So far, we have learned that in January 1936, when Mayor Fred Wheeler took office, the City's finances were in a precarious state, and, with the country still struggling to recover from the Great Depression, the Commission of Public Charities, which provided relief for a tenth of the residents of Hudson, would run out of money just four months into 1936. The mayor blamed the Board of Education and its $275,000 bond for the new high school for the "cessation of food, shelter, fuel and milk to over one thousand people in want."
In February 1936, Wheeler outlined the City's dire financial situation for the Common Council. The City's bonding limit was $833,925.00. The Board of Education's bond for the new school brought the City's total indebtedness to $911,500.00--over the limit. As a consequence, none of the four banks in Hudson at the time--First National Bank & Trust Company (561 Warren Street), Hudson City Savings Institution (560 Warren Street), Farmers National Bank (544 Warren Street), and Hudson River Trust Company (520 Warren Street)--would make an emergency loan to the City to fund the Commission of Public Charities. It was in this context that the following resolution was presented to the Common Council:
WHEREAS, The state of the finances of the City of Hudson is in a precarious condition due to the approach of the limit of the bonded indebtedness of this city, and
WHEREAS, This condition has been conclusively demonstrated by the refusal of the banking institutions of this city to make an emergency loan which had been properly authorized and approved to enable the city to pay tradesmen who had advanced supplies for relief purposes upon orders of the Commission of Public Charities in the amount of $25,000.00, and to carry on such relief work to May first, 1936, and also to enable the city to carry on some relief work projects which will give employment to the unemployed and remove them from the relief rolls, and
WHEREAS, The action of such banks evidenced their lack of confidence in the credit of the city and is and will be productive of the most unfortunate consequences, and
WHEREAS, The unfortunate financial condition of this city has been brought about by the spending and borrowing policy of the former administration and the issuance by it of $275.000.00 of bonds for the building of a new High School, which issue of bonds has endangered and destroyed the credit of our city and will prevent the issuance of any future bonds for additional improvements for several years,
WHEREAS, This city is faced with a problem of furnishing relief after May first, 1936, without any funds applicable for that purpose, and
WHEREAS, The legality of the issuance of $275,000.00 school bond has been and is here questioned and the correctness of the date upon which such issue was approved has been and is here questioned, and
WHEREAS, In view of the financial condition of the city and the question as to the legality of such bonds, it is of the utmost importance to the city to have such questions determined. Therefore, be it
RESOLVED, That the Corporation Counsel of the City of Hudson be, and he hereby is instructed to commence an action in the name of the city against the Board of Education, the contracting company or companies and the corporation holding the issue of bonds, and such other persons or corporations as in his judgment may be necessary and proper parties defendants, for the cancellation and nullification of these bonds and for the return of such bonds to the City of Hudson for cancellation and for the cancellation of any contract made for the building of such High School and the return of the money received on such bonds, and to apply to the Supreme Court for an order of injunction to restrain the Board of Education, and to prevent the expenditure of any of the money received on the sale of said bonds of the Board of Education until the termination of this action, and that the Corporation Counsel is further instructed to notify the Board of Education, the contractor, the corporation holding such bonds, the bank where the money received on the bonds is deposited, of the action of this Council so that there may be no claim that they were unapprised of the procedure directed by this Council, and it is further
RESOLVED, That if it be established that this bond issue was brought about by wrongful acts of the Board of Education the Corporation Counsel is directed to commence an action in the name of the City against the individual members of the Board of Education for any damages the city has or may sustain.Two aldermen--Colwell and Hermance--expressed the opinion the Council needed more time to consider the resolution before voting on it. Alderman Thorn told his colleagues that "in his mind there was no question of the legality of the bond issue since the Federal Government had given its approval." He called the thought of bringing action against the individual members of the Board of Education "absurd."
Despite the suggestion that more time and consideration was needed, the resolution was voted on the same night it was introduced. It passed, with Council president Cartwright and aldermen Barlow, Buckley, Banks, Egan, and Unger casting their 6 votes in favor, and aldermen Colwell, Decker, Hermance, and Thorn casting their 4 votes against. (These were the days before the weighted vote.) Alderman Moy, although present at the meeting, did not vote.
We know the outcome, of course. The court upheld the school board, and the new school was built. But there is more to this story, and Gossips intends to pursue in the minutes of the Common Council.
COPYRIGHT 2016 CAROLE OSTERINK