The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1902-11-25
WILDCAT FINANCE
Allan L. McDermott's Clear Exposl-
ton Of the Sinking Fund Fraud.

/ that grew out of the appointed Com
mission system that burdened Jersey
City from 1871 to 1876. Bonds were
issued with most liberal hand 1t was
the custom of Mr.. Hamilton, then City
Treasurer, to pay ordinary claims with
seven per cent. bonds. If creditor S
bill amounted to $1,019, Mr. Hamilton
would settle by giving the creditor a
thousand dollar bond and $40 in cash.
This method of increasing the city debt
became unsatisfactory slow to Mr..
Hamilton; so he put lot Of bonds in
bag and went to Mexico.
THE SINKING FUNDS.
awakening to the fact that the bonds
would mature some day, the Legislature
created the Sinking Fund of 1879 Its
provisions are as follows
'And be it enacted, That all
moneys to be received from licenses
and fines, granted and imposed un-
der the provisions of the act to
which this is supplement, and all
moneys to be received from the re-
demphon of lands within the pres
ent limits of Jersey City, which have
been sold for taxes levied prior to
the year 1871 ,<and all moneys to be
received from the payment of all
s,1+n o,,I /.
before that year shall be appropriate
ed to the sinking fund of Jersey
City; that said sinking fund shall be
used exclusively to satisfy bonds of
Jersey City,"
SIT will be seen that the sources of
revenue for this fund are limited, and
do not include the money received from
liquor licenses, which are not granted
under the provisions of the act to which
this is supplement- but are granted I'M
der general State law. But this does
not bother our city administration, and /
understand that, by some hook or crook
not sanctioned by any discoverable law,
there has been covered into this fund a
very large amount of the fees received
from liquor dealers during the present
license year. This will be very con
venient place to have it, for it can be
used to pay the ordinary and extraordin-
ary running expenses of the city govern
ment.
ROBBING IN A CIRCLE.
''The modus operandi, as illustrated by
the resolutions recently approved by the
Mayor will be as follows
''The tax levy is found to have not
provided for cleaning streets or repairing
buildings. Temporary loan bonds age is
sued and, through these bonds, money is
drawn from the Sinking Fund. Before
they loaned the money, the Sinking
Fund Commissioners had in their hands
money to be used exclusively to satisfy
bonds of Jersey City, This money they
used to make temporary loans, receiv.
ing obligations to be paid by the next
tax levy 1t being found that to insert
the amounts in the tax levy would cal
attention to the way the city is managed
at the Union League Clubhouse, the
Sinking Fund Commissioners resolved to
cancel the bonds. Why all this circum,
locution? Why bother with temporary
loan bonds? Why not draw warrants fol-
ordinary expenses directly against the
sinking funds? Is the borrowing of money
from a sinking fund to pay for cleaning
streets and ordinary repairs to public
buildings, and then directing the Sinking
Fund Commissioners to cancel the notes
given for the loans, using the fund 'ex
clusiyely to satisfy bonds of Jersey City +?
IL this can be done with the cash in the
fund Of 1873, it can, with equal legality
pe uOuS Will ever III every OlUeT
fund. Why make any tax levy next
year? 10 put it by contrast, what would
we say if informed that the Common
Council of Newark was conducting the
ordinary affairs of the town by borrow
ing money from its sinking funds and
then destroying the obligations given tc
repay the money so borrowed?
A FOUL LIE.
'It is sought to cover this thoroughly
illegal action by stating that a similar
course was pursued when / was a
member of the Board of Finance and
/ Taxation in 1884. Nothing con be fur.
ther from the truth If anytime of this
sort had been attempted in 1884, Jersey