Evening Star Newspaper, February 5, 1923, Page 4

$4,438,154 D. C. SURPLUS IS REPO (Continued from First Page) ment. Its administrative officials are appointed by the President, by and with the consent of the Senate, and s laws are enacted by the Congress. “From the etart it has been the de- aire of that legislative body, as well as, for that matter, of the residents of the city, and certain office hold- ers here who maintain a legal resi- dence elsewhere, to make it a beauty ¥pot of America, of which our cit- isens might be justly proud. Hence the expenditures for public improve- | ments have been inordinate as com- nared to those of other communities of approximately the same size and vopulation. Committee’s Understand| The forezoing reveals the occasion for the creation of your committee, and is illuminating, when the lan- suage of the act is under considera- n, to dctermine the scope of the mmittee’s work and the nature of whe report which should properly be iwade to the Congres: Authority for Expenditures. In some cases these expenditures tiave been authorized upon the rec- ommendation of the District Com- | Digtrict of Columbia and the United way, as the representative of ‘he Departinent of Justice ard of the United States, for his opinion. The committee submits to the judgment of the Senate and of the House of Representatives its conclusion that this provision of the act should not be given a strict literal interpreta- tion, in disregard of the purpose and intention of the act as a whole, and of other provisions of the act. In his opinion Mr. Galloway states: “I am fortified in this conclusion by & consideration of the act as a whole, the title of which indicates that it 18 an act dealing with proportional ap- jons for the government and activities of the District of Co lumbia. It is an act directed wholly toward the consideration of those things which are primarily and solely for the interest of the District of Co lumbia. All of the act preceding the paragraph quoted deals with an ar- rangement for proportional appro- priations and for expenses primarily for the support of the District of Co- lumbia. The committee is created ‘to inquire into all matters pertaining to the fiscal relations between the missioners, who are local residents, selected by the President. In many | uther instances the Congress, in the | cxercise of its rightful prerogative, | rcfusing to follow such recommenda- ! tons, has appropriated more or less than desired, as the case may be, and tor_different’ purposes. From 1378 to 1vZ1, as a rule, 50 per cent of all the District expenses were borné by the federal govern- ment, and 50 per wsidents of toe aw at pr share of the 0 per cent cent came from the . However, the ent provides that’ the United States shall be and that of the District &) per c(unt As in the case of the actual aprropriations themselves. ihese proportions have been fixed by the Congress, in which citizens of ‘Washington have no representation. For many years liberal appropria- ‘lons were made to carry out the pro- gram of city beautfication, during which period of time the District was in_debt to the federal govern- went. The accountants’ report shows that prior to 1914 there was a balan due the United States, but that at the end of that fiscal year the District bad a credit balance of §68,300. Limited Outlay Due to War. Then came the war period and ex- penditures for further development were necessarily limited; yet no re- duction was made in the rate of tax aBsessments. _The District tax receipts increased, as a matter of fact; the money was ceposited in the United States Treasury, and a surplus created, largely due, as will be observed. from fallure to continue the proper ex tgnsion of streets. their paving and rdpaving. the building of publ Eohools, und the upkeep of other ol agtivities, corresponding to the ®rowth of the city Jt Is with this surplus that your cpmmittee has to deal. among other :Hings. On the one hand it is urged by. some that the spirit of the entire system of fiscal relations between the LWo governments, existing since 1 3 wps violated by the creation of such 2’ fund. tBe fifty-Afty rule been adhered to, as rrovided by law, there would be no sgeh surplus. as’the money in ques- tipn would have been expended for £6Bools, streets and other municipal agiiviies and improvemente. t is, therefore, claimed that the Dis- tget i entitled to the entire fund, which should be applied to the main- énance of its government and other vitles, and should be matched by eral money, according to law. Argument Against District. “On the other hand, it has been scrted that the District has no legal laim against any money now In the Gnited States Treasury. which has gen accumulated in this fashion. ¢1t is argued that there is no law on which the District can predi- s a legal claim to any eums of money in the Treasury, whether as- cérizined as.to amount or not: that stich & claim is, to say the least, un- enforceable at law and, hence, equi able or moral in its nature. Being nterely equitable, it follows from this réasoning that equitable defense counte; rday be asserted to reduce the amount | of said surplus, to wipe it out alto-: &ether, or possibly to show that the ! District equitably or morally in- | debted in large sums to the federal governme: Parenthetical before your i | committee, irrespective | of the magnitude of the claim or off- ! »et insisted upon, that, inasmuch as | the equitable balance might be con- ! sidered as being in favor of ted States. from the District, therefore, hould be recommended io the Con grecs. Briefly, it is the understanding of your committee that it is required to make such findings and recommenda- | tions as would bear directly upon this | primay question of the District & plus, and could be used by the gress, in its discretion, 2 sottling for al he £ commit- Iso been d ermined In other 3 luding a close cx- amination of the lunguage of the ac: On this point i its views, subje the Congress. A statement of same fs deemed! vecessary at thie time because it has Leen contended that under the k zuage of the