis
trlct of Columbia is due to the fact that
almost all the time from 1873 until the
present the revenues of the District of
Columbia have been less than one-half
OF the expenditures of the District of
Columbia, SO that in actual practice Con-
gress has matched dollar for dollar the
amount of money raised locally
The act of 1878 was absolutely sound
in theory, provided you grant the logic
or propriety of fixing the District and
federal contributions upon the percentage
basis. / say this because in that act
paragraph II, Immediately following the
paragraph just quoted-Congress said
And the remaining so per centum of such
approved estimates shall be levied and
assessed upon the taxable property and
n ba he
property of the United States and of the
District of Columbia
Fixed Rigid Tax Rate.
I'm other words, in 1878 Congress
said, The United States will pay one
half of the expenses of the District of
Columbia and by proper legislation will
levy such taxes as will produce the
Districts half Had this purpose been
followed the present crisis in the fiscal
affairs of the District might not have
arrived. But very soon after the pas
sage of the act of 1873 Congress fixed
the tax rate in the District of Columbia
at $3.50 per hundred, and it has stood
ever since. This rigid tax rate has
necessarily produced each year an in
creasing sum of District revenues until
at this time those revenues exceed the
Districts half of its annual expendi-
lures and bring sharply to the surface
for consideration the whole question of
how much the District and how much
the federal government should pay of
the annual bill
July !, 1916, we anticipate that we
will have a surplus of revenues of the
District of Columbia of something in
the neighborhood of S1,500.000 to ST.
100000 We would have had a surplus
of nearly a million July /, 1915, had
it not been that we met an unusually
| large payment on account of old debts
which, for one reason or another. had
accumulated against the District in
the fiscal years 1914 and 1915 we paid
wholly from District revenues an old
bill for care of insane of S719,536 o9,
and old interest on 3.65 bonds of $780,
o6723 old debt to Freedmen's Hospital
of S37. .996.70; we restored to the federal
government s165,937 of rentals on prop
erty belonging to the United States
and we made UP a shortage of S63, 900
arising from a defalcation of a District
employe.
Big Surplus in Future.
| Looking into the future, we find an
additional reason why it is very i'm
| portant that this increase in District
revenues be carefully considered 1t
seems to me that these figures alone
| show the necessity of a rearrangement
| of the fiscal relation between the Dis
trict of Columbia and the United States.
| because unless they are rearranged In
1oEV we w III nave d surplus
revenues of about s9.000.O00, which OBJ
| viously would be absurd"
| Mr.. Newman submitted the following
| as tentative estimate of surplus in
! District revenues over approximation
| charges for the fiscal year ending June
| 80, 1920:
Estimated Estimate
pOftoh OF surplus Of
appropriations Estimated revenues
payApe from District appropriation
District revenues. revenues charges
| 1885,. So 40 507 n SSO71 300 90 81 9OI 300 IT
| 1917. $500 ooOO s,10O, 10000 /, 900 900 90
| 19Is.,. s7JoO00.O0 S 800 0oG 90 2'o50 Ooo 90
| 1918... I.0oO0oooo 1900 10000 1000, 600. 90
l92o.-. 7ooOooo.oo 9,2ooOOoOo 2,20o, ,000.Oo
Estimstsd d ,ssd surplus accumulation % ., .oo -
by l3<o 80, ,751 1892. II
! Deduct dehnciency in revenues
close 1915 765 Jog IA
| Leaving accumulated surplus
Of about SO. .ooo, 10000
Decrease In Tax Rate.
TN considering the increase of reye-
nues I would like also to call the COM
| mittee's attention to the fact that
| there has been. in effect since 1873 a
| decrease In the tax rate. l said a mo-
ment ago that the rate was fixed at