The New York herald., 1921-09-26


the exemption or exclusion from the
debt limit of certain pier and transit
bonds. Amendments passed by the Leg
islature in 1909 and 1917 provided that
when an Improvement of that class In
which the city had invested money was
earning good money there was no rea-
son why It should be counted as a LA
bility against the municipal credit. The
Appellate Division Is authorized, to de-
terrlline exactly what exemptions may
thus be made and the Constitution sets
forth in clear terms that money thus
released may be rcinvested by the city
for. specific dock and transit Improve
ments and cannot be diverted to other
general improvements
Laws Purpose Very Simple.
The whole purpose of the amend
ments. Mr.. Brown contends. was to open
the way for the city to expand its transit
and pier accommodations. He adds.
1.-THE city has assumed that by maxi
ing an expenditure equal to such ea-
cluded bonds, the exclusion becomes
complete for all purposes: or stated In
another way. that after adding TO the
city's debt by expending $120,0oo.OOo In
non-self- disappearing municipal enterprises
entitled, in determining its debt in
CURING power, to deduct for all pur-
poses the bonds excluded by the Ap-
pellate Division for a single purpose and
treat them as exempt like water bonds
The effect Of this process has been to
increase the city's debt incurring power
for all purposes. and so. OF course, for
other purposes than docks or rapid tran
sit, beyond what it was before the con-
stitutional enactment"
Officials have conrended that inability
to increase the debt mourning power ps
using money thus released for other pur-
poses than piers and transit would Grip
pie the city financially, and Mr.. Brown
states franklys that is precisely wha'
was intended. The purpose OF the law
was to restrict the officials within the
plain meaning of the Constitution. Mr.
Brown continued:
"The city may relieve itself of any
embarras ssment from the situation thus
arising in several ways, some of which
do not involve the painful suggestion OF
part payment OF the debt. AS an Illus
tration and considering the situation as
of January /. 1921. when 10 per centum
OF the assessed valuation of the real
estate was 1862, 100000, and as such
the measure Of the debt incurring power
of the city; IL we assumed that the city
at that time had incurred Indebtedness
to the full measure of sS62 100000 and
had also expended s120. 100000 for docks
and rapid transit under the exclusion OF
a like amount by the Appellate DIVISION
for that specific purpose. the city wouio
then have reached It's debt limit on
docks and rapid transit and be over the
debt limit for all other purposes in the
amount of $120,o0o.0oo.
Three Ways to Relieve City.
"The city could be relieved of its
embarrassment in three ways:
Il. 1t could pay 1920, 100000 in bonds.
whether dock, rapid transit or other
bonds, and be restored to it's financial
condition OF solvency or zero and no
longer be over the debt limit.
"2. 1t could increase its assessment
more than a billion dollars, as 1t has
done in the last year. and thus restore
it's financial condition to solvency or
zero and no longer be over the debt
limit.
"s. It could make the dock and rapid
transit investment self-sustaining. Such
investment would then Immediately come
under the first clause of the constltu-
tional amendment OF 1909, and as a
self-sustaining investment hereafter
made, become an exempt debt for all
purposes The city would thus be re-
stored to financial solvency for genera
purposes or to zero.
"It Is true that the city would not IN
any OF these supposed cases have further
debt incurring power. except for docks
or rapid transit, until 1t had further in
creased it's resources by another step In
one of the ways suggested, but being
square with the world, II would be in a
position to seek and obtain further re-
sources according to its needs and
capacities.
"The increase in the debt capacity
arising from the exclusion for specific
purpose only. of past Indebtedness
would not have been exhausted by the
expenditure of the sl20.o00.o00 for rapid
transit and docks. had such investments
been made self-sustaining. for In that
case the new investment would immedi-
ately have become exempt and deducted
from the total Indebtedness of the city.
The city would then have been in n posi-
ton to invest another S120. 100000 In
docks and rapid transit and if it was
self-sustaining and so within the terms
of the first clause of the amendment.
suffer no loss of debt incurring power
from the transaction, and the process
could be indefinitely repeated.
The Meyer Committees public hearing
will be continued in City Hall at 2 80
this afternoon. The inquiry will be con-
tinued into the Police Department and
Commissioner Enright probably will be
recalled to the witness stand. The hear
ings will continue all of this week.