act this Is little more *han a fact-Anding committee, and fhat its obJect is malnly accompiished | I# it furnishes the Congrese with a vast array of tabulated figures from ‘which members of that body may draw thelr own conclusions, with few, if any epecific recommendations on {he part of the committes. The fol- iowing portion of th. - d In"this conneetion. > PR o _Ar:olnrl M]Eict committee © o o o 13 directed to Inquire into all matters | pertaining to the fiscal relations be. tween the District of Columbia and the United States aince July 1, 187 With a view of ascertaining and r porting to Congress what sums hav been expended by the United States #1d by the District of Columbia, re- spectively, whether for the purpose of maintaining. upbuilding, or beau- tfying the said District or for thel purpose of conducting its government of ite governmental activities and agencies, or for the furnishing of oconveniences, comforts and necessi- ties to the people of said District.” Some Contentlons. i Certain witnesses have contended | that this languzge properly includes | all expenditures made by the United States for maintaining. upbuilding | and beautifying the District since | -Tuly 1, 1874, whether or not the same had cver been considered by the Con- Zress a8 in any way affecting the fiscal relations between the District of Columbia and the United States: and that it includes such activities a8 the erection of the Lincoln Memorial, statues of national heroes, the Congressional Library and vari- ou‘l other large expenditures, At least one of the witnesses has declared that. whilo it was not in- cumbent upen the committee to recommend that such ftems as the Lihcoln Memorial be coneidered, un- der the above language, as matters to which the 50-30 or 60-10 ratio was nroperly applicable, vet it was the duty of the committee to report on all ‘'such items for the consideration of the Congress in the determination of, this question. Another . witness, TRepresentative | Jehnson of Kentucky, after mention- infg the Lincoln Memorial and similar pyblic works, states that "It is my unqualified opinion that the cost' of the Congressional Library, and every- thing in it, and 3 per cent interest, mist be offset against any claim of surplus. This language is mighty ;)‘]d-‘ln when you come to read it care- Tully. Other witnesses have insisted with eqlial emphasis that euch things =hould not be considered for a mo mnt In & report on the fiseal rela- 1i6ns existing bétween the District of + §lumbia and the federal govern nt s to the judgment of i | \ Call Upen Galloway. Hour committee has had the sub- t under advisement, and. in this nection. called. wpon Mr. -Galo- i J 5 1t is pointed out that, had! claims. offsets and credits | €O no one has urged | languags of the act is clear. the | Structions colle~tion of such bal- |and | included in this report tabulat2d il ! tion of national memorials or monu- i or character, | therefore, directed to make a detailed | stance, States since July 1. 187 All past legislation upon the fiscal relations between the District of Co- lumbla and the United States, €0 far a 1 have been able to ascertain. involves expenditures primarily for the benefit or for the maintaining, upbuilding or beautitying of the District of Columbia and conducting its activitles, and Con- gress seems to have had such things always in mind when it considered these fiscal relations. There is nothing in any of the acte indicating that Congress ever intend- ed that such expenditures as for the Lincoln Memorial or the Congressional Library were made for the primary ! purpose of beautifying the District of | Columbia, and even some of those urging a construction which would include such expenditures have stated that they do not think that the Dis- trict should bear any proportion thereof. Can it be logically contend- ed that Congress was directing this committee to do a useless thing? Further, should not this act have such construction as would make it reason- able and susceptible of execution? If| it is held to include all of these ex- penditures it is conceded by most all that the task would be so enormous and the expense So great that the same could not be accomplished either within the time fixed by Congress or with the amount of money appro- | | United Stutes to the District of Co- tee, to make an audit which would be final and conclusive. Regult of Probe. One of these investigations Wi made into the general account of the District of Columbia with the United States by ssrs. L. Scott Mayes and J. H. Mayes, accountants who were employed by ‘and reported to the spe- cial committee investigating the af- fairs of the District of Columbia un- der Houss resolutions. Nos. 134 and 200 of the Sixty-second Congress and House resolution No. 203 of the Sixty- third Congress (H. R. doc. 1627). Said report stated the balance jn the seneral fund of the District of Colum- bia on July 1, 1911, and was described by the committee as “a finished re- port.” This was an investigation of the ccounts between the two govern ments, as they relate to the revenues of the District, and to the appropri- ations made from the revenue of the United States to the District, and the advances made from both by the Secretary of the Treasury of the United States, as authorized by the various acts of Congress since the passage of the act of June 11. 