Evening star., 1937-07-15
; PCT. LIMIT FIXED
ON FEDERAL LOANS
MADE TO DISTRICT
Amendment Drafted to Per.
nit Treasury to Set
Interest Rate.
FUND ACTION HINGES
ON JUDICIARY FIGHT
Senate Consideration of Tax Bill
Soon Held Imperative to
Avoid Crisis.

The Secretary of the Treasury would
be given authority to fix the rate OF
interest to be charged the District for
any money it borrowed from the Fed
eral Government during the impend-
ing fiscal crisis under an amendment
Representative Kennedy, Democrat OF
Maryland drafted today to his resolu-
ton authorizing such loans.
The original amendment to Ken
nedy's resolution, which the House
District Committee approved, fixed the
rate of interest at per cent Later
Kennedy felt the 3 per cent rate
might be too high and he framed an
amendment to the amendment which
would give the Treasury Secretary dis
cretionary power to fix the rate as
long as it does not exceed per cent.
The loan resolution, as introduced
by Kennedy, would have permitted the
District to borrow Federal funds with
posed the per cent interest amend
ment for fear the House would not
adopt the resolution otherwise.
The House probably will not act on
the resolution until July rs, the next
District day. 1t can only be called up
before that time by unanimous con-
sent agreement or under special rule.
While House leaders have indicated
their objection to consideration of the
resolution under such plans, Kennedy
feels they may change their attitude
after he explains the serious financial
situation that will confront the Dis
trict after Angst l unless it is allowed
to borrow Federal funds to meet obliga-
tions until tax revenues start to flow in
the latter part OF September.
Meanwhile, efforts to get Senate
action on the local tax bill to solve the
financial difficulties are due to be re-
newed next week, with the outcome
depending on what has developed by
that time in the Supreme Court fight.
Chairman King of the Senate Dis
trict Committee announced yesterday
afternoon he plans to confer in the
next few days with committee men,
bers and other Senators on the ad-
visibility of moving to take up the
tax bill as soon as the Senate resumes
business, probably Tuesday.
The Senate is holding brief ses-
sion today, but no business of any
importance was expected to be taken
up. After today legislation will re-
main at standstill until after the
funeral of Majority Leader Robinson.
After the court debate is resumed
next week, the outlook for the local
tax bill appears to depend on whether
a movement develops to lay that con-
troversial issue aside, either by send
ing it back to committee or displacing
it with other major legislation. In
such an event there would be good
chance of getting up the District reve-
nue. measure.
If. on the other hand, both sides to
the court fight dig in for continua-
tion Of the parliamentary battle that
was being waged when Senator Rob-
inson's death brought an armistice,
the District probably will have to
concentrate on seeking passage of
the resolution to allow the city to
borrow from the Treasury until local
taxes are collected.
The citys available cash will not
last much beyond August /, and the
calendar already will be up to July
20, when the Senate gets back into
full swing.
Members of the Senate District
Committee will wait for House ac-
ton on the stop-gap borrowing pro-
posal and in the interval watch for
any opportunity to get up the tax
bill itself, which also has the borrow
Ing feature embodied in it.
While the separate borrowing meas
ure would save the District from rum
ming out of funds during August, If
1t should pass without enactment of
the new taxes, District officials would
be required to put all of the $7,0OO,oO0
deficit on real estate and tangible per-
sonal property, by raising the tax
rate from $3.50 to $2.10, an increase
OF 40 per cent. They feel that would
be "burdensome, onerous and un-
fair" to property owners. For this
reason members of the Senate District
Committee probably will make every
effort to obtain action on the tax
bill.
The Commissioners yesterday called
on both the Senate and House District
Committees to speed financial relief.