IN WITNESS WHEREOF, The Port of New York Authority has caused its name to be signed hereto by its duly authorized officer and its official seal to be hereto affixed or imprinted hereon, and interest coupons hereto attached to bear the facsimile signatures of its Chairman and Secretary, and this bond to be dated as of the first day of February, 1960. THE PORT OF NEW YORK AUTHORITY Authorized Officer (End of Form of Bond) The coupons for interest attached to unregistered bonds of the Seventeenth Series, and bonds registered as to principal only, shall be in substantially the following form, the blank spaces being appropriately filled in: (Form of Coupon) On the first day of.. 19...., (unless the bond described below shall have been duly called for redemption at a prior date, and provision for payment duly made), The Port of New York Authority will pay to bearer Dollars ($.. .), lawful money of the United States, at the principal office of its Paying Agent or Paying Agents in the City of New York, State of New York, upon presentation and surrender of this coupon, being six months' interest then due on its Consolidated Bond, Seventeenth Series, dated February 1, 1960, No. C(17).... Chairman Secretary (End of Form of Coupon) Each of said bonds of the Seventeenth Series shall have provisions for registration endorsed thereon, in substantially the following form: (Provisions for Registration) This bond may be registered in the name of the holder on the books kept by the Registrar of The Port of New York Authority as to principal only, such registration being noted hereon by such Registrar in the registration blank below, after which no transfer shall be valid unless made on said books by the registered holder or attorney duly authorized, and similarly noted in said registration blank below, but it may be discharged from registration by the Registrar on application of the registered holder by being transferred to bearer, after which it shall be transferable by delivery, but it may be again registered as before. The registration of this bond as to principal shall not restrain the negotiability of the coupons by delivery merely, but the coupons may be surrendered and the interest made payable only to the registered holder, in which event the Registrar shall note in the registration blank below that the bond is registered as to interest as well as principal. With the consent of the holder and The Port of New York Authority, this bond, when converted into a bond registered as to both principal and interest, may be reconverted into a coupon bond and again converted into a bond registered as to both principal and interest, as hereinabove provided, but always at the expense of the holder; except that if this bond is of a denomination greater than $1,000, it shall not be converted into coupon form unless it is first converted into bonds of the denomination of $1,000 each. Upon reconversion of this bond, when registered as to principal and interest, into a coupon bond, coupons representing the interest to accrue upon this bond to date of maturity, shall be attached hereto by the Registrar, and the Registrar shall note in the registration blank below whether the bond is registered as to principal only or payable to bearer. Date of Registration In Whose Name Manner of Signature of (End of Provisions for Registration) In case any official of the Authority who shall have signed any of the bonds of the Seventeenth Series shall cease to be such official before the bonds shall have been actually issued, the bonds may nevertheless be issued as though the person who signed such bonds had not ceased to be such official of the Authority; and the Authority may, by issuing bonds bearing coupons so executed, adopt and use the facsimile signature of any person appearing on the coupons, notwithstanding the fact that such person may have ceased, at the time when the bonds and coupons shall have been issued, to hold the office appearing after his facsimile signature on such coupons. SECTION 10. In case any bond or any coupon pertaining to such a bond shall at any time become mutilated or be lost or destroyed, the Authority, in its discretion, may execute and deliver a new bond or coupon of like tenor and amount in exchange or substitution for and upon cancellation of said mutilated bond or coupon or in lieu of or in substitution for such destroyed or lost bond or coupon; or if such bond or coupon shall have matured, instead of issuing a substitute bond or coupon the Authority may pay the same without surrender thereof. In case of destruction or loss, the applicant for a substitute bond shall furnish to the Authority evidence satisfactory to it of the destruction or loss of such bond or coupon and of the ownership thereof and also such security and indemnity as may be required by the Authority. The Authority may execute and deliver any such substitute bond or coupon; or the Authority or any Paying Agent may make any such payment upon the written request or authorization of the Authority. Upon the issuance of any substitute bond or coupon, the Authority, at its option, may require the payment of a sum sufficient to reimbu se it for any stamp tax or other governmental charge or other reasonable expense connected therewith and also a further sum not exceeding the cost of preparation of each new bond or coupon so issued in substitution. Any bond or coupon issued under the provisions of this section in lieu of any bond or coupon alleged to have been destroyed or lost shall constitute an original contractual obligation on the part of the Authority, whether or not the bond or coupon so alleged to have been destroyed or lost be at any time enforceable by anyone, and shall be equally and proportionately entitled to the security of this resolution and of the Consolidated Bond Resolution with all other bonds and coupons issued hereunder or thereunder. SECTION 11. The foregoing provisions of this resolution shall constitute a contract with the holders of the bonds issued pursuant to this resolution, and each such holder. SECTION 12. The Committee on Finance is hereby authorized to sell all or any part of Thirty Million Dollars ($30,000,000) of Consolidated Bonds constituting the Seventeenth Series, and to do so in the name and on behalf