New-York tribune., 1909-02-04
OPPOSE CASSIDY PLAN
REPORT ON DEBT LIMIT.
Bankers Tell Mayor Taludtion In
crease U-ould Hurt City's Credit,

TIE bankers arpoiuted by the Mayor on Fii-
aax % consider the debt limit reported 10 nm
Yesterday against the plan favored hy '"e
- ,,,,,r,-ftta.- e., increase the debt incurrlns
sansritv by extending it from 10 TO Il per cent
n ia. assessed valuation Of real estate
The commission fsvors. though not en'"uSi-
asricanv. The exemption Of bonds issued on ae-
-. e sslf-s,5f;,orting utilities. like rapid
transit and docks The commission Is "Il@i
nous in its COMMUNICATIONS. The report Is
signed hv James T Woodward. president OF the
Hanover National Bank. chairman; Frank A
Nanderlip Edwin :. Narston, Francis /. Hlne'
George BlumenthaL John L. Borne and J. T.
Morgan, jr.
Navor Mcclellan VIII send the report to the
Legislature to-day. II is as follows
The Undersigned. having been requested to
advise sou as 20 whether in their opinion the
64ht limit Of the city ~ New York should be
increased. and. if So. in what manner ana uhueI
what conditions. beg 70 report as follows
That. ID their opliloh' any toitS' I ,
amendment proposing an increase IN the borrow
ins power OF The city on general INES, say from
she present lG per cent 10 il per CtilI u a9
s.sSsd valuation of real estate. would De most
Kreindcial the credit Of the city. and the
committee has no hesitation IN saying thal Such
q measure besides being A violation n1 the con
tract made between the city and the holders OF
tfz already existing bonds would seriously re-
sirlce the market value and availability OF lle
city's bonds.
while il is the committees opinion that the
most desirable course Tor the JllaIlclal CIttiI VI
.he city would be not 10 extend the debt limit
set in view Of the urgent need Of large eNpeh-
diture foT dock and rapid transit HnTroN elneHlS
Il has carefully considered the CONSTITUTIONS
amendment now before the Legislature.
This amendment provides. among other thlngS.
Tor the exclusion from the debt limit of debt
hereafter incurred for public improvements
which Yield the city current net revenue IN
excess Of the interest and sinking funds on Such
debt and also for the exclusion from the DEBT
limit Of any Indebtedness heretofore incurred by
the city Of New York for any rapid transit or
dock Investments 70 the extent TO which the net
revenues from such investments shall meet the
interest and sinking fund thereof
This amendment provides further that such
increase in the Gebt-inCurring power as may re
suit frern Lhe exclusion from the debt limit #
rapid transit and dock investments, before men
7i01eE shall be available only for the aCQuisi-
1ion or construction Of properties TO be used for
rapid transit deck purposes This amend
anent seems 10 your committee 10 provide q
method logical well safe. by which the
city may increase its rapid transit and dock
facilities without encrOaching further on its
debt limit.
The committee reports therefore, that il is
The opinion Of It's members that the proposed
amendment would il adopted. be Of advantage
70 the city and would show a safe and finan-
Cially sound method whereby the sums 50
urgently needed could he provided
Il is our opinion, further. that the DIVISION
IN the proposed amendment by which the Leg
isIature may prescribe the method by which and
the terms and conditions under which the
amount Of any debt To be SO excluded shall he
determined. and no such debt shall be excluded
except in accordance with the determination 50
prescribed should safeguard the interests of
the city sufficiently. but the committee recon-
Tnends that any legislation 81 this character
should be conditioned absolutely ou the city
being able 10 show conCluSiyely that when the
contemplated amount is excluded from the debt
limit The city shall have 4 guarantee inat the
property acquired or constructed with the pro-
ceeds Of the bonds so excluded shall he self
supporting
The committee would further draw your hon
or's attention 10 q matter Of the greatest impOr-
1ance Il the credit Of the city. viz that the
amount available under any Increase in the debt
limit should be used in the most careful and
conservative way. in order that the credit OF the
city may stand in the highest rank This can
only he done by the exercise Of the stricteSJ
economy in expenditure and by the most acCu-
rate and careful accounting. by which il may
easily and clearly he proved al any time that
exempted debt is based On properties which are
self lining and that the city itself is not
subject 10 any loss Of revenue in their operation