Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-04-17
The Capper Loan Proposal.


The point Immediately to be raised in
connection with Senator Capper's Munic-
ipal Center financing proposal is this:
Why should the District be charged in
terest at three and one-han per cent on
money advanced for this particular
semi-national project when, in the case
of two other semi-national projects, the
Cramton park bill and the Bingham air
port bill, no interest is to be charged
and the interest-free loan is construed
as representing q part of the Federal
contribution?
What justification exists for such
discrimination in this most impress
sive of the great undertakings that con-
front the local community in its task of
maintaining and developing the Federal
City, the Nations Capital?
If the Federal Government, as in the
Cramton bill, feels obligated to particle
pate to the extent Of advancing, interest
free, money for the purchase Of parks in
the Capital; If the Federal Government
feels. obligated, as in the Bingham bin,
to participate by an interest-free loan,
plus the donation Of land, in the acqut-
sition and development Of a National
Capital airport, what semblance of rea-
son remains for foisting a great debt
upon the District In connection with the
Municipal Center without even these
evidences of joint responsibility on the
part Of the Federal Government?
Interest at three and one-half per
cent on the s15ooo,0O0 loan proposed
IN the Capper bill, with reduction Of
principal at the rate Of $1,000, 900 q
year, will amount to s4,20o,0oo, or an
average annual interest payment Of
$2s0,o00.
If the Federal Governments contri-
button to the Districts general fund
remains 100000, and this lump sum
Is generously construed as representing
twenty-five per cent-which it does not
the District will be paying more in
interest on this loan than it receives
from the Federal Government In the
proportionste parts Of the annual al
lotment that go into reducing the prin-
cipal.
If a part Of the Federal Govern
ments allotment to the general fund is
to apply to payment Of interest as well
as reduction Of principal, the net an
nual cost to the District, to be taken
wholly out Of local taxpayers money,
will amount to an approximate $se0,o0o
year.
AS in the case of all these proposals
for Treasury advances or Treasury loans
to finance the semi-national undertak-
ings of the Federal City, the evil does
not rest in the proposals themselves,
for it is often necessary as well as
good economy to go into debt. And
there is no particular reason Why the
District should not 60 into debt 70
finance large projects.
The evil rests in the existing system
Of sharing expenses between the Dis
trict and the Federal Government, with
the resulting destruction OF the con-
cept Of fair partnership between them.
Substantive law, enacted and never re-
pealed by Congress, fixes the Federal
appropriation OF forty per cent. Depar-
ture from this lawful system by means
Of legislative evasion has reduced the
Federal contribution to something less
than twenty-five per cent year, and II
this policy, If it can be dignined by calling
it a policy, is continued, the reduction
in the amount Of Federal participation
will be steady and continuous, for since
1924 the expenses of the Federal City
have been growing by leaps and bounds.
Thus the proposals for Treasury ad-
vances or loans, sound If undertaken
on the basis Of equitable partnership in
Capital financing, become grave dangers
to and unwarranted burdens upon the
taxpayers of this community. The curb
upon the tendency to unjust exactionE
by Congress from the unrepresented
taxpayers of this community, so wisely
placed in the organic law and continued
In substantive law by guaranteeing that
the Federal Government would pay q
proportionate part of the appropria-
tons, has been lifted. Congress gives
annual exhibitions of having seized the
bit in its teeth. The Cramton bill will
put the District $l6,OOO,ooO in debt
The airport bill will put the District
$2,5o0,0 900 in debt. The Capper bill Will
put the District 5000, 900 in debt, with
added interest amounting to $4,000, 900
1t is time to stop. 1t is time to stor
piling up these obligations without Civ.
ing scientific study and attention to the
supporting foundations. 1t is time Il
begin at the bottom and arrive agar
at a just determination Of the respective
responsibilities of the District and thu
Federal Government in their joint tasl
of Capital building and development
Then the matter of loans and advance
can be discussed in proper perspective
with due regard to the consequences.