New-York tribune., 1909-04-09
1[ETX on DEBT LIMIT.
Says Tracys Decision May BE GOOD
Las, but Not GOOD Business.
IF-om The Tribuae Bureau


Washington. April S-CoutroIler Metz, when told
Of the report % General Tracy that the debt Limit
ON June 81 ls0S was Slu620j. ~ 66. said THAI the
decision might be good law. but il was good
business and that, moreover, ne was guided by
tur advice ~ the Corporation Counsel fixing
the limit at loss than $2,oo0Cto lie pointed out
the fundamental differences 4 his method "f con-
strung the constitution and that Of General Trdc'
and insisted that Tn" controversy would not 5e
eettled until had been passed ON hy the highest
court, and even then that statute should Ue
enacted defining beyond the possibility oi differ
the debt making limit of the city. asserting
that II General TracN's decision should be upheld
bv the highest court business safety would de
niand a limitation considerably below that imposed
By tho constitution Explaining his views MI.
Metz said.
General Tracy report seems TO differ on two
Important points from the established custom "i
aIj lghirI weTe tlcllg,!ed in uur calculation ana
tiis is one of the open questions involved. The
constitution provides ~ one place t''dt such n"Hds
shall be- exempt onl, when issued tor taxes collect
Cd during the year Of their issue and tI auptter
that revenue bands shal n@i be Included untH me
shall have run nHe ears. We included it'W 1iider
the first provision aud IS matter Z" business
In the second place General Trac>'s report dis
regards all contract liability except where tue
contracts in force moi considered debts until
the bills are actually paid, or about 10 lie paid
3:tl, : ~ ,1" rt,,. -, - is IoIlG T." nav for Tie
as if tie money was actually due For instance. I'm
1906 We had entered INTO contracts for $4,000. 600
every dollar @ which would be payable tho moment
III contracts We're certified 10 b.. the Controller.
You can where we would hand II we took no
cogiii2 ,nce of such contracts until the money was
1~tuailH due. InicsS raised pJr assessyncnts
very laUdlN would soon reach .ulnJ where
We wn, ,,id exceed the debt limit
Now. as lAnd liabilities, experience has dem
.,nstratFd Chat We Day from three times the
assessed value Of land under condf9nat lion pro.
csedin2s. and there are millions and millions OF
dollars worth Of land now in process Of Cuudemna
tirn to Wiiru have aot vet secured title but
the asSosSed aluc of which estimat ed at more
tfan $40 AJu 0G0. Suppose thgt have to pay oaly
double ihat amount when the awards are finally
made II certainly requires great stretch OF Che
ina Einatiuu to how FAR that would leave US in
excess OF tie debt limit.
I personally realize perfectly thnt tic city has
got 70 continue mailing Improvements and spending
large OF money IOr some years 10 come.
on the other hand, | realize that with TOO arse
debt limit there is danger Of our authorizing all
sorts Of improvements don't actually ueed-iU
fact. 0f actually trying to spend the money for
things which could just as vel walt
If people would only member that putting
ca,Iacitv does not mean that the bills will have to
paid nftN Neals hence. they would be more
serNatiVe. Issuing tfty-Ycar bonds means that We
pay interest these bonds every year. and in adj
50 000 to $4,000 81 0oo OF corporate stock
issued against our borrowing capacity. The amount
O annual expense depends on the length of time
for which the stock This interest and the
sinking fund instament become part of our annual
levy. 1t the present time our debt service
takes tilirieth OF annual budget expenses.
and the amount cannot be reduced until the term
ef the hond has expired and the bond has been
redeemed.
On the whole, / am gratifed at the result of