Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1915-02-11
veiopments on an economical ana busi-

/ Cnb0Be III the Constitution.
| FIRTH. That the adoption OF the pro-
! posed amendment is essential TO enable
| the city to finance not only transit and
| port developments on an economical and
/ business-like basis, but also to enable
| the city to finance all municipal develop-
| ments on an economical and buslness-liIse
| basis.
INCREASED BORROWING CAPACITY.
THE Joint resolution proposing an
amendment to Section S Of Article tx OF
the Constitution Of Pennsylvania, under
consideration. provides as follows:
| ut increases the borrowing capacity OF
| the city by an amount equal to per
cent. of the assessed valuation of tax
able property for transit and port de-
velopment only.
Based upon the City Controllers fig
| ures or October 1, 1914 of assessed valua-
tion of taxable property for 1916 this
| increase In borrowing capacity will be
upward of S67,000OOO.
| 1T also provides: That when transit
and port developments have been acquired
or constructed, and when they have been
| placed on an income-produclng basis
| such portion of the bonds as have been
| Issued therefor which are then sum
ported (as to annual interest and sinking
fund payments accrulug thereon) by an
| nual net income produced thereby may
| be excluded from the Indebtedness of
the city In calculating its borrowing
| capacity.
This provision will enable the city to
recover from time to time such portion
| of the borrowing capacity SO utilized for
transit and port development as may
then be represented by the per value OF
| ponds outstanding which are sustained
as to interest and sinking fund out Of
the net earnings of the facilities. In
| order that the terms of this provision may
apply It will not be necessary, as it Is
under the now existing terms of the Con-
stitution for each facility to earn the
annual interest and sinking fund pay
| ments on bonds representing the total
| cost thereof
But such portion of the bonds issued
| therefor as are sustained as to the in
terest and sinking fund requirements out
| of the net earnings produced thereby may
| be excluded from the city's debt in cal
culating its borrowing capacity.
5o-YEAR CITY BONDS.
ut enables the city to issue 50-year
bonds instead of 3o-year bonds, thereby
reducing the annual sinking fund re-
quirements from 2h per cent upon the
par value of bonds issued to per cent.
| on the par value Of bonds issued.
ION a s5o,OOOOOO issue of bonds this will
reduce the annual payments required, in
addition to interest. for sinking fund
purposes by 1Is per cent.-a saving In
| such an issue of S750,000 per year.
'It permits graded sinking fund install
| ments to be established.
"Thus, in the early years, the sinking
fund payments may be made nominal,
| increas sing annually as the producing
capacity of the facilities constructed in
creases. so that in the early years OF
operation the sinking fund charge in ad-
dition to interest accruing on the bonds
issued therefor will be kept down to a
minimum.
"It authorizes interest and sinking fund
payments on bonds issued accruing dur
ing the period of construction and dur
ing the first year of operation to be
capitalized.
'"Thus the city will be enabled tc
finance and construct rapid transit facili
ties and port improvements and have the
same in complete operation foB one veal
before the interest or sinking fund pay
ments on the bonds issued therefor be-
come a charge against current revenue
"On account of inaction on the part o.
the existing street railway system II
according its cooperation, as provided
| in the program arranged between the De
partment of City Transit and the officials
Of the Philadelphia Rapid Transit Com
pany, / have tentatively suggested tina
the amount OF the increase in the city''
indebtedness to be submitted to tn
voters for approval. might be $4,000, 600
upon the assumption that by authoriz'
ing a large amount the moral erect upor
the existing system In reaching de
termination to cooperate with the CITY
would be efficacious.
Upon further consideration, however
and in view of additional facts which
have been developed. 1 believe that tn
existing system cannot long withhold IL
| co-operation from the city, and that i
| will be necessary for the existing system
to accord such cooperation in protectloi
| of its own interests,
"The very minimum amount whicl
should be made available as a basis 10
contracts and the securing of the neces
sary easements during 1915 Is $6,OOO,Ooo
and I shall earnestly recommend ina
| this amount be made available ana ina
the same shall be appropriated by Coun
ellis in order that the contracts may p
awarded and the construction OF tn
high-speed lines may be commenced ol
July /, 1915.
IMPORTANCE OF AMENDMENT.
"This course, if followed, will enable
the Department of City Transit to plac
under contract that portion of the worl
which will be most tedious, and afte
deducting this s6,UOO,OVO from the CITY
borrowing capacity (s47, 1920 the cit.
, will have remaining borrowing capacit'
of $41, 1854, 1890. which amount, plus tn
normal yearly increases in borrowing ca
J pacity due to the operation of the sink
ing fund. and due to the yearly increas
in taxable values, will remain availabl
for improvements other than transit AM
port development, and the most advanta
geous provisions contained In the pro
posed Constitutional amendment will
make the remaining borrowing capacit,
of the city usable for such Improvement
other than transit and port development
In Almost economical and businesslik
manner to the great advantage of tn
taxpayers.
"It Is very important that the consti
. tutlonal amendment be adopted In NO
vember so that the funds required 70
transit development in excess OF SBOOO'0O
OR approximately $4,000 00O-and tn
funds required for port development ma,
! be borrowed as provided in the eonsti
tutional amendment on the most econom
J zeal basis without further encroaehin
! upon the remaining borrowing capacit
} | of the city, which, as l have shown, VIII
} amount to over 81, 100000
: LET 1t be clearly understood that tn
i constitutional amendment, after Its adop
IL .