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SPECIAL FIUXCHi:?: TAX 'POWER DEFINED. Court of Appeals Makes Earn ing Capacity a Basis. Francis K. Pendletea. Corporation Coun *"•*!. explained yesterday the scope and ef fect of Use recent decision of the Court of Appeals relating to assessments for special franchise taxes, which Is expressed by the opinion of Judge WUlard Barilett In the case «f the People ex ret Jamaica Water Sup ply Company agt. State Board of Tax Com missioners. In applying the franchise tax law to the facts of each case certain grave difficulties arise which do not exist in the appraisal of ordinary real or personal prop erty, ' said Mr. Pendleton. who then con tinued as follows: "The case now decided by the Court of Appeals to of importance as being the first ease in which the highest court of the state has been called on to pass upon the many questions arising in the course of the ap praisal of a special franchise for taxation. - The case was begun by a writ of certlorari, by which the court commanded the State Board of Tax Commissioners to make a re turn of their procedure in assessing the apodal franchise under review. "The state board, tn certifying what they had done, made a general statement pt their method of valuing the special fran chise, but did not state the process show- Ing the precise method of valuation or the items of the computation by which it - arrived at the sum of SSOO.OOO as the value of the pedal franchise of the Jamaica Water Supply Company. The Court of Ap peals decides that there should be a more compete certification of tfce method adopted. It determines that the assessing t «accra are not bound to adopt any par- J ticular rule or method of valuation, but rives a general sanction to the method of I appraisal founded on the earning capacity of the property, and in this respect the court «u6tain» the contention advanced on ; behalf of the city of New York In support of these assessments . : . "It is held that this method Is a proper one to he applied in cases similar to the rase of the Jamaica Water Supply Com pWl. end there can be little doubt of the Intention on the r art of the court to hsjo tlaa that method as applied in every case wfcere there has been continued operation tzrder the franchise and where the property has been so managed mat evidence is avail able of the lair earning capacity from rrop ei operation. '" Mr. Peodleton cited an exception to this ? rule in cases where the value of the prop erty used in cuaneetfon ivith the operation of a franchise has so increased that the earn ings from operation under the franchise do rot give a fair return upon the enhanced value ef the property. He looks upon the decision «• favorable to the city, and said that It would go far toward sustaining the a»ount cf the special franchise assess ments. The problem to be solved, be said, was -the valuation of a part only of the plant er property of a public service corporation, and the property of euch a company may be din-led generally into four classes, as fol lows. 1. The intangible franchise right or per mit to use streets and public places. 2. Th« tangible property situated in streets and public places and used In con r.ection with the operation under the fran chise. I. Other property of the company situ ated outside the public streets, but neces sarily used In th« operation under the fran chise. 4. Property having relation to the con duct of business under the franchise right granted by the state. Property included in the first two classes, srcordir.g to Mr. Pendleton, la the only kind taxable as BBMBBJ franchise. He said thai the first essential under the decision is M ascertain the amount of. annual net earrings which can be derived from the operation of the franchise In connection with the necessary tangible property, as- Fuming reasonably prudent management on the part of the company. He then went on to say: "The amount actually earned by a par ticular company is M be used as evidence of its earning capacity, but I do not un derstand that the court intends to : strict the assessors to that evidence. Apparently the assessors are left tree to analyze the methods cf the company's management. and by any reasonable means at their dis posal to ascertain the earning capacity as distinguished from actual earning*, basins their valuation upon the amount which the property is capable of earning, rather than the amount which it has earned. : "It then becomes necessary to determine what tangible property Is necessary for the proper operation of the fr&nchisc-. and on this point it is apparently held that in ordinary eases the property In fact used in connection with the franchise shall be considered as indicating what property