New-York tribune., 1909-10-31
1RfrSES WHICH HAVE
REEN REVE4LED.
Uast Orerissue of ReUenue
Bonds-Reorgani2ation
Imperdtire.

sought to give the public a concep''o
,l,e manner in which the city
,.,,.a ,,een administered during '"e -
.,,,oo raa-s and an idea OF ho"
- ,.ean administered uiioei
--;~.,,r of the city charter FROM
'iie "a os the officially puphsheo
-. r-rib,Ine has been apie u
demonstrate; .ta ,owers
- mon the Controller to raise
n, The issue and sale or revenue '-
r. amount actually required 10 meet
,,,enditures under budget appr0pi
,tnns each year for the cost Oh cils
--,,,.-,,,,ert has produced q condltion oi
.ipannial chaos that is costing the cay
millions Of dollars a year in lnteres' anu
- charpes and at the same time Is
-,u:,.,,,e, at the foundations OF the CITY
credit. ,o,,,- IL
T7,at the unauthorized and whohy n
-, oractice of dumping the snlio
,-e,-an,es of the city treasury
OYER $500 100000 year, INTO E"
..-a-,o,-ol moi regardless Of the spec-lc
-,.,r,,ose fer which the money IL
.a;,ad has constituted the Cohliolioi
. ve-itable financial Car
,Ya. the equally unauthorized ana
.,.sa1,,taI.. illegal practice of selling the
-i,,-,s -s,-vear corporate stock wlthoSt
specifying before sale the purposes loi
,.bicr the proceeds are TO be used gives
the controller autocratic powers 10 ulS-
nose. under the operation of the genera
NOT, practice. of every dollar raised py
,ba sale of these securities each year IN
snv manner he may see mt
\ FINANCIAL CZAR.
T,,a, in The exercise of these two IL
legal practices the Controller ass
-,o,vers never contemplated by the char-
fer and that the widest opportunities
for the grossest kind OF INJUSTICE ara
graft are the result Of this hagrant Vlo-
latjou of the specific provisions OF lhe
city charter
that because those IN charge OF the
administration of the citys hnahces re-
fuse 10 tell the public the actual 'ruth
sho,,t the extent 10 which the citys an
nuai revenues from taxes and the gen
ersl fund are insufficient to meet the an
nual expenditures for the cost OF city
government, the urgent and absolute
necessity for an increased tax rate or a
largely reduced budget each year is not
realized by the public.
That in order TO find money to eXpend
in excess Of legally available revenues
for the payment of running expenses
millions of dollars a year are diverted
from the proceeds of the sale Of cor
,orate stock and used for that purpose,
and that the receipts of special and trust
accounts are regularly taken and used
for the same purpose. in absolute VIOLA
ton OF charter provisions
That there has been for more than six
years 2 persistent shifting of financial
responsibilities from present TO future
years by means of lengthening the life
OF corporate stock bonds. and thereby
reducing present redemption charges at
the price Of enormously increasing in
terest charges on these bonds in future
years.
DECEPTIVE TAX BILLS.
That with legislative consent SGS, ,7:to,-
eso of sinking fund revenues pledged to
debt redemption nave in six years been
turned into the general fund nominally
10 reduce taxation, but actually TO mis-
lead the public into the belief that the
consequent lower tax bills meant econ
@eay in administration, while as d mat
l'f OF fact this acquisition OF new reve-
nue. merely afforded the means for
uIiiler extrayagant expenditures.
iat II this SOS 100, 900 of pledged rev
enues Of the sinking funds had been
aiio'a'eu iof d purpose similar to that
1or "Ilch they We're originally pledged
under the old sinking fund laws. and the
money invested in corporate stool. hopde
the present cost Of debt service ,,,o,,Id
not be, as IT is now. practicable ope-,,,ir,7
Of the total expenditures autboriz.a =,
the budget for next year.
That in jacking up ASSESSED valuation.
of property in 1898 5y one-haIf and
consequently reducing the tax rate ia -
same extent. the then Controller obtained
an additional borrowing margin upon
corporate stock Of over $50, 900. ana
that this margin was completely wiped
out in two years time by reckless issues
Of these securities, and rhe proceeds ex-
pended during the years in which the
bonds were sold.
ms process OF putting off the day of
hiaA reckoning is only storing up more
trouble for future years, and If
continued during The coming adminIstra-
non 10 lhe extent il has heen nractise3
in the Last six years win resui, in rho
absolute necessity for an annual tax .s,c
that will make New York IT, -.
pensiVe city in the country in -.
live. ~
ILLEGAL BOND ISSUES.
T1at the Illegal overlssue of oyer $40
~stoD Of revenue bonds in two wears,
uine VIII have cost the taxpayers before
'he last Of these bonds are redeemed
almost s3.oo0.ct0 in interest, two-thirds
% "Hich amount could have been saved
hau 'ie controller squarely faced the
"Il'eh existed ~ the time this
money was Illegally borrowed instead .,
leaving the difficulty 10 he sol,o,, h.,
succeeding administration tbro,,.,,, -,
ms per cent revenue bonds pear,,.
slo'Ov.vJO Of which are nor d,,a
redeemed until November of ne,, -.
The initial weakness In the -.
hnanciai system is the method rro,,io,.s
hy The charter for financing the COS, 30