Evening star., 1922-01-26
FURTHER BREACH
Of ORGANIC ACT
IN NEW D. c. BILL
Sinking Fund Provisions Now
Put on New 60.40
Ratio.
HERETOFORE, TREATED
ON THE $3.50 BASIS

Joint Congressional Committee Of
1915 Found That Haf.and.Half
Law Should Govern.
as it comes from the House commit.
tee follows exactly in it's appropria.
tive clauses the same formula thai
has prevailed in the last two fisca
enactments, it makes one importan,
change in both fact and principle, tc
the disadvantage of the District, and
in departure from the previous prac.
tice. 1t provides a fund of 100000 tc
meet interest and sinking FUND
charges for the funded debt Of the
per cent from the District revenues
and 40 per cent from the federal rev.
enues. Heretofore this sinking fund
item has been kept on the fifty-f1fty
ratio. 1t was so stated in the esti-
mates submitted by the Commission
ers and by the budget bureau.
The sinking fund item has hereto
fore been. treated consistently in a
class of it's own as a contractual CO.
legation. The joint congressional
the District and the general govern
ment made that distinction In 1915
and Congress has recognized the
equity Of the ffty-f1fty ratio as ap-
piled to the debt even when 1t has
changed the ratio in other respects
1t is now proposed for the first time
to break down the hitherto preserved
joint participation in debt extinction
and on the very eve of the final liqui-
dation Of the debt which. it Is esti-
mated. will be extinguished August
l. 1924.
Joint Committees Report.
In it's report to Congress the joint
committee on fiscal relations in 1915
said:
We find that the interest on the
funded debt should be paid by moneys
from the Treasury of the United
States and so per cent charged to the
revenues OF the District of Columbia
and SO per cent charged to amount
appropriated for the expenses of the
District of Columbia from the moneys
of the United States. # r.7a
The funded debt consists entirely
of 8.65 bonds ESQ called because -of
the rate Of interest they bear) OF
the District Of Columbia, amounting
At this date to @s.22S. 900, and q
which $s75,4os is paid yearly. one
Of Columbia and one-half by the
moneys of the United States.
The time of payment Of this funded
debt extends to the year 1924. but
with an annual appropriation Of APP
proximate'y $s75,4os the debt will be
two prior to 1924. and when paid the
District Of Columbia will have no
other funded debt.
This funded debt had its origin in
the very extraordinary expenditures
for city improvements. principally the
establishing, grading and paving Of
streets and avenues, the construction
trees and generally the rebuilding
and re-equipment Of the city Of Wash
ington from a then existing deplora-
BILE condition Of utility and santa
tion along the lines Of a great ma
tional capital which 1t was intended
to be and which destiny 1t Is fulfill
ing.
Move for New Basic Law.
These expenses accumulated between
1871 and 1874 in very large amounts,
burdensome upon both the District OF
Columbia and its citizens, which bur-
dens became fully realized and for which
relief was first sought by the act OF
June. 1874. providing, among other
things,
THAT joint select committee shall
be appointed. consisting Of two senators,
to be appointed by the presiding officer
Of the Senate, and two members Of the
House. to be appointed by the Speaker
of the House of Representatives, whose
duty 1t shall be to prepare a suitable
frame Of government for the District OF
Columbia and appropriate drafts OF
statutes to be enacted by Congress for
carrying the same into effect. and re-
port the same to the two houses. re-
spectively. on the first day of the next
session thereof; and they shall also pre-
pare and submit to Congress a state
expenses Of said government, or any
branch thereof. including interest on the
funded debt, which should be borne by
said District and the United States, re-
spectively. together with the reasons
Ss Spsii sssd. y which their conclusions may be
OASSus
The principle Of Proportional pay
ments on the funded debt account was
established in the sundry civil act OF
1874. President Grant In his message
in December of that year noted spe-
officially this principle and subsequent
enactment in 1878 further established
It, The joint committee in its report
intent to maintain a partnership OF
obligation in the discharge of this
District indebtedness.
Controllers Decfsion.
Noting that the organic act Of June
II. 1878. provided for the payment OF
the debt Of the District by definite
epportionment on the f1fty-fifty basis,
the joint committee recited an opinion
rendered. by the Controller of the
Treasury. January 8, 1914. in which he
reached the following conclusions:
TT remains for US. upon the prem
ises thus. as believe, satisfactorily
established. to predicate proper con-
Il. The indebtedness represented
by the 8.65 bonds was indebtedness
Of the District Of Columbia, and not
in any part the indebtedness Of the
Unit United cd. states. 9 ss,,S and the bonds Of the
'.2. To restore the credit Of the
District of Columbia, make accepta-
BILE to creditors Of the District s.65
bonds by guarantee Of payment.
and assume the to-be-determined
equitable proportion to be contributed
by the United States toward the ex-
penses of the District. the United
states covenanted with the holders
of these bonds that 1t would provide,
by taxation on the property within
the District, q portion Of the reve-
nues necessary to pay the interest
on and principal of these bonds, and
that It would provide the other por-
tion. ito be determined. by. appropria-