should be •"> used. It is then necessary to allow a reasonable annual return op the tangible property, end deduct the sum *I lowed from the total net earnings. The balance of net earnings resulting from this computation may fairly be assigned to the us* of the franchise, and the court de cides that It may fairly perv« as a basts for appraisal of the bMsmsMb things "known as the •franchise' or Tight to op- BJSJhV*" Mr. Pendleton looks upon the decision a* disposing substantially of all the contested legal points which hare thi;i> far been raised In behalf of the corporations, and said that he hoped It would be th* means «X «a early adjustment of the entire mat ter, without the necessity at continuing the litigation. OFT WILL VOID. Testator Was President of the Conti nental Insurance Company. The Appellate Division -of the Supreme Court affirmed yesterday the decree of the Borregate's Court refusing to admit %o pro feat* th« will of Hiram H. Lamport, presi dent of tfce Continents 1 Fire Insurance Company Tbe rare was decided by Surrogate Hcokett in June, i£oß. In the will filed Mr. j Lamport bequeathed to a sister, brother and other relatives amounts ranging from CO* to $8,000. He left to Mary Clementine BniedJey 235.000 for caring for him. the will said, in his declining years. Surrogate Beckett held that the will was executed - under unfi'ie Influence by Miss Smediey on the testator, -rrha was eighty-six years old v hen *ie Mas: Th? Appellate Division, ■ without tv:'.unc an opinion, upheld the de rision cf »he Surrogste holding th* will void. » LAKE FREIGHT RATES ADVANCE. Dclyth, Minn.. Oct. 22— Grain rates have taken another advance and now are 2*4 '••fits from the bead or the lake* to the lower lake ports. .Yesselmen ar* not potter iting any business even at that rate, as there is enough ore to keep the vessels brjpy until the end of t! <- season. BANKRUPTCY CASE DISMISSED. Judge Hand, in the United States District Court, dismissed yesterday the bankruptcy p: oci»Vjjr.sfc brought on Thursday against Albert ."if. Flint. » bond oal«-r, of N. . 15 Bread street, by Thomas Orals; of Phila delphia, and two other creditors, of this rfty. Counsel for Flint showed that he ■nfjg solvent, with assets of J300.00J over and • reive liabilities Tbe turn* claimed by the petitioners di<J not ,i mount to mere than 111,0:2, CITY FIXAMT. C«Mrttanod from first pa*'. is illustrated by the following table, showing the amount of budget appro priations authorized, the annual tax levies, the amount of revenue bonds is sued In anticipation of the collection of taxes, the cost in interest of financing budget expenditures and the average in terest rate per cent upon the revenue bonds issued for each of the ten years from 1809 to 1908: statement of budget appropriations, tax lev.c*. revenue bonds issued l and interest paid thereon, showing the averse rate per -cent on the total bonds issued during the ten years from 1800 to 1908. inclusive. Amount Interest Per . Amount of . of revenue paid on centage Budget « Arao uni "i bonds issued revenue «of in appropriations , n VVhevear. - and sold. bonds. terest. Year. for the year. ££ ,«?07105 J48.027.450 S3 $759,379 26 LSI 1899 1&5532 &53321254 46,020.600 00 694,90171 1.51 1900 90.778.5*72 48 fsMI&JVS 76.333.10000 1,095,57653 1.48 1901 88.100.4UJJ 2«w 75.485.600 00 1.248.9&9 79 s 1.66 I? 02 «•«»•"? g 9fi" 118,483,000 00 1.579,036 23 " X 1.38 I*o3 ff '£f 1 528 MO6B 403 42 144.377.30000 . 2.282.187 37 ' 1.58 1904 1 06 - 905^^ «59S0C94sS 152,669 15« 16 1,732,618 00 1.13 J9OO. «0.«l».«Sl •« &OBUOSI 138.519.74414 2.926.248 9? 2.11 «£.:. v7 ' IS H£?i imW«sa 123.935.256 02 3.89M703R 3.14 urn : '&'2&SSi» U6BC>96<» 127.911.00000 5.650.403 30 4.41 19M £jiuH&ii »W. 456,23150 $1,051,785,18810 $21,865.959 71 ■ 8.03 BSSEratHH Controller had to have money to re deem or refund $14,187,139 of revenue bonds issued against the taxes of years prior to 1007 in excess of the taxes and ether revenues available to redeem them. These bonds matured in 1907. In the early months of the year he used the proceeds from the sale of the current year's revenue bonds and the receipts of permanent improvement accounts for that purpose, but in the last threa months of the year he was compelled to refund at least a part of the money so used. A STILL WORSE EXPEDIENT. In order to get out of the predicament in which he found himself, because of his failure to use the means of escape he had himself provided in 1006, the Con troller resorted to an expedient many times worse than that which had been employed by his predecessor. He entered into an agreement for the sale of ?30, nnrt.OOO of revenue bonds bearing inter est at 6 par cent per annum for terms varying from one to three years. The