The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1890-08-22
WHOM IS HE SHIELDING?
The Municipality Systematically
Robbed by the Failure to
Levy Interest on Deposits.
HOW THEY DO IT In NEW YORK.
Vast Profits Of the system--- What
Jersey City's Charter Requires.

Jersey CltyS Charter requires.
In showing the vast increase in the tax
payers burdens which resulted from the
advent to power of the New Charter
Ring, THE JERSEY CITY NEWS incidental
ly exposed yesterday one of the most
scandalous abuses of the Cleveland-Hog-
encamp administration of the city's
finances.
The following expressions were used
editorially:-
What revelation 1t is, too, that with all these
vast sums raised the city receives no permanent
improvement. Even the wretched, shabby
Police Headquarters, the Fourth Precinct police
station house and our solitary new engine house
are paid for with borrowed money, by new is
sues of bonds. while the river of tax money
flows into the pockets of Ring heelers and Ring
contractors.
Mr.. Bill Hogencamp's share in the business,
too, is interesting. He and his bank always
come out ahead. They pay no interest to the
city on the enormous balances which it keeps
with them; but the interest rolls into the Golfers
of the argus bank all the same This is one OF
the most shameful features of our financial ad-
terest at the rate Of 21s per cent for the use of
city money deposited with it. Why does not
Jersey City derive similar benefits from her re-
serve cash.
There is not one particle of reason why Mr..
Bin Hogencamp's bank should not pay hand
somely for the vast monopolistic privileges the
city confers on it. But what is to be expected
when Mr. Hogencamp holds the de facto Mayor
in the hollow of his hand and owns besides the
souls OF three members of the Board of Fl
nance, one of whom is actually director Of the
bank.
What show have the taxpayers against such d
combinationS
THE Law IN THE CASE.
Here is the section of the City Charter
which prescribes the rules and conditions
for the deposit of city funds in various
banks:-
And be it enacted, That the said Board of
Finance shall from time to time fix the terms
upon which the funds of the city treasury may
be deposited in bank including among such
terms the rate of interest to be allowed by the
bank to the city upon deposits and the rate Of
interest to be paid by the city to the banks on
loans, and said terms shall be the same
for all the banks how existing in Jersey City,
an d the moneys in the city treasury shall be de-
posted and kept in equal proportions as nearly
as practical in all the city banks that may be
willing to comply with such terms, and the
money which said city may need to borrow from
city banks shall be borrowed in equal proper
tions, as nearly as practical, from each of them;
HOW THEY DO IT IN NEW YORK.
To ascertain the exact manner in which
the banking business of the great metro
polls is conducted, a reporter of The JER-
sEY CITY NEWS was sent across the river
Yesterday The result of his enquiries
are given below. He was received with
conspicuous politeness by the New York
officials, fact which will seem all the
more noteworthy when contrasted with
the high handed insolence with which he
was treated by one of the paid public SER
wants of Jersey City.
But of that anon.
The law governing the deposit OF
New York city's funds. provides that de-
posits of the city's monies in any bank or
trust company shall be limited to one
half the capital and surplus of the bank.
The law also provides that no bank shall
receive deposits of the public funds un-
less it agrees to pay interest on the bal
ances.
The law providing that no bank should
receive an amount exceeding one-half OF
its capital and surplus was brought about
by the suspension of the Marine National
Bank, of which James ID. Fish was presi-
dent. At the time of the banks suspen
sion, through the rascality of its presi-
dent it had on deposit 81 100000 when its
capital stock and surplus were little more
than one-half of that sum. The fact
that it carried this large amount raised
apprehensions in various quarters and
it was fre quently proposed that the sum
be reduced But Fish had influence and
the money remained in his custody until
his dishonesty was exposed and the bank
ruined. 1t is now over six years since
that bank failed and on January it still
owed the city of New York 100000. The
Marine Bank was considered one of the
strongest and most stable in New York and
its entire connection with the public funds
of New York presents lesson which
might be perused to the interest of the
taxpayers Of this city.
QUARTERLY DESIGNATIONS.
The Mayor, the Comptroller and the
city Chamberlain of New York meet
quarterly. designate banks which are to
receive the deposits, and fix the rates Of
interest to be paid. 1t can plainly be
seen how little opportunity isailowed un-
der this law for a display OF such rank
fayoritism as Is practised by the Board
. of Finauce. Although this is the time OK
the year when the treasury OF New YORK
is at its lowest. there are at present
thirty-seven banks and eleven trust
companies which receive thepublc funds
on deposit.
The present rate OF interest which the
banks pay on the deposits is e,S per cent,
which has been the prevailing rate for
,axeraI years past BY the last report Of