Morning journal and courier., 1880-01-10
THE ROAD TO KUHN.

1
 Elizabeth City. New Jersey, is bankrupt Under law passed by the Legislature last winter several property holders of the city ap- pealed for summary investigation of it's af- fairs. This was ordered and the report of the investigation gives cause for wonder that Elizabeth City remained solvent so long as it did. We select from the report few speci l mems of the way in which the finances of the oity were mismanaged.
 There are various classes of city bonds, the most prominent being the City Improvement, Consolidated Improvement and Funded Az l seSsment. The City Improvement bonds of the collection of certain assessments for improvements, and to be expended only in payment of such improvements or loans for the payment thereof. In some cases bonds were sold to pay for improvements for which no assessments have ever been made h one case bonds were sold in anticipation of an im- provement that was never made, and the pro- ceeds used for other purposes. At maturity they were paid from money received for as- sessment on other improvements. No sepa- rate accounts seem to have been kept, but all
 
 ed to the general assessment account and paid out promiscuously for bonds and interest as they accrued. In many instances bonds have been sold in advance of the requirements of the improvements for which they were issued, ana apparently to meet maturing obligations not connected herewith, in some cases en- taiiing serious loss in discounts on the price of bonds, when payments on said improve ments matured, and adding materially to the interest debt. In some instances the ordi- nance authorized more bonds than were re- quired by the specified improvements, yet in all such cases the bonds were sold, and the surplus applied to the objects, and in some instances the overplus of bonds were sold after the final payments on the improvements had been made. The deficiency made by these irregularities was supplied in part at least by the issue of funded debt bonds. The Funded Assessment bonds were issued to provide for the refundipg of amounts paid in for patent improvements, which had been set aside. Of these bonds the investigator says: ''I find that $715, 1000 were authorized and SIP, 900 issued. This amount appears to be largely in excess of the amount required for the purpose. The entire proceeds, however, appear to have been disposed ::of-a large portion for | ing considerable amount still unpaid on as- l sessments set aside as above stated. In addi ton to these there were issued $65,- POS. 84 of certificates of indebted ness, which were also applied in set clement in part of the above mentioned as- easements, and were receivable for taxes on presentation. can find no authority for the issue of these certificates, or reason for their issue even if authority existed therefor In the sales of the various classes of bonds there seem to have been distinctions made by the Comptroller among purchasers. In some cases this distinction was made in the price of bonds; sometimes by an allowance as com- mission, and in some cases both. As an in- stance, City Improvement was sold to one at S93, and on the same day another paid 94. Consolidated Improvement bonds have been sold at 91 to one purchaser and at 94 to anoth- CT on the same day. The operations of the Sinking Fund .Com- missioners were characterized by fine disre- gard for the interests of the city. Between May, 1877, and the close of 1878 they pur- chased bonds of the city of Elizabeth at par l
 
 when their value was far below par. It seems | that many of these bonds were even purchased | at par and interest when the market price was | far below that figure, in some instances as | low as 77, interest included. Some of them | were sold by holders at v to 80, and only l few days before being purchased by the Sink | ing Fund Commissioners at par and interest. l During September, 1878, and after, it was diff fcult to find purchaser at over 75 :; yet pur- | cha.es were made by the Sinking Fund Board ! as late as December at 90 and interest when | bankruptcy was inevitable and soon followed. | The Comptroller of the city was and is one | of the directors of the National State bank. I From April, 1875, to March, 1876, the city's | balance in that bank was never less than | $1O9, ,O0O, and sometimes over $200, GOO. | May 1st, 1876, it was $376, 6,0oO. Till July I esth, 1878, it was $1o0,OOO to $250,Ooo. On these balances no interest was allowed by the I bank during Comptroller Leggett's admins I tration, though the city was paying per cent on the same, to say nothing of discount | on bonds on which portion of it was realized. | It remains to be seen whether those guilty | of thus mismanaging the finances of Elizabeth \ City will be punished. The report which re- veals their misdeeds has been laid before the | grand jurors to act upon if they see fit.