The New York herald., 1879-02-02
A BANKRUPT CITY.
Elizabeth, N. j., Unable to Meet
Its Liabilities
QUEER FINANCIAL MANAGEMENT,
Probability that the Public Schools VIII
Have To Be Closed

The beautiful city or elizabeth, N. D., naVlng
$4,000 inhabitants declared itself bankrupt yesterday
BY defaulng not only on the interest on its bonded
debt, but also by failing to provide the means
requisite for the payment of the bonds which
matured yesterday. Up to the very last moment
hopes were entertained that Comptroller Leggett
might succeed in raising the wherewithal to pay at
least the interest but with less than $1,000 in the
city treasury and unable to borrow money anywhere
it was impossible for him to pay the S36.000 which
was due to the public creditors "nd the Farmers
Loan and Trust Company, of this city, acting as
financial agent of the unfortunate city, had but two
words for those presenting coupons-viz.. "No
money" The npayment of this debt only in
creased the excitement in Elizabeth, where
so many laboring had hoped that
on the first of February at least por-
ton of the 100000 due them since Octo-
ber last would be paid but policemen, school
teachers and all those employed under the city
ernment went to the Finance Department in vain,
and there received the answer given to the
bondhoders in New York. The excitement increased
toward evening when the City Council met for organ
ization. 1t almost impossible to reach the Coun-
ell room, so dense was the crowd along the stairs
and in the lobby. Unfortunately. however, the
Council kept wrangling about the presidency of
the Board, occupation in which it has been
engaged since New Years Day. Ballot after
ballot was taken without result until motion
made to go into secret session, so that members
could privately consult and see if something could
not be done to organize. ''We the on board
the ship" said Councilman Ryan, "and the ship is
in terrible condition Let us drop politics and do
our duty and attend to the affairs of this beautiful
city" I'VE democrats will carry this city through
its troubles" exclaimed Alderman Bauer. "This
Board is not responsible for this cys terrible state
added Mr.. Crane. 1.-The trouble comes from ridicu-
Ions improvements made long ago and from n false
financial system
THE COMPTROLLER BLAMEs THE CITY COUNCIL.
1t was nine O'Clock when the Board went into
secret session, and message from the Comptroller
lay the presidents desk unacted upon. In this
communication the Board is informed that lowing
to the many unfavorabe remarks by some members
respecting the. credit of the city, and general
dissatisfaction and constant talk of our credit
the Comptroller not able to sell bonds
or make further temporary loans The total city
debt of Elizabeth according to another report of the
Comptroller, is s5 6s6 13O "a To meet the interest
this and the bonds maturing in 1879 ($l715OO)
there was in the treasury on the lst OF January lit
tie IS 0O0 and official has been paid since and
but few taxes have since been collected.
"All the trouble, said prominent property owner
arses from the fact that ten years ago, when every
body went on improving and the pavement compa-
MES came along here they got a decree from the Su
linea foot. The City Council took this
guide and they went on improving Three years
and they threw s3,ooo.ooo back on the city at
large. The city had to assume responsibility and
property t then aa en to sn
consolidated bonds paying seven per cent. This was
in 1876 and they have paid their interest regularly
up to this day. In fact. there exists two parties III
Elizabeth, one in favor OF entire repudiation the
other favor of paying the honest debts of the city
and the action OF the present council will show who
has the upper hand
TEARS AT POLICE HEADQUARTERS.
The effect of the non-payment of honest debts to
CITY cmplOyes practically illustrated when last
evening the HERALD reporter paid visit to the Office
OF the Chief of Police Lieutenant Fnrman, fine
looking officer nearly seventy years DID, charge
at Headquarters and with tears in his eyes, he said
Never until this morning have had piece OF meat
to-day is the first time that l could not get
meat. have not a dollar since October 1 have
had to buy the necessaries of life trust but this
morning my butcher refused to trust me any more
The city owes me s175 for last year and $75 for
January.
Tomorrow evening the Board of Education will
meet. and it will then be decided whether the six
public schools, containing about seven thousand
children, shall be closed. The gas supply, il is also
believed, will be cut of in very few days.
MIR. Jonn Eagan exspeaker of the House Of ASSEM-
bly,, sad:-"rhis Finance Department Of Elizabeth
has been run in the interest of the National state
Bank here, of which the Comptroller IL director
The Mayor of the city is vice president OF the bank
At time they had authority from the Legislature
TO issue the consolidated improvement bonds TO
help along the payment of the old hve year bonds.
They issued those one million at time.
million at a time. The money received therefor
deposited in this bank in anticipation Of debt
some wears in advance without interest The city
to meet its current expenses borrowed from the
bank money, paying therefor seven per cent
in other words, borrowed their own money paying
seven per cent bonds and seven on borrowed
money, virtually paying fourteen per cent for money
lying Idle. The Schools" continued the ex-speaker
care state institutions. The funds for their
mantenance-$2 % O0O-comes from the State. No
has a right to divert it from that purpose and
yet teachers not paid. call your atten-
ion further to the fact that the Mechanics Savings
Bank, of which the Comptroller is president, had
100000 in Elizabeth bonds in 1877; in 1878 the bank
had only $4,000: to-day the bank has not dollar
pf these bonds The city OF Elizabeth has made itself
liable. crmnally. by not paying over to the state
Collector the money due to the state for State pur
poses. The city owes the State $4,000. and that
money has been diverted by its officers to other pur
poses.
ADDITIONAL SUFFERERS.
In addition TO the State of New Jersey and the
ployes OF the city generally. the following said to
be the leading sufferers by the bankrupted condition
of Ezabeth:-Snger Manufacturing Company holds
100000 bonds; Equitable Life Insurance Com
pany holds ST. 500 O0o the Mutual Benefit Life Insur
ance Company of Newark. s2.0OO.Oo0 and the Eliza
bethtown Savings Institution. s56.o0o. The latter
concern has been placed in the hands of Chancellor
Runyon, who has ordered the officers to prepare
port at once and protect the interests of the deposit
tors, to whom some s22o.ooo are due.
Comptroller Leggett could not be found in Eliza
beth yesterday. he having gone to New York TO
rest after the worry he has gone through
while endeavoring to prevent the crash that finally
had to At the Finance Department rcpresen-
tatives of the press informed that of the
principal reasons why he had left the city for the
day to avoid being interviewed by reporters.
1t was ascertained. however. that III addition
to the city Improvement bonds amounting
20 fl71,5OO, $4,000 almshouse bonds. also
fall due this year. The other Improvement bonds
mature follows In 1890 S6S,000 in 1881. $1,000;
in 1851 s29O 900; in 1855 $4,000. The consolidated
improvement bonds ts2.50o,O0o do not mature until
1885, while various additional bonds q 100000 be-
come due between 1880 and 1856.
CITY DEBT IN FULL.
Tho following is "a detailed statement Of the city
debt as 10 stood January last:--
City improvement bonds. ............... s297.5o0 90
Consolidated improvement bonds. ....... 256l 900 10
Funded bonds. ACKNOWLEDGEMENTS. 712VOO 90
Funded debt bonds. ds...................... 155Ow 90
school house bonds. 10000 %
Market house bonds. $4,000 90
Almshouse bonds. ds........................ 5000 %
Tax arrearagc bonds. 2il,ODO %
Interest accrued ON bonds. G51g1 %
Temporary loans. ACKNOWLEDGEMENTS. 91s,Gss 95
tall, vol Loan IN M