division nt the issue was as follows: Seven million dollars against, the taxes of 190& £5.000.000 against the taxes of IBM and $3,000,000 against the taxes of ISST, all redeemable in November, 1908: $4,000,000 against the taxes of 1906 and KU900.000 against the taxes of 1907. both payable in 1909. and $5,000,000 against tbe taxes of 1907, payable in 1010. It is true that by means of this sale the Controller got $16,000,000 to refund the $14,187,139 of maturing revenue bonds that were outstanding against tax levies prior to 1907 in excess of the tax collections and other revenues available to redeem them. He also got $14,000,000 in addition on that part of the bonds Issued in anticipation of the collection of tl\e tax levy of the current year, $3,289, 000 of which he afterward discovered were illegally issued according to his cwn method of calculation. By a book keeping entry in the following year he assumed to correct this error by calling the $3,289,000 of an overissue revenue bonds issued in anticipation of the col lection of arrears of the 1904 levy. COST TO THE TAXPAYER. This agreement made by the Controller in 1907 tor the sale of $00,000,000 of 6 per cent revenue bonds for terms of one, two and three years will have cost the taxpayers before the last of these bonds is redeemed, a year from now. just $2,000,000 in Interest. It has been urged that at the time this money was bor rowed call loan rates in Wall Street •were as high as 15 per cent per annum. It would have been cheaper for the Con troller, if he had been compelled to do so. to have raid even call loan rates on the money he actually needed to borrow for a few months until the money market got back to normal again. But the fact is that both before and after this par ticular loan was mad* the city had been able to secure money for short terms upon revenue bonds at from 5 to 5u per cent per annum. In addition to the aralr al cost to the taxpayers of this J3o.r .o*o loan upon revenue bonds made 1,-. j&j &o 7. the records plainly show that nv-.e of the tax levies against which th* ***. were issued •wore pledged than there remained tax<>3 to collect. The total uncollected tax. of the IMS levy at the end of 1907 were J5.767,16:'. Of this amount J3.000.000 had been deemed uncollectible and had b«en provided for by an appropriation in the budget of 1907. There remained therefore, only J6.767,1«2 of uneollected taxes to provide for f 2,289,884 of unex pended appropriations authorized in the budget of that year and to redeem $7. 000,000 of these 6 per cent revenue bonds. The total uncollected taxes of the 1906 levy at the «nd of 1907 were 112.706, 001 Of this amount J3.000.000 had been de clared uncollectible and had been pro vided for by an appropriation in th» budget of 1908 before th* $30,000,000 loan on revenue bonds was made. There re mained, therefore, only $9,706,301 of un expected taxes to provide $1,680,804 for unexpended appropriations authorized in the budget of that year, $619,210 for the redemption of other revenue bonds out standing against 1006 taxes at the end of 1907 and J9.000.000 to provide for the redemption of these 6 per cent revenue bonds. The uncollected taxes of the 1907 levy at the end of that ye«»r were $28,727,651. Out of this amount had to be provided J9.552.203 for unexpended appropriations authorized in the budget of that year, 514.151.526 to redeem other revenue bonds outstanding against uncollected taxes of 1907 and $14,000,000 to 1 redeem these 6 per cent revenue bonds. CROWXIXG FEAT IN TRAVESTY. It is difficult to conceive any adequate defence for the illegality and utter folly of this kind of municipal finance. But the crowning feat In the travesty was performed in 1908. when the Controller sold in the very first week of the year another lot of $35,000,000 of revenue bonds bearing interest at 6 per cent per annum for terms varying from nine months to thirty-three months. This time all the bonds were issued in antici pation of the collection of taxes of the current year's levy, but only J10.000.000 were redeemable in November of that year, while 516.500.000 were redeemable m November, 1&03, and 18,500,000 were XEW-YORK DAILY TRIBUNE, SATURDAY, OCTOBER 23, 1909. redeemable In November. mo. A» * result of this brilliant bargain the tax payers will have to put their hands in their pockets to the tune of $2.