1878, to and including the fiscal year ended June 30, 1914; and also all appropri- ations and advances made by the lumbia from June 20, 1874, to June 40, 1878, inclusive, which affect the account between two govern- ments. ’ Sald investigation required a rreximately three vears' time and re- sulted In “the discovery of ocertain | ftems in considerable “amount, for, the by the Unfted States from the Dis-! trict of Columbiz. These were as| follows: i Figures Submitted. H Reimbursement on mccount unpaid | balance of advances to defray Dis trict expenses for fiscal ear, 1878, required under act of Ju! 11, 1919, $75,000; reimbursement on _account | of advances for support public schools | 18 required under a July 11, 1918..... H eimbuisement on account of coustructing school butlding in Georgetown. required under act of July 11. . $75.000.00 | 50,865.00 | of this act, and that, in the absence of certain records, they are as satisfac- tory and complete as any audit could ever be. No witness appearing before the committee has testified that a further detalled audit would be advisable, while, on the other hand, the citizens’ joint committee, Representative John- son of Kentucky and Mr. Thomas Hodgson, an employe of the Treasury Department, who stated the @ccount of the District for more than thirty yeare, have all spoken against the necessity for or advisability of the same. No -witness who has testified before the committes has been able to bring up any items of dispute whith have not been investigated. Your committee, therefore, belleves that a further detailed audit would be a decided waste of time and money, and would serve no good pur- pose. Neither is the same necessary, according to our belief, under the provisions of the act of June 29, 1922, which must be considered with refer- ence to their practical effeot. Your committee, therefore, recom- mends that the investigations already made be taken as a basis upon which definite and final sctlon should be had by the Congress. Claims for Adjustment. As a result of the inquiry, your committee finds that the various items appearing in the annual appropriation ; bills for the District of Columbia, en- acted during the entire period speci- fled in this act, have been properly allocated between the District of Columbia and the United States, with the exception of several small items. | which relmbursement was required | These have elther been corrected by prior action of Congress or are in- cluded under this tille in this report. Your committee also finds that cer- tain ftems, which cannot properly be | considéred as accounting and book- keeping errors, and which are con- siderably larger in amount. have either Leen settled by prlor legisla- i tion or are covered by the recommen- dations cont, this report. Your certain additional ftems, which have been called into question, have been considered by its members and re- ported under the head of title IV of ained under this title in committee also submits that | Reimbursement for interest on 3.05 D. C. bonds for 1877 and 'S, required uader act of March | this report, with the recommendation | that they should be held to have been { properly accounted for, and that mo !changes in the account between the | District of Columbia and the United 596,067.28 on r Freedma Hospital, _required District as its proper proportion of such expenses. 5. The accountants show that the amount of $634.33 was paid out of federal revenues for the relef of Eldred C. Davis on account of loss ogoasioned by a larceny in the office of the collector of taxes. As there is po equitable reason why the United States should have borne the entire cost, your committee recommends that $317.17—one-half - of said amount— ghould now be charged agazinst the District. Mr. . Taggart views the matter in this light, while Messrs. Donovan and Galloway make no recommendation. The citizens' joint committee cannot understand why the District govern- ment should have anything to do with the matter. Items Properly Charged. Certain other items have been point- ed out by Messrs. Haskins and Sells, with the comment that although they may not be proper matters for adjust- ment, yet they should at least be in- teresting in connection with future legislation dealing with District fiscal relations. In the opinfon of your committee all of the following have heen properiy charged and it is recommended that in ail of such cases no sums shall be considered as being due, either le- igally or morally, from the one gov- ernment to the other. 1. The first one is summarized by the committes’s accountants in a letter to the chairman, dated January 17, 1928: 1 “In ‘our opinfon the genefal fund i#hould be charged with $545,484.54, a8 follow Redemption of District bonds issued under the act Congress approved June 10, 1 (excinsive of participation in in- terest payments and raid oo redemption) agAinst the United States ‘rmlnunl of provisions of At o Congrdun, an. whown paze 35 of our report 0% o | ¥z z00) S S | Lens adgusinient of eirors ennmerated on page 9 of our report 2546,150.00 653.46 Remainder The act in question authorized the District Commisisioners to issue cer- tain bonds of the DiDstrict, redeem- able twenty years after date, to an amount not exceeding $1,200,000. The committee's accountants contention on & provision contained hase their under act of August 1. 1914.... 7,996.70 | Reimbursement on account of ! priated “All of these things sustain the con- | ! clusion which T have heretofore ex- | pressed that this act should not have | a strict literal interpretation indis-} gard of the act as a whole. Tt is my ! ! opinion that this requires vour com- | mittee to report to Congress what] sums huve been expended by the| United States and by the District of | Columbla. respectively. whether ex-! i pended primarily for the purpose of maintaining, upbullding or beautify | ing the said District or primariiy for { the purpose of conducting its govern- ment or its governmental activities and agencles, or for the furnishing of conveniences, comforts and necessi- | ties 1o the people of the District, ¢ { cluding the cost of construction or of j maintaining any bullding ted or [owned by the United States for the! | purpose ‘of transacting therein the business of the government of the United States and that your report need not include expenditures which do have the cffect of upbuilding or beautifying the District of Colum- bia, but which were erected by Con- gress primarily for another purpose and which incidentally did in upbuild or beautify said District.” In a few words, your committee ba- lieves that the language contained in the clause in question, which reads: “A Joint select committee ¢ * * {5 directed to inquire into all matters pertain- ing to the fiscal relations between the District of Columbia and the United States since July 1, 1874, not