New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-12-23
GOLD CANAL BONDS.
ROBERTS DEFENDS THEIR
LEGALITY.


PAPER MAN ANswERED-ACTIoN OF A FOR
MER CANAL BOARD A PRECEDENT.
fFRoM THE REGULAR CORRESPONDENT OF THE TRIBUNE
Albany Dec 22--BenJamin S. Dean, of James
town. a member of the constitutional Conven-
ton Of 1894 has written "open letter. TO
James A. Roberts the State Controller asking
him by what legal authority, in his advertise
ment asking for bids for canal Improvement
bonds to the amount Of 80 900, he promises to
pay the bonds principal and interest in gold"
Mr.. Dean, who is at present the Editor OF ''The
jamestown News" then goes on to add: How
long since you became the Legislative power Of
this State? How long is 1t since you became
the censor Of our National currency and the
Judge of what kind of money shall be paid upon
our obligations? The statute of 1895 under the
provisions of which YOU supposed TO act.
makes mention Of gold"
Mr. Deans letter in the opinion OF State off,
cias here. has tendency to throw a cloud upon
the legality Of the canal Improvement bonds,
and to compel the State to pay higher interest
on the bonds, and to sell them at less pre-
MUM than would be otherwise the case. Since,
also, s9OOO.O0O OF these bonds certain to be
issued and possibly $685. 900 Of them for that
is the some engineers estimate It will cost
the State to improve the canals under the
Seymour PLAN, any such attack upon them. in
the Judgment of State officials must be seriously
considered The banking firms who will make
bids at the sale of the 100000 in bonds on
January g. 1896, will have thorough investi
CATION made by their attorneys regarding Mr..
Roberts's authority to pledge that the State will
pay these Obligations principal and Interest, In
gold"
I)chn ho1ia hot bo boa ftt11
legal authority to make such pledge. II fol-
lowed a precedent made in 1872. said he yester-
day, "by the Canal Board of that period. which
had as its members Allen c. Beach. Lieutenant
Governor: Francis c. Barlow, Attorney General;
G. Hilton Scribner. Secretary Of State; Nelson
II. Hopkins. Controller and Thomas Raines.
State Treasurer. II was shortly after the War
Of the Rebellion, and IT essential that the
credit of the State should be upheld There was
a deficiency In the Canal Fund amounting to
81 .562 900 and it necessary to sell bonds 10
that amount to make it good. Under a law of
1850 the Canal Board was authorized to borrow
money as 1t might deem most beneficial to the
interest of the State. Attorney-General Barlow
offered n resolution declaring that since the
State had resumed specie payments on July l.
1870 the Board was satisfied that the financial
interests Of the State required that the principal
as well the interest on the said canal debt
falling due on July /, 1872. should be paid in
coin And the resolution declares that the said
bids be made and payments made in gold coin
That resolution WIS passed by the unanimous
vote Of the Canal Board on June 19. 1872 The
bonds were gold bonds, and were paid In gold,
principal and interest
"Do you believe there was anything in the act
passed 10y the Legislature OF 1895 which would
prevent YOU issuing gold bonds?
"NOt a line" replied Controller Roberts. The
only limitations were in regard TO the amount OF
bonds u be issued. che rate Of interest and the
time in which they must be paid. issued gold
bonds on the authority Of the Canal Board OF this
year because ii was to the financial interest OF
the State that should do So | found upon in
ouiry in New-York that could sell gold bond
~ a higher price than | could a coin bond. The
State saved money by doing 1t, and therefore !
issued that kind Of bond There Is not the slight
est question in my mind but that they are legal
bonds and that | had legal authority to promise
TO pay them principal and interest. in gold. The
only political party in this State that could OBJ
ject 10 this proceeding OF mine Is the Populist,
and that passed out Of existence. so far as this
State is concerned. on the 9TH of November
State Engineer Adams stated few DAYS ago
that the sum Of 81 600 600 would be expended in
canal improvements before the canals are opened
for ma viga ton in the spring OF 1896. AS soon
Mr. Roberts has nOated the S20O0.0O0 OF canal i'm
provement bonds In January. and thus obtains
the money for the work. the State Engineer VIII
put 900 engineers and chainmen al work on the
Erie Oswego and Champlain canals to make sur
vevs for the proposed canal work When all the
SURVEYS have been completed contracts Will be
made by George w. Aldrdge, the superintendent
of Public Works, for the intended work. All OF
the 50 900 900 Improvement work Is to be executed.
by contract" This viii be much cheaper for the
state than If the State hired the laborer. The
State Capitol has been built by laborers hired by
the state. and a consequence It's cost mas been
Increased at least third.