««0.000 for interest charges before the last of these bonds is redeemed in November of next year. And yet. just one month after the sale of these « per cent revenue bonds the Controller secured $2,500,000 upon other revenue bonds issued for short terms at 2 per cent per annum, while in the May following during one single week he bor rowed $37,527,000 on revenue bonds is sued for a year «t from 3% to 3* per cent per annum. The taxpayers paid the first annual instalment of the price of this utterly wasteful experiment in municipal high finance in 1908, when revenue bond in terest bilis Jumped from $3,897,670, in 1907. to $5,650,403, in 1908. The second Instalment of the price is being paid during the present year, and it is higher even than the amount paid last year. The last instalment of the price will be paid next year, and that will be the larg est of the three. TAMMANY SHOWN UP. Finance Series Attracts Wide Attention. The opinion concerning Tammany Hall, which was never high in the financial district, is being rapidly lowered there by The Tribune's publication of its series on the. city's finances. It Is the general opinion of bankers and men familiar with financial affairs that it is time to turn out Tammany officeholders and put in control of the city's affairs men familiar with the handling of financial problems and who have had success in such deal ings. The fear is expressed In Wall Street that if Tammany is returned to power an already glutted market will be flooded with further Tammany bond issues and the prices of New York City bonds will go lower, instead of reaching toward the higher level at which they should be. Lewis B. Franklin, of the Guaranty Trust Company, of New York, 6aid yes terday that The Tribune's series should do an immense amount of good. "The temporary effect may be to reduce the price of city bonds by showing the actual condition of the city's finances," he said, 'but the ultimate effect will be good. Everybody knows that there is something wrong, and that has created a feeling of uncertainty and hurt the city's credit. Now the people will know ex actly what is the matter and what is the remedy. They have the remedy in their own hands— to turn out Tammany— and it only remains for the people in this election to put in a sound city govern ment and put the city back on a sound financial basis. "The Tribune is doing m valuable educa tional work. No one doubts the solvency of the city and the value of the security back of its bonds. It is an outrage that the bends should be at the price at which they are. It is due to the mismanagement of those in office. The system of issuing reve nue bonds is all wrong. These bonds are issued against taxes which may never be collected. "Many of the tax cases are now in the courts. Take the franchise taxes. Bonds are issued against the assessed amount of the taxes. Then the assessments are con tested in the courts, and in nearly every case are lowered. In the mean time the bonds have been issued and the money spent The misapplication of funds also is very bad. Tha city needs a change of financial management, and The Tribune Is doing the kind of work to bring that about." John Harsen Rhoades also had high praise for The Tribune's work. "I am glad to see it." he said. "The city's finances have been grossly misman aged, and we need a change. We need a business management in control. The peo pl« in this election should put in business men at the head of their affairs. The work of The Tribune is the kind to bring about that result." The opinion was expressed at the Na tional City Bank that there could be no doubt of the intrinsic value of the city'a bonds. The financial management, how ever, it waa said, was unfortunate, and The Tribunes series would be of great value in giving the people an exact knowledge of conditions and showing them the remedy. CONTROLLER METZ INTERESTED. System in Bad Shape, but Inrproving, He Declares. "Certainly I am reading The Tribune's articles en the city's finances since I have be^n Controller," said Mr. Mets yes terday. "I am free to say that The Tribune would not be in position to present its figures about the handling of the city's finances if I had not more than two years ago begun an overhauling of th« whole system, with the Idea of getting things on a better basin. "I don't like the inference that the sell ing of the revenue bonda was a new de parture. That's an old system, as every on« ought to know. I tried to improve it. 1 don't think there is anything worthy of criticism in our selling revenue bonds dur ing the panic at 6 per cent interest. We were lucky to get the money at aIL "I agree with The Tribune that the sys tem in tha office has been in bad shape, but I insist and I am able to prove that under my adminietration it has been vastly improved, and that it will soon -be on a sound and sensible basis, if the reforms I have inaugurated are carried forward to <-onn»letion." MR. OOLER* APPROVES. Says He Tried in Vain to Get Infor mation of Bond Issues. To the Editor of The Tribune. Sir: I have read with great interest your Interesting exposure of the