New-York tribune., 1909-10-30
CITY FINANCE
Continued from arst page.

ItGElHlS RlGQ6Su AiiNA~A '*N 'fH-O
laws for debt redemption purposes Con-
troller Grout was able to make corre-
spending reduction in the amonnt~of tho
tax bills for the year.
EFFECT OF CIRCUITS EXPEDlENTS.
But in jacixing up the assessed valu-
ations by S1.575,351, 200 in a single year
the Controller also secured an additional
borrowing margin upon corporate stock
bonds Of 10 per cent Of the addition to
the assessed valuations, or S157, ,o30,12o.
The immediate result of these two moves
is evident from the records for the fol-
lowing year. The amount authorized in
t,t budget for the cost of city govern
ment rose at once to $106.905.026. The
assessed valuations increased to $500
542 637. and tax rate of 1.51 produced
SS6,06S, ,403 in taxes levied. Surplus
sinking fund revenues also brought in
S9,50Q,000. The lower tax rate, the
smaller tax bills and the new found rev.
enues from the sinking funds immedi-
ately set a. new pace for expenditures in
the cost of city government.
The increase in the borrowing margin
upon corporate stock was also made the
excuse for lavish expenditures Of money
obtained from that source Instead of a
n 7dest S29, ,O00, 900 Of these bonds being
issued and sold, as in 1902, before the
assessed valuations were increased, the
following year saw the issue and sale of
S51522919 of these bonds. Again in
1904, the pace was kept up for S96, ,325,-
142 of corporate stock bonds were dis
posed of. Thus. in two years S147, 7,S4S,-
661 of the new borrowing margin was
practically used up, for every dollar
raised was expended during the years in
which the bonds were sold.
FUTURE GENERATIONS, WILL PAY.
Another expedient was resorted to by
Controller Grout in 1908 which reduced
the amount required TO be provided for
debt redemption purposes during the
years Immediately following, but which
has very greatly increased the interest
charges that will have to be paid upon
corporate stock bonds issued and sold
since the change was made. Before 1905
all corporate stock bonds We're issued for
a term Of forty years. Controller Grout
SNu Al+C tEi III IOI WHICH llitSt JULIUS
were issued to fifty years. Under the
sinking fund system Of providing for the
redemption at maturity of all these
bonds issued, an annual instalment must
be included in each years budget for re-
demption purposes. Another amount has
to be included to pay interest on the
bonds during the year Before the
change made in 1908 in the term of
years for which corporate stock bonds
could be issued. the budget each year
contained instruments which were equal
to one-fortieth of the amount required
to redeem all Of these bonds outstanding.
By increasing the life of the bonds from
forty TO fifty years the amount required
II be included in succeeding years bud
gets was only one-fiftieth of the amount
required to redeem those outstand-
ing at maturity. While this change re-
duced by one-third the amount required
to be included in succeeding budgets for
redemption purposes. it likewise in
creased by ten the number Of years upon
which interest will have to be paid upon
all bonds thereafter issued.
The records demonstrate that the pace
set by Controller Grout in 1903 and 1904
has been steadily kept up ever since.
Expenditures have increased by leaps
and bounds, and the policy of putting the
devil behind has continued. The amount
authorized in the budget for 1908 for the
cost of city government was $140,572,-
266 The assessed valuations increased
to S7,15S, 10000. and tax rate Of 161
4
The surplus revenues of the sinking
funds used to reduce the tax levy
amounted to S14, 100000. Still in both
1907 and 1903 The Tribune has shown
that millions of dollars were taken from
the proceeds Of the sale Of corporate
stock and from special revenues collected
for other purposes and used to defray
the cost of city government.
WHAT TAXPAYERS FACE.
Following the lead of his predecessor
in Office, Controller Metz in 1906 made
change in the life of corporate stock
bonds issued for water supply purposes,
which had the effect OF reducing the
amount to be included in the annual
budgets for redemption purposes by 80
per cent, while it increased by thirty the
number Of years upon which interest
will have to be paid upon all water bonds
subsequently, issued Before 1906 all
these bonds were issued for terms of
twenty years. Under the change made
by Controller Metz all water bonds since
issued are for a fifty-year term.
Still, with all these expedients to keep
down the tax rate and throw over to the
future the task of paying what ought to
be paid in the present, the city is now
face to face with a budget of over S1G3.-
100000 to pay the cost of city govern
ment next year. Of which almost one
third ispfor purposes of redemption and
/ the payment of interest upon the city
/ debt
/ The city's finances are in state of
! hopeless chaos. The most desperate ex-
/ pedients are being employed to keep the
! public in ignorance of the actual facts.
Millions of dollars are being wasted in
unnecessary interest charges for money
raised upon revenue bonds issued in. ex-
I cess OF the limit permitted under char
ter provisions. And all this chaos and
violation of law, all this rerourse 70