The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1897-02-12
Financiers Want Compen-
sation for the Use Of
the Corporations
Funds.
BANK PRESIDENTS NOTIFIED
If the City's Demands Are Not
Complied With a Change
Will Be Made.

The Finance Board met last night Only
Commissioner Simpson, Kellers and Det-
willer were present. AS foreshadowed in
The News" week ago they took UP
the question of changing the city's de-
positories. In accordance with their reso-
luton Martin Finck. clerk of the Board.
this morning served notice upon the
Second. Third and Hudson County Ma
tionsl Banks, which are the city's de-
positories, that unless they will pay the
city at least two per cent. on its deposits
legislation will be sought whereby the
city will have authority to deposit its
money in State banking institutions.
This course was pursued under advice
from Corporation Counsel Blair, who, in
looking over the law governing the SUBJ
1ect, found that cities must make de-
posits in National banks only. For some
reason the First National Bank has never
been city depository and for many
months the Finance Commissioners have
been endeavoring to re-arrange the de-
pository system whereby the First Ma
tionsl Bank might become a beneficiary.
Ever since Mayor Wanser has been at
the head of the city government he and
Comptroller Hough have been endeavor-
ing to devise plan whereby the city
could procure interest on it's deposits
The determination to force the banks into
such an agreement was arrived at a few
weeks ago when the city found it neces-
sary to borrow on temporary loan bonds
sS0o,o0o in anticipation of the collection OF
tax arrearages. The bank from which
the money was borrowed charged the city
per cent. interest. At that time the
city had on deposit in the three deposit
tories nearly half million dollars.
At about that time the Finance Com
missioners received letter from another
bank. In the city in which 1t offered the
city 2 per cent interest on all money de-
posted with it. At the following meeting
of the Board of Finance the City Treas
urer was requested to furnish the Board
at the first Of every month detailed re-
port of the amount of money to the city's
credit in the several repositories. That
was the first step in the direction of re-
arranging the city depository system
Next; Monday morning at ten o'clock the
Finance Commissioners are to meet
William Hogencamp, John D. Carscallen
and Richard Washburn, presidents of the
Second, Third and Hudson County Ma
tionsI Banks. with a view to arriving at
conclusion whether those banks will
allow the city interest. at least per cent.
on its deposits. If the banks represen-
tatives refuse. and 1t Is expected they
will, a bill is to be prepared by Corpora
ton Counsel Blair allowing the city to
make State Institutions repositories.
which, If passed. will enable several Trust
Companies to get fair share Of the city's
money on deposit.
The bill will be made a caucus measure
and will, 1t is said, be given the support
of the Essex members of the LEGISLATURE
New York and other large cities get i'm
terest on their deposits and it Is rrafntain-
ed BY the Finance Commissioners that this
city should also get interest. Under the
PRESENT system of sinking funds and spec
ial accounts the city's money lies in the
Repositories year after year sometimes. the
funds growing into hundreds of thousands
Of dollars.
Sinking funds are created for the re-
demI'tion of certain issues Of bonds and
certain sum is paid into the several funds
every year. Those funds cannot be drawn
upoA w Nlcuuibea Ii dkky ptAEt1Culdf. AS q
consequence the banks holding them en-
Joy free use of the money and loan it to
good advantage OF the stockholders of the
bank.
The, same condition of affairs exists in
regard to special accounts which,s are
drawn upon only for the payment of a
certain class of claims. The money goes
into that fund in bulk, but is drawn in
small lots during the fiscal year. 1t is
maintained, as consequence that the
bank is enjoying the use of the whole fund
practically for year.
While the city may have hundreds of
thousands of dollars on deposit and it is
compelled to borrow money, 1t cannot
touch the funds on deposit, but must bor-
row from the bankers.
The Finance Commissioners, therefore,
contend that the city Is compelled to pay
interest for its own money. 1t is also cited
that the bank makes double interest on
at given rate and also charges the city
for its use.
At next Mondays conference the whole
subject will be definitely settled. The
presidents of the several Repositories are
expected to refuse to allow interest. It
having been learned from these gentle
men some time ago that there Is very
little activity in the money market some
of them eontendsng that they now have
takers for.
The, Finance Commissioners hold that il
State banks are willing to pay the city
per cent the National banks should be
willing to do likewise.