The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1896-05-19
CITY WANTS Ma'ERESG
The Board Of Finance to In-
terview Bank Presidents
WheFNoW Have the
City's Money.
TRUST COMPANIES WANT Its
They Will Pay Two Per Cents
Interest-The City Now,Gets
Nothing, But Has to
Pay for It's own
Money.
TRUST COMPANIES WANT Its

The question Of having the city's banks
repositories pay the city interest for the
use of its money, which was agftatedl
about four years ago by 'sThe Jersey
City News" was brought UP at a meet
ing of the Board of Finance last night by I
President Braufigam. He secured the
passage of a resolution directing the
members of the Finance Committee to
consult with the Presidents of the vari-
Gus banks and trust companies and as-
certain what rate of interest they will.
pay the city if designated as the regular
repositories.
This action is due, it is said, to the,
fact that trust companies have offered
to pay the city about two per cent. ON;
Its deposits. The interest may not seem
very large, but for the city to get it
means an increased revenue of about sso,-.
600 year. For many years the eity'si
repositories have been the Second Third
and Hudson County National Banks.
For some reason the First National Bank
has always been forgotten in the desig-
nation The designated banks have never
paid the city any interest, but, on the
other hand, have charged the city be-
tween and per cent. for the use of it's
own money.
Until quite recently the city had a rule
of paying certain sum Of money each
year into sinking funds, to meet certain
issues OF bonds. Each year the prescrib-,
ed sum was paid into the fund to which
it belonged. The money was sent to the
bank and was never disturbed until the
bonds, which the fund had been created
70 retire, became due. That system was
always regarded as a. wretched one by
HnanC1orS. but nod -.
make a step in any other direction AS
consequence, hundreds of thousands OF
dollars OF the city lay idle in the banks.
The city could not use the money bun
the banks did to good advantage, loan
ing it, 1t was learned at rates of interest
varying from to per cent.
1t frequently occurred that while larges
sums of city money lay idle in the banks :
the city was forced to borrow money!
on temporary loan bonds. Although en-
joying the use of the city's money, the
repositories would never advance the city
money for less than 4 per cent
Comptroller Hough was the first official
to make change. and it was at his sug-
gestion that the city is making use of
its sinking fund monies Not many
months ago, it will be remembered the
Sinking Fund Commissioners bought an
issue of 100000 of bonds from the Board
of Finance. By following out this policy
the city is paying itself interest and
such interest Is applied only to paying,
the interest on the city's debt. In this
manner the tax burden is considerably
leN9ened, and at the same time the city's
q Jositories are deprived of the free use
the city funds.
Y Within the past few years trust cen1-s
panies, which pay interest on deposits.
have been started in this city. The most
important of them is the New JerseyN
Title Guarantee and Trust Company y
which has deposits of over two and ones
half millions and assets aggregating four
and a half millions. The others are thas
Greenville Loan and Trust Company and5
the Peoples Safe Deposit and Trust Cons
pany, both of which have been starteds
within the past year. These institutions.a
which are backed by local capital, afes
now in the field to be made city deposi-s
tories. All three, it is said, have mada
propositions to pay the city interest oIrf
its deposits.
The amount of money carried in banlA
by the city aggregates $1,500,0O0 OF thatl
amount about $1,000 is in general orr
working accounts and about $500 600 in
sinking funds. This is the money thai
trust companies want to become the cus-j
todians of by paying the city interestl
at about the rate of per cent.
The Finance Committee is to report the
result of its conference with the banzi
Presidents at the next meeting of thei
Board.
If the present repositories decline tod
pay the city interest there will doubts
less be a new designation, in which the |
three trust companies mentioned wiz
figure conspicuously.