New-York tribune., 1906-05-30
MAYOR ON CITY DEBT
MILLIONS FOR SUBWAYS
Total Borrowing Capacity for This
Year Is SIS2, ,96S, ,S6S 2S.

,itv's debt margin at sI32 6S,Ses IS. and saws
that this sum will be available for further in
ssb,edness throughout the year 1906" It is no
secret az the City Hall that the Mayor intends
.hst his outline Of the citys financial condition.
with It's Unexpectedly large debt margin shall
he aa answer TO the Rapid Transit Commission.
SIT assumes that the city is without means to
undertake the building OF subways
Il IS understood that. while the Mayor is not
courring clash with the Rapid Transit Com
mission he will insist. in all further discussion
Of the city's financial abilities. that for the year
1906 the municipality has this round sum at its
6isposal II the Rapid Transit Commission
should 1ustify any action by the argument that
the CITY was helpless. on account Of limited re-
sources. 70 90 otherwise. the Mayor will contend
that the commission is wrong. and Will insist
upon his contention even TO the point OF an open
break with the commission.
When the Elsberg bill was up for hearing
before the Mayor, Albert B. Boardman. counsel
20 the Rapid Transit Commission alleged that
the city's debt iacurring capacity was about
:450o0000 The Mayor told Mr Boardman al
that tine that he was wrong
Not the least interesting feature OF the
Mayors statement is his warning that there
IS likely 20 be a reaction against the present
boom in real estate speculation. and that the
city IS hound 70 guard against it On this point
be says:
II the city. in its endeavor TO furnish further
borrowing capacity 10 enable IL 70 enter upon ex-
tensive and expensive improvements, raises the
valuations from year to year beyond reasona-
bic amount representing normal increases in
values, the time must certainly come when the
limit VIII be reached. Full assessment values,
with debt incurred TO the limit of the margin
thereby created. would mean that the city had
substantially reached its limit OF development.
II history IS 70 repeat itself and real estate
values suffer a heavy decline through over
speculation. q condition indicated by the present
activity, the risk run is that the city may be
compelled. because Of its policy OF assessing at
.uu values. 70 make material reductions in
such values. thereby placing it in the position
OF having q debt larger than that allowed by
the constitution II would be several years be-
fore such excess could be adjusted. ConseTva-
tive management is essential If a continuing
but gradual development OF the city is 70 be
maintained
RELATION OF DEBT TO BORROWING.
On the debt Of the city OF New York and its
relation 10 the city's borrowing capacity. the
Mayor says:
On January !. 1906. the debt Of the city was
ss follows:
Ne; funded debt: arrived at BY subracting
9 % .ee goss @ funded 9ss: a5n0un;tPE ~ ,5 70
s,y a-1ocnIizE 70 sos 40 7os 26; the wa
@ @ oaas sspsa Is So 5 s9s :ss IsRqsE g. s5h d we 1sG
para ot The der are not unoer the pro
sA5uo+tDE sinking .urd
aaRss & Rs slnoaa5ins 70 ia s724 2a2 la
Net S2n'5saS s lt 1a9lss e51sTes i1Io less bal
Snoes 70 The credit Of the several funds
.5i::; s5SS$55 Z
Total .s457. .ss2. 7&5 O3
On the assessed valuation Of realty for 1905
the Mayor finds the constitutional margin over
debt 10 be So. .S256S5 OF. This figure he reduces
% s45.s53 6s5 Il by treating as debt the short
term revenue bonds outstanding and unapplied
proceeds of the last corporate stock sale. Start
ing with this amount as the margin on January
: last. he says there may be added as borrow
tng capacity developing and available through
out the year the following items:
O. the sel715.o 600 revenue bonds 1902
1895 and 1905 referred 10 above there vi s,s mo N
CGss baiauoes in the several sinking funds
revenue ponds and special revenue bonds
hele BY the sinking FUNDS. falling cue in
.ssaes 22ss1s 20
De-. Tsseseaasbie rom direct a. 5a.ation dur agE-
ing 1875 dncludtng special revenue bonds
so anu -. 7Ia54s II
i5g Leo likewise aNaisfle i1r reaernpLlon
S7ns .sslss es,instea at-.--'..-..-... 100000 90
Ter per q increase assessed velU-
t.rza.es s,.7.. .......-...-..- 100000 90
Producing additional borrowing capacity
throughout Jhe year Of. ss4.oi4.eT2 81
This amount added 10 the margin Of $685.
SIS Il al the beginning of the year. produces
together ,36s rs, which will be available
for further Indebtedness throughout the year
1906
Assuming that the city's debt for ordinary
purposes during the year 1906 will be $4,000, 600.
The average incurred during the last four or five
yea-s. there viii still remain z margin Of about
ao,000g10 for commitments not yet developed
INTO acual debt and for extraordinary purposes.
This viii afford opportunity 70 fund portion
a. least = the UncoIlectible taxes by the issue
q corporate stock authorized by act OF the Leg
islature % 1906. Although the total amount Of
rncolectibe taxes heretofore levied IS estimated
&; about S33 000, ,000 the funding should be dis
t1oute6 several years, not 10 i'm
pound the debt margin TO the extent OF delaying
Improvements. Funding at the rate Of about
H00900oo per annum would be justihable in
ofcer 10 dispose Of a weak feature In the IMAM
cal operations Of the city.
LARGE CORPORATE STOCK ISSUES.
Large bond issues result in increasing the
BUDGETS. For every S1O00o0OO0 OF hfty-year
Der cent corporate stock issued about Sooo.-
90 vii have 10 be provided IN the budgets an
alaly for interest and for instaln1ents 70 meet
Ne principal when due. The charter provinces
nst corporate stock shall be issued for periods
To- less than ten years. nor more than hfty
gs-s
would seem that the life Of bonds Issued ny
lie city should be limited 10 the possible exist
saoe OF usefulness OF the objects for which they
e'e issued Il such usefulness be less than the
fiy-year MInit fixed by the charter. The fact
taat the issue OF bonds for the longest period
EsoSed viii reduce the instalnlent 70 be pro-
Noed 81 the annual budgets 70 the lowest pos
soe amount should not be the determining fac