mismanagement of our city's finances which has resulted in the overissue of revenue bonds and the Imposition upon the bac« of the taxpayers of New York of an enormous and unnec eary intere6t charge. This is a matter which I tried to bring to light a* a member of the Board of Es timate and Apportionment, but relative to which all information has been refused. I send you an extract from the minutes of the Board of Estimate and Apportionment of October 16, IMS. showing that at that time 1 introduced a resolution calling ui>on the Controller for Information upon this subject— a resolution which was unani mously adopted by the board, but with re gard to which no report has since been me.de by the Controller. At to-day's meet ing of till' board I asked the Controller why he had not reported, and he informed me that he '1:1 not have tim» to bother with such matters. ; I hope tfiat all the taxpayers of Brooklyn will read your articles. BIRD 8. count, President. Borough of Brooklyn. Brooklyn, Oct. 22, 19C3. I'LL WIX-BANRARD sthe or the result. Fusion Candidate Plant Many Speeches for To-night. "11l be elected. That's all." said Otto T. Bannard. when he was asked how be felt about the campaign. The laconic, con fident answer waa characteristic of the man. It meant a good deal. too. for Mr. Bannard makes no raeh statements. He has been confident for some time of the election of the rest of the Fusion ticket. Representative Bennet, manager for Mr. Bannard, wore the broadest smile yester day he baa had since he started the arduous campaign. "We are getting in seven or eight polls every day," he said, "and they all tell the same story, that the drift <s away from Gaynor and to Bannard. "Just a few minutes ago I got several polls from Abraham Gruber. of the 19th District. He says that the independents. as well as the Republicans, are standing by Bannard ti a man." "Well. I have found that Colonel Gru ber's information was pretty good In tbe past," said Mr, Bannard. This morning at 11:18 o'clock Mr. Ban nard will meet the county committee of the Cleveland Democracy at tbe Fifth Ave nue Building. He will speak at a noonday meeting at No. 494 Hudson street. In the even'.ng he has been invited to attend a dinner of the Independent Club, of which the Rev. Dr. John P. Peters is president. It will be held In the Hotel Marseille, Broadway and 103 d street. After the dinner Mr. Bannard will go to the Calvary Meth odist Episcopal Church, where he is to speak at the church's forum. This Is where Judge Gaynor refused to speak because General Bingham had appeared there. From there Mr. Bannard will go to Tbe Bronx and speak at Camp Bannard. No. 1347 Boston Road, and at Camp Bannard, at 149 th street and Seventh avenue. His last meeting will be at Cooper Union. APPEAL TO TAXPAYERS. • Dr. George W. Bush, representing the Taxpayers' Conference, gave to Mr. Ban nard a copy of an address that Is being issued to taxpayers throughout tbe city. It cays : The organized taxpayers of the city have been using every Influence in their power in the last few months to secure the nom ination of men of the highest class upon the tickets of the various parties, with the objact ot securing officers who will con duct the business of the city on such lines as to conserve the interests of the citizens as a whole and stop the waste and ex travagance which characterize our prevent city government. The tickets are now made up and the candidates are before the people. We have carefully scanned the records of these men and have reached the conclusion that we should urgently recommend all taxpayers and rent payers to vote for the support of the fusion ticket, which is made of such men as give the assurance of a clean, honest government. Especially do we rec ommend this as to the Mayor, Controller, President cf the Board of Aldermen and the five Borough Presidents, which make up the Board of Estimate. Raymond V. Ingersoll. chairman of the campaign committee of the Committee of One Hundred, said yesterday: "If every one who prefers Mr. Bannard above the other two candidates wiU vote for him he will be elected. We have been gratified with the progress which Mr. Bin nard has been maktng during the last week. The citizens have grown to know him better ever}' day, and it seems reason able to think that every intelligent voter will understand before November 2 what a straightforward, -democratic and thorough ly capable man he is. "There can be no doubt that he will hold the great Republican vote, and will get thousands of votes from Democrats who feel that the affairs of the city and the selection of its department heads can be better Intrusted to him than to either Mr. Gaynor or Mr. Hearst "The conservative vote in 1905 went al most