New-York tribune., 1920-10-04
Declares Huge
Budget Is Peril
ToCity's Credit
Enormous Contract Awards
by Hylan Regime Threat
ell Bankruptcy, Is Charge
of Citizens Union Counsel
Undermine Economy Act
Says Incompetency Will De-
molish Safeguard Against
Excessive Taxation Here

Leonard M. Wallstein, counsel to the
Citizens Union, in a statement issued
yesterday, severely criticized the Hylan
administration for the enormous
budget for 1921. He declared that the
present administration had under
mined and overturned the "pay-as-you-
60 act passed by the Legislature at
the suggestion of the Mitchell admin
lstration for economy and retrench-
ment in the city's financial affairs. Mr.
Wallstein said:
The amazing total Of the estimates
Tor next years budget is staggering
revelation of the calamity which the
city brought upon itself in the election
or the Hylan administration. Incom-
petent, Needless of the first principles
OIL economical administration, deter
mined to award huge public contracts
and resolved with partisan vindictive-
ness to overturn every solid achieve
ment OF previous administrations, the
hyIan regime threatens to run the city
headlong. into bankruptcy and to saddle
the people of the city with tax bur-
den which they will be compelled to
carry for years to come Even more
than in the estimated total for the
budget, which will, of course, be
greatly reduced before the final
figure is adopted, the demonstration
IS found in the recent final over
turn of the pay-as-y -you-go policy
TOT the purpose of enabling the ad-
mlnistration to proceed with increas-
ing wildness with the orgy of public
contract awards.
Economy Measure Undermined
"To compel economy and to preserve
the clty's credit the last administration
m September, 1914, adopted resolu-
ton embodying the s-you-go pol
ICY OF paying for public improvements
out OF current funds instead of out of
long-term loans carrying annual in
terest and redemption charges.
The recommendation was adopted
and the city charter amended accord
lrgly by the passage Of the pay-as-you-
go act.
But the present administration had
hardly been in Office when it began
the process of undermining and over
turing the act. On the plea that needed
Aew school buildings could not other
wise be provided, the present admin
lStratlon procured the enactment of
ohapter 6oS of the Laws of 1918. This
suSpends the pay-as-you-go act so as
$15,000,000 Of long-term securities and
remains effective till one year after
the President, by proclamation. fixes
the end of the war--a proclamation
winch has not yet been issued. Though.
as stated, the pretensc for urging this
law WAS the need for school buildings.
the act nowhere restricts its applica-
ton to that purpose Comptroller
Craig. himself has said that for all
practical purposes this may be re-
garded as the total repeal of the pay
as-you-go act. Practical is the right
word, for see what followed
May Appropriate $50. 10000
at the special legislative session
Just past, the administration pro-
cured law permitting it to issue
long term bonds absolutely without
limit as to total amount for school
buildings and sites. This bill was
enacted at the Mayors urgent plea.
ne result Is two-fold: First, the
~ 100000 annual exemption from
tae -as-you-go act, obtained in
1913, beng unrestricted as to pur-
poses is now avallable for any pur-
pose to which the Hylan administra-
tion may desire to apply it. Secondly
the present board may appropriate
h1ty million dollars or more for new
schools this year, despite the fact that
lt could not possibly exDenA that sum
economically for that purpose in a
single year, and the further fact that
SIX million dollars remains still unex-
pended out of this years appropria-
ton Of fifteen million dollars for that
purpose
wv nat then is the prospect? The
adnlnlstratlon will eliminate from the
budget a great many millions Of dol
lars no" included in the estimates for
capital lmprovements Thereupon, it
VIII Dreen itself for its economy. Then
It will issue city bonds for most of
the matters thus eliminated from the
budget and pile an enormous addition
TO the city debt, the cost OF which
for annual interest and redemption
VIII have TO be carried in future bud
gets.
Threatens Borrowing Capacity
Even worse; on July 81 last the
comptroller reported that the city's
lrec and unencumbered borrowing ca
paclty was about twenty-five million
dollars. From that date to this sub
stantially all Of that amount has been
authorlzed for expenditure in new can
ital lmpr ovenemts Aside from the in
creased borrowing capacity incidental
to the huge enhancement of reality as
Sessments Just announced, it may safe
~ be said that the city now has hardly
penny Of unencumbered BORROWING
c;apacity' ca and the just acquired borrow
ing capacity is to be used for the pro
gram OF capital expenditures which
VIII be eliminated from the estimates
ior next years budget. The result viii
be that the safe margin of fifty mill
ION dollars borrowing capacity. which
every body comedies the city should
nave to protect its credit. will shortly
vanish and 80 again the Hylan admin
istratlon will have overturned and de-
me. mohshed safeguard on the citys
credit and protection against excessive
VaXatlon which had been established
as the result of bitter experience. the
like Of which the city and its people
are apparently doomed to suffer again
IN even aggravated intensity"
Sleep Walker Chases Cat
/ alls From Second Floor While