New-York tribune., 1908-09-14
CI1p,S DEBT LIMIT Up
Referee to Hold Another HeorinD
To-day an Leu iSuit

"A nearing VIII be held this afternoon before Gem
eIdi hehJamln F. Tracy, the referee Amounted nv,
0 supreme Court in the suit of jefferson NJ Levy
70 restrain the Board of Estimate and Annor+ion
ILiehI from approving contracts let by the F,t,Iic
service commission for the construction Of +be mo-
80 ouFth avenue subway in Brooklyn and from
u'i-oiizhg the issuance of corporate stock to nav
Ioi me subway. Justice Blanchard recently ap-
pointed General Tracy as referee TO hear all facts
~'ils 10 Ihe Indebtedness of the city to classify
Ihe debt and to report whether or not in his
opinion. the city of New York had reached or ex-
ceeded its constitutional margin OF indebtedness on
June so. 1908
The assessed valuation Of real estate IN the citv
for 1907 S6240 $50 602 If annear. f-or, tho eg
ures OF the Department of Finance that the gross
luhoeo debt amounts s79s5 I2S s. as of June 50
lS'o' II no Indebtedness were permitted TO be de-
quoted from this amount It could readily be seen
mat the city had exceeded its constitutional debt
limit Of 10 per cent Of the assessed valuation of
re estate and would therefore be unable to under
take any further improvements Moreover the
validity OF the recent bond issues might properly
be questioned
There are however. certain provisions Of the con-
butuuon and other provisions of law which re-
qulre that there shall be deducted from the gross
iunoed deot certain sums in calculating the net
oebt OF the city. Article VIII Section 10 of the
constitution provides that certain revenue bonds
shah be deducted that debts incurred by the city
amer January l, 1904 10 provide for the supply
Of water shall also be deducted and shall not be
included as debt. II is also contended that bonds
OF counties shall be deducted. and that so-caued
assessment bonds shall not be included in calculat-
ing the debt OF the city. Numerous other questions
affecting the net debt also be passed upon by
the referee.
According TO Controller Metz. the city's debt
is s62l24o.6l1 SIS. AS o per cent of the assessed
valuation Of the real estate is s624.04S.06O 20
this estimate leaves q margin Of only S2.SO7.-
44S 81 Borough President Coler of Brooklyn,
who is anxious TO start work the Fourth
nue. subway. in his borough. asserts that Mr..
Metz is wrong IN his methods Of calculating the
city debt. and that the margin should he S64.-
100000. Until the dispute is settled by a Judi
cial Interpretation 10 what is and what is not
debt officials Of the city will he unable safely to
carry out plans for any further improvements.
II is the purpose Of Corporation Counsel Pen
dle1on representing the Board OF Estimate and
Apportonment and OF Robert F. " agner repre-
senting the taxpayers TO take the suit TO the
Court Of Appeals, regardless of the disposition
that may he made by the referee. Il is only
by this means that in the future the debt Of the
city OF New York be exactly and scientifically
determined.
The Importance Of the SUIT they say. can he
seen when 4 is realized that a decision in favor
Of the taxpayer would bring the city's debt to
within S30oo.eoo Of the sum which II IS enlpov-
cred by law to borrow or owe. On the other
hand, decision in favor Of the Board Of Fstf-
mate and ApPortionnent would permit the be-
ginning Of work on the Fourth avenue subway.