Evening star., 1939-07-07
per cent, which would have called
for about So 900 900 at this time.

| .Wnlle tne compromise continues
the unscientific lump sum basis, il
writes the $6,5O0,0OO figure into
permanent substantive law. Since
the repeal last year of the 6O-4O
ratio, which had been disregarded
during Is years of lump sum pay
ments, there has been no law on the
statute books establishing any ma
tional obligation toward the capital
the $5 900, 900 lump sum having been
temporary, for one year only.
School Needs Study.
In agreeing to drop most of the
school building items the Senate
had added to the appropriation bill,
Senator Overton said he would ask
to have the Commissioners make a
careful study during the recess of
school building needs.
The tax agreement today makes
provision for retaining one Senate
school amendment, calling for 1929 :
600 for an eight-room addition to
the Ketcham School and remodeling
the present building, to replace the
Van Buren, School.
This was part of Senator Over
tons program for replacing some of
the oldest schools, some of which
have been in use more than fifty
years.
Representative Randolph of West
Virginia, head of the House tax
conferees. left this afternoon for
Keyser, w. Va, to address letter
carriers meeting, but announced he
would be back in time to cooperate
with Senator Overton tomorrow
morning in putting the tax report
in final shape for submission to
the House when it reconvenes Mon
day.
Written into the agreement also is
a provision creating joint House
and Senate committee to resurvey
the local tax structure for the next
session of Congress, SO that any in
equities that develop during the first
year of operation under this tax
agreement may be studied and cor
rected.
The real test of whether this
agreement ends the deadlock and
terminates the hiatus under which
the city government is functioning
will not come until the House acts
on the conference report next week
With the income tax in its present
form, the odds are believed decided
ly in favor of adoption of the report.
Some of the conferees, it is under
stood, were convinced the House
would not have agreed without the
exemption, originally applied to
members Of Congress and Capitol
employees, and now broadened to
cover other temporary residents.
In the White House announcement
that the President is considering a
special message to Congress on the
District fiscal situation, it was
point out that Mr.. Roosevelt is
gravely concerned over the situation
The President fears the District
government is operating without le-
gal authority, except to protect life
and limb.
| Actually there is some question
whether arrests for violation of local
laws or regulations would hold in
court during the emergency period
since June 30.
The Presidents contemplated mes
sage was represented as designed to
point out that the failure of Con-
gress to appropriate for the District
after the beginning of the new fiscal
year has left the Capital in serious
plight.
Early Reveals Attitude.
The Presidents attitude was re-
vealed by Stephen Early, presiden-
tial secretary. He represented the
President as regarding a consttu-
tional law question involved, since
| there is some doubt whether the
District government has legal right
to operate under present conditions.
The local government, Mr.. Early
said, has been operating since mid
night, June 80, as IAN extra legal
| government serving an emergency
He evidently was, though he did not
say So quoting the President.
Although President Roosevelt issued
an order last Saturday directing the
/ Commissioners to carry on the nee
essary functions of government de-
spite the failure of Congress to pro-
vide further funds. he was reported
to be doubtful of the legality of such
measure.
The 100000 people of Washington
virtually are without a legal gov
ernment, in the Presidents opinion.
| If Congress reaches a final settle
ment along the lines on which the
conferees were proceeding today, the
District tax structure would be re-
vamped as follows:
The intangible personal tax on
stocks, bonds and money, which
raises about $2,875 900 a year, would
be repealed.
The business privilege tax, which
yields about $2.2O0,OO0, and which
expired June 80, would not be re-
enacted.
Continues $1.75 Realty Rate.
The present SITS rate on real
estate and tangible personal prop
erty would be continued.
The House tax on automobile
parking lots would be dropped.
The Senate amendment would be
retained to give the District credit
for so per cent of District Court
fees and fines, and 80 per cent of
Court of Appeals fees, being the
same proportion the District con-
tributes to the support of these Fed
eral courts.
The House per cent corporation
net income tax would be restored.
and the income tax would be worked
out as agreed to today.
While the conferees were seeking
this way out of the legislative i'm
passe that has left Washington run
ming without authorized funds for
week, the Social Security Board
took steps late yesterday to pre-
vent hardship to recipients of So