solidly to the Tammany candidate. Mr. McClellan. This year tbe same con servative vote from all parties will go to Mr. Bannard. My best Judgment Is that. while' Judge Gaynor has been losing every day since his nomination, the election still lies between him and Mr. Bannard." SUBWAYS NEED BUSINESS MEN. The Bannard Campaign Club put out an other of its snappy bulletin* yesterday. It says : If you broke a leg would you go to a doctor or a blacksmith? Who is the best man to build the subways— a judge, an editor or a business man? Everybody knows that more subways ara important to the present need and future welfare of this city. More subways must be built. It is better to build them poorly than not at all, but it is better still to build them right. Remember that every mistake that Is made will have to be paid for by the people. Every subway that Is built wrong will become an add"d burden on the community. Every blunder that is committed by the buiWers will raise the taxes now and >:eep them raised so that you, and your children as well, will have to pay. Do you want to pay for blunders? The man who talks a lot of what he will do and then blunders in the doing is not a progressive man. II ■• stops* progress be cause his work must be done all over again. The progressive man does his work right the first time and so goes forward. Air. Bannard will be the principal speaker at the Democratic meeting arranged by tbe Bannard Campaign Club for Cooper Union to-night. Charles P. Rowland will preside. In addition to the speeches announced be low, letters will b» read from Robert W. de Fo/est, William B. Hornblower and Robert Grier Monroe. The fusion meetings to-day will be as follows: NOON. Broadway and 16th street; speakers. I^. L. Drigg, L. B. Cohen. Jesse J. Goldberg and A. Parker Kevin. ._ Eighth street and Broadway; speakers. Martin Saxe, I* J. Obermeyer, 0%8. Wlren and W. H. Michalls. No. 412 Broadway; speakers. George Me- Aneny. E. A. Kelsey. W. . C. Davis and A. F. Eagan. NIGHT. Cooper Union; speakers. Otto T. Ban nard. Colonel Norrls. G. Oeborne. Julian W. Curtis. Paul Fuller anU Arthur C. Train. Camp Bannard. 149 th street and Third avenue; speakers, Otto T. Bannard. N. A. Elsberg. Job Hedges and Lee Fairchild. Fusion Camp. No. 373 East 138 th street; speakers. John S. Wise. Jr., A. V. Camp bell. Leopold Leo and J. H. Adams. Camp Bannard. 125 th street and Eighth avenue; speakers. Martin Sax*. Joseph Levtnson. Montague Lessler and W. C Davis. * Hell Gate Club, No. $44 East 88th street; speakers. Otto T. Bannard. C. L. Felnberg. Martin Schenck, A. H. Porter and A. Jor dan. Loth Hall. 150 th street and Amsterdam avenue; speakers. Charles S. Whitman. George McAneny. W. H. Wadhama and Isaac Fuld. \ West Side Republican Club. SSd street and Broadway; speakers. Otto T. Bannard George McAneny. C. F. Moor© and George N. Bruce. m Patriotic Republican Club. 70th street and Third avenue; speakers. Otto T. Bannard William A. Prendergast, Max S. Grlfen hagtjn. Edward Pollock and Solomon Qp penheimer. D. B. HILL COMES TO TOWN Expresses Hope That Judge Gavr.n: Will Win Here. David Bennett Hill, former Governor and United States Senator, came here yesterday to appear before the Appellate Division of the Supreme Court, and talked politics while waiting for his case to be called. "Z hope Judge Gaynor will be elected." he said. "He is an able man. "I think I was the first Governor." be continued, "who want all over the state and spoke to the people aa tbe chief ex ecutive, but I se« now that the plan la b«lng generally followed, not only by tbe governors who have succeeded me. but also by the two most recent Presidents of the United States. Somatimea I waa criticised for this, but I told my critics that I at tended properly to my duties as tbe execu tive of the state, and that I addresser! Re publicans snd Democrats alike.' will tel about Tammany Graft TO-ISTIGKEiT Cooper Union Come and hear him. Meeting at 8 o'clock. Auspices Bannard Camp, -^ <- ; ' Other speakers. No tickets required. GEN. TBAGY UPHELD of a contract for an extensive public improvement, made when the margin of the city's debt limit, as measured by *n Indebtedness consisting In direct or ab solute obligations, seems to warrant n, the debt limit is reached through th« issuance of bonds to meet payment* upon other contracts subsequently made, but completed at an earlier date, is the obligation of payment upon the first con tract avoided? The constitutional pro vision is "that all indebtedness In excess of such limitation shall be absolutely void." with an exception that does not apply to the case supposed. Can that provision be involved by a taxpayer to defeat an obligation of the city, valid and binding when incurred? I do not think we'd agree to that. I agree with the referee that all un liouldated and disputed elaima pending •gainst the city on June 30. 