New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1909-10-25
4 COSTLY FLOATING nERr.

The table published in The Tribune
on Saturday lin the series OF articles
entitled Hidden Chapters in City FL
nance') containing New York's issues
Of revenue bonds from 1899 to 1903,
compared with the amount Of the tax
levies from year to year, together with
the interest paid by the city in each of
those years on these revenue bond is
sues, is an impressive illustration of the
cost of the kind of financing of which
New York has been victim.
Essentially the revenue bond is
short term note TO raise money to meet
the city's expenses for the first nine
months of the year and to be paid off
when the taxes come due, in the fall
Through the failure OF the authorities
TO collect all the taxes, and through
their neglect to deal cOurag eously with
the situation resulting from uncollect-
ible taxes, the revenue bond has become
the means Of carrying part of an enor-
nous floating debt. The table to which
we referred shows the change that has
come about in a decade In 1899 the
tax LEVIN anticipation of the cOllec-
ton OF which revenue bonds are issued
was $S6,0OO,OOO in round numbers.
and the issue of revenue bonds amount
ed TO S4S,OO0,000. In 1900 the situation
was virtually unchanged, the levy being
SS3,OOO,000 and the issue of revenue
bonds S16000,000 Not until 1903 did
the issue of these short term notes ex-
coed the tax levy for the year when
with levy Of gro 900 anO 81 ,,o.-a..,.
bond issue became S11S,OOO,OO0. The fol-
lowing year. with a tax levy of SS6. OOO.-
600, the same as in 1899. the revenue
bond issue was $144OOOOOO. or three
times as great as that of 1899. The ex-
cess of revenue bonds over tax levies
has continued ever since In 1907 the
tax levy was S1O2,OOO,OOO and the rev
enue bond issue S124,OOO,OGO. and in 1908
the levy was S117,OOOO0O and the bond
issue S12S,OOO,OOO
The reason for this increase in rev
enue bond issues is that an enormous
volume Of uncOllected and uncollectible
taxes has been permitted to stand upon
the city's books. The tax money not
coming in TO meet the citys notes when
they fell due, the notes have been re-
neWed from time TO time, until they CON
stitute an enormous floating debt So
great has this debt become that there
were outstanding at the end of 1907
$53,O00,O00 of revenue bonds-that is TO
say, there remained still unpaid at the
end of that year an amount 100000
in excess of the total issue of revenue
bonds in 1899 and 100000 in excess
of the total issue in 1900
This floating debt might in part. at
least, have been cleared up if the Con-
troller had awaited himself of the au-
thority which he sought and obtained Of
funding a portion of it, Not less than
$36,O0O,0OO of the unpaid taxes had been
declared uncollectible, and law had
been passed permitting the issue of 500.
100000 of corporate stock to wipe out
the obligations which those uncollectibIe
taxes should have met But the Con.
troller issued only 100000 for that
purpose. The Tribune's articles have
already shown some Of the various de-
vices TO which the Finance Department
has resorted in order TO carry this enor-.
nous floating debt. Special and trust
funds and corporate stock accounts have
been borrowed from-that is TO say.
money that should have gone to perma.
nent improvements has been diverted 10
carry the floating debt Money has been
and is borrowed on revenue bonds