want a broadening, of the meaning of "city purposes" should be the very ones to insist that these projects be placed on a business basis.

Nor should the sinking-fund provisions of the coming constitution be ignored. No bond should be issued without automatic provision for its retirement. The provision of the constitution limiting the years for which the state or cities may issue obligations should remain. A yearly tax should be levied to meet a part of the principal of each bond issue. The accumulation of large sums out of current tax levies, to constitute a sinking fund with which to retire a bond issue, in the distant future, is a fruitful cause of public corruption. It seems that the states and cities should reserve the right to retire a proportionate part of a bond issue each year.

And there are some reasons why the latter should be a positive requirement in connection with the obligations issued by cities for the purchase of business enterprises. In fact, in redrafting the fiscal features of the new constitution, it will be well for the convention to keep in mind the distinction between bonds issued for city halls, sewers and pavements, which do not yield a revenue, and for which service no charge may be made, and obligations authorized for the purchase of water and lighting plants, or the like, which yield a return and for whose service to private citizens charges may be made. City demagogues have thriven by eliminating sinking-fund and depreciation charges from the calculations of municipalownership expenses, and then convincing the people that this type of vicious and indirect subsidy is in their interest. The placing of city-owned systems under the jurisdiction of the public service commission has tended to stop this practice. If bonds issued for the purchase of property, in contradistinction to obligations issued in connection with the exercise of a local governmental function, were retired proportionately each year it would be necessary to calculate the sinking-fund charge with precision, and the protests of the taxpayers would prevent those moneys from coming out of the annual levy, rather than out of the revenues of the particular property. Moreover, by careful investigations and adjudications the average life

of a particular type of municipal system may be determined, and no bond issue should be permitted for a period longer than the life of the plant.

All these things cannot be inserted in a constitution. The constitution must be considered as the embodiment of necessary fiscal principles. These items are mentioned to emphasize the conviction that the next constitution must delegate large discretionary powers to the legislature in relation to state fiscal policies and city government.

And if the state is to hold the cities to a high standard of fiscal policy; if the cities are to be granted home rule, but subject to debt limitations under the constitution; if the localities are to be allowed to join with the courts in giving a broader meaning to permissible "city purposes" from year to year, as regards municipal-ownership activities, then should there not be some automatic method which will to a partial extent grant to those cities which conduct their systems efficiently a larger measure of home rule, than to those which burden the taxpayer by poor service or by requiring tax levies to maintain their plants? This method can be found; but it cannot be applied unless the constitution draws the distinction, as previously suggested, between obligations issued for governmental purposes and those required for the purchase of quasi-business systems. The same rule should not apply to a bond issue for a city hall and a revenue-producing water plant. One must be paid for by the taxpayer and the other should be paid for by the consumer. In fixing city debt limits, the new constitution should separate the two and make provision accordingly. As to bonds for city-hall purposes and the like, the clause should be definite and inelastic; but as to obligations for water, light and similar municipal plants, the provision should be elastic and discretionary. As a matter of public credit, all bonds issued, in the first instance, and without respect to the principle underlying the suggested separation, should be a municipal lien and be counted against the debt limit. But it is urged that the constitution should empower the legislature to permit a city which conducts a particular enterprise with success and which provides for the sinking-fund and depre

ciation charges without resort to taxation, for a given period of years, to establish those facts before a commission, or in an appellate court proceeding and then to withdraw that bond issue from the calculation of the permissible city debt limit. This enables a city to acquire other enterprises when it has demonstrated its capacity to conduct existing systems.

