Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1913-02-12
WHY CITY'S DEBT
INTEREST IS LOW
Comptroller Parmly Tells OF
Newark's Practise of Buy
ing Its Own Bonds.
INSURANCE FUND AND
SINKING FUND BUYERS
System Was First Inaugurated
by Mr.. Connolly, Now
City Clerk.


The administration of Newark $
finances BY the eomptroller's depart
ment ever since James F. Connolly
now city clerk. was appointed comp
troiler. has ELECTED the praise OF
bankers and has helped TO command
for Newark low rates of interest on
tie city's bonds Prior to Mr. Con-
nellv's administration the sale OF the
citv's bonds was controlled by local
financial influences and was confined
to certain favored local institutions
There was no competitive bidding py
outsiders. Mr.. Connolly was the nrst
comptroller to place loan at lower
interest rates fixed by competition
with New York bankers and ms
methods have continued to this day
Had High Interest Bonds Refunded.
He also had large amounts of old
. tneh interest bonds refunded, and 1t
WIS under his administration that
CITY bonds were first sold at per
cent. and lower,
Comptroller Parmly has followed
the traditions thus established, as
did his predecessors. Among them
has been the sale of city bonds to the
Sinking Fund Commission for its in
1estment. the interest paid on the
bonds by taxation going to help iqui-
dale the city's debt, instead of being
paid to individual bondholders. On the
same economic principle the Munich
- fec 81 "a
CURED block of city bonds for its
ENLISTMENT, the interest to accumu-
late for city insurance.
Comptroller Parmly, in a statement
which follows, makes reply to some
criticisms by the News on the policy
and methods of his Office. The state
anent is so clearly worded and so easy
to understand, that it will be instruc
tive to the average citizen, as well as
to the News Mr.. Parmly says:
Mr. Parmly's Statement.
The article published in the New
ark Evening News. under date of
February 8, regarding the sale of mu-
nicipal bonds, is misleading. The at
tempt is made to show that the sale
al the bonds by the city to the Sink
method. while the facts are this prac-
tise has been in vogue for some time.
1T is also true that the insurance
Fund Commission now holds 100000
Of these securities at per cent. 1t
has always been the policy of the
financial department of the city of
Newark to dispose of all the bonds
possible to itself, |. e., Sinking Fund
Commission and Insurance Fund
Commission. All bonds purchased
by either of these commissions re-
suit in the saving of all interest to
the people.
sThe question of the rate of inter-
est Is not however, important when
the bonds are turned over to these
commissions for the reason that 1t
all goes to the credit of the city OF
Newark. To illustrate; if the city
issues bonds at per cent. that
amount, ) per cent, must be placed
in the tax levy each year to pay the
interest. If they be issued at an
interest of 4 per cent. then only per
cent. is TO be raised by taxation for
interest purposes. The result, there
fore. YOU will observe, is exactly the
same The reason in favor OF the
lower rate is because il lessons the
burden of taxation without changing
the results. No one can reasonably
advocate a high interest rate unless
il be Of an advantage to someone
Where no better results are produced
the practise should always be in favor
Of the lowest possible rate. The city
Of Newark has not for many years
paid a higher rate of interest on its
long term bonds than 4 per cent,
therefore the attempt to increase the
rate against itself is a mistake.
..Give People What They Desire"
eff any gain whatever would accrue
By this method to the benefit of the
people of the city of Newark then II
would be worthy of consideration.
The correct policy of finaneiering in
behalf of government is to give the
people what they desire at the least
p0ssible cost. thereby relieving the
burden of taxation at every available
point
.Tbe article referred to also at
tempts to make it appear that there
is a lack OF harmony between the
several departments Of our city gov
eminent This attempt IS evidently
made In the spirit of revenge with
OUT any foundation; in fact, simply
for the purpose of trying TO create
discord.
The reference to the sale of short
term bonds is so far from the truth
that it needs no reply. The policy Of
the comptroller's department has
been and always win be to borrow
money in behalf of the people where
81 can be obtained at the lowest pos
siBie rate. IL the writer of the News
article had informed himself. as he
might, about the condition of our
local money market during the last
I'VE months he would have found that
not one of our Newark banks had
any money to loan whatever. The
statement that the comptroller Dor
rnwed money in New York during this
period when our local banks were
willing TO loan it to the city is un-
true. During the last two years the
-