The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1897-08-06
Mr.. mepsfmots on city Finance.

interesting chapte TO the discussion
which Is going on over the city finances.
Ii advances three important propositions.
and while adding nothing positively new
in the way of argument ON the controvert-
ed points, it afnplihes and explains the
side Of the eass which Mr.. MeDermott
represents in such degree as to make
every detail of it clear to expert and In
expert alike. In doing this, Mr.. MeDer-
mott at once strengthens and undermines
his own position.
The three propositions advanced by Mr.:
MeBerniott. as We grasp them. are these:
Efhe city authorities more or less ma
bitually issue warrants in excess of APP
preparations.
az total Of s7oo.ee of bonds, said to
have been paid off last January were not
paid. and 1.-THE city's debt to the Sinking
Fund Commissioners or anyone else was
not on the first of last January. reduced
sos. 900 or any other considerable
amount.
N 1"1Uc 0lIlkiH6 OAAu u nC 10y
sham TO shch extent as they consist OF
tax arrearage bonds, because these bonds
are worth much less than par. This in
cludes the charge that the Martin Act
money was misdirected from the sinking
fund to pay the current expenses of the
city.
Now. Nos. 1 and 2 are mere questions
of fact. 1t would be futile to discuss
them here. We hope that in the news
columns of this edition we will be able
to publish specific admissions or denials
of Mr.. McDermott's serious charges,
made by The proper authorities.
Point No. 8 is a fair subject for differ
ence of opinion and discussion. The
facts WITH slight differences of ~presenta-
ton being agreed upon by both parties
to the dispute. and being. indeed, I'M
questionable, the discussion resolves itself
into one of morals and motives on the
one hand and results on the other.
When the collection of taxes began to
flag. towards the end of each fiscal year,
the Board of Finance. to Keep up pay
ment of the appropriations, resorted to
the device. year after year, of borrowing
money on short-time bonds. the bonds, in
effect, which are classed as tax arrearage
bonds. In SO borrowing, two courses were
open. Ii was possible to go to the banks
and borrow from them. or it was pos
sible to go to the Sinking Fund and bor-
row from it. The latter course was
adopted in numerous instances. and h
a mass Of tax arrearage bonds became
substituted in the assets of the Sinking
Funds for cash derived from Martin Act
collections and other sources.
That there was nothing abstractly
wrong in this operation. we are assured
BY Mr.. McDermott himself. we quote
from the Journals interview
ashould. IN your opinion. the money in
the Sinking Funds be loaned to the cor
onIs in one Instance. McDsrmotds
loq1 As a tax levy is never collected
within the year fer which It + IL m i; L ]
from the Sinking Funds. on temporary
loan bonds, in anticipation of the cOllec-
expefience shows VIII be collected. and
even this should not be done # the money
IN the Sinking Funds can be USED Tor
t dsstl purchase ana retirement OF 'an0s0
This appears to eff~ectually dispose of
the morals of the question, and TO reduce
1t TO one of discretion. Mr.. McDermott
comedies that what was lone was right.
il done with sound judgment, the only
remaining question then is whether the
judgment was good or not.
B tits point, Mr.. McDermott explains
his views so clearly. that on every ground
it Is best to quote him verbatim
what IS yeus asa,nit5ioa q the ta ].
man; E, saa,.u .;a,a
moh nes n The Sinking FINDS. Borrowed
It.. and had an easy time. Having Dor
F E0mS ,z e 5nsy b gaSs toe Is sin paid w WBen
taxes in arrears as far back as 1888 are
win aWiiS not those taxes. be coifeeted?'
s56ome will; some will not
shWhy. wilt not all be coilected?s
which these bonds were issued represent
all the never-to-be5collected taxes on per-
sonaf property. all unbelievable taxes
levied on the South owe property. all
the taxes reduced by the courts. or the
State Board of Taxation-ip,s short. all
the taxes that will never be collected"
Here We are brought face to face with
another question of fact. but one which
it is peculiarly hard to settle. That any
ana every city bond has a value is certain,
but what that value is, until the bond OF
its mate IS Pit upon the market for sale
no man can certainly say. 1t remains 4
matter Of personal opinion. In the pres
ent case, Mr.. McDermott insists that the
tax arrearags bonds are worth only .
traction, large or small Of their face
value. Last week. at a meeting Of thu
sinking Fund Commissioners. at which
Mr.. McDermott was present, comptrollel
Hough declared that he could ioat every
bond in the Sinking Fund at par. and II
saying this he had particular reference
i'd these tax arrearage bonds.
So long as the value of these bonds re-
mains an unknown quantity. the good
ness Or badness Of the Judgment showr
ii their acquisition BY the Sinking Funt
i I thing that cannot BE settled. Il the