New-York tribune., 1909-10-24
".

".
Desperate financial expedients have
been resorted TO in latter years TO OBJ
tain the money necessary to meet current
expen6itures and at the same time pre-
vent the real condition of the city's
finances being made public. Every
method has been employed to conceal the !
TACT that the city has been spending
money in excess Of its legally available
revenues each year.
At the beginning of the panic year,
1897, the results Of this state of affairs
became plainly evident The official
records show that there was a shortage
of s6NS5.-S7 in the amount that should
have come over from the previous year
Is cash balance available FOR expendi-
ture in 1897. At the time when it was
most REQUIRED to meet current obligations
Sl4IST,139 OF the current years receipts
vas diverted and used to redeem reve~
Tue bonds of prior years OF this amount
ss1S5.525 was taken from the receipts
Intended TO pay budget appropriations
II 1907. and s600l .664 was diverted from
the cash belonging to permanent i'm
rrovement accounts. which was derived
principally from the sale of corporate
stock and assessment bonds. In ALL $20.-
2-2 927 that ought to have been avail
able To meet current expenditures was
used 70 pay obligations previously in
CURED.
one Of the results of this large deficit
III and misappiication OF the current
vars receipIs- -Nas a very considerable
eerissue of revenue bonds; for the of
fdally published records Of the Con-
ueller demonstrate that there were out
Standing at The end of that year no less
than SO 1855 Of these bonds in ex-
esss Of the limit permitted under the
terms of the city charter
STARTED WITH-A DEFICIT.
The Controllers report for 1907 indi-
Gates that there was a cash balance of
sl0l95.5S5 on hand in the city treasury
81 the first Of the year. The same re-
port also shows that there were out
Standing against that balance S9,206,056
of warrants issued on account of the
previous years expenditures that had to
b. pad In addition, according TO the |
same authority there ought to have been
n the city treasury at the first of the
year $2.026,330 of the proceeds Of cor
porate stock. sold in 1906, that had not
yet been transferred TO the accounts for
which the bonds were sold; also, S1l0491
q proceeds Of special revenue bonds.-
soid al the same time that had not yet
ben transferred, and $4,938, ,495 Of excise !
tax collections. none Of which amounts
We're legally available for expenditure
Until 1907.
The city started out to do business,
therefore, at the beginning of the panic
year with an actual debit balance
against the city treasury amounting to
seea5,78I instead OF an apparent credit
Balance Of 5l0.lS55S5, stated in the Of
hcial records 70 have been on hand. This
Mas exclusive entirely Of a further liza
bIity q $19.7618G7 on account Of uu-
expended budget appropriations Of 1906
and prior years.
UNABLE TO SELL BONDS
With this sort Of start, the city found
Itself unable 10 dispose of its fifty
Year corporate stock and its ten-year
assessment bonds. out Of $114.0O0 900 /
o. these securities offered TO the public I
Curing the year, S3s, ,:}29. 900 not only re-
NAMED unsold. but were rendered un- /
Aalable. for the time at least, by the /
TACT that they bore interest at the rate
O only / per cent, while bonds subse-
quently issued during the same twelve I
months bore interest at the rate of AZ 4
Per cent per annum
Bearing in mind the extent Of the
cash deficit at the first Of the year. /
me lecord Of these bond sales indicates /
'ne desperate need in which the city !
elood for money during the greater part I
" 1871. The first sale was held Oh Feb /
ioary J. when $27,JO0.OG0 Of corporate 1
STOCK and s.. 10000 Of assessment bonds /
were offered to the public. There were 4
ui-soid Of this Offering S3S9,OO0 of cor
pofate stock and 81 20 900 OF assess
Heht bonds. The second sale was an
Aounced for June y, consisting of ST. /
'N'VJ Of corporate stock and S20O000O /
:! assessment bonds But al this time
1le investing public was not buying city .
securities. and $25,0G7 iGJ of tie corpor- (
ale stoc-. and $l.bll.OJ1 of the assess
1'sAi bonds remained uns0ld. Again, on .
A-e4st y tie Controller essayed an /
~.sf sale This time tic public was .
Scr uie opportunity Of purchasing .
-"'5ti''| of corporate stock and s.,
VVJV of assessment bonds. But again .
attempt Was a dismal failure.
4'lgA FOR the Grst time in New Yorks
municipal history, city securities were
oleied for sale over the counter in small
'o'S' and contractors who needed money F.
@'s 10 them Dy the city we're practically (
vi le.led. !n order 10 set tie amounts
= lheir claims. TO accept bonds ~ par
sia Seu them ~ discount wherever