New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-08-17
Craig Admits
Debt Deal Cost
$5,5O0,0O0

laugh at particularly some quotations
applauded as he left the hearing
chamber for the MONDAY recess. In
anticipation of any disturbance two
policemen were added to the force OF
sergeants alarms yesterday, apparent
lY in compliance with the letter sent to
Com missioner Enright by Chairman
Meyer.
In connection with the custom of
transferring money from the sinking
fund to meet current expenses, Mr.
Craig testified as follows:
Ever since Seth Low was Mayor, the
surplus money in the sinking fund No
Of the old City of New York has been
taken out under the act Of the Legs-
lature passed in that year and applied
to the reduction of taxation. Alto
gether up to the present time more than
$350000,000 of money pledged to the
payment Of the city's debts has in that
way been applied to reduce current
taxes. General fund bonds have been
substituted; that is, merely an |. o. L.
showing the total amount that the sink
ing funds have been depleted in this
manner"
at is receipt which is given in
pursuance Of the method established
in 1902" asked Mr.. Brown.
"Yes," replied Craig; "t is bond
chat according to the act Of the Legs-
lature will never be paid. | may add,
Senator, that that money could be bet
ter applied in reducing the city's debt.
But the transfers includes money
from the docks and water rents, which
are more than adequate in amount to
take care of the budget provisions for
;,,to 81 so tov : t,p n
Mr.. Brown.
"Ycs,' replied Craig.
81 would like to ask you If You don't
regard that as an evasion Of the con
stituton'
at acts to practically expand the
tax limit | think it is beating the
devil around the bush. l think the
act Of 1908, although no one so far has
challenged it, is an utterly indefens
ible bit of legislation. You cannot re
peal it, because you put the city IN {
position where it cannot be changed
even if you repealed the act
ITS indefensible' went on Craig
because it takes money intended foi
the payment Of the city's debt and di
vcrts it to a wholly different purpose
to cut down the tax bills Of the admin
istration 1t made the bills of the tax
less than they should have paid. If the
money had been applied to the reduc
tion of the cty's debt we would have
had 1854 100000 less debt to-day or
which to provide amortization and sink
ing fund requirements.'
The Comptroller said from the frs
transfer Of $8,5O0,000 the amounts liav,
risen annually until in 1920 they were
1872 .500.0 600. Every year the amount in
crcases, he said, so that there is NJ
reason why there should not be an an
nual gain until 1929, so long as the
bonds Of the old City Of New York are
outstanding.
II think the system of handling tht
income Of the city said Craig, "is IN.
scientific in many particulars, referring
specially to the general fund bond act
which | think is iadefens BILE"
and that it has in effect the result
Of greatly increasing the debt of the
city" asked Mr.. Brown
THAT has been one of the effects, anC
it has lifted restraints that otherwise
would exist. Another effect is to heir
the Legislature to be entirely unrc.
strained in the passage of measures
that must be financed within the two
per cent tax limit of the city That
is q very unsound situation"
Mr.. Craig here fairly oozcd figures