Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1915-01-26
COUNCILS NOW
SOLE BARRIER

Continued from Page Ono
conference with Senator McNichol before
the latter went to Harrisburg, and 1t Is
understood the Senator declared he would
support the Taylor amendment.
Concerning the increase for port and
transit facilities, Senator Ware said:
Based upon the City Controllers fig
ures of October !, 1914, of assessed valua-
ton OF taxable property for 1915. this in
crease in borrowing capacity will be up
ward of s66, ,SS5, ,665. This amount would be
available for rapid transit and the port.
The resolution provides that when transit
and port developments have been ac-
qured or constructed and when they
nave been placed on an income-produc-
ing basis, such portion of the bonds as
have been Issued therefor which are then
supported (as to annual interest and sink
ing fund payments) by annual net income
produced thereby may be excluded from
the Indebtedness OF the city in calculating
Its borrowing capacity.
"Ths 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 par value of bonds
outstanding which are sustained as to in
terest and sinking fund out of the net
earnings of the facilities.
I'm order that the terms of this pro-
vision may apply 1t will not be neces-
gary, as 1t Is under the now existing
terms of the Constitution, for each facil-
ity to earn the annual interest and sink
ing fund payments on bonds represent
ing the total cost. But such portion of
the bonds issued therefore as are sus-
tained as to the interest and sinking fund
requirements out OF tho net earnings
may be excluded from the cty's debt in
calculating its borrowing capacity.
SAVING TO THE CITY.
"The resolution also enables the city
to issued 5O-year bonds instead of SO-year
bonds, thereby reducing the annual sink
ing fund requirements from 2h per cent.
upon the par value of bonds issued to
/ per cent On a 100000 issue of bonds
this will reduce the annual payments re-
quired in addition to interest for sinking
fund purposes, by IL per cent, a saving
In such an issue OF S750,OO0 year.
ut permits graded sinking fund install
nients to be established. Thus in the
early years the sinking fund payments
may be made nominal, increasing an
nually as the producing capacity of the
facilities increases, 30 that In the early
years OF operation the sinking fund
charge, In addition to interest Will be
kept down to a minimum.
"It authorizes interest and sinking FUND
payments on bonds issued accFulhs uur-
ing the period of construction and during
the first year of operation to be capital
ICED,
THUS the city will be enabled to finance
and construct rapid transit facilities and
port improvements and have them in
complete operation for one year before
the interest or sinking fund payments
become a charge against current reve-
nues
'It will give the city adequate borrow
ing capacity for both transit and port
developments; viii relieve current income
from taxation of the interest and sinking
fund charges on bonds Issued for such
developments until they are in actual OPP
Grafton and producing income. and will
also enable the city to finance these Inn
provements In an economical manner by
reducing the annual sinking fund pay
ments 1t will enable the city to enlarge
its borrowing capacity from time to time
automatically as the facilities become
partly or entirely self-supporting,"