Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1925-10-23
Gov. Richie ReneWs Attack On
Aid To States.

State Chamber Of Commerce at Harrisburg
last Friday. again attacked the system Of
conditional subsidies whereby the Federal
Governments appropriations must be
matched by the States and the States
agree to submit to Federal supervision
over the purposes for which the money is
spent.
Two points brought out by Gov. Richie
had not been referred TO heretofore by him
10 bis addresses on the 'ffty-ffty" State
aid system. The first was in reply TO the
contention Of Western States that the tariff
benefits chiefly the industrial East by
favoring manufactures and adds to the
burdens Of the West. thus justifyine Fed
ersl subsidies TO the West as a sort Of
evening up" process.
Aside from the fact that two wrongs
cannot make a right" said the Governor.
the tariff question is a great political
issue Of itself-bie. complicated and far
reaching. The particular States it may be
said to favor at the expense of others
depend entirely upon the provisions Of
the particular tariff law which is in effect
at any particular time
But assuming that the tariff laws dur
ing recent years have favored the industrial
and urban East at the expense of the az
ricultural and rural West. still this feet
could not justify any system Of Federal
subsidies to the States except one worked
out on basis which would make up to
the West for this discrimination.
The 'ffty-fifty' system Of Federal aid
is worked out with no such purpose in
mind. The allotments under it. as pro-
vided by the various acts. are based on
rural. urban and total populations and on
road mileage. and include also fat appro-
priations. and they are made to the States
without any regard at all to the question
whether or not any particular State has
been favored OF injured BY any particular
tariff.
1T Is simply not possible to check tariff
results in the States against Federal aid
results. and say that benefits to individual
States from Federal aid make up or tend
to make up for detriments to those States
from the tariff. The two things are en-
tirely disconnected. and each must be
treated separately"
The Governors second point was in
refutation Of the argument of a number
OF Western States that Federal aid simply
is grant to them Ia lieu Of taxes on their
large areas Of Federal domain, which are
exempt from all taxation and that the
government in fairness ought to compensate
those States for the increase in the value Of
those areas which results from local i'm
provements and for which the people Of
the State pay. The Governor said this
argument seems plausible and needs to be
refuted in practical way.
But as an argument for the 'fifty-fifty'
system" the Governor said. this is mis-
leading, because 1t disreeards the fact
that the Government already pays the
States in which the public domain is To-
Gated part Of the revenues from the public
domain which is within their respective
borders. and these payments undoubtedly
are greater than the amounts which the
States receiving them would obtain from
the Government II the latter held the do
main as taxable landowner.
In support Of his statement, Governor
Richie cited that the National Forest Fund
act. under which rs per cent Of the gross
revenues from timber sales. livestock privi-
leees and other uses Of the Forest Reserves
goes back to the States where the reserves
are located for their schools and roads and
an additional 10 per cent is appropriated for
forest roads and trails. Under the Mineral
and Oil Leasing act. the Governor asserted,
81 l-2 per cent of the bonuses and royal
ties from oil wells and mineral resources
on public lands goes back TO the States
where the same are located for their roads
and schools
Neither Of these acts require the States
20 put up any Of their own money" Gov
Richie said. NOR does the receipt by the
States Of these subsidies involve control
by the Federal Government over the ex-
penditure Of the funds on the local roads
and schools to which they are dedicated
This vicious characteristic of Federal aid
under the 'fifty-fifty system Is not present
In the legislation. The subsidies are straight
payments"
In a table showing the amount paid the
several States from the receipts from the
Federal domain. the Governor pointed Out
that eleven Of the Far Western States re.
cefve $l4.eS5.636.29. while eight States
receive nothing. and the balance Of ST..
500.827 II is divided among the remain.
Ing twenty-nine States. and nineteen Of
these States receive less than $25 900 each
Governor Richie furnished seven tables
brought down to the close OF the fiscal
year ended June 80. 1924. showing pay.
ments by the States to the Federal Gov.
eminent and the amounts received by way
OF subsidies. Another table shows the
value Of real property and improvements
taxed and exempt in each State. with the
percentage of exemptions to taxed property
Wyoming leads the list. with a ratio Of
124.05 per cent Of exempt property to 100
per cent Of taxed property. 10 thirteen Of
the States the proportion Of exempt prop
erty is above 20 per cent. and Iowa is at
the bottom of the list with 40 per cent
exempt. Maryland's ratio Of exemption is
14.4S per cent. In the whole country,
according to the table. the ratio Of exempt
10 iarad real nrnnarfv L. 70 iS m. .o..