New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-01-29
ALBANY.
AL IRREGULARITIES.

oIhIE fLNANCIAL lhhEuULhnlllCo'
SINKING FUNDS ILLEGALLY ENCRoAcHED UPoN-IM'
PORTANT MESSAGE FROM GOV. DIX AND sIGNIFI-
CANT REPORT FROM CONTROLLER HOPKINS.
ALBANY, Jan. 2s.-Tho most striking feature OF
Legislative business to-day was Gov. Dixs message,
forwarding communication from the Controller In
relation to the illegal custom of drawing upon the
sinking funds 10 meet appropriations of the Legs-
lature for which provision was made by current
taxation. The following is the full text of the two
documents:
THE GOVERNORS MESSAGE.
STATE OF NEw-YoRK EXECUTIVE CHAMBER,
ALBANY, Jan. 49, 1874
10 As State Legislature have the honor to transmit
herewith communication from tho Controller In regard
to sinking funds apart by the Constitution and
sacredy pledged to pay the interest and redeem the
principal Of the State debts cannot too strongly CON-
mend facts and suggestions contained In the COM
muncaou TO your attention. They concern the proper
administration Of the Financial Department OF the Gov
ernment and the Of the good faith OF the
State toward the public creditors. have referred
to this subject IN both my messages to the
Legislature, and particularly In tho
one which had the honor TO mako
to You at the commencement Of your present session.
the financial statement presented 70 me when was
preparing It, the aggregate amount OF the severa' SILK
ing funds was set down as ,so O5. On nquring
in what the funds had been set apart, as re-
quired by the Constitution, found that nearly two
thirds of the amount existed only paper, aud that
the moneys belonging to them had been used In deray
ing OF tho Government In direct
violation Of the Constitutional requirement and OF the
pghted faith Of the State.
Tho communication OF the Controller explains the
manner in which failure fulfill high Constitu-
tional obligation has been caused, and points out the
only mode In which the obligation can now De computed
with do not doubt that 1t is his duty, under the
higher law Constitution. TO invest all moneys
raised by taxation for these funds rapidly as they
Nib Of in ia
Legislative appropriations and to leave the latter I'M
paid until other means provided for them. In my
first annual message assumed that, as SINKING Iunds
were their nature solemn pledge OF faith to credit
ors for the payment Of debts due them. to borrow
money on Of those funds for other purposes
to make subject other pledge. OF make even
a temporary OF the moneys or securities OF which
they consisted, was q clear violation OF the pledge
originally given Further reflection has confirmed my
confidence In the correctness OF this conclusion
Some years ago there unnyested moneys belong
Ing the capital OF the general fnnd debt sinking fund.-
and these moneys used to meet current expendi
lures Since that the Legislature. in repeated In
stances authorized the Controller TO invest surplus
moneys belonging capital Of the sinking funds in
taxes thereafter collected and to apply these mon
eys meet appropriations made by the same act An
investment In tax does not convey very definite con-
cepton of the financial measure intended. In plain
terms II is an expenditure Of to be replaced at
authority invest given to tho Controller In the
instances referred TO- there surplus moneys In
existence to be invested expended and the result has
been that the principal Of the sinking fund has been in
yaded and consumed. as already stated.
The largest deficiency in tho sinking fund OF the
Bounty debt This debt contracted under Section
II OF Title Of the Constitution. The sinking fund to
extngush created by Chapter 326 OF the Laws OF
1868 and the money provided for became by virtue OF
the section referred to- applicable to the repayment OF
the debt, and "to no other purpose whatever" Like
the sinking funds OF the General aud Canal Fund debts
IL il inyioabe and only be invaded and consumed
through an the Constitutional requirement
The act Chapter OF the laws Of 1861 amending that
Of 1865 requires the Controller invest the proceeds Of
the annual authorized TO be levied for this sinking
done, in the bonds authorized to be issued
under that act in any OF the stocks issued by TINS
Constitution setting epart the sinking funds for the
payment OF the state debts and tho OF tne
are in accord and failure to make the inyestmeDt pre-
scribed by the latter would involve violation OF both
I make the suggestions with entire confidence in your
take such measures as may be necessary
to mantan involae the fatn Of the State, and TO re-
lie e the Financial Department of all embarrassment in
meeting public obligations, both OF an ordinary and an
extraordinary character JOHN A. DIX
THE CONTROLLERS STATEMENT.
STATE OF NEw-YoRK, CONTROLLERS OFFICE,
ALBANY, Jan. 26, 1874.
To his Erceieney JOHN A. DIX Gorernor called the
attention OF the Legislature In annual report sub
general fund bounty lists Of the State and the
condition OF the sinking fund intended for their pay
ment maturity for the creation Of which provision
is made in the Constitution of the State. deem it
matter OF grave Importance TO the proper admins
tration OF the financial department Of the Government
Of the to Justify me in audIng to the subject
more in detail in this special communication to you.
The general fund debt now outstanding amounted
on the lst day OF January, 1874, to &3,9ss626 40.
pavabe as follows On demand, 800 43 76 July 1875,
July 1875 $SoOOCO at pleasure, G25s0s2 g.
The bounty debt the date amounted to Sl0S15,
Geo. payable April T. The general fund and bounty
debt amounts in the aggregate s24 $685. 52e 40 Pro-
vision was the creation Of sinking fund for
the payment Of general fund debt in the second
ton OF the roth Article Of the State Constitution which
provides that "the principal and interest Of the said
sinking shall be sacredly applied to the payment OF
the ,aid debt" The whole required to take up
and cancel said general fund debt has been contributed
and paid the Treasury under said section and arti
Gle OF tho Constitution. but the moneys
20 contributed for the establishment Of this sinking fund
have been diverted from their legitimate purpose and
expepded in payment Of appropriations made by the
Legislature nominally, in anticipation of taxes from
wear TO year, and the same cannot be invested until
such paid into the Treasury The bounty debt
was meet certain expenses or this State in
Cured in the suppression OF the late Rebellion in pursu
ance Of Chapter 32 Of the Laws OF 1865 under the au
tbory contained in the 18th section of the seventh ar
Gle OF the Constitution of the State which is in the fol-
lowing words:
debts the State may debts to repe Invasion,
suppress nsurrecon. or defend the state ID war Out
the fund arising from the contracting OF such debts
shall applied the purposes Tor whch III Is raised or
10 debts, and TO no other purpose whatever
There has been assessed, and should have been paid
into the Treasury the present tme to the credit Of
E,nd thc nm NJ