The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-20
<Payas You Go Plan for City
Is Approved by Bankers
Gradual Reduction to Cash Basis Carefully Worked Out
by Mitchell, McAneny and Prendergast With
Financial Experts.


4 Will have to take care of the Court House
expenses and hundred other things
But this thing We do know: That when
| we cut the Issue of fifteen year bonds
! down one-fourth the first year we will
save the interest on one-fourth OF the sum
we will save IL on one-half the second we
VIII save 1t on three-quarters in the
! third year The interest on the bonds
we do issue will be cut down as they are
| amortized. until finally In the fifteenth
year 1t will be reduced practically "a
| nothing"
Long Considered, Says McAneny.
The plan as adopted has been under
advisement for several years" said Mr.
McAneny. but OF course the situation
created by the war FASTENED its adoption
In small way we have quietly tried !,
out. 1t was the practice OF the city for
years to continue paying for improve
inents long after those improvements had
worn out For instance, the city has now
SS3.oOO,OOo OF nifty years TO pay for paw
ing and we will be- paying for that years
after the paving has worn out
I'm 1911, when / undertook a compre-
hensive repaving OF the city. a resolution
was presented by me whereby the paving
cost, an average OF little more than s4,-
100000 year. was taken UP by the issue
Of ten year bonds. Now the question
arose how TO take care OF similar ex-
pendltures without making them perina-
nent charges to the city. or at least for
fifty years.
Naturally the self-sustainlnE improve
ments are eliminated and we found that.
say. slS.OOO.O00 of improvements are made
annually, which must be paid for without
the hope OF financial return. In our plan
three-fourths OF this amount will be paid
for by the fifteen year bonds the first
n N M m fn
ton. In the meantime the plans for
economies OF various kinds the saving
Of interest charges will all 20 to reduce
the net Increase and the city thereafter
will he relieved OF the burden OF an in
debtedness which was constantly grow
ing"
Me. Prendergnst's Views.
In many cities. particularly our own.
the greatest burden the annual budget
has to bear Is the sum which mus, be
provided each year for what is called the
debt service said Comptroller Prender-
CAST. This represents the interest upon
the city's bonded and floating debt and
the amortization charges through which
the long term Indebtedness Is paid.
There has been too much OF ten
dency to cast upon posterlty the financial
burdens incurred by the present genera
ton The people themselves have been
largely to blame for this because they
have encouraged great OUTLAWS for public
improvements under the fallaclous belief
that they were no; paying for IT, Hence
our investigations led US to believe that
the best thing 10 be done was to prevent
as far as we could any large additions TO
our present bonded Indebtedness
Il have long beer Of he opinion that we
must get down TO the pay as you 20
policy, and at the same time I have
realized that any such plan would defeat
itself II II called for too heavy an annual
burden upon the taxpayer At the time
the plan adopted was under consideration
! worked out "A typical case assumed
that we had 10 make improvements cost
ing in round figures s50,OO0.OOO The
plan suggested itself that we might bor-
row his sum on short time notes or bonds
with tho agreement that an instalmsnt
OF II could be paid annually. say one
tenth, thus running the operation over a
period OF ten years.
How II Figures Ont.
That illustration is given simply 10
show an economy which works out equally
well with the four year plan. For in
stance, an Issue OF $50, 1000 900 of short
time notes at I per cent. to be paid
during the next ten years including prin-
c!pal, instalments and interest would
represent an aggregate outlay of sci OOO :
OOO, but at the end OF that time the in
debtedness would be comnIote,v d,s-
charEed
ION the other hand ~ we wsro ~ ,.su.
as has been the nrsctico sso on0 400 -;
fifty year bonds al AZ nar can, No
would have to nav Interes, unor ,hor, 20
the amount OF t1i2 400 ooo an ,a,' 's stdo
In amortization charges s2o Tsa 7SS a. an
aggregate cost M sIaa sss 7En Th ~
would be a saving nv rho tirs, ,,..,on =,
s73,G63.75O to the civ OF M Wi, 49, VI
"In the arst plan wa wou,d ha,,o 80
add 10 our budget the s,n, n, ,e In ooo
for ten years, undar tho secona 40 900 ogS
for fftv wears There would ha " 800.
charge after ten wears hv tho ers, ,'o,hnS :.
II would con,Inue Tort vaars tonna ".
the SECOND "s'' ~
This annual NO, ,rcr.aso ., q, ,oc -o,
need not alarm INV nerson ~ I,,',,, 80
tho Ins,oIlo,,o, - a ,i 10 ilt.
bureau Tor tho ci,,, ,,a,,i5 is'''S'"s
adert resui, 4, an. a.' ' ono,
nnnual,v ~ '''ooo'oo0
.,,, N""o"' increase