The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-05-10
The Proposed New State Debt.

The Proposed New State Debt.
BY the United Real Estate Owners
Associa ton we are informed that the
state debt OF $5,0OO,OO0 which the
Comptroller purposes to contract on
the plea that the money will be needed
to pay the expenses of the state after
June Is alleged to be authorized by
Section IL Of the State finance law,
which provides that:
From time to time as the legal de-
mands IA the treasury render 1t neces-
sary. the Comptroller may make such
temporary loans at a rate OF nteres,
not exceeding per centum per annum
as are necessary TO discharge such de-
mands. and may issue transfer certlh-
Gates for the amount borrowed. with in
terest. payable semi-annually. and the
principal payable al such time or times
not exceeding seven years. at which. In
his opinion, the treasury will be in
condition to pay the same from the
revenues Of the state applicable to their
payment. and SO much OF such revenues
as will he sufficient to PAY the amount
borrowed are pledged to that object.
The Comptroller may issue bonds In
anticipation OF revenues derived from
taxes authorized By law TO be collected
for the current expenses OF the govern
meu,. not exceeding SIX millions OF dol
lars in any one Year, payable within
I sN months OF the date OF ssue and
| drawing interest at the least rate OBJ
alnabe by him.
The proceeds OF such bonds shall be
applied In payment OF the current ex
/ perses of the government and to no
/ other object.
When received into the treasury 50
| much as may be necessary o. these reve-
nues IN anticipation OF which any such
| bonds are issued shall be applied exclu-
sive.y TO the payment OF the principal
and interest OF such bonds"
THIS statutory authorization pur
ports to confer on the STATE Comp
/ troler the ri yht 10 create n seven year
state debt Of any amount bearing ;
per cent Interest. and 10 borrow
money in anticipation Of taxes, TO the
sum Of Si,pO.uN on The best terms
he can obtain II was under this sec
| ton that the tomptroll-r'S represen-
tatiyes last week sought 10 borrow
50 600 900. But the Constitution au.
thorizes no such method for financing
the state As THE SUN pointed out
on Saturday, il permits the State 10
contract debt or debts not exceed
ing "singly or in the aggregate" 81
600 600 80 meet casual deficits or
failures in revenues or for expenses
not provided for" This authority j.
specifically and directly described as
limited power 10 contract debts.
The indebtedness thus sanctioned is
far removed from debt running
seven years as contemplated by the
state finance law.
80 far as borrowing S6,oooO0 in
anticipation Of taxes is concerned, IL
j Interesting Ia observe that in See
ton 10 OF Article VIII, which limits
the debts Of counties. cities. towns
and villages, the Constitution ex
pressly sets forth that:
This section shall not be construed
to prevent the issuing Of certificates OF
Indebtedness or revenue bonds ISSUED
in anticipation OF the collection OF taxes
for amounts actually contained or Il
be contained in the taxes for the yeaI
when such certificates are issued ant
payable out OF such taxes nor to pre-
vent tho city Of New York from lssu rs
bonds To be redeemed out of the Ia,
.evy for the year next succeeding th'
year Of their issue. provided that tn.
: amount ~ such bonds which may b'
1 ISSUED in any one year in excess OF thu
| Limitation herein contained shall not ex
= coed one-tenth Of | per cent. OF the as
= sessed valuation OF the real estate o
l said city subject 20 taxation"
1t will he seen that on subdivision
of the State the Constitution confer
tue IlSul 10 nuIIuN In'H'N III dnl4II
patton of taxes, but with respect Il
the State itself this authority wa
not given.
That the United Real Estate Own
ers Association intends to take lega
action 10 test the power Of the al
y ministration assumed in its PROPOSED
u 81 900 OOn loan we ard as mos
: wholesome exercise Of public spirit
= II is Of supreme importance to es
tabllsh whether me constitutions
= limitation means what IL seems T.
: mean or is merely n specimen Of 81
perhuous and ineffective rhetoric.
The FlatfOOted Man.
u In litnratnra tba 1nt fnptnI man