New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-12-20
PRICE THREE CENTS.
TO CONFER ABOUT THE BOND
SYNDICATE REPRESENTATIVE TO MEET
RAPID TRANSIT COMMISSIONERS.

HOPE THAT THE COURT WILL coNsrRuE III
ORDER TO MEAN THAT THE ;i5oooooo GUAR
ANrEE IS ONLY FOR THE PERIOD OF
CONSTRUCTION TIE BOARD
READY TO TEST THE DEBT
LIMIT QUESTION IN THE
COURT OF APPEALS.
Representatives of the syndcates which have
been formed to bid for the contract for build
ing the underground railroad have been invited
to attend the meeting to be held this afternoon
Of the Contracts Committee Of the Rapid iran
sit Commission. The committee was Instructed
at the meeting of the Commissioners on Satur-
day to investigate the practicability OF obtain
ing the S15OO0OOO bond required OF the con-
tractor by the Appellate Division OF the ou'
preme Court, and to draw up report embody-
ing the results OF its inquiries. To this end the
committee will consult with the syndicate
representatives to-day to the possibility OK
complying with the Courts ruling. 1t Is thought
I'm many quarters that the committee VIII 20
told that while II will be perfectly feaslpie tor
the successful bidder to raise Slo,OVU.ooV oono
to run for the constructive period or the WORK.
IT will be financially impossible to continue sucn
a guarantee for the operative term or thirty-
five or fifty years This view will probably be
in the shape Of report upon the strength OK
which the Commissions counsel, when appli'
cation is made to the Appellate Division to en-.
ter an order will ask the Court so to construe
its decision as to make the bond cover simply
the time Of construction.
1t IS believed that the Court will undoubtedly
accede to this request. The supporters OF the
rapid-transit scheme in expressing this oeiet
argue that 1t Is absurd to suppose that the JUS
tces, after approving the plans intended prac'
tlcally to nufy that approval by the imposi'
ton OF stipulation which would be prohibitive
Should the Appellate Division agree to make
the bond existent only until the work Is NM
ished the Commission will at once set to work
TO complete the form OF contract and advertise
for bids.
QUESTION OF THE DEBT LIMIT.
II Ia understood that when application Is made
10 the Court to enter an order the opponents
Of the road will urge the contention that the
carrying out Of the plans would have the eject
OF exceeding the city's debt limit. The gravest
doubt surrounds this probability. and lawyers
who have discussed the question are divided In
their opinions. The Justices themselves did NOT
attempt to determine this vital issue Tney
suggested that as there was no appeal from
! their confirmation of the report upon the rapid
| transit plans the matter OF the city's indebted
! ness should be raised in another form, so that
| it could be passed upon by the Court OF APP
peals The debatable point is whether the city
! becomes indebted for the total cost of the con-
! struction from the moment the contracts are
awarded and the work is begun. 1t Is held th@t
! il this were so the cty's debt limit would GER
! tainlv be exceeded but II the debt accrued
| as the work proceeded and the money be-
came payable, a contract could be drawn, the
| counsel for the Commissioners say. which would
protect the city's interests and keep the debe
within the constitutional limit.
READY TO MAKE THE TEST.
II the bond matter is adjusted the members q
| the Eapid Transit Commission are willing.
through a taxpayers suit. to make the test be-
fore tn. Court OF Appeals. Edward NJ. Shepard.
| one Of the counsel Of the Commission has given
| deep study to the extent OF the debt burdens
which the greater city will take upon its shoul-
ders. Mir Shepard computes that the enlarged
city. upon its constitutional ability to undertake
! Indebtedness to the amount OF 10 per cent OF It's
valuation Will have margin Of borrowing ca
pacty Of $40 S2O7J47 40 Mr. Shepard points
! out that this sum would be more than enough
| for the present, and that the additional and
assured provisions for the next five years would
build two rapid transit roads. He also refers
! in his commentary upon the citys borrowing
/ capacity to increased valuation of real estate
as the inevitable effect Of consolidation "All OF
/ the territory in a city," he says, must neces-
sarily he assessed at about the same rate OK
! valuation The rate in NewYork and The
| Bronx is very much lower than 1t is In Brooklyn.
IL is not probable that the rate will be lowered
! In Brooklyn. 1t is more than probabe-it Is
| practically certain-that the rate In New-fork
! will be raised If this is done. the increase in
valuation will be at least 25 per cent. This will
! add about S4J0,0tO.OOO to the assessed valuation
! in New-York City. II Is now constituted.
! This would mean a corresponding increase In
| the debt limit Of S4J,OO0,OO. There is no doubt
| that we are safe within the debt limit and will
| be Just as safe when the contract for construct
| ing the subway is let. New-York will assume
| a great burden Of debt that has been piled up Ia
the various counties and cities. but the constitu
| tional margin Of Its borrowing capacity Is In no
| danger. The counties can no longer incur debts.
| The only power within the limits Of NewYork
| that can do this hereafter is the greater city
! itself II has ample resources and an ample
prise. especially IT will from first to last cost
| the city not single cent The contract can be
! so drawn, and Is. in fact. 80 drawn, that II will
| not endanger the debt limit. This be
| ranged by Issuing bonds as the road Is built.
| SO that only part Of the debt will be incurred at
| time 4 special provision would be made that
| would fully cover this and protect the city from
| any obligation for work not completed II the
| bond matter Is adjusted, think We shall have
no further difficulty In constructing the rapid
| transit subway"