In the investigation of the financial features of several state and city enterprises in the United Kingdom the writer found that in many instances the public service systems were purchased, subject to existing trust mortgages and bonds. This simplified the acquirement of these properties, and the method has been successful; but it does not follow that it should be adopted in this state, even though it is now being tried in the cities of western Canada. The plan may be permitted, or not, in England or the Dominion, because an enabling act must be obtained from Parliament or the provincial legislature. This requirement permits the legislators to pass upon the desirability of taking over a public service system, subject to existing mortgages, instead of issuing city bonds for the whole purchase price, upon the merits of each proposition; but where, as in New York, it is necessary to devise a uniform method of municipal financing, and insert it in a constitution, this plan is not feasible. The advantages of the plan may be gained here by withdrawing from the calculation of the debt limit those bonds issued for plants paying a revenue for successive years.

No new constitution may be deemed a liberal instrument, which does not enable the state and its subdivisions to absorb those values accruing through the exercise of governmental functions, and community effort. The "excess-condemnation " amendment was a step in that direction. A constitution which embodies a sound state fiscal policy must provide not only for efficient and inexpensive administration; but it must assure to the people the profits accruing from an extending ownership of systems inherently quasi-public in their nature and service, coupled with payment into the treasury of those franchise and site values which are enhanced by the efficiency of the government and by its increasing ownership of public utilities.

THE CIVIL SERVICE CLAUSE IN THE

CONSTITUTION

SAMUEL H. ORDWAY

Chairman Executive Committee, New York Civil Service Reform Association

HE civil service reform movement in New York state

THE

may be said to have had its beginning on May 11, 1877, when a call was issued for the organization of an "Association for the promotion of Civil Service Reform." This association devoted its efforts to the federal as well as to the state service, and helped to secure the passage of the Pendleton civil service bill on January 16, 1883. Four months later a state civil service bill prepared by this association received the approval of Governor Cleveland, who designated as commissioners President Andrew D. White of Cornell University, Attorney General Augustus Schoonmaker of Ulster County, and Henry A. Richmond of Buffalo. Mr. White finding it impossible to serve, Hon. John Jay was appointed in his stead. The eighth section of the state law authorized the mayor of each city in the state having a population of 50,000 or upwards to establish a merit system of municipal appointments. Mayors Low of Brooklyn, Scoville of Buffalo and Edson of New York subsequently issued rules in accordance with the civil service act.

For the first two years the system was sympathetically and effectively administered as an aid to good administration. This record did not continue, however, and during Governor Flower's administration the situation required a thorough investigation by a committee of the legislature. This legislative inquiry showed that in New York state the operation of the civil service law had been almost nullified by bad administration, while it was demonstrated beyond all question by the testimony of executive officers of the United States and Massa

chusetts civil service commissions that elsewhere the success of the merit system had been unqualified.

Closely following the senate investigation came the adoption by the constitutional convention of 1894 of the following civil service amendment:

Appointments and promotions in the civil service of the state, and of all the civil divisions thereof, including cities and villages, shall be made according to merit and fitness to be ascertained, so far as practicable, by examinations, which, so far as practicable, shall be competitive; provided, however, that honorably discharged soldiers and sailors from the army and navy of the United States in the late Civil War, who are citizens and residents of this state, shall be entitled to preference in appointment and promotion without regard to their standing on any list from which such appointment or promotion. may be made. Laws shall be made to provide for the enforcement of this section.

The Civil Service Reform Association had been engaged for several months before the convention met in promoting a movement to bring to the attention of the delegates the importance of this recognition of the principle of civil service reform. In recognition of the general demand for careful consideration of the subject, President Joseph H. Choate appointed a committee on the civil service, and a series of hearings was accorded to the organized advocates of civil service reform. The section was reported and came up for consideration in the closing days of the convention. There was a spirited fight over the adoption of the amendment. Some of the delegates were opposed to the merit system in every way; others objected to putting such matters into the constitution, claiming that they fell only within the province of ordinary legislation. The amendment was finally carried by a vote of 97 to 54. Of the Republican delegates, 58 voted in its favor and 41 against it; of the Democrats, 39 voted for and 13 against it. A strong speech by Elihu Root of New York is credited with holding a majority of the Republican vote to the affirmative side, as a good many delegates of that party manifested a disposition to break away.