Evening star., 1933-04-28
DONOVAN JUSTIFIES INCREASED
FEDERAL FUNDS TO DISTRICT
Auditor, in Hearings Before Senate Com
mittee, Shows Budget Bureau Did Not
Make Equitable Comparisons.

fixed by law on the basis Of an ex-
penditure Of $4,000, 900 from the Fed
eral Treasury"
The auditor and the Commissioners
suggested the fixing of new and much
lower rate Of reimbursement based on
the facts as they exist. The Senate
committee has recommended that no
installment be required from the Dis
trict IN the coming year.
Copeland Makes Inquiry.
While the Senate committee was dis
cussing the surplus of District tax
money which would lie idle in the Fed
eral Treasury during 1884 II the bill
was held to the House total and the
present $1.70 tax rate continued, Sena-
tor Copeland. Democrat Of New York.
inquired:
what business do we have to raise
O lot Of money from the taxpayers that
we simply pile up In the Treasury? That
Is legalized larceny is 1t not? I think
that Is what Calvin Coolidge called it."
While Auditor Donovan was explain
ing how $6,000,000 surplus fund Of
District tax money would accumulate
under the House bill and the present
know If some money could be appro-
priated from that fund and the tax rate
reduced. In reply, Donovan testified as
follows:
Eyes, sir: certain amount could be
taken out. AS stated q moment ago,
on the basis Of the bill now before the
committee, we will have balance Of
about $6,000,000 to the credit Of the
general revenue fund of the District at
the end Of 1884. II we were to reduce
the tax rate. as has been suggested, from
$1.70 to 81 so in 1884. that would mean
about 81 100000 to come off the $6.000,-
600. leaving about $3,4oO 900 still re-
naming as surplus belonging to the
District Of Columbia
Favors Reserve Fund.
"It would seem to be the part of
wisdom, under present economic condi-
tions, to maintain a reserve, or emer-
gency fund Of reasonable amount say
about $2,000,000. to cover emergency re-
lief and for other purposes. The bill
now before the committee carries ST.
250,000 for emergency relief and from
the best information that we have at
this time 1t seems evident that that
amount Of money will be inadequate
and that anywhere from $750,000 to
$1,000 additional may be required
before the close Of the fiscal year 1884"
Senator Copeland. A total Of about
$4,000 OOO?"
Mr. Donovan. That would bring the
total to about 100000.
I'm addition to that, we have also a
condition that is prevalent throughout
the country-a shrinkage in revenue
collections Through the nine months
ended March 81 of this year our
general revenues have dropped $780,
900. I mean by that, the actual reve-
nue. collections are 81 10000 under the
amount collected in the corresponding
period of last year, 81 SOC, 900 under the
amount collected in the corresponding
period Of the fiscal year 1881, and a
similar amount under the collections in
the fiscal year 1880.
In other words, our revenues are fall
ing of. And on top Of this the Federal
contribution has been reduced from
So, 500, 900 in 1882, to Sits 900 in 1888,
and for 1884 the amount proposed is
SIS, 100000, loss Of $500 900 between
1882 and 1884
Between the fiscal years 1892 and
1884 I figure that we will lose In reve-
nue. about $5000,0 ,000 $4,000, 900 in the
Federal contribution, on the assumption
that s5,700,000 will be appropriated. and
around 81 100000 in general revenue
collections"
The foregoing figures related to the
bill as it passed the House. Since that
testimony was given the Senate SUBJ
committee has voted to recommend an
increase in the amount for emergency
relief to ST 500, 900, has recommended
the Federal contribution to be raised
from $500. 900 to $6.250, 900 and made
other alterations In the House bill