only de- fines, but limits the 'scope of the committee's investigation to matters that properly pertain to such fiscal relations; that the words “for the purpose” ‘mean “for the purpose,” and | not “for secondary purpose” or “hav- ing the incidental effect”: that in the uct reference to the surplus is made | !tn apt words; that the act must be nstrued as a whole; that the task assigned must be considered as possi- ble of accomplishment;. and that when all these factors are taken into consideration. including the occasion for the creation of the committee, the |intent and meaning of all the Your committee Is anxious to carry ut completely the mandate of the ngress, and hence deems it its duty to call attention to the various con- which have been urged, to set forth its conclusions in some detail. As a part of the findings required nder the law, your committie hLas ures, recured as a result of its 'n- quiry into all matters pertaining to the fiscal relations between the two governments, from July 1, 1874, to June 30, 1922, inclusive, which show what_sums_have been expeaded by the United States and the District of Columbia, respectively, for the pur- pose enumerated. On the merits of the particular question which has been used as an illustration, it is the sense of your! committee that no portion of ex- penditures made wholly out of federal funds for the purpose of the construc- ments in honor of any national hero or in commemoration | of any national event shall, in mak- ing up the fiscal balance, be charge- able to the District of Columbia. Work of the Committee. At the beginning of its labors your committee had fts attentlon calied to the fact that Investigations had al- Teady been made, under authority of the Gongress, intending to cover the fiscal relations between the two gov- eraments during the period up to June 30, 1911, and that the reports on such investigations had been acted upon by_the Congress. Mesers. Haskins and Sells were, audit and examination of the District accounts from June 30, 1911, to June 20, 1922, inclusive, and {n addition to bring to the cons‘deration of the comi- mittee sny other items pertinent to the inquiry to which their attention was called or which came under their observation. and which existed dur- ing the period between July 1874, and June 30, 1911. This detailed au- dit has been made, and a report sui- mitted by the accountants, whica - cludes references to certain outstand- ing items arising prior to the Jatter date. " Lack of Thoroughness Suggested. It has been suggested, however, that the investigations made relative to these earlier years were not as thorough or comprehensive s they should Lave been; that errors may not have been detected In every in- and that the reports of the investigators could not be considered complete. ! Your committee, therefore, after the report of Messsr. Haskins & Sells was received. seriously reconsidered the advisability, not to say the neces- sity, under the direction of the act of June 29, 1922, of authorizing the | same kind of an intensive audit over.| the period already covered by these prior Investigations. In that event it would have been necessary to ask the Congress for a year's additional time, at least, within which to make a final report, and for an additional appro- priation of many thousand dollare. As will be recalled, $20.000 was orig- inally set aside for this purpose, a smail portion of which remains unexpended. Submits to Judgment of Congress. In this respect, also, your committee desires to submit its conclusions, with a brief statement of its reasons, to the jufl{menl of the Congre: The act of March 3, 1909, enumer- ated certain advances made from time to time to the District government, and directed that. within five years, the money should be repald by the District into the United States Treas- ury, together with interest at the rate of 2 per cent pef annum. The princi- pal of the sum refunded was 52,665 081.51, and the interest amounted to $101.313.25. It was, therefore, desirad to clear up all remaining questions. and certain accountants were detafled by the Sixty-second and Sixty-third Congrese, through the proper commit- {kins and | ing prior to 1911, your committec has | i tion could hardly support of insane o St Eliza- Teth's Hospital, 1881 to 1911, act of March 4. 1943 2 Relmbursement on account o support_of ipsane in St. Eltra- beth's Hospital, wa in full, quired u t of July 1. 1916, Reimbursement on account of nstruction of District jall, re- guized under act of Augus 1918 . 5 Ret #dvanc 1 719,835.07 | ve. 282,764.26 | i l 125,000.00 | Schools tn' 1634, act of August 31, 1918. Making 2 t ired under i 3 0! A second investigation was made | by W. W. Spalding, accountant, who ! examined the misceliancous and gen- | eral revenue accounts between the: United States and the District of Ce lumbia from 1874 to the date of the | inquiry. These accounts were check- | ed up carefully by Mr. Spaiding, who | was employed Intermittently between the years 1913 and 1918, His recom- mendations were in_every instance favorably acted upon by the Congress. and certain refunds to the United ] States were required from the DI trict, as follows: Refunds Required. Reimbursement, account of Wi ington Market Ca., rentals. 1575 to X‘:H. required under Act of Mareh 4, 1$135,437.50 | oo ates cases It vision of Supreme Cour tween July 1. 1878, & 1905, required under 17, 191 Reimburament, account of Sncs in United Sfates branch of Police Gourt between July 1, 1876, and Junvacy 1. 