of the Authority, at public or private sale, with or without advertisement, in one or more lots, at one or more times and to apply the proceeds of such sale or sales to the accomplishment of the purposes for which the issuance of said bonds is authorized. Said bonds shall be sold at a price which will result in an average net interest cost to the Authority not in excess of six per centum (6%) per annum to maturity. The Committee is hereby empowered to authorize the refunding, pursuant to Section 5 hereof, of Consolidated Notes, Series J, out of the proceeds of such sale or sales, by purchase or redemption, at any time or times before maturity and in such amount or amounts as shall be determined by the Committee or pursuant to its authorization. In the event the Committee on Finance makes a determination to sell at any time less than all of the bonds of the Seventeenth Series hereby authorized, it shall do so by a resolution adopted by said Committee prior to said sale which resolution also shall specify which of the bonds hereby authorized shall be omitted from such sale and shall redesignate the numbers of the bonds so determined to be sold so that the bonds sold at such time shall be numbered consecutively; such resolution may omit from such sale (1) all the bonds of the Seventeenth Series which are scheduled to mature in any one or more consecutive years of the first five years of scheduled maturity and/or any one or more consecutive years of the last five years of scheduled maturity, and/or (2) bonds aggregating any uniform amount or any uniform percentage of the principal amount of bonds of the Seventeenth Series scheduled to mature in all years other than any years completely omitted as aforesaid. Nothing herein contained shall be deemed to limit the power of the Committee on Finance to sell the other bonds of the Seventeenth Series authorized by this resolution at any subsequent time and in such event if such subsequent sale shall again be of less than all of the remaining bonds of the Seventeenth Series hereby authorized, the Committee may again, by resolution adopted by said Committee prior to said sale accomplish such reduction in principal amount and redesignation of numbers on the same terms and conditions as aforesaid. The Committee shall have power to fix the time or times of sale; to determine the terms and conditions upon which sales shall be made; to make any selection, designation, determination or estimate and to take or withhold any action and to formulate and express any opinions and to exercise any discretion or judgment which may be or is required to be made, taken, withheld, formulated, expressed or exercised by the Authority pursuant to Section 3 of the Consolidated Bond Resolution as a condition precedent to the issuance of the bonds of the Seventeenth Series or for the purpose of determining whether all conditions precedent to their issuance exist, the Authority hereby adopting all such selections, designations, determinations, actions, withholdings of action, estimates and exercises of judgment and discretion as its own; to authorize one or more official statements on behalf of the Authority (describing the Authority, its financial condition and the bonds offered for sale, and making representations on behalf of the Authority); to accept or reject offers to purchase said bonds; and generally to take such action as in the opinion of the Committee will best serve the public interest. The Authority hereby authorizes the purchaser or purchasers in offering said bonds for resale to use such official statements and representations as those of the Authority. (The document referred to at p. 1553 follows:) AT HOME & ABROAD The New York Port Authority, Guardian of the Tollgates WILLIAM S. FAIRFIELD E ACH YEAR, the roads from Florida to New York are lined with new evidences of a unique form of American economic expansion. As the mo torist travels north, he passes posters announcing the efforts of the Ports of Georgia Authority, then the Port of Charleston (South Carolina) Authority. Farther north, the toll bridge over the Susquehanna is followed by the new toll bridge over the Delaware, which in turn leads to the New Jersey Turnpike, a recently completed toll highway that ends on the Hudson shore opposite Manhattan. The crossing to Manhattan is made via the Holland or the Lincoln Tunnel or via the George Washington Bridge, all three toll facilities that are the property of the Port of New York Authority. More rapidly than most Americans realize, the highway and harbor developments of the nation are being taken over by the so-called Authori ties, quasi-public corporations created by one or more states to develop transportation facilities. These corporations derive their incomes not from taxes but from collection of tolls and fees. In city after city and state after state, the Authority idea is catching on as local governments find themselves ill equipped to meet the vast new needs of modern transportation. Generally, these local gov ernments look to New York City, where the thirty-two-year-old local Port Authority serves as an excellent model. The Port of New York Authority is proud to be a model, and not too modest to boast of its successes, which September 29, 1953 are quite a few. On its thirty-second birthday this year, it reported total assets of $475 million and a record profit of $20.5 million. Along with the Holland and Lincoln Tunnels and the George Washington Bridge, it has three Staten Island bridges, two truck terminals, three marine, one bus, and one railroad freight terminal, one heliport, and a wide variety of industrial property, includ ing the third largest office building in the world, its own headquarters in mid-Manhattan. It also owns one airport, Teterboro, and operates, under lease, three others: LaGuardia, New York International (Idlewild), and Newark. It has opened promotional offices in Chicago, Cleveland, Washington, and most recently in Rio de Janeiro. The Port Authority's enthusiasm for its expanding half-billion-dollar empire is shared by the local press. Published criticisms of the Authority are rare, and such scattered private attacks as have appeared have invariably been chalked off to petty personal grievances. One attack, however, would