New-York tribune., 1908-01-07
THE CFTY'S DEBT.

Naror Ncf1IelIan's annual message calls at
tention TO the near approach of the city TO ITS
constitutional debt limit. The total outstand-
ing obligations amount to Sbo4,4 i,ooo lo.
Ten per cent of the assessed valuation or the
real estate in the city amounts to $62404S-
O6O 90 leaving the small margin of $1956l-
$40 o7. But to this must be added certain items
of cash on hand, making the city's present
borrowing capacity S36,093, 123 "a. How small
a margin this is for prospective improvements
il apparent when we recall that the city added
So 491. .474 73 TO its debt in 1906 and S66,la9'-
162 S3 to its debt in 1907. In addition TO TINS
we must take into consideration the fact that
If the present depression in business continues
for few months next years assessments are
not likely to be greatly increased, and SO the
city may be brought to standstlll IN reSaru
to its borrowing capacity.
The cramping of the citys capacity for ex-
penditure upon municipal Improvements will
seriously interfere with subway building so
long as the laws remain as they are. Governor
Hughes has suggested that expenditures upon
subway construction and other productive prop
erty be exempted from the constitutional hml-
tation, but amending the constitution thus to
increase the city's borrowing capacity would
delay relief from the present intolerable con-
dition for two years. Mayor Mcclellan ques-
tions the wisdom of this suggested change on
..tutional debt limit might tempt the city into
..enterprises which in the end would result in
shaking its financial stability" There seems
to be some reason for thinking he is warranted
in his fears when consider that the city deDt
has increased over S11S000,0G0 or more than
one-seventh of its gross amount, in two years
In the last few years there has taken place
marked boom in real estate values, in response
to the general prosperity. Assessments nave
Of y,riGn
and the city debt has mounted by leaps and
hounds always leaving only a slight margin
available for further municipal expenditures
The city seems to have been moved by the gen
eral optimistic tendency of the business com
munity and like it, to have induged in over
trading We do not mean 10 take an alarmlSt
view of the situation That would be unwar-
ranted But the citys borrowing capacity Is
checked at a time when its increase through
normal growth in the value Of assessable prop
ertv is probably temporarily halted and When
its need of additions to its transit facilities IS
as great as when the existing subway was be-
pun There is enough point to- the Mayors
warning of the danger that lies in greatly en-
larginc the city's borrowing capacity to snow
the wisdom of hedging around with strict safe
guards its increase through the exemption of
any class of funds from the operation of the
debt limit rule.
When we contemplate the rapid growth IN the
city debt and the equally rapid increase in the
CITY budget the usual observations upon the
excessive costliness and ineffciency of munich
pal government are in order. But in this case
every orc must be Impressed by the lack OF
regard for what is probably the citys most
imperative need which has been exhibited by
the city administration in the liberal eX-
pendtures of the last few years. 1t has been
perfectly cognizant of the city's requirement
of additional rapid transit facilities and OF the
laws which made it practically Impossible to
secure capital for subway building except
through the use of the city's borrowing capac-
itv. Has an administration served the city
well in respect to its expenditures which has
not always held this situation III mind and ac-
cordingly kept far within the debt limit that
funds would be available for that purpose?