1902, Tequirsd under Ant of April 17, 19i7. .2 Meking a ¢ e ,188. JMr. Spalding appeared before your mittee and testified that the work was done as thoroughly as practica- ble, but that he believed at the con- clusion of his labors, and believes now, that certain other items. total- ing possibly £60,000 or $70.000, should | be investigated. Later on he furnish ed vour committee with.a memoran- | dum of these items, and it was dis- closed that except in three instancee they ‘had already been considered y it These three remaining itéms have since been Investigated by your com- mittee and are sét forth under the head of Titie V of this report. Summary of Report on Audit. As heretofore stated, Messrs. Haz-! s were also requi tentlon to any items noted Ly | arising during the period bhe- | tween July 1, 1874, and June 30, 1911, which might hav investigation. t £11.450.12 | of. l jand as shown in exhibit A of jthat shown by_the States should be made in respect to the same. 1. ‘The commiitee reports, first finding, that at June 30, the credit balance, District of as its 1922, Tum- | bia general fund, in the United States Treasury, certified to by the con- troller gencral of the United States, the report of Messrs. IHaskins & Sells, certitied -public accountants, was $7 574,416, which iy $5,280.67 less than records of the auditor of the District of Columbia. The committee understands that the difference is being Investigated and will be properly adjusted. Encumbrances Shown. Your committes ulso finds that the records of the District appropriation ledgers show encumbrances against that balance, on account of unexpend- ed_appropriations, aggregate $2,017,- $16.24, and also further obligations to the amount of $825.603.69, which wiil eventually have to be paid out of this fund. That, eubject .to the correctness of the liability above stated, which can Dbe accepted for all practical purposes, the free surplus at June 40, 1922, was $4.67L16 2. The actountants have called at- tention to certain esrors in stating the account belween the two gov- ernments, and have recommended yedited to the District. Messrs. Gal- {loway and Taggart also suggest ad- ustment of these matters on the Haskins and Sells, and in this recom- mendation the committes concurs. 2. As a partial offset against these credits the comm'ttee recognizes that the United States is entitled to re- imbursement on account of the $240 annual bonus paid to certain classes ot District employes, and which, up to the flecal year, came solely from | federa! funds. The accountants, without definitely committeeing themselves, call att, tion 1o the fact that such general In- creases In_compensations of certain employes have been charged whilly against federal appropriations, while the regular salaries, other than the increases, have been charged propor- tionately against the United States and the District of Columbla. Here {s an evident oversight by the { Congress. due no doubt to the fact: that provisions for such bonus have been {nserted from time to time in measures other than the District of Columbla bill. The appropriation act or the present fiscal year made the necessary correction as to the futu:e. There is no doubt concerning the yol- fcy of Congress in the matter, and 2 bearing n this ! your committec recommends that the s OF ! In'a summary of their | District should pay its proportionatajshould have been credited with 50 In the act, to the effect that it should not be conétrued to make the federal government liable for any part of the principal or interest on the bonds, and they point out that such pa: ments were eventually made jointly from the revenues of the United States and of the DiDstrict. However, such relmbursement was made on the 50-50 basis, in accord- ance with the express authorization of the Congress, contained in eeveral subsequent acts. In the opinion of this commitiee, Congress had knowl- edge, actual as well as constructive, iof the provision contained in the act | of June 10, 1879, and deliberately in- | tended to place payment of the prin- cipal and interest of these bonds on the same basiv as other District ex- penditures. Such is the view ex- pressed by the District auditor and the citizens' joint committee, while Mr. Taggart of the general account- ing office does not give his opinion because he believes the guestion is one of legal Interpretation Mr. Galloway, representing the Department of = Justice, reiterates jthat in subsequent appropriation | acts it is expresely recited that so i much money be appropriated, 50 per |cent from the revenues of the Dis- ftrict, and 80 per cent from the moneyvs of the United States, “for the payment of intercst and sinking | fund of the District.” He adds that | ithat the net amount of $685.46 Dbe | Congress certainly had a right to do this, and even though the provisions of former acts were in conflict with such appropriations, the subsequent 24.300.78 | PESIS of figures submitted by Messrs. : action of Congress must be held to control, the question being now legaily settled. This position is supported by decisions of the con- | troller of the United States Treas- ury. View of Committee. Your committee inclines strongl to this view, and believes it wort lof note that the Mayes-Spalding in vestigations brought this matter fuily to the attention of the Congress, which failed to include the item in {those for which reimbursement was | then required from the District. } 2. The next principal item to which !the committee's accountants invite | consideration also dates back to the i time when the prezent form of gov- | ernment was established in the Dis- Itrict of Columbla by organic act of ; Congrees. The United States then as- sumed 30 per cent of the debt of tha District outstanding on Juné 30, 1878, 1 There were. however, uncollected ftaxes Aamounting to $1.822.738.75 !which were later deposited in the ! United States Treasury solely to the credit of the District. The question | arises whether such action was proper hether the federal government t report, dated January 17, 1323, they |share of iucreased compensation in} Per cent of such tax collections. state: “Certain of these items referred to in the foregoing synopsis would be affected by transactions prior to July | 1, 1911, In order to complete the In- | quiry into such questions, it would, | therefore, be necessary that the ex- | amination be extended prior to Ju | i1, 1911, 50 ae to cover the entire pe- | riod comprehendad by the act creat- | ing your committee.” ! But as to each of said items, aris- | found, as will be hercinafter shown | under the head of Title 1V, that they ! were properly charged, and that| there is nothing due from one