New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-05-09
SULzER KNEW BILLS
PURPORT, SAYS WALSH
OeCIareS Governor Was Under
No Misrepresentation About
FraWIey Bond Measures.
CONTROLLER SENT LETTER
Date for Extraordinary Session
Of Legislature Fixed for
June 16 to Save a
Week S Time.
rBy telegraph TO The Tribune

Albany. May S.-Deputy Controller Nj
.hasl D. Walsh issued q statement this
,rernoon in which ne declared that Gov
ernor Sulzcr knew the purpose and effect
- tine TWO Frawley laws introduced TO
emulate the sale of state bonds, ana
,bich the Governor sought TO have re-
roaled before the close of the regular SEES
zion. Measures for the repeal Of the two
l.u,s will he acted on at the extra session.
i, mad been charged that the Frawley
laws were introduced in the interest of
certain bonding houses. and the Gov
,ruor. who said that they became laws
,brouch a Misrepresentation, mas been
holding the state Controllers Office re-
snonsible for his being persuaded that
thew were ali right. lie sought their re-
,cal after Il conference with Lawson
purdy. who told him that they would APP
rly not merely TO bonds 10 be issued in
tho future but to all outstanding bonds.
and would mean an enormous loss 10 the
state
on learning that the repeal bills did not
got through the Assembly the Governor
summoned Speaker Ar Smith to AL
hany 10 explain. and twice this week he
sont for Deputy Controller Walsh. II is
rsported that he did not mince words in
EXPRESSING his resentment against the
controllers office because of the enact
ment of the Frawiey bills. The result
was the statement issued to-day By the
Deputy Controller.
Conference Held with Sulzer.
Mr.. Walsh said that conference had
. ,.
cessty of changing the law in reference
10 the sale Of state bonds, in order 10
make them more attractive. After that
he declared that d letter dated March Il
had been sent To the Governor by the
State Controller. III which was this para
graph
Suggestions for legislation which have
been made and which might possibly be
favorable 10 the issuance Of state bonds
bearing ( per cent interest, including the
exemption thereof from the provisions OF
the transfer inheritance tax law. and
also the increase in the exemptions OF
savings. banks, trust companies and in
surance companies from the provisions Of
. the franchise tax. 10 the extent Of IL per
, cent for per cent bonds, in the manner
as now pfONluCu III khN t"A ia" III " -.
cent bonds
Mr.. Walsh said that this paragraph
makes il certain that the Governor At
that time knew the purpose and effect of
the proposed laws to exempt state bonds
held by savings banks, trust companies
and insurance companies, and that he
knew the proposed laws would affect all
state bonds previously issued
The two Frawley laws provided an in
crease in the rate Of interest Of state
bonds from 10 AZ per cent. and would
exempt them from the provisions Of the
inheritance and franchise tax laws. On
learning that the bills repeating them had
not been passed. the Governor on Tues
dav issued a proclamation that the Fraw-
lev laws had been passed under misap-
prehenslon. that they would be repealed
BY the extra session and that the state
would not pay the additional interest they
require.
The Governor Informed.
Mr.. Walsh said that before the Fraw-
lev laws were introduced representatives
Of the Controller stated to the Governor
that the only way to make possible the
sale Of state bonds was 10 make them
exempt in the manner referred to in the
Controllers letter.
The plan OF exemption was again clear
" explained 10 the Governor" he said,
Without any hesitation the Governor
directed the Deputy Controller 10 see the