New-York tribune., 1910-03-07
THE CONTROLLER,S REEORNS

y NE IOh 4 hOLf[JII - flEf Oh II y.
The public owes to Controller Prem
dergast the first frank statement it has
received in a long time concerning the
cityS financial operations. Hitherto an
nual reports of the Finance Department
have been remarkable for the little they
disclosed Az expert accountant. after
an extensive study, might be able to
reach some conclusions regarding the
way the public money had been spent,
but for the most part those from whom
the city has had to borrow have been in
the dark about its real financial condi-
tion. All they have known was tlat the
city was constant borrower and that
besides its bonded debt it had a floating
debt whose enormous volume bespoke
bad business methods. Whether the
money borrowed went for the purposes
for which it was raised or whether there
was Il legal basis for all the short time
loans they could not learn from the re-
ports put forth by the financial authori-
ties.
AS matter of fact, it appears in Mr..
Prendergasts statement, as it did in The
1ribune's studies of the municipal ac-
counts, that neither has all the city's
money been expended for the purposes
for which it was raised nor has all the
borrowing been proper. The Controller
puts the amount due TO various accounts
that is to say, the money that has been
allocated to one purpose and used for an
other-as of January I. 1910, at S14,449.-
575, and he gives the amount of uucol-
lectible taxes which have been financed
by the issue of revenue bonds or by
loans from other funds at $39. .25S, ST.
This latter figure differs by only a few
hundred thousand from the amount
which The Tribune in IFS articles upon
this subject showed had been thus
financed. In fact. Mr. Prendergasts 5
whole statement is Il striking verification
Of what The Tribune revealed regarding
the city'S finances.
The publication OF this statement can
not fail to be of benefit 10 tne municipal
credit for the investing public will re-
alize that the city at last has financial
officer who is not only pledged to re
fern Of present abuses. but vino believes
H. open dealing. and who will not con
ceal the character of New YOrk'S finan-
cial operations. The most important
specific reform which The Controller
promises is the discOntinuance of the
practice of borrowing on revenue bonds
against the city's uncolectible taxes and
the gradual funding or paying off by
amounts raised from the sale of corporate
stock of the $39. 100000 of loans outstand-
Ing against these worthless assets" Rut
the public may be sure that the Con-
troller who has so promptly recognized
the faults of previous mana cement in his
department, will not stop with this
measure of reform. He is already con
sidering method by which the dumping
OF all the city's revenues into a single
fund, out of which claims are paid with
out much regard for the purpose for
which the money was raised NAV be
ended and the selling of corporate stock
under the blanket deSigna ton for VA
rious municipal purposes may also be
stopped. The tangle into which the citys
affairs have been brought has resulted as
much from these two practices as from
That OF issuing revenue bonds against
uncoilectible taxes.
Another practice. that of issuing rev
enue bonds in excess of the actual bud
getary needs, has. as The Tribune has
hitherto shown. contributed largely tG
swell the enormous floating debt, and
this is practice which will be certain
Ia tiEd no favor with n Controller like
Mr.. PrendergaSt, who Will not iuggle the
C;tyS borrowings to hide It's real situa-
ton The cost OF this floating debt
which preceding Controllers nave rolled
NJ has jumped from an annual interest
payment on revenue bonds of $759.:}79 in
1899 10 more than S6OOO,OO0 i'm 1909.
And before sound conditions are restored
big increase in the tax rate will fur
ther remind the public of the cost of
Borrowing from Peter to pay Paul.