The San Francisco call., 1895-12-14
CITY MONEY IN BANKS,
Labor Unions Declare That 1t
Is Opposed to the
Charter.
THE BANKERS VIEW OF IT.
Could the Council Adjust Funds so
as to Pay Warrants
When Due?
OAKLAND OFFICE sAN Francisco CALL

OAKLAND OFFICE SAN FRANCISCO CALI
908 Broadway, Dec. Ii.
The various labor ganiZations of Oak
land are again trying to bring about the
stoppage OF the present system of placing
city and county money in local banks.
The matter has frequently been agitated,
but now that the subject has created gen.
eral interest all over the State the Ala
media County Federation of Trades is max
ing renewed efforts to bring about the
desired change.
Mayor Davie has always been in favor of
that provision of the city charter that de-
clares that the city shall build suitable
vault to receive the funds Of the municipal
treasury. He has tried to secure an ap-
preparation for this purpose, but has not
yet succeeded, and he contends tna. the
city government has been derelict in its
duty. The ch arter provides that the vault
shall be built as soon as possible after its
passage, but although six years have
passed away it has not yet been done.
The following correct statements taken
from the Auditors Office to-day make it
apparent that there has been some misrep-
resentaton of facts on both sides: Up to
1890 the banks of Oakland had the privl-
lege of using the public funds, but nothing
was asked OF them III return. In that year
the banks were approached and were told
what it really meant, that if they were to
continue to receive public moneys, they
must cash all labor and salary warrants
without discount. This was agreed to and
since then the following amounts represent
the average amount on deposit throughout
the year: In 1S93-94, owing to the sale OF
school bonds. 81 ,278 600; 1S94-95, 1904, 900;
present year, $3.50 900. The lowest amount
ever in the banks since the practice was
commenced is 5000 and the Auditors
statement for to-day shows it be $4,000.
The amount is distributed among the
various banks and must always be on call,
although it is l well-known fact that lt IS
kept in circulation by the banks and does
not remain idle.
Since 1890 the banks have cashed all city
warrants without discount, and the
amount so paid out by the banks last year
was $3.50. .OO0 Previous to 1890 this amount
would have been discounted by brokers at
from per cent per month to 10 per cent
! per annum. With large amount OF
! money always on hand in the banks, the
question is often asked if it should be
! necessary to discount warrants, but this i3
due to the fact that the city S income is
| divided up into funds and the salary funds
are always empty, while other funds are
always supplied.
1t is this adjustment of funds that forms
the main argument of those who want the
money kept in a vault at the City Hall.
| They declare that so long as there is
money enough each fiscal year to pay all
debts all the pece ssary adjustment or
funds could be made by the Council and
save the intermediate part played by the
banks.
With balance of $4,000 always stand
ing to the credit of the city during the
past year the opponents of the banking
system argue that it would be a compare
lively easy matter to keep all funds run
ming evenly, but this is denied by the city
officials, who declare that funds can only
be used for the purpose for which they are
appropriated. However legal may be this
view, there are numberIess cases on record
where money has been spent for all sorts
of unnecessary schemes by councils who
have been more anxious to pay political
debts while in office than to serve the peo-
pie faithfully. A canvass of the banks was
made ten days ago, and their officials
stated that if the $400,e00 received for
bonds three years ago, and which is not
! yet all used had been deposited in the city
! vault and withdrawn from circulation,
| Oakland would not have tided over the
! great depression of a year ago.
To this the other side reply that if any
of the banks had gone under every cent OF
city money on deposit would have been
! lost.
The first step toward keeping the
money in a city vault, said Auditor Snow
to-day, would be to build vault. Be-
fore a vault could be built there must be a
city hall capable of receiving it. 1t would
| be impossible to build suitable vault in
this old shaky barn. The foundations
would have to begin right down in the
City Prison"