1906. which he computes as upward of $82,000,000. should not be included as a part of the city's existing indebtedness. Liability upon them is denied; they have been adjudicated and. so far as they may be ultimately reduced to Judgment, they viu be payable from the proceeds of special revenue bonds, which, aa it has been previously shown, do not enter into the constitutional purview of an existing indebtedness. Chief Judge Cullen in his opinion deals with the question of sinking funds. He 6ays in part: The most important question before us is whether In the case of contracts for public improvements, the cost of which is to be defrayed by the Issue of city bonds, the whole estimated sum to be paid under the contracts is to be con sidered a city indebtedness upon tbe ex ecution of the contract, or only from time to time the amounts which then may be actually due thereon for work already performed. As regards this question I agree not only in the opinion of Judge Gray but in the opinion o< Judge Haight; for. as I read the opin ions, both of my brethren are in accord as to the principle of law which should determine the question. Judge Haight thinks that the record does not show that the contracts which are the subject of this difference are to be paid by the Issue of bonds, and, therefore, that the certified questions should not be an swered. I think that the record does show this fact. Tbe availability as an offset to the general indebtedness of the city of water bonds issued by the city since the new constitution and held in the sinking funds, I think depends entirely upon the particular sinking fund in which su?h bonds are held and not on the character of the bond. If they or other ben Is are held In the special sinking fund cre ated by Section 20S of the charter, or in any sinking fund which is by law espe cially created to discharge indebtedness which, under the constitution, is not to be reckoned in ascertaining the city s debt then they cannot be treated as an offset against the general city debt; otherwise they should be so considered. The questions certified to us do not seem td present any distinction between the several sinking-funds, and any answer we make to those questions should ba considered as subject to the qualification here expressed. DECISION PLEASES. Metz and WtUcox Differ About Subways. Corporation Counsel Pendleton received a dispatch from Albany yesterday saying that tbe Court of Appeals had sustained in Its Important features tbe report of Gen eral Tracy on the debt margin of New "Jork City. The Tribune on Wednesday morning made the exclusive announcement that the Court of Appeals had so decided. The formal decision traa not filed until yester day. It holds that the city had a safe margin of $48,097,443 within its debt limit In June last. The debt Incurring margin now is about 1100,000,000. Since General Tracy made his report there has been a new tax levy, based on largely Increased arseesed valuations. Furthermore, millions of dollars in long time bonds have been maturing, and the Controller has held back the certification of a number of contracts In the last year. These factors jointly contribute to an en largement of tbe city's debt incurring ca pacity, making the city's margin, according to the Controller, very close to $100,000,000. The decision dissents in som« respects from tbe report of General Tracy, holding that the contract liabilities are debt, and should be so computed hi figuring the city's financial condition. "The decision of the highest court U strictly in line with what I have main tained all along." said Controller Mots. yesterday. "When General Tracy held that contract liabilities should not be counted as debt until the contract was fully On lshed I dissented, and said that It might be good law. but it certainly was poor busi ness. lam gratified that according to the highest court such a contention by General Tracy was both poor law and poor busi ness." "How mucbA margin la there now under the decision T' "In round figures, from $98,000,000 to $100, 000.000." said the Controller. "I haven't seen the decision, and don't know Just what it comprehends. It will have to go to J>e Law Department, and then we shall kno<v Just what we can do" ""What about subways, now that you have the money?" "There are many things besides subways to be considered," said tbe Controller. "Just Art Exhibitions and Sales, This Afternoon at 2:30 CONCLUDING SESSION ffjf X* THE jrfffsft£ Fifth Aye. # Art Galleries, Art Galleries, rav^° 546 Fifth Aye., fpTS?