gov- ernment to the other. The ones concerning which adjust- ment is recommended by your com- mittee, and which are listed under title 1II. have no possible relation to transactions prior to June 30, 1911. Also the committee’'s consultants, | Messre. Galloway, Taggart, Donovan, | and the citigens’ joint committee, «re in complete agreement as to the ex- | istence of the surplus, and practically in accord as to the propriety of re- Jjecting possible equitable credits be- iween 1874 and 1911. suggested for consideration by the committee's accountants. Official Records Lacking. Again your committee Is advised that many of the officlal records and memoranda necessary to & satisfac- tory audit have long since been de- stroyed, and that, however great, might be the diligence of the ac. countants. & complete and thorough audit for the entire period in ques- be secured. We submit, that the above statement of | what the facts actually are, speaks for itself, and we are content to leave | it _tos the judgment of the Congressi whether or not another audit at this| late date would be at all justified. As practical men we cannot escape the conclusion that the investigations made in this nad prior audits a-e as thorough as required for the purposes 'that $41,500 be charged against thei Gets “Evidence” such cases us enumerated hy the a countants in thelr report. This share amounts to $191,890.35. The above is in accordance with the recommendations of Mr. Galloway and Mr. Taggart, while Mr. Donovan and the citizens' joint committee make no argument on the queetion. Similar Item Cited. 4. Another item of somewhat simi- lar nature arises in connection with appropriations of 380,000 and $2,500 nade in the acts of June 5, 1920, and March 4, 1921, respectively, far the purchase of land in comnection with the National Zoological Park. The cost of land previously se-{ cued for this purposs was charged | proportionately to the federal and District governments, and your com- mittee can see no reason for an e ception in theso two cages. It is b lieved that this is another oversight, caused by the fact that the appr priation {n question was not contain- led in the District bill. In this position your committee has the support of Mr. Taggart and, by inference, of the accountants. 'Mr. Galloway states that the moral que tion is the only one involved, as legally the matter is settled, while | Mr. Donoyan is content to leave the matter to the determination of the Consress. The citizens' joint committee, on the other hand, advocates not only that this sum be charged whoily against the federal government, but also that there should be a refund to the District of moneys heretofore contributed for such park purposes. Your committee, however, Is unwil ing to disturb the evident intention of Congress in this respect, and in addition believes that sufficient ben fits are derived from the.park by local -residents to justify the Dis- trict’s share in the expenditures in- volved., The recommendation, therefore; is for Dry Law Case by Squeezing Clothes Special Dispatch to The Star. ALEXANDRIA. Va., February 5.— “Evidence” squeesed from clothing that had been In proximity to broken Jars in a ‘suit case was introduced into court here today during a pre- liminary hearing before Acting Police Justice A, B. Nichol. The result wa: that Jack Davis, sald to live in Wash~ ington, arraigned on a charge of violation of the state prohibition law, will have to face a grand jury, Here's the way it happened: Police- man Lawrence Padgett, according to his testimony today, saw Davis walk- ing on lower Queen strest jast Satur- day afternoon carrying a suit case. The sult case was nolr y‘,“: Randled 2 with punctilious care. recelved several hard jolts. Then it Degan to lesk. 4 Policeman Padgett -followed the trickle and-3rrested Davis. “In police headquarters, however, when the suit case was opened and investigated. all that was found was a shirt, a bandana handkerchief, some other articles, two broken fruit and an odor similar to that of distilled spirits. The two broken fruit jars had aliowed their contents to trickle_into the clothes. That didn’t stop Policeman Magner. He squeezed some of the fluid out of the clothing and held it for evidence, which was presented in court today. Attorney Chatrles Henry Smith, who represented Davis, held that his client carried. within the meaning of the law, bong fide baggage. Ho contended that Davls, .therefore, could not legally bde held. mmonwealth's Attorney Wil- lam P. ‘Woolls, on the other hand, said he thought the case one for the grand ‘ur to determine. Davis gave bond of §800 for appearance ‘before the grand jury. And Alexandria is faced with the question of whether a wet shirt and bandana handkerchisfs and broken fruit Jars constitute personal baggage. Here again, in the opiufon of vour| | committes, flie law controls, reflect- {ing as It does the evident intention { of the Congress. The purpese of the ! organic act was to wipe the slate ] clean; to provide for the payment of { prior and future obligations on a 50- {30 basis, and to turn over to the Dis- { trict authorities what assets existed 1at the time. Meesrs. Galloway, Dono- | ¥an and the citizens joint committce are in accord with this view. while | Mr. Taggart takes a neutral position. Quotes Report. The following extract from the Galloway report states the eituation clearl “The organic act of June 11, 1878, provides that the Commissioners of the District shall have power to apply the taxes and other revenues of the District to the payment of the ex- penses thereof, and that they shall take over the books. papers, records, moncy, credit, securities, assets and |accounts belonging or appertaining to the business or interests of the District; and another part of the same act provides that all taxes shall be States and the same, as well as the appropriations to be made by Con- gress, shall be disposed for the ex- penses of said District on itemized vouchers, etc. In other words, it seems that there was an intention to change the forms of government, giving to the new form whatever assets