seem well justified-that directed at the general theory of unrestricted Authorities. Many normally conservative individuals look askance at the New York Port Authority and at all the Authorities modeled after it. They recognize the advantages of the Authority system-its freedom from politics and from government red tape. But they also recognize its inherent threat to the democratic process-its immunity, as a sovereign power, from strikes by employees and from taxes; its ability to pile up public funds by charging tolls and fees far beyond costs; its ability to use those funds to expand its empire as it sees fit; and in general, its almost total lack of responsibility to the people for its acts, past, present, and future. In the hands of some men, such an Authority could become a source of unlimited personal wealth and personal power, of wholesale corruption and complete subversion of the public interest. The fact that the Gov ernors of New York and New Jersey have appointed only the most publicspirited citizens to the New York Port Authority's Board of Commissioners is indeed a happy circumstance-but not necessarily a foolproof one. For Whom the Tolls? When the New York Port Authority was established in 1921, there was certainly a place for some such body. Wars of jealousy between the States of New York and New Jersey had effectively blocked all attempts at joint construction of needed facilities in the port area. Finally, the Governors of the two states met and devised the Port Compact of 1921, creating the Port Authority and calling on it, as their joint agency, to develop port terminal and transportation projects. The Port Authority was subsequently placed in control of twelve commissioners, six to be appointed by each Governor, for staggered terms of six years each. Within these appointive limits the commissioners 21 were left free to act virtually without restraint. The most important feature of the regulations governing the Authority is the stipulation that "the two said states will not... diminish or impair the power of the Port Authority to establish, levy and collect tolls and other charges..." The Authority has taken this as a blanket permis sion to collect whatever fees it de cides upon for as long as it wants, regardless of toll limitations set forth in such other laws as the present Federal Bridge Act. Thus, the Port Authority has so far collected $427 million in tolls on its six bridges and tunnels, as compared with a cost of construction of these facilities, including all improvements, of $266 million. The Authority justifies such collections on the grounds that various sinking funds must be set up to pay for less profitable Authority activities, for retirement of bonds, and for future projects. Despite all the claims made by Port Authority officials for "sound business corporation management," primary credit for the Authority's present success must be given to the above two factors-the Authority's ability to charge rates figured to yield substantial profits and its ability to raise those rates at will if initial estimates prove to be inadequate. Any corporation that can collect upwards of $37 million a year in tolls alone and can pledge those tolls against debts incurred enjoys huge borrowing power to finance its expansion. SUCC UCCESS has not always been the Port Authority's reward. In its first decade of operation, the Authority was actually pretty much of a flop. It spent most of those years working on a grandiose plan for reorganizing the flow of freight traffic between railroads and ships in the port area. Such a reorganization wasand still is-badly needed, and was thought of as one of the Authority's basic missions at the time of its creation. Its plan, unfortunately, was considered unrealistic by too many of the transportation men, and had to be dropped. While this was going on, New York State and New Jersey had signed a separate agreement for the joint construction of the first roadway link between Manhattan Island and New Jersey, the Holland Tunnel. After seven years' work, the tunnel was opened to traffic in 1927. Its immediate financial success astonished even its most avid original supporters. The Port Authority quickly recognized it as a prize well worth fighting for. Heavy pressure was put on officials of the two states, and the pressure soon paid off. On April 21, 1930, the Holland Tunnel was transferred, without cost, to the Port of New York Authority. With that valuable property in its hands, the Port Authority was on its way. Perhaps the first indication that an uncontrolled Authority's corporate practices were likely to be no more righteous than the practice of its cousins in the business world came-as a direct result of the Holland Tunnel transfer. Governor Morgan Larson of New Jersey had worked long and hard for the Port Authority's case. He was given chief credit for pushing the tunnel transfer bill through the state legislature in 1930. Shortly afterward, his term of office ended and Larson was out of a job. In May, 1932, at the nadir of the depression, Larson turned up on the Port Authority payroll at a hundred dollars a day. He was listed as a consulting engineer, despite the fact that his appointment came at a time when the Port Authority was actually laying off engineers in sizable numbers. Larson, placed on a regular salary of ten thousand dollars a year in 1934, served with the Port Authority until 1945, during which period his private financial manipulations were to involve him, as a defendant, in at least three lawsuits. The acquisition of the Holland Tunnel also gave the Port Authority a chance to demonstrate its own view of the extent of autonomy given it in the Port Treaty of 1921. The separate bistate agreement on the tunnel had authorized the charging of tolls only as long as the construction cost remained unpaid. The states explicitly agreed the tunnel would be toll-free after amortization. When the Port Authority took over the Holland Tunnel, it also took over jurisdiction of this bistate agreement. But the agreement's limitation on tolls was promptly ignored in favor of the Port Treaty's grant of unimpaired power over tolls. To date, the Port Authority has collected more than $187 million in Holland Tunnel tolls alone, com THE REPORTER |