Evening star., 1937-07-15
ExtOrtiOn and Usury.

Extortion and Usury.
The preposterous proposal that the Dis
trict be required to pay three per cent
interest on Federal funds advanced to
the District until the Districts own tax
revenues become available represents
new wrinkle in the ancient art of ex-
tortion.
! Consider the facts: The unrepealed
sixty forty law of 1922 contained, as one
OF It's provisions, the requirement that
within a certain time the District be
placed on -as-you-go basis that is,
that the District meet its cash obliga-
tlons from its own funds.
Up to the time of enactment Of this
law the Treasury had always advanced
funds to meet appropriation obligations
of the District repaying itself out of
District tax revenues as they became
available. All the money belonged to
the United States anyhow, whether de-
rived from local or national taxation.
The advance of Treasury funds vas
merely bookkeeping transaction.
Nevertheless, the new requirement for
a cash operating basis was written into
the sixty-forty law. The remainder of
the slxty-forty law was ignored by Con-
gress, but this requirement was retained
The District accumulated necessary
surplus revenues to enable it to operate
on a cash basis.
The surplus funds slowly have been
drained by reduction of the lump sum
and by additional demands placed on
local revenues. The close of the past
fiscal year found the District without
funds. In the meantime, a tax-boosting
revenue bill, which would raise the cash
from new local taxes, is tied up in knot.
The District is broke" not through any
fault of its own, not through any failure
to pay taxes, but because of incredibly
unfair inefficient government by the ex-
clusively responsible Congress Of the
United States.
Because the District is now facing an
emergency, the proposal is that the
Treasury advance cash on three per
cent loan basis. What could be more
unjust? Does the District receive any
interest for the millions OF dollars it
places in the United States Treasury?
Not one penny of interest! Are the
~ fta niefv ",
sponsible for the present emergency
They have had nothing to do with it.
Yet, because of congressional indiffer-
ence and failure properly to function as
the exclusive legislature for the District,
the local taxpayers are asked to pay
through the nose in higher taxes and
then to borrow at three per cent the
money they must pay in taxes.
The excuse is offered that the House
would not approve a simple provision
authorizing the use of funds in the
Treasury until the District government
which is merely a Federal agency for
administering affairs of the District
collects local taxes and places the money
in the Treasury.
Well, let the House turn down the
borrowing clause. Let the House make
itself ridiculous in the eyes of the
country by its own msmanagement of
municipal affairs. Why should the
people of the District pay q three per
cent premium to obtain the money they
must in any event pay through their
taxes?
Where, by the way, are the District
Commissioners? They ought to be fight
ing tooth and nail against the imposi-
ton of this harsh, unjust burden on the
local taxpayers. They would have a
more convincing argument to support
their request for larger powers-such as
the appointment of the Board OF Educa-
tion-if they gave more evidence of
willingness to exercise them in the in
terest of the unrepresented taxpayers
OF the District.