The Portland daily press., 1883-12-10
GIGANTIC sWINDLE.
New York City's Contract System
Exposed.
How the City Has Been Defrauded Of
S6,OOO,0OO i'm the Past Seven Years.
Ross Tweed Outdone.

New YORK, Dec. 9-This mornings Tri-
bune contains an expose of system OF con-
tracts made by the department of public
works, of which Hubert o. Thompson is the
head, by which the tax payers of this oity
have been defrauded within the past seven
years OF $6,000,000. These frauds have been
made possible by system of unbalanced bids
such as resulted in the State being swinaled
out of million dollars some years ago by the
old canal ring. The nature Of an unbalanced
bid is described as follows: 1t always depends
upon misleading estimates. If there is
to be really large amount OF earth
excavation and small amount of rock exca-
walton, estimates the reverse of the amounts
of bids are invited-for a small amount of
earth and large amount of rock excavation.
The contractor, knowing the truth to be con-
cealed by the estimates, bids anominal price for
the rock and big price for the earth. In
this way on the face of the estimates his total
bid will be low but as he is paid by the cubic
yard according to the returns ON completed
work his bid will in the end tnr out to be the
highest and the city is consequently defrauded.
If the contractor bids cent per cubic yard for
excavating rock and 50 per cubic yard for
cxcavating earth. the bid is plainly unbal-
anced, it is out of all reason and not honess,
but the departments are full of contracts made
by such bids.
The Tribune charges that although this
system was in vogue when Tweed was COM
missioner of public works, 1t is carried on to-
day to greater extent than ever before. A
large number of bids are cited TO show the
range of bids for the same class of work. Bids
range as follows: for earth excav alton, per
cubic yard, from l cent to $8; rock excava-
tion, from one-quarter OF cent to $40; curb
stones, per linear foot, from one-quarter of
cent TO 68scents: tagging, per square foot,
from one-quarter of a cent to 81 cents. Con-
tractors have been paid over, 800, 900 for work
on which the total bid was less than $4,000
These bids also extended to the park de-
partment where man was recently paid $50
per yard for excavating rock and another man
was doing similar work for 80. Eight con-
tracts are cited where the total accepted bids
were $66, ,691, but the amount paid for the
word was $227l.31. Street Improvements are
paid for by an issue of bonds which are to be
paid off when the assessments are collected
from owners of the property benefited; the
assessed property owners go into the courts
and prove that the cost of the work was OK
cessive and the courts would vacate the asses
ments and the loss was then added to the city
debt.
Since 1876 the city has lost S., 1868 431 by
vacated assessments nearly all caused by I'M
balanced bids but this is not one-half of the to-
tai loss. The courts have decided that the
fact that work was done by contract under
public letting is no excuse for, the excessive
cost, as the city was not bound to accept such
contracts. Hence the board of aldermen re-
Gently assessed property owners only what the
board considers fair value of the work done
without regard to contracts made the COM
missioner Of public works or the park board.
The excess of cost over the amount levied in
the assessments is charged among other mat
ters to fund called deficiencies in assess
ments." This fund, which represents total
loss to the city, now amounts to $4, ,356.
Altogether since 1876 there has been a loss to
the CITY treasury of over Sc, ,000, 900 because of
frauds, Irregularities and excessive cost in as
sessments for the work. Nearly all this loss
has been caused by unbalanced bids.