New-York tribune., 1909-10-29
CITY FINANCE
Continued from first page.
city treasury available for that pur-
CHAOS NOT DUE TO PANIC.

CnamDerlaln'S official records that the
financial panic of 1907 would not have
brought about this disgraceful condition
of chaos but for the general pot"
method of diverting money from pur-
poses for which it was received under
specific provisions of the city charter.
1t has likewise shown that similar con-
dition exists at the present time, for, al
though there ought to have been in the
city treasury on September Is last more
than $30OO0O00 to pay claims against
permanent improvement accounts, it is
well known to hundreds of contractors
who do work for the city that ever since
last June the Controller has refused to
register for payment approximately $2O,-
| 100000 Of claims against these accounts
on the plea that there is no money
| available.
In defence of this general pot" prac-
tice it has been urged that the city is
saving a great deal of money by being
able to utilize all its revenues for pur-
poses for which they are Immediately re-
quired instead of being compelled to
borrow money for current needs. while If
receipts were allowed to remain in the
accounts to which they belong millions
of dollars would be tied up all the time.
Properly used the general pot" method
might advantage the city in this respect,
but the official records make it plain
that the abuse of this method has be-
come a disgraceful license, and that in
stead of saving the taxpayers in inter
est 1t is costing them millions of dollars
in principal interest and, what is most
important of all, the city's credit as well.
So strongly did the evidence of abuse
of this practice impress some members
Of the Cassidy committee. which COM
pleted an investigation Of the city's
finances a few months ago, that one of
the members in his minority report to
the Legislature recommended that it be
made a criminal offence for any official
to knowingly appropriate for temporary
purposes any funds allotted out of the
proceeds of the sale of corporate stock.
But the general pot practice is ex-
pressly forbidden by the specific pro-
visions of the city charter-that much
violated legal instrument which is sup
posed to be the guide in the administra-
ton of the City's finances. 1t says that
the Chamberlain shall keep books show
ing the receipt of moneys from all
sources. and designating the sources Of
the same, and also showing the amounts
paid from time to time on account of
the several appropriations, and NO
WARRANTS SHALL BE PAID on ac-
count of ANY appropriation AFTER
THE AMOUNT AUTHORIZED TO BE
RAISED SHALL HAVE BEEN EN-
PENDED"
AN OFFICIAL PROTEST.
In their annual reports for both 1907
and 1908 the Commissioners of Accounts
register gentle protest against the
general pot practice of receiving and
disbursing the receipts of the city treas
ury Nowhere in the charter" says
the last report of the commissioners.
published in the City Record of March
13 last, lis it provided that an examina-
tion and report be made, either by the
Commissioners of Accounts or any other
agency, which would comprehend the
citys income and expense accounts. If
the city's accounts We're upon an income
basis, and all the assets and liabilities
were set up on the books, it would be
feasible to prepare at stated periods a
proper balance sheet and an income and
expense account that would exhibit the
citys true financial condition, with the
surplus or deficit in the current balance
sheet as compared with that appearing
in the one previous. The Importance of
such statements as a source of informa-
tion regarding the City's affairs cannot
be oVerestimated The improved aC-
counting methods by which such state
ments would be arrived at would greatly
aid in far more efficient audit of the
city's business than is at present pos
sible under the system of bookkeeping
which obtains, at the same time render
ing it practicable for the proper officials
to satisfy themselves that the city is re-
ceiving all the income it should receive
something which al present cannot be
accomplished without great labor"
In spite of all the difficulties in the
way, even beyond the conception Of the
Commissioners of Accounts, The Tribune
has been able to read some of the truth
into the officially published records of
the administration of the city's finances
during the last three years
CORPORATE STOCK ABUSE.