New-York tribune., 1909-12-18
MAYOR PUTS ON LID
HALTS STOCK ISSUES.
ACtiOn Comes Late in Vie7C of
DzCindLing Debt Limit.


With a great show of frmness Mayor
Mcclellan at yesterdays meeting Of the
Board of Estimate clamped down the lid
upon any further reckless authorizations of
corporate stock issues.
If the Mayor had exhibited this same
firmness two weeks ago the incoming ad-
ministration might have found left TO II
just a little of the legal borrowing margin
which IL said the city had under the de-
cis.on Of the Court of Appeals, AS it is,
however, the door has been carefully locked
after the horse has been stolen. It ap-
pears from figures prepared by the Finance
Department that IT was not necessary for
the Board of Estimate yesterday to au-
thorize any more corporate stock issues in
order TO wipe the city's slate clean of the
practical power 70 incur further indebted
ness. This can be avoided only by cOnsd-
ering a debit or $33, 100000. for which
bonds have been authorized but not issued,
an "uncoUectible asset" instead Of a debit.
Unless this is done, if the Controller before
the end OF the yer Certifies contracts al
ready provided for by previous authoriza-
tions, there will not be any borrowing mar
gin left And it is not at all certain that
the figures prepared by the Finance De-
partrnert can be absolutely relied upon in
installed in that department by the Con-
troler.
Something more than a month ago It was
announced that the accounting staff Of the
Controllers office was engaged in comput-
ing a statement showing the borrowing
margin Of the city under the recent de
Cision Of the Court Of Appeals. The public
was impressed with the fact that it was no
easy matter to prepare this statement in a
manner that would forever set at rest the
contentious question of exactly what the
cftv's right TO incur further Indebtedness
really was After the meeting of the
Roard Of Estimate ten days ago, Mayor
elect Gaynor wrote 10 Controller Metz and
asked to be informed upon this important
question.
PREPARATION OF STATEMENT.
The debt statement upon which the ac-
counting staff OF the Finance Department
has been Iaboring for month or more was
forwarded TO Mayor-elect Gaynor a few
davs ago and was printed in yesterday s
Tribune Because Of the enormous amount
of skilled technical labor required IN It's
preparation the statement exhibited only
the citvrs borrowing margin as upon No
,-er,ber last. If the task had not been so
! monumental the Controller would doubt
lass have had the statement prepared 70
exhibit the margin as on December last
However. the statement shows that upon
/ the frst of last month the city had regal
right TO incur Indebtedness to the extent Oh
/ S6s,Ol5l76.
/ The manner in which this figure Is
/ raacbad carries too many conclusions to
| be convincing. There is no descriptive IN
formation explaining each element that en-
! so
sten taken might be susceptible of proof
and agreement with the provisions of the
/ constitution and the decision of the Court
/ of AnneaIs thereon For instance, after
! staring that the limit to which indebted
/ ness can legally be incurred Is 10 per cent
/ Of the assessed valuations under the pres
ent years assessment or S6SO,7li,S1O, and
the total bonded deDt on November l as
81 Ol5. .7l2 AS, the Controllers Interpretation
l of the decision of the Court of Appeals is
not explained in any way. The amount of
bonds to be deducted from the total bond
/ ed Indebtedness as exempt in computing
the debt limit is not even segregated,
! but Is Jumped at s220,000,00O. The question
| Immediately arises what bonds have been
omitted. and how do the amounts omitted
| compare with the total amounts Of such
bonds outstanding November l last.
total bonded Indebtedness is described in
! the Controllers statement as sinking fund
| holdings for the redemption of nOn-exempt
| bonds" This is also given in lump sum,
| without any details whatever. at s22400O,
/ 600 This part of the statement appears to
be in absolute contradiction to the state
ments contained in the pamphlet issued
Yesterday by the Controller giving the cash
transactions Of the city for the last nine
months for there the entire holdings of the
sinking funds on Setempber 80 are given at
s21S 600 This includes both exempt and
non-exempt bonds. and the Controllers own
Official report for 1898 shows that there
was held by the sinking fund at the end
Of that year more than S7.0O0.0O0 Of water
bonds issued after January l, 1904. These
/ bonds are certainly exempt under the de-
cision Of the Court OF Appeals This would
seem 20 indicate that a rather serious
error has been made IN computing the debt
limit. Notwithstanding the length of time
ana great care exercised by the accounting
stafr of the Finance Department in pre-
pairing H.
bonded indebtedness Is described as avail
able budget appropriations. This, Of
course. means all appropriations voted in
/ TN. wears budget FOR redemption Of bonds
and instalments payable into the sinking
funds that had not been dsbursed at the
date upon which The margin has been
ascertained But II this is the case, IL is
difficult TO understand why the Controller
should qualify the statement by using the
word 'aVi liable
Ia this extremely general manner the