Evening star., 1934-04-23
Wanted: New Deal for Capital;
Guaranteeing 1t Financial
and Political Equity.
Wisdom and Justice of Definite Plan
of Percentage Payment by Nation:
Evils of Lump Sum Substitute.


1uctuating lump sum plan.
Expressions Of opinion on Capitol
Hill indicate that some of the leaders
in our National Legislature Gnclud-
ing Senator Thomas, chairman of the
subcommittee in charge of the Dis
trict appropriations bilD are inclined
to take up for serious consideration
and definite action this issue with a
tendency to favor restoration of the
principle of the organic act.
The National Capital Development
Partnership.
The Districts organic act of 1873
clearly recognizes as primary
national obligation the maintenance
and upbuilding of the National Capt.
tai, and in effect sets up a special
partnership for the discharge of this
obligation. In this partnership the
Nation is the general, active and
dominating partner, with monopO-
listic, unlimited power, and the Dis
trict is the silent, impotent special
partner, with no effective power of
participation in partnership affairs,
and with only the obligation to con-
tribute and the power to petition.
The Nation as the active partner
determines the policy and fixes the
rules for the conduct of the partner
ship business and also decides the
amount of funds to be contributed
by the respective partners, and the
manner in which the money shall be
appropriated and spent.
The dominating partner first ap-
proves the District estimates and ap-
propriates one-half Cor, according to
the law of 1922, forty per cent? of
the amount of the approved esti-
mates from the National Treasury
and later collects by tax levy the
other half (or sixty per cent? from
the silent partner.
Partnership agreements often pro-
vide definite safeguards for the silent
partner, and the organic act clearly
does this in specifying a definite pro-
portionate amount to be contributed
by the respective partners.
The special silent partner is thus
given a certain protection against un-
Just increases of his Capital-develop-
ment contribution by the requirement
that whatever the dominating partner
exactS in taxes as the silent partner S
contribution toward partnership af-
fairs shall be duplicated from national
funds when appropriated and ex-
pended by the dominating partner.
The vitally important effect of the
half -and-haf provision was to pre-
vent excessive taxation of the Dis
trict and extravagant, wasteful ex-
penditure of the District tax money
by requiring the dominating partner
to match every dollar of expenditure
from the local tax money by an equal
expenditure from the national tax
money.
Under this system the Nation paid
more upon the Nations city with
every increased expenditure of local
tax money upon the National Capital;
while under the lump sum system the
more the dominating partner exacted
from the silent partner in local taxes,
the less he would have to pay him.
self from national taxes.
Destroys Safeguard Against Excessive
Taxation.
Substitution of the lump sum plan
of national contribution completely
changes the nature of the original
partnership. The first objection to
the lump sum plan in substitution
for the definite proportion contri-
button plan is that unfairly it causes
every dollar extorted in excess of
what is equitable from the silent part
ner to reduce the amount that it is
necessary for the active partner to
contribute to the partnership fund.
Whereas under the definite propor-
tionate ratio plan every dollar exacted
from the silent partner increases also
the amount contributed by the active
partner. The lump sum payment
practice thus deprives the silent part
ner (the unrepresented CapitaD of
his safeguard against excessive tax
alton by taxing body in which he is
not represented.