^* Cor. 45th St. Mr. James p. SUo, Auctioneer. fN TJIB MATTER OF TWIN BROS. BANKRUPTS ORIENTAL RUGS and Carpets, o«c» Futon*. «to. New York. Chicago. Cleveland Bar Harbor. RUSSELL LORD TAR BOX. Truste* and GEORGE S. KAbABIAN, *0 WeU St, Arty, lor Creditors. THIS AFTERNOON'S SALE MMM The Host Important Large Silk Palace Specimens Store Open Until 6P. M. . Eight Car Lines Each Way r Directly on the Subway. . Direct to Store. ;,:::::„ -iw^fe .:::;: I I •» The Store You Are Sure Of" . Cabled October 6 for these Afternoon & Evening Women's Capes Just Landed, Ready Tod When you see the fine meltcn cloth in many of the, beanti ful, sombre autumn shades, the pretty trimming >: black satin, fancy button-, and touches of rich Persian embroidery, you will wonder at their little price of $25. It is because of cur close connection with some of the Urge foreign manufacturers, who copy Paris closely, and who give C 3 what we want when we want it; because of our great business with them. — - . These capes -re a re order. The first importation hardly lasted two days, for their colors and styles are well liked by American women. Each afternoon now one sees more gt^ loose, graceful capes worn. This $25 style will help to swell their numbers. . ' So many other capes around $25, $28, $30, that if you have any desire for such a wrap, we think you are sure to be inter ested in the collection. Second floor, Old Building. , » / Some Attractive Top Coats in the Girls' Store Today Every coat plain as a pipe-stem, yet each style is different Every coat has individuality. Individual coats for individual girls o£ 14 to 18 years, in saiieja. serges, wide-wale diagonal cheviots, homespuns and broadcloths. Colors are like the hues of an Autumn forest, besides black and bine. A few mannish overcoat styles, too. $10 to $35. Junior Top Coats Girls of 13 to 17 years— with dresses down to the shoe tops, require other styles. Perfectly plain styles — qtrite a few with a boyish tendency — sasisalar materials as those of their elder sisters. $7.50 to $13,50. ' One vita » deep cape is $15; an overcoat, lined with flannel. $13.50. For Little Girls Plain little Reefers and long Top Coats, fancifully trimmed with braid, are sharing honors in coats for little girls 6 to 14 years $5 to $12.50. Sturdy blue cheviots and mixed materials most in evidence. Fine broadcloth Coats of tan, light bine and gray, $20 asjd $21 JO. Capes that go to the hem of little dresses, blue or red cheviot with plaid flannel linings, $10; others, $15. Second fleer. Old Building. We Know No Better SI Gloves for Women Princess May gloves fit. They are the best $1 glove 9m women we know of. >t In one-clasp pique sewn glace, tan, brown, red, gray, white and black, and black with white stitching. Or in one-clasp cape, skin, P.X.M. sewn, drawn or spear point embroidery, wide range of new tan shades. Price $1. Splendid collection o! o -cvea for children and young women, in all leathers, lined or unlined. One-clasp mocha gloves for women. Full pique sewn. Pahs point embroidery, in tan and gray, $125. Mam floor, Old Bid* Special $3 Velvet Turbans Good looking draped black velvet turbans with a tailored bow at the side, to which a wing or flower can be added 1 desired. These copy a much finer turban, but are not of quite so good velvet— but the velvet is decidedly good looking, at that Limited quantity Second floor. Old Building. because we have a margin I am not eager to authorise subways indiscrimlnatety. Common sense should control. The Mc- Clellan administration has only a month or two In office, and it is a sure thins that we are not going to spend all the money in sight. I expect that we shall leave our suc cessors $100,000,000. and they can make the most ot it. Schools, hospital needs and sewers and half a hundred other demands must be considered, aa well as subways. I consider schools as Important as subways." Corporation Counsel Pendleton sent for a full copy of the decision, and said that until he had a chance to read it he would not be able to comment on It. Beautiful Photogravure FREE with The I^ew-York Tribune Sunday, Oct. 24ih » An excellent like ess of the Republi can nominee for Mayor of New York Chairman Willcox of the PQhOe SsntJl Commission said: "Inasmuch as It appears that the «st limit was some $&.0C9.0C0 en June) » of bit year, cot counting what may hay* aeons! since last year— I anderstaa* i* •bout $13,000,000— it would certainly appear that the Board of Ksttmsrtisi and Apportion ment would not be scratching a point If » were to appropriate the* swat o£ tt.MMs\ which was tha aniotrat fixed by the cam' mission to sects worm on all six sectkwsef the Fourth avenue subway. It remaias) • be seen whether or cot the Board ot s*sV mat* win ondartak© to held up the Tea* ftvesms) subway any further."