Evening star. [volume] (Washington, D.C.) 1854-1972, 1958-04-07
Could Help
Lag in Works
Program
BY GRACE BASSETT
Star stan Writer


separate authorization.
The national bill would free
ST billion for State and munich
pal works construction. The
District is defined as State
IN the measure sponsored by
Senator Fulbright, Democrat Of
Arkansas.
Strongly backed by the DEM
ocratic majority, the Fulbright
bill is priority business of the
Senate. Passage is expected
soon after the Easter recess,
which ends April IA.
A much less certain fate faces
a separate proposal of the Dis.
trict Commissioners for author
ity to borrow 500 million from
the Federal Treasury to finance
the same kind of works. This
local legislation is before a
Senate House Fiscal Subcom-
mittee.
Although the Fubright bill
promises millions less in loans
to the District. its chances Of
passage have drawn local ON.
Gals close attention to it.
Raises Ticklish Question
The big loan bill raises q
ticklish question for District
Commissioners. 1t is:
If Congress authorizes the
Federal Government to lend
money to the District, is the
District authorized to accept?
Robert E. Mclaughlin. presi-
dent of the Board of Commits
sioners, said today he thought
the bill would have to author
ize specifically the District to
borrow.
Asked if he would seek an
amendment to the measure, he
said, 1T would be interesting
to try to do So" But the legal
implications of the Fulbright
bill for the Capital City merit
more study before any course
is fixed, he noted.
He said he would ask Corpo-
ration Counsel Chester Gray il
the Fulbright bill, as written.
would make the District eligi-
BILE for Federal loans.
First Reaction
The first reaction of legal
advisers in Mr.. Gray's office Is
that it would. without an
amendment.
IF Congress tells the Fed.
eral Government it can loan
money to the District. it
seems ridiculous to hold that
the District must seek permis-
sion to accept such an author
lied loan," one assistant cor
poration counsel said. He
wanted more time before 60
ing on the record with a legal
opinion. however.
Another assistant corpora
ton counsel, Robert F. Kneipp,
noted that the only legal bar
to District borrowing is the
lack of congressional authority
for it.
In 1878, Congress ordered the
Commissioners to incur no OBJ
legations other than those "ap-
proved by Congress. Since
then, Congress has authorized
no borrowing for general fund
works projects. These health.
education, welfare and penal
building programs must be A.
nanced on a pay-as-you-go
basis. Congress has decided.
1.-THE intent was to keep the
Commissioners from getting the
District over its head in debt"
Mr.. Kneipp said. If Congress
defines the District as a State
which may take advantage OF
a Federal loan program, then
Congress would seem to be
giving the District permission
to borrow" he added.
Required by PrOvisO
Passage of the Fulbright bill
would be the approval by
Congress" required by the 1873
proviso, according to Mr..
Kneipp.
Senate Banking and Cur
rency Committee aides who
worked on the Fulbright bill
said the District never was dis
cussed in preparation OF the
measure.
1T is directed toward au-
thorizing the Federal Govern
ment to loan money" one
staffer said. 1T is not directed
at altering any limit-such as
q bond limit on borrowing-in
existence in any State or mu-
nicipality."
The Fulbright bill would al.
low the Housing and Home FL
nance administrator to distrib-
ute loans up to 81 billion for
works throughout the country.
Now. such loans are available
only to cities with less than
5000 population
Interest would be based on
the average yields on markets
able Federal obligations of COM
parable maturities. This would
amount to a rate to the bor-
rover of about 3ia per cent,
under current conditions. ac-
cording to the committee report
on the bill.
Localities would not be linz
tied in amounts of loans by
the bill. But on a basis Of
population. the Districts equal
share, under the legislation.