Evening star., 1934-05-06
Debt and Capital DEVELOPMENT.

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District Committee, enabling the Dis
trict to borrow from the Public Works
Administration for specified projects
essential to Capital development.
Thus once again, as the direct re-
suit of continued failure adequately
and fairly to provide for improve
ments through the annual appropria-
ton bills, the District prepares to
assume indebtedness. Had substan-
tive law been followed in dividing
Capital maintenance and develop
ment expenditures, borrowing for
necessary improvements would prob
ably be unnecessary. AS it is, bor-
rowing under the conditions of pend
ing legislation offers certain advan-
tages and provides reasonable solu-
ton in part of immediate financial
handicaps confronting the District.
The bugaboo of debt in the alb
stract has no terrors for Washington.
The Capital has climbed by the steps
of debt to its present development
as the Nations city. Until recent
years most of the just and fair treat
ment in its relation to the Nation
which the Capital had secured had
been obtained through the painful
process of piling up obligations for
necessary public improvements which
the National Government should itself
have made until the Nation in shame
partly fulfilled its obligations and
came to the relief of a community
bankrupted in the public-spirited ef-
fort to perform neglected national
functions and to bear unaided the
national responsibilities in Capital
building.
AS related more in detail elsewhere
In The Stars columns today, it was
the heavy debt incurred by local tax
payers in meeting obligations which
properly did not belong to them which
led to the first formal recognition, by
a Senate Committee in 1885, of the
Nations financial obligations to the
Nations city. Again, 1t was the Shep-
herd debt of the seventies, laying the
foundations for the Greater Wash
ington, which put the local taxpayers
in virtual bankruptcy, but led directly
and inevitably to the half-and-half
contribution of the organic act of
1878. 1t was through Indebtedness
wisely contracted between 1900 and
1910 that the District, borrowing
from the Treasury at low rate of in
terest. was able to finance such great
improvements as the sewage disposal
plant, the Mcmillan filtration plant,
the District Building, new railway
terminals involving reclamation of the
Mall and the elimination of grade
crossings, the Municipal Hospital, the
Highway Bridge and the Connecticut
Avenue, Massachusetts Avenue, Ana
costa and Piney Branch Bridges.
The debt is economical and useful,
which permits money to be obtained
for immediate use in larger lump
sums than could be spared from cur
rent revenues; when the public works
to be undertaken will by their nature
justify themselves and the debt.
In the National Capital partner
ship the wealthy, national partner
lends to the temporarily impecunious
local partner to enlarge the firms
business and profits to the benefit of
both partners. The transaction in
wolves no insecurity to the creditor
partner, since he has absolute control
of the firms property and affairs.
He can see that the money is eco
nomically spent solely for the pur-
pose for which 1t was obtained,
namely, for the upbuilding on wise
lines of the National Capital. Finally,
having control of the finances of the
firm, he holds all the taxable property
of his local partner as security for the
debt, and can repay himself when
and how he pleases.
The same reasoning which vindi-
Gates the creation of this debt as
wise and economical should be ap-
piled in strict regard by later Con-
crosses to the terms Of repayment.
The debt will not be economical and
wise if the terms are unjust and hard
working reimbursement is de-
manded. In fairness and for the best
and most wholesome development Of
the Capital, the debt will be spread
over a long term of years in compare
lively small annual installments, so
that present taxpayers may not be
unduly oppressed and SO that pos
terity, which will enjoy these per-
rnanent Improvements, may help to
pay for them.
This loan is, of course, not to be
made to the District alone as an ex-
ceptional and exclusive favor, but is
one among many similar loans by the
Nation to American cities as part Of
the National Governments plan to
give employment to the unemployed
and to expedite recovery"
The National Government has IN
the past given hundreds Of millions