New-York tribune., 1920-10-31
Bonus Measure
Is Analysed
By City Club
Veterans to Get $40 for Each
Month in Service, With
$3.50 Maximum; Will
Cost State $751; 900
Observation-Disclosures
Proposal Will Replace the
n Long-Term Bonds Plan
by Issues in Serial Form

pared the following analysis of the
bonus referendum measure and the
proposed constitutional amendment in
regard TO the issuance of serial bonds
10 be voted upon on Tuesday:
THE SOLDIERS BONUS
Proposition No. Ito be distin-
guished from Amendment No. Ito be
voted upon at the polls on November
is the so-called bonus referendum.
If acted upon favorably, provision
viii be made for the sale of bonds of
an aggregate amount not to exceed
$45 5,0000O0 the proceeds to be used for
payment Of bonus to persons who
served in the military or naval forces
of the United States at any time be-
tween Anil 6, 1917, and November II,
1918. This shall apply to all who so
served for period of more than two
months and who were residents of the
state at the time of entering the serv-
ice and are residents now. Tie bcne-
fits shall not apply, however, to army
officers above the grade of captain or
10 navy officers above the grade of
senior lieutenant. Where the person in
service is deceased the amount payable
shall go, as provided, to q near rela-
tive.
Each beneficiary is to be entitled to
receive the sum of $40 for each month
of service or major fraction thereof,
but no one person is to receive more
than $3.50.
Disabled Men Get Rejected Bonuses
commission is to be established to
distribute the proceeds of the sale sof
bonds and provision is made that any
one entitled to bonus but not desir-
ing to receive one may assign the sum
due him to q fund for the benefit of
disabled soldiers and sailors.
The bonds are to be issued in seria,
form, so that they will be payable in
twenty-five equal annual intallments
They arc TO bear interest at per cent
and must not be sold at less than par.
1t is provided that these bonds shall
be exempt from taxation and that "all
payments or allowances made under
this act shall be eXemrt from all tax
alton. and from levy and sale on
execution"
If it is assumed that the rate of in
terest will be i per cent. interest for
the first yea VIII amount to $3.50 ,OOu
and the amount Of principal to be paid
IF viii be $500, COO. This makes .
total of S4,250,000 to be paid out OF
taxes for the first year. From year
to wear the amount of interest to be
paid would grow less as the bonds are
retired. Average yearly payments to
come out of taxes for the entire
twenty-five years would be $2,925 O0O
The total payment or principal and in
terest would be SG3.125.009
CONSTITUTIONAL AMENDMENT
Constitutional amendment No. l, 10
oe yoted on hy the people November
2, would change the constitution in re-
ha -
contract dca- and would make the is
sue Of bonds in serial form mandatory.
The effect Of the proposed changes
are as follows:
(a) The present restriction in Sec
tion ,, which limits the amount of debt
that may be contracted to meet casual
deficits or allure OF revenue. to total
OF 81 600 600, is repealed. and debts are
perm It'd without limitation on
amount in anticipation of the receipt
of taxes and revenues, direct or in
direct. for the purposes and within the
amounts of a9propri ations heretofore
made, and must be paid of within one
year.
(bt The nczt change is the new
provision that, except for the debts
contracted to repel invasion, etc, and
those i'm articir patton of revenue, all
doots hereafter authorized shall be
payable i'm clual annual nstallments,
beginning not more than one year after
the debt is contracted and to run not
Longer than the probable life Of Tie
Improvement Gin no case longer than
fifty years which continues the exist
ing provisioa).
Eliminates Long Term Bonds
The intent of this change is to sub
sttute the serial bond plan for the
long-term bond and sinking fund
method, to which various objections
have been raised; and il follows the
general tendency in municipal finance
(c) Section is changed so that the
annual contribution to the shaking
funds for the cid bonds outstand, ne
snail be proportionatc to the amount
estimated to be necessary to retire the
bonds at maturity.
he Leg gislaturc is also authorized tc
provide Cor the exchange Of serial
bonds for outstanding long term bonds
ard to decreasA sinking fund C. nrrinr.
tions pro rata If the Legislature fails
10 appropriate sufficient amount fol
the sinking fund amortizations, o,
serial bond redemption or interest. the
Comptroller is directed to make snc}
payments ou; of the first revenues re-
ceived, and any bondholdcr NAV SUE
10 compel compliance with this provis
Cd) Section 10. relating to highwa,
uValus. is chsrGed TO provide tuat mere
after such debts shall be created il
me same manner as other debts.
me proposed amendment is simila
to that proposed by the constitutions
convention Of 1915 and has receive,
e'nSlderable support as being in ac
finance