The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-05-02
ASSESSMENT BONDS
The Bill for Paying Them from
the Sinking Fund.
COMPTROLLER KELLY DEFENDS IT.
A Review OF Governor Robin
sons Veto Message.

Comptroller Kelly mas transmitted to the Legsla-
ture the following communication, rev..wing the
objections OF Governor Robinson to the Bonded In
dcbtedness Sill:-
CRY OF NKw YORK FINANCE DEPARTMENT
CoArrRoLLkRs OfFIck, May l. 1875
To THE HONORABLE THE LEGISLATURES or THE STATE or
tue paramount Importance to the interests Of this
city Of Assembly bill No. 100, entitled IAN act reat-
ing TO certain Indebtedness OF the city Of New York,
and 70 provide TOR the payment aud cancellation q
Robinson your honorable body without his approval,
induces mo to respectfully submit Tor your considera
why the objections made 10 its
provisions are not, IN my Judgment souid and valid
against the bill becoming law. The bill, as prepared
ny the Comntroller, was approved ~ ne local au-
tnorities before " presented to the Legislature,
and has received the emphatic approval o. the press
almost without exception, Of banKers merchants and
taxpayers generally and OF societies organized 10 pro-
mote reforms IN the administration OF the financial
affairs Ut the city, which nave aken direct and active
part ~ advocating the passage OF ths bill
The bll was Transmitted 10 the Legislature last
January, with memorial praying Tor It's passage, by
the Mayor, Aldermen and Commonalty OF the city OF
New York, representing sthat, in tho opinion OF
your memoriasis II Is absolutely necessary, IN the
by Legislative enactment Tor regulating us bonded in-
debiedness"
A statement was presented Of the bonded debt OF
the cily on December 81, 1877, and the objects and
prov, OF the bill explained Finally, aiser due
consideration Of the bill IN the committees on The
Affairs OF Cities oil both houses OF the Legislature II
was reported iavoraDly without amendment Of It's rro
visions aud passed the Legislature almost unanL
mousiy
Under these circumstances the exercise OF the veto
power warranted ouiy ny worry grave and cogent
feeling regard 10 the merits anu operation oil
the provisions Of the bill. which characterize the
reasons igned ny the Governor for not signing IT,
Efficient grounds Tor veto. Governor Rob
inson says OF the biii:-"My own examination OF II
has led TO fear that II enacted, IL VIII accomplish
nothing toward these purposes beyond what viii DO
attained the financial aGrs OF the CITY are left 10
% ssu Tsss .a' ay VIII no. accom-
Dish more 10 "simpiy the financial affairs
OF the CITY, prevent the augmentation 81 It's debt and
provide for payment OF It's outstanding stock and
bonds al maturity. than Will be attained under exist
ing laws and the provisions Of ne existing ordinances
relating to the sinking iund 10 view OF the POSITIVE
limitations OF the SINKING fund by existing laws 10
small portion Of the bond.d debt OF tue CITY, and the
certainty that about $100 000 900 OF funded debt
now outstanding eau now be paid only from taxes TO
he imposed at the maturity OF the bonds, aud that
other provision made by these laws for auy o.her
entertained by Governor Robinson 10 regard 70 the
operation OF the bill VIII hardly be shared in by the
taxpayers OF this city.
