, 1873-03-05
LUuAL DEBT AND TAXATION.

The Constitutional Commission Of New York
recently appointed committee to report the
aggregate amount Of the county, city, town, and
village debts. The result Of their investigation
has been, in their own words, "to show
great abuse in the exercise Of the powers OF
creating municipal indebtedness and reckless
ness in the creation OF obligations for future
indebtedness Of the local governments OF the
State amounts to the enormous sum Of s214,
s17,676, which is 101G per cent Of the assessed
valuation Of all the real and personal property
OF the Stat O. The details OF this inres-
dgation afford information that is both
interesting and important. The largest
single item OF indebtedness has been incurred in
aid Of railroad enterprises. The indebtedness
assumed Tor this purpose which remains unpaid
amounts to s26,919,662. The practice Of subsi-
dizing railroads by local governments is vari-
ous. The most general rule has been to issue
municipal bonds and exchange them for an
equal amount OF the stock of the road which it
is proposed to aid. In some cases, this stock
has been Sold rs high as 10 or IS per cent; in
others, the roads have been leased to other cor
but, in nine-tenihs OF the cases, the towns will
DO compelled to pay not only the interest but
the full amount Of the bonds issued. The
matter is all the more serious as each
town has dated these bonds SO that thoy
will fall due in the same year; and,
in some instances, the property, real and por-
sonal, has been mortgagedin this way for20, 90
and even 50 Per cent OF its assessed value. OF
the other ite1ns Of local Indebtedness, S10 49,
8C4 was incurred for erecting public buildings
52G 934 ,9G6 for expenses on account Of the civil
war 936, 65s, LA for 1oads, bonlegards, streets,
avenues, sud bridges; s29. 1886 1888 for water
works and fre-apparatus; 984, ,052, ,655 for parks
and other local improvements. There is only
one city in the State which has no bonded debt.
The debt Of New York City amounts to 1oN per
cent Of the assessed valuation, but the debts of
other cities are much larger; in one case Pough-
keepsie) 81 per cent, and in another (0swego)
q per cent Aside from tbs bonded debt
actually in existence at the present time, addi-
tional municipal bonds have been authorized to
the amount Of 92,1G5, 600; soveral towns are
going through the preliminary stops for new
DEBTS; and tho Committee estimate that, by the
close Of the present year, the aggregate amount
will reach 9225, ,000, 600 for the State.
, Tho conclusion OF the Committee is naturally
TINT the time has arrived to place some consti-
tutional restraint upon the power Of municipaI-
foresao the most disastrous results, probably
either bankruptcy or reputation. They there
fore recommend section OF the Consti-
tuition prohibiting the cities, towns, and I
villages mourning debts beyond 10 per
cent Of their assessed valuation, including
their present indebtedness. The Committee |
would havo done better to recommend An imi- |
tation of the constitutional prohibition in this |
State. In the first place, the Constitution Of |
Illinois prohibits every city, town, aud 7il1nge |
corporation from incurring debts on account Ct |
railroads or any other private enterprise. They
are expressly forbidden to Issue bonds, sub |
scribe for stock, OF make any donation whatever
in aid OF corporations The necessity for this
universal prohibition is found in the manner |
through which railroad and other corporations |
have secured municipal aid The use Of money
to secure the needed legislation from Common
Councils, and the inadequate informa-
ton and email interest in cases where