Evening star., 1922-06-24
Rate by Mail-Payable in Advance.
Maryland and Virginia.
All Other States.
Our New Organic Act.

The new fiscal relations law OF the
District has. as The Star has already
indicated, both its good and its bad
points.
It's fundamental and conspicuous
merit IS that it approves. and con-
t!nues in permanent legislation, as a
substitute for the organic act Of 1878,
rhe principle of definite proportionate
contribution by nation and local conf
n,unity in capital upbuilding.
This Will characteristic of the law
of 1878, from which the wonderful de-
velopment of the capital has sprung,
has been threatened repeatedly in the
House and very recently in the Sem
ate. The capital community owes
debt Of gratitude to the trainers OF the
new law for preserving this definite
relation between unrepresented Wash
ington's tax contribution for capital
upbuilding and that Of the nation
which through Congress is the capt.
tails alien and exclusive legislature.
The G0-40 ratio IS not as effective
safeguard against un-American and
excessive taxation Of the unrepresent.
ed taxed by an allen taxing body
as the $3.50 ratio. But it will serve.
Some uneasiness has been felt at
the sweeping authority reserved by
Congress 10 make appropriations in
-
than 604O.
But the custom is well established
Of appropriating on the full cost basis
in exceptional cases. whenever Con-
sreSs pleases. without any authority
TO do so in the substantive law: and
by putting on record authority to
make exceptions the way is opened for
the District to urge that purely ma
tional expenditures though made in
the District shall continue to be paid
from the Treasury, and that the half
and-half obligations shall be fully met
that are contractual. as in the case Of
sinking fund payments on the 3.65
bonds, or that will otherwise make q
change Of ratio inequitably retroac-
tive, as in the case of final expendi-
ture of the Districts five millions Of
tax surplus accumulated under the
half-and-haf law.
In discussion of the new law while
in the making its bad points In sub.
stance and in method Of enactment
have been thoroughly exposed and
criticised. Broadly its main demerit
was in its apparent proposal that
realty taxes should be increased pos
sible so per cent and that the intangf-
bles tax should be increased certainly
S6 % per cent in order that the tax
payers Of 1927 might, after paying
60 per cent of current expenditures,
accumulate a surplus by the begin
ming Of the fiscal year 1928, which
would enable the District to pay in
advance ten months expenditures Of
collected near the end Of the year, be-
gan to flow in.
Elaborate planning for building up
this new surplus implied denial Of the
existence of our present five-million
accumulated tax surplus. AS no
change in the date of tax payment
was originally suggested in the pro-
posed law it was implied that the taxes
Of 1928 would be paid in lump near
the end of the fiscal year. If these two
suppositions were accurate the burden
was imposed upon the taxpayers Of
the next five years Of accumulating
enough annual surplus so that at the
end of fiscal year 1857 the District
would have in hand its share Of ex-
penditures for nearly the whole Of the
fiscal year 1928. Official estimates Of
the amount of this compulsory surplus
required the taxpayers Of the next five
years, after paying current expenses,
to plan to raise altruistically for all
powerful Uncle Sans fiscal protection
between s2,500000 and 100000 in
each year.
1t was, however, quickly ex-
planned that the only compulsory
and unesca pable requirement by Con-
gress In this connection is that at the
- =
the District shall be able to adopt the
"pay-as-you-go" system. and put up
It's share of current expenditures as
the occasion for making them arises
without compelling Uncle Sam to
make advances from the Treasury to
enable the District to meet its share
Of the bills until tax-payment day is
reached.
The amount of the necessary 1928
surplus could obviously be reduced by
changing the date or dates Of tax pay
ment to earlier in the fiscal year, and
the necessity of any new advance in
1928 could be removed by govern
mental recognition of the existing ac-
cumulated tax surplus and the utiliza-
:ion Of part of this fund to put the
District in 1928 on the pay-as-you.go
basis.
The trainers Of the new law in Con-
gress have therefore assented to an
amendment which changes in the
manner suggested the Districts tax
paying days; and instead OF definitely
repudiating any national obligation in
connection with the Districts existing
surplus they have by another amend
nlent created a Joint committee to as
certain exactly the amount Of this ac-
cumulated tax surplus. when any
counter claims of the United States
have been considered.