New-York tribune., 1909-10-21
CITY FINANCE
Continued from first page.

! ment. For time the city was virtually
compelled to suspend payment of its cur
rent obligations. Still. the Charober-
lain's records show that there ought to
have been in the city treasury during
this very time, available for the pur-
poses for which 1t was so urgently
needed. S33.319.452.
The fact that the city was unable
during the first nine months of 1907 to
dispose of all the corporate stock and
assessment bonds offered for sale TO the
public was given at the time as the
reason for the lack of money in the
city treasury. Emergency legislation
was secured at Albany making i'm
pOrtant changes in the charter pro-
visions with respect to the sale of cor
pOrate stock and assessment bonds upon
the plea that these changes were abso-
lutely necessary TO enable the admins
tration to sell such securities and thus
procure enough money to make it posi-
Bile for the city to meet it's current
obligations during the panic.
CONTRACTORS PAID IN BONDS.
The Controller was empowered by
the first of these amendments TO sell.
for not less than par value, at private
sale any corporate stock or assessment
bonds that had previously been adver-
tised and offered for sale to the public.
About the only use made of this legis-
lative concession was that contractors
to whom the city owed money were
practically compelled to ac6ept unsold
bonds previously offered for sale to the
public in lieu of cash for their claims.
Ihe immediate result was that these
ponds were peddled in Wall street for
months and were sold in many cases
at from ten to fifteen points below par
value. 1t is scarcely necessary to ex-
plain the effect the resort to this expedi-
ent had upon the value of the same kind
OF bonds previously purchased at a
premium and held in tens of millions by
savings banks and other financial insti-
tutiOns. II recourse TO this sort Of thing
had been absolutely necessary at the
time, ii would have been a most unfor-
tunate but unavoidable impairment of
the city's credit. The second emergency
amendment to the charter removed the
provision limiting the interest rate that
could be paid by the city upon corpo-
rate stock and assessment bonds to
per cent per annum.
The figures quoted from the Chamber
l2in's cash accounts do not demonstrate
that all of this emergency legislation
was absolutely necessary There were
offered, for sale during the first nine
months OF the year to the public s74.-
OooOO of corporate stock and assess
ment bonds. 1t is true that S3S. 329. 900
of these bonds remained unsold. but
from those that were sold S35. .671 600
were realized, in addition to over So
100000 more that was obtained from
sales TO the sinking funds. If the Con-
troller had not used So, 1I2 of the
proceeds from the sale of these long
term bonds during the first nine months
OF the year to redeem revenue bonds in
advance of the receipts from taxes out
of which they were legally redeemable.
the city would not have been SjOOOO
VoO short of the amount required 10
meet claims payable out of the money
received from the sale of corporate
stock and assessment bonds. II the
city treasury had begun the year with a
solvent cash balance 1t is evident that
there would have been little, IL any lack
OF funds to meet these claims.
During the last three onths ~ the
year $40OOO.OOO was obtained from the
sale OF corporate stock and assessment
bonds TO the public. This made the total
receipts from the sale of these bonds To
the public during the twelve months s75-
oI,tO This amount was increased bv
further sale of 81, 4,429 195 to the sinking
funds.
A MARVELLOUS PERFORMANCE
The financing of budget accounts for
the last three months OF the year was
a marvellous perform~~~o as gathered
from the official records After landing
the city in a prodigious hole financially
by paying out every available dollar to
redeem revenue bonds in advance of the
receipt of taxes out of which thew were
legally redeemable, the Controller evil
IDENTIFY discovered that the tax collec-
tions were not going TO bring in enough
money to carry on business for the re-
mainder OF the year and allow for the
refunding of the money taken during the
preceding nine months from the receipts
of permanent improvement accounts
During the month of October, after the
bulk of the taxes had been received. he
entered into an agreement With a num-
her of prominent Wall Street bankers
for a loan of $30.O0o.OOO upon revenue
bonds bearing interest at the rate of 6
per cent per annum. with an option of
$20.O00,OO0 more of the he kind of
bonds. This option was later increased
TO S35.OOO.O0O. These bonds were not the
ordinary revenue bonds issued for a year
or less than year. Only S15.OOO,OpO of
them were payable in a years time
while the other $15,O00.OOO were to run
for two and three year terms The full
effect of this brilliant bit of financing
Will be dealt with in subsequent articles
With this S30,OOn000 Id the receipts
from taxes the Controller during last
three months of 1907 began to Iquidate
obligations and do the refunding neces-
sary to get r accounts in shape before
the end of the year. He paid back $19.-
III, 500 Of the $24, $40 172 taken from the
receipts of permanent Improvement ac-
counts during the preceding nine months
This left S6,042.29 of these receipts that
had been diverted and use to redeem