OUTSTANDING DEBT and ITS ADMINISTRATION
THE PORT AUTHORITY'S ADMINISTPATION of its debt has been notably successful. Not only has the payment record been clear, with no delays in the meeting of interest and principal requirements, but the planning of the debt structure has contributed very materially to the quality of the Authority's credit. All bonds have been issued to mature well within the periods of usefulness of the projects financed, and the judicious employment of callable bonds has not only permitted large savings in interest through refunding but has created a protective flexibility in fixed charges.
The Port Authority issued its first bonds in 1926, $14,000,000 to finance construction of the Arthur Kill bridges and $20,000,000 toward financing construction of the George Washington Bridge. Including this initial financing, it has issued in slightly over 21 years through December 31, 1947, a total of $537,851,260 of its obligations.
Of the total amount of obligations which have been incurred, however, not much more than half represents direct financing of capital projects. The remainder is accounted for by refunding operations. Since the Port Authority has issued most of its bonds with optional provisions for retirement in advance of maturity, it has been able to take extensive advantage of favorable market conditions and of progressive strengthening of its credit standing to refund bonds for the purpose of reducing interest rates and of improving debt structure. Total interest paid in 1946 was 33 per cent less than in 1939, despite the fact that debt outstanding at the beginning of 1946 was only ten per cent less than that at the beginning of 1939, a financial gain due in large part to the refunding program. Table 4 accounts for the difference between the total of $537,851,260 of obligations issued and the $215,735,000 outstanding at December 31, 1947, indicating the large volume of refunding operations but