that had ac- crued or were in the process of ac- cruing for the purpose of beginning a - carrying on the new plan. ‘Even actual money then on deposit was | transferred to be used-in accordance with the new plan, and it certainly was not the intention of Congress to deprive the District of all means dur- ing the firat year of carrying out its duties under this new plan. Had these taxes, uncollected at June 30, 1875, been used for other purposes than th i AN a man for 5,10, i his life, but { way I " Plan_You: perience. Telephone Main 8320 pald in the Treasury of the United | Planning Your Career found him ably expect achievement? John M. Brewer, Harvard University, - “declares that: A man can and must so plan s0 important as the next steps and the wise use of the p 3 Holcomb Parker, Assistant Editor,.R: age. Yes, in nine times out of ten will reach his goal before the expiration of his time limit, 7 Business Couns 8 c of the most interesting interviews of your ex- La Salle Extension University The Largest Business Training Institation in the World WASHINGTON OFFICE, 1426 G ST.N.W. (AlbeeBldg.) 5, 1923. of the new form of govern- ment, the District would have been unabis to contribute one cent toward carrying out its part of #aid plan un- til it was able to assess and levy 2 new tax. “Certainly Congress did not intend that by this legislal ‘and, in fact, the express provisioris of the statute above referred to, indicate a contrary intent, 8o that it is my opinion that | from a legal standpoint this question is also settled, as Congress clearly showed that it Intended that these uncollected taxes be deposited in the Treasury to the credit of the District exactly as they were deposited. The above is another.item which was called to the attention of the Congress in the Mayes-Spalding in- vestigations. Largest Item. 3. The largest item to which the accountants refer, without making definite recommendation, consists of recelpts from licenses, privileges, etc., totaling $6,300,058.57 for the fiscal years 1912 to 1922, Inclusive. These, in the opinion of your com- mittee, fall clearly in the same cate- gory as local taxes, and were properly collected and deposited wholly to thc credit of the District of Columbia. The organic act is specific on that point. After the requirement that an- nual estimates of proposed District expenditures should be transmitted to Congress, it provides that: “To the extent to which Congress shall approve of sald estimates, Con- gress shall appropriate the amount of 50 per centum thereof, and the re- malning 50 per centum of such ap proved estimates shall be levied and assessed upon the taxable property and privileges in sald District other than the property of the United States and the District of Columbia. District Auditor Donovan, in his re- port, cites several decisions of the controller of the Treasury which re- fer to this language and appear to settle the question conclusively in the District's favor. The arguments ad- vanced under this head in the brief of the citizens’ joint committee also ap peal to your comimittée as being sound and based upon correct rules of { legal construction It is, of cour: quite within the | province of the Congress to provide for a different disposal of future col- lections, and from time to time the irecelpts from certaln privileges have been placed, by act of law, jointly | Yo tthel credit of the District amd the itederal government. But except in | cases where such specific provision 18 made the District has been en- titled, according to your committee, to the full amount of such receipts. Galloway Report Quoted. Mr, Galloway, in his report, con- firms this view that legally such fees and licenses should’ bé . credited wholly to the District, as has been done. Mr. Taggart “can see no rea- son why the District should now be charged with any part of these col- lections.” with the exception of a small_item known as special reim- bursable taxes, amounting, durf1g the period covered by the accouutants’ report, to $9,014.23. It is admitted that according to the Jaw thess latter items should be col- {lected in the same manner as gen- eral taxes in the District of Colum- bla, and the committee cannot see how a valid distinction can be made as to this class of miscellancous gol- lections. 4. Another matter referred to by {the accountants, without any ape- {clfic recommendation, arises from the { itncl that certain United States Army | officers have been assigned from time ) to time to duty in the District go ernment, 1 Their compensation, consisting of | I pay and allowances, comes wholly | fout of the revenues of the United States. This is also true of civil em- pioyes of the general accounting of- fice, who have been called upon to work on District accounts. The ‘full | amount of such Army officers’ com- pensation, between the years 1912 and 1922, s given as $2827422.18. Authority Not Questioned. There is no question but that there | is specific legislative authority for the payment of éuch Army officers by the United States, and for their d tall_ to the Dlstrict government; naither is there any doubt as to the | existence of statutes creating the positions held by employes in the gen- eral accounting office and the Treas- ury -Department who keep the Dis-{ trict accounts. Thess employes, of course, are se- lected primarily to safeguard the in- tereats of the federal government. | More than this, the arrangement ro- lating to Army officers carries out the general policy of the Congress. As pointed out by Mr, Taggart, who de- clines to make a recommendation, it has not been the policy to charge for the services of such engineer officers for river and harbor fmprovements, and for other purposes, even where the whole cost of the worl: is paid by states, municipalities or by pri- vate interests. Mr. Galloway, Mr. Donovan and the citizens' joint committee concur in the views of your committee, that no part of this item should properly be charged to the District. Refer to Collections. 