New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-03-16
SAVING CITY MONEY
NEU FINANCIAL Plan
SHOU'S BIG GAIN.
Controller Secs Benefit of
Millions an dbolitiOn of the
General Pot"

T
ing Of corporate stocks under the blanket
designation Of various municipal pur-
poses and by the abolition of the gen
eral pot" practice Of receiving and dis
bursting tho receipts OF the city treasury.
In the official circular announcing the
terms Of the cits's next bond sale. on
March II. a clear statement is made
Of the general purposes for which the
money received from the sale Of cor
pOrate stock will be used. instead OF
leaving it hidden. as formerly. under the
designation OF various municipal pur-
poses"
The Controller also purposes 90 treat
the money received from the sale Of these
bonds as trust funds, which will be kept
on deposit in tho hanks to the credit Of
the permanent Improvement accounts for
the purposes for which the bonds are 10
be sold. This means the abolition of the
general pot" under the operation Of
which i'm the past the Controllers fnan-
cial statement shows over S14.OG0.O10 of
corporate stock proceeds diverted and
used e. pay the cost of city government
in violation OF the provisions Of the city
charter
owing 20 the custom Of misusing this
money i'm past years contractors and
others having claims against tho city for
work done upon permanent improve
ments were unable to get the money due
them promptly. and as a result by com
mon consent added per cent 20 their
bid prices 20 recoup them for having TO
wait for months before the city had
money available 20 pay their claims. II
is by prompt payment Of these claims
i'm the future that the Controller expects
10 be able TO effect the saving Of s.. $50. >
OOO.
Origin Of Diseredited Practice.
The custom OF selling corporate stock
for various municipal purposes was
begun by Controller GrOut in 1898 Al
though the city charter does not permit
any such practice. il was resOrted 10 on
tho plea that the custom in vogue previ-
Cusly Of selling bonds for each perma-
nent improvement account rendered un-
available large amounts OF money. in
asmuch as il was not legally possible 20
transfer unused balances from one ac-
count To- another. The selling OF bonds
under the blanket designation Of ''vari-
Gus municipal purposes" permitted the
Interchange Of these account balances.
The working out Of the practice. how
ever. resulted In the general pot" Gus
tom Of receiving and disbuFsing the re-
ceipts Of the city treasury. Corporate
stock for various municipal purposes
was i'm reality sold for money. After the
bonds We're disposed Of and the money
received the proceeds were transferred
To the various permanent improvement
accounts as required. but inasmuch as
these bonds were not sold for any spe-
cifc purpose there was nothing TO pre-
vent the Controller from temporarily
borrowing the funds for the purpose of
meeting the cost of city government
This is exactly what was done. Cor
porate stock proceeds were constantly
borrowed for budget purposes. and the
practice was defended upon the ground
that there was no sense i'm the city going
into the money market and borrowing
money upon revenue bonds for current
needs when il had large amount upon
deposit ia the hanks % the credit Of
permanent Improvement accounts. Grad
ually the leeway which the operation
OF this system permitted grew 10 be a
disgraccful license. Not only were un-
used corporate stock proceeds applied
L. current needs but the money was
not returned 10 the accounts from which
il had been taken.
Used Money lndiseriminateIy.
Finally tie line OF demarcation be-
tween money raised for current needs
and money raised for permanent im-
Irovements was lost, and the entire re-
ceipts Of the city treasury were used
for whatever purpose the Controller de-
sired 20 use them without regard 20 the
purposes for which the money was re-
ceived This was the genesis Of the
general pot system unde- which the
correct balance OF the citys accounts
Was completely destroyed.
Without returning u the old practice
of selling corporate stock for each one
of the permanent Improvement accounts
upon the city's books. the Controller by
llS llEM lfldA IT NdANu AllE Ndg 10 a
happy medium which VIII conserve in
tact all money raised for permanent i'm
movements. and at the same time OBJ
Niate the holding Of large Unused bal
ances that could no, under the practice
in vogue during the years following con-
solidation be trans. -rTed legally from
one permanent Improvement account TO
another BY the creation Of nine func-
tional permanent Improvement groups
,f accounts all corporate stock formerly
sold under the blanket designation OF
various municipal purposes" will now
l,e disposed of - specific purposes. The
controller also int nds 10 hold this
money upon deposit in the banks 10 the
credit of these nine groups Of accounts
This means that there will ln future
be no borrowings from permanent i'm
pro, ement account balances 10 supply
current budget needs. bu, that all money
raised for permanent Improvement work
M, the sal, of corporate stock viii be
.Ksilsble a. all times .oT the payment
al claims duly registered against those
..c.,,. MS. This means tie complete
abolition of the general pot"
How the Plan Will Work Out.
rrle Finance Department officials es-
,inate that after the next bond sale. for
/, ,eriod OF say three months. there will