Tho Governor further says:-'sA general objection
the whole b Is that It's language is 50 obscure and
involved that its construction Will be difficult and
certain. Trusts enormous those affected by this
bill ought not 10 be subjected 70 statutes wanting Ia
precisiOn." Aud again, Tho bill, as have said, Is
obscure and ambiguous III It's language"
these alleged detects 10 tho oil have not been per-
csvsa by other perons familiar with financial AFFAIRS
anu the opinion OF the Governor Is not c0ncurrsd
by such persons generally II BY any. An examination
OF provisions section by sectlou will exonsrsts tho
bill fully Il 10 confidently believed from this critcsm
II has certainly mover been made before publicly
but contrary all the provisions Of the bill have
been strongly commended for their brevily, clear
ness and precision. III this allegation. were well
founded the obscure or doubtful provisions should ut
least have been pointed out ami their liability 10 mis-
construction explained In order TO give force TO the
objection. This has not been done. although Tho ob-
jecls and operation OF the bill forth and dis
cussed the assumption OF being clearly and FULLY
understood, even II not approved
PKovisoNs FOR PAYMENTS
Now, what the facts IN regard to the provisions
for the psyment under existing laws. OF tho
bonded debt oi the city which this bill intended
s.a,smen. Of the debt presented. IN the memorial to
the Legislature shows that on December 81. 1877, the
amount Of the funded debt aud the provision for It's
payment under "the existing ordinances and laws" 10
l-Bonds payable from the sinking fund.- 043 AZ
2-Bonds payable from taxation... 99030,0S9 IS
Total amount. 440, lS3 Is
The amount OF bonds that mature in each year pay
able from the sinking fund, and also from taxation
stated also IN tho memorial referred TO- In some
years than $40 600 O0U VI bonds mature payable
IRON taxation. besides those payable from the sinking
fund The same years. In \ number VI other years
amount oil bonds which TALL due IN single year is
81 100000. So, 600 900 and $60o0o00 Under '.exisl
ing aws these bonds cannot be paid out oil the sinking
fund, aud amount must be added 10 the tax levy
Of each year when they faiI due.
In the next year, 1879, the amount Of bonds falling
due payaole from taxation Is $s447, Loo 35 Inns
sum must inevitably be added 10 the TAX levy next
year II 40 provision Is for It's pay onl other
wise, designed anu provided for w the bill just
vetoed by the Governor. Whatever reduction may be
In the taxes Of next year by the passage Of
measures 10 reduce taxation now pending In the
Legislature - certain that II the npsncs al affairs
OF the city are left 70 be regulated oy the exsng
dinances and laws" as commended by the Governor,
they would DO Increased ny this amount vi bonds
due. the OF taxation IN 1879 will exceed three
estate, instead ol bcing reduced below aud halt
per cent AS desired IN the interests Of the city.
The Governor also says:-'ihe sinking fund was
established Tor and Ia pledged to- the protection OF
certain long bonds, aud argues that the application
OF the iund TO inc payment OF other bonded Indebted
OF tue city ~ not "cvnssicnt with good fatbn
That "by letting things alone, by leaving the sinking
iund operate under the original ordinances city
keeps iaiIh with the creditors 10 whom tho fund
nrsi pledged anu yet constantly dong ths very
thins 10 protect lis other creditors TO wiz buying It's
own dcbts"
The sinking fund now has IN II q surplus Of securi-
ties Of aoouI $4,000 900 over and above the
bombs for which Il ID pledgcd BY Law. Tho primary
provision Of the bi h TO continue The sinking iund
apply us revenues 10 the rest Of the bonded debt
without In the least degree touching or affecting the
about $2i, 600 0OO previously stated That this is
the fundamental object and provision Of the bill Is
clearly set iorh IN tho hrgt section, as fo0ws:'sec
ton 1.-The iund known the SINKING tund OF the
City OF New York, Tor tho Redemption Of the City
Debt shall be continued, aud any excess there may
said iuLd after provuiDg Tor the payment OF tho
bonds and stocks of said city payable tncrclrom,
provided ny law. shall form a fund for the payment
OF bonas and stocks OF sald city and county now
oststauaing, payable IRON taxation, other than
bonds, &c
This provision Is certainly explicit and precise In
It's language or only aitcr providing Tor the pay cut
u the bonus and stocks vi the city payable there
irom" that Is 10 say IRON tho sinking fund. then
then only "anY excess thefo may be IN said Iundv
be applied to and form a fund Tor the paymcu OF
other city bonds payable under "existng Iaws' from
tsxaton aud also, provided, for certain bonds des
igbated as assessment ponds
IL cannot be truly sad that this Of the sinking
fund revenues Is breach OF "good faith" 10 holders
of bonds tor when the SINKING iund liz
pieuge They are already Iuiiy provided Tor
aud .hsir holder, holders csnno. reasonably desire
unlimited amount as collateral IN excess OF their
special issues bonds. But The revenues OF the
sinking fund In oil Their claims upon may
be properly used 10 the great advantage OF me tax
payers the regulation OF the cry deDt aud the en-
hanced credit OF the city under one compreh ensve
and uniorm system OF management by the Commits
soners Of tho SINGING Fund, without detriment 70
their security, whl0 also the holders oil other city
bonds will DO benefited. The frat section OF the bill