New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1912-06-30
SUBWAY CONTRACTS VALID.
SAYS COURT OF APPEALS.
wauner Law Declared COnStitu-
tionaI and the Preferential
Clauses Are Sustained.
WORK MAY NOW PROCEED
dissenting Opinions by Judges
Cullen and Werner-Former
Calls Deal a Constitu-
tional Evasion.

Albany. June 2a-The Court of Appeals
A.. dow upheld the so-called preferential
e,.usss IN the pending New York City sub
,,.,v contracts calling for an expenditure OF
.nort 5000 10000 by the Interborough and
rrookIvn Rapid Transit companies and
New York City.
The constitutionality of the Wagner law,
,essed this year, under which the con-
tracts we're made, also was involved. The
rrAvsiIiug opinion was written by Judge
uiscock and was cCncurred in by Judges
uaiebt Vann and Collin. There was dis
sentIng opinion by Chief Judge Cullen and
Judee Werner Judge Gray did not sit.
Under the preferential clauses the com
NAMES are TO receive specified return on
,bair expenditures for both the old and new
subvays before the city can get any return
IN IFS own investment. There also is
cumulative provision.
The legality Of tho Wagner law and the
contracts made under II were attacked in
tbres taxpayers actions brought by the
Admiralty Realty Company. John r. Ryan
and John J. Hopper against the New York
city Board Of Estimate and Apportionment,
The New York City Public Service Commits
sion and the railroad companies.
Supreme Court Justice Blackmar. in
Rrool,lvn. dismissed the complaint In each
Of the three cases, and his action was
upheld by the Appellate Division Of the
Sypreme Court. and the Court of Appeals
to-day affirmed Justice Blackmar and the
Appellate Division.
The greater part of Judge Hiscock's opin-
ION is devoted to consideration of the OBJ
lection urged 10 the proposed contracts.
that they are in violation Of the constitu-
tlonal provision prohibiting a city from
loanng its money. property or credit and
that therefore the rapid transit act itself,
which concededly authorizes these con-
tracts, is unconstitutional and void.
No Power of Review.
Judge Hiscock points out that the court
has no power to review the wisdom and
benefits Of the contracts for the subway
construction. its only power being 10 de-
eide whether the Legislature had the right
10 authorize them He holds that 1t is
within the power of the Legislature and
public officials to make them.
In d dissenting opinion Chief Judge Cullen
says.
ignition Of the great skill and ability dis
played by the lawyers and financiers who
have formulated these contracts In their
efforts 70 make the evasion OF constltu-
tional restrictions practicable. But their
successors may be found and even their
own services may again be brought into
requisiuon. The corporations ,contTolllnig
the Brooklyn and the New York rallroads
each holds and operates many miles Oh
street surface railroads.
After their present success they may
fGn q
income Of such property through pledge
Of city property by a scheme similar to
the present one. or course, " SUBWAY
roads can be combined with elevated roads,
equally can they be combined with surface
roads but If we assume these companies
win rest satisfied on what they now OBJ
tain. there are other railroad companies In
the city Of New York who, on the principle
that equality is equity, Will seek their
chance at the city treasury;
Nor do I see how the principle about 10
be decided can be confined to railroads
With the utmost respect for the majority
Of the court l fear that the decision sDout
TO be made will lead 70 practical nuIhnCa-
ton of the constitutional restraints ny
methods Of revision. II may, however
prove interesting TO that school OF pup
lcstS and political economists Whch mas
always maintained the futihty of restraints
imposed by the people themselves on theiL
own extravaganza in the expenditure d
public moneys, on the ground that "heh
the popular demand is not great the re-
they are unavailing.
Lending of Municipal Credit.
Judge Werner, in another dissenting opin-
ion, says
II is true. the city had the title to the
subways which are to be built, but the
leasehold the thing that gives the naked
fee its value. is turned over for forty-nlne
years TO private corporations in order that
they NAV mortgage II 10 raise their con-
tributiOns to construction ana equipment
Into an enterprise characterized by theSe
elements the city is TO pour its InlliIo oIS
II that IS not d lending of municipal credit
10 or in aid Of private corporations then L
think we should frankly concede that our
constitution is an absurd attempt on tne
part of the people TO limit power IN lts
own nature iliimitable, for from TINS ut il
forth IL will be difficult. II not Impossible.
TO define the constitutional limitations or
municipal power.
In expectation Of the decision Of the
Court of Appeals, the Public Service Com
mission prepared the form Of operating
contracts. which will be advertised shortly
Although seemingly the bidding is open to
any responsible company, # is a certainty
that the Interborough and the Brooklyn
Rapid Transit companies will get the con-
tracts, as the proposed routes are nothing
but extensions OF their lines. Moreover,
these contracts were prepared after confer
cnces were held between members Of the
Board Of Estimate, the Public Service
Commission and representatives Of the In
terborough and the Brooklyn Rapid Tran
sit
II is expected that the contracts will be
formally awarded by the middle Of August
or the early part of September