The Warp on the Loom (Part 2 of 2)

Core idea

The second part of The Warp on the Loom dives into the specific gimmicks Moses inserted into the bond covenants. Reuben A. Lazarus — the drafter of the original Triborough Act — described the gimmicks to Caro with admiration: a clause that allowed surplus revenue to be applied to new projects without state approval; a clause that defined cause for chairman removal in a way Moses could litigate against indefinitely; a clause that gave the Authority the power to refinance its own bonds, restarting the covenant clock and extending its sovereignty for another generation. Each was technically legal. Together they made the Authority effectively immortal under Moses.

Why it matters

The surplus reinvestment clause

Triborough's surplus revenue (toll collections minus operating expenses minus bond service) could, under the covenants, be applied to any related project the Authority chose. The definition of related was deliberately broad. By the 1950s the surplus was funding bridges, parkways, beaches, public housing — anything Moses wanted. The clause gave the Authority effectively unlimited mission expansion.

The refinancing clause as immortality

The covenants gave the Authority the power to refinance its bonds with new bonds carrying new covenants. Each refinancing restarted the contractual clock. Moses refinanced strategically through the 1940s and 1950s, extending the Authority's sovereign window through 1990s. Lazarus described the refinancing clause as a gimmick — and the word came out of him with admiration.

Key takeaways

Mental model

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Practical application

Example

Modern technology terms-of-service routinely include clauses about arbitration, class-action waivers, and dispute venue that are technical-sounding and seldom read. They produce lasting legal sovereignty for the licensor. Moses-style covenant drafting has become a profession.

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