5. An item, to which the account- ants have also called attentlom, is that certain collections made by the | clerk of the Supreme Court of the District, for the issuance of certain ! licenses and for fines assessed against jurors, are covered into the Treasury wholly to the credit of the federal government. The accountants recom- mend that the committee consider the item, whilo Mr. Taggart suggests | an apportionment betwcen the United | States and the District as to such col- | lections subsequent to June 30, 1922, which the committee understand is covered under the terms of the Dis- trict appropriation act for the present fiscal year. There is no question but that there was sufficlent authority of law to justify the deposit of these funds Wholly to the credit of the United States, and vour committee believes it consistent to recommend that they #should not be disturbed. A ruling In support of this position was made by the controller of the Treasury under date of December 13, 1920. The en- tire sum involved is $175.870.99. 6. The cost of erecting and fur- nishing the District - of Columbia Court of Appeals building, provided for by the act of May 30, 1908, ag- gregated $263,600. all of which was pald by the federal government. Sal- aries of emploves and miscellaneous expenses of this building, since its| completion, have been apportioned ! between the United States and the District of Columbia. Your committee's attention-has been | called to the fact that, in addition to considering appeals from the Supreme Court of the District, this appellate court also has original jurisdiction in cases involving patenta and that this business is of considerable vol- ume. Many uits are also brought in or carried to this court on account of the fact that ono of the partles is an official of the United States gov- ernment.. Neither of these olasses | of cases can be properly considered as District matters. e In view of the various phases of | 1 | | 1 i Advertisement No, 2. in his thirties who has not yet self successfully plan his life or 15 years ahead and rcasos- perhaps the ultimate goal is not resent. e Consult a r Business Career. elor at our office and enjoy one Open Until 9 P.M. this guestion which havs been pre- untefi, your committes does not jeci justified” In _recommending that the matter of the cost of erecting this Court of Appeals building should be reopaned. This item, as weil as those which follow, has baen brougbt to the at- tentlon of your.committes in the con- dyct of its hearfngs. but was not com- mented upon in the various reports hereinbefore refer'red to. 7. The annual report of the Com- missioners of the District of Colum- bla for the year 1896 (page 96) refers to-a judgment of $&5,740.47, secured in the old case of the District vs. the Metropolitan Rallway Company for paving done in the years 1871 to 1875 The entire amount was paid to the colléctor of taxes of the District, and the case closed. 1t will be observed that the greater portion of this transaction arose prior o 1874, and that the wark was all done some time before 1878. Under the head of item No. 2, of this tit'e, your committee takes the position that all of these assets prior to 1878, even ir uncollected, were to g0 to the District under the provisions of the organic act. This case apparently falls In that cate- gory. 8. Sectfon 7 of the act of May 18, 1918, provides for ~a appropriation of 425,000 for the repair and maintenance of the old Acqueduct bridge until the hridge, provided for in this same act should be completed. This money for such repair and maintenance was ap- propriated solely out of fedéral runds. Conts of Bridge. In the preceding six sections of the chapter detailed reference is made to the erection of the new bridge, and what was appropriated in these sec- tions was to be apportioned on the 50-50 basis. The amount appropriat- ed to begin construction was § | gation 000, and the amount authorized, $1.- 000,000. It geems evident to vour committes that tho Congress clearly intender that the 4mount of $25.000 for repair and mainterance was<g be paid by the United States. 9. The reclamation of that portion of Potomac Park on which the speedway has been bullt has- also heen brought to the attention of your committee. This reclamation Droject extended over a period of years and was, of course, directly under the control of War Department engineers, 1t was paid for by the federal government, although the District shared proporionately in the building and maintenance of the improvements constructed thereon, such as the speedway ltself. Concerning tlie primary purpose or original object of this reclamation project there may be some question. One leading reason which has been assigned is the improvement of navi- in the Potomac river, while sanitation may alse have had some- thing to do with the matter. After consideration of the facts as di closed, your committee does not b lieve that it was the intention to call upon the District to share in this expense, or that any proportion of same should be charged at this time. However, it was deemed proper to make reference to the matter in this report for the information of the Congress. Title V—Moral Liabllity and Interest. In making its findings and recom- mendations, moral as well as legal obligations have been taken into con- sidefation by the committee, pursuant to the instructions of the act of June 29, 1522. The guestion of moral obli- gations has given its members some concern, as the language may con- ceivably be construed to cover an ex- tremely wide fleld. In_this, as in irued on page 5 column 3) Con Every now and then we make an“advertising test” to find out how many folks read our advertisements. We do this by offering bargains so great that when you DO read of them you want them—and ask you to clip the coupon and bring it in. If YOU like to save real money on purchases clip the coupon and COME TO GEORGE'S TOMORROW . 7" Ribbed Shirts and Drawers Good quality garments in gray and ecru color. They were 69c but. hecause tho rizes are broken we offer them with this coupon at— L 49c / “ Medium-Weight ¢ | = N Union Suits Ecru color. Sizes 34 to 50. 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