New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-09-11
BANKERS RECEDE
ON CITY BONDS
Abandon Condition That
Improvements Be Paid
for When Made.
MITCHEL'S PROTEST
WINS NEW PLAN
Decided at Midnight Confer
ence That Tax Rate VIII
Not Jump.

As Mayor Mitchell and other mem
beers Of the Board Of Estimate were
not willing to agree to the drastic
changes in the method Of financing
permanent improvements suggested by
]. P. Morgan & Co. and Kuhn, Loeb &
Co. as a condition upon which they as
managers Of a syndicate would agree
TO furnish $lO0,0OO,0OO to meet the
city's foreign obligations, less sweep
ing changes will be made.
Following 4 conference held by the
Mayor, Controller Prendergast and
President McAneny of the Board Of
Aldermen with the bankers yesterday
afternoon, there was an executive
meeting of the Board of Estimate.
The members agreed TO a tentative
proposition, which will be presented TO
them for action at a special meeting at
1880 this morning.
The Mayor, the Controller, President
McAneny, Deputy Controller Brough
and City Chamberlain Bruere were
busy until early this morning at the
City Club framing the resolutions.
The provision in the original propo-
sition of the bankers that caused the
opposition was that until after the
year 1917 no obligations of any char
acter Except revenue notes in antici-
patton Of tax collections) should be
issued by the city for any permanent
improvements not now under contract.
This did not apply to self-supporting
improvements, such as subwsys, water
supply and docks. The plan was that
all such work should be paid for each
year out of taxes, instead of as now by
the issuance of ffty-year corporate
stock bonds.
This would have meant placing the
city on an absolute cash basis and a
sharp increase in the tax rate. Active
opposition developed on the party OF
property owners.
The new proposition, which was put
up TO the bankers by the Mayor, the
Controller and President McAneny,
and which was agreed TO by them, IS
a modification by which only part OF
the cost of such Improvements will be
paid out of taxes each year prior 70
1918.
The action Of the Board Of Estimate
is only morally binding on it and can
in no way bind future boards. II may
BE- that this feature Of this case had
something 10 do with the acceptance
by the bankers of the modified propo-
sition.
The resolutions adopting the new
financial policy which will be passed
by the Board of Estimate this morn
ing state, in part:
The COS; Of all permane5: improvement;
other than those Of the revenue producing
class a. above specified water, docks ana
subway. hereafter authorized By this board,
shall be financed a. follows:
tn Those authorized subsequent 70 mo
ear 1915 shall he paid for, three-quaTters
10y the issue II 1ftccu-yesr corporate stock.
The corporate stock 80 ISSUED shall mature
either IN not more than fifteen years. amor
Tied os provided b. law, or In equal annual
,uStalments, during period OF not more
ism fifteen years. The remaining one-quar-
or Of the cost Of such improvements shall
be paid through tine medium OF cue-year
bond pay able from the next annual tax
uudEo'.
THO % authorized in the year 1916 shall be
PAID for. ouc-lalf by toe issue OF corporate
took maturing az Aforesaid. The remaining
ouc-haW OF the cost OF such improy emcnts
shall b." paid through tho medium Of d on0.
year bond. payable from the neat annual
tax budget.
paid FOR one-quarter by the Issue Of corpor-
ate stock as aforesaid. The remaining three
quarters Of the cost OF such improvements
shall he paid through the medium of 4 one
year bond payable from the next annual tax
budget.
The foregoing statements OF policy contem-
plate the financing Of Improvements author
lied during the year 1915 and subsequent
\ ears through the inclusion OF the eutlro
cost thereof I'm the annual budget o., tho city
excepting the revenue producing improve
mcnts a. heretofore defined.
In 80 far as corporate stock notes issued by
the City Of New York as n part OF the pro-
Issues Of corporate stock, tho corporate stock
so Issued shall mature as provided IN clauses
fal and lbl and Cc) Of Paragraph II OF these
resolutions
Tho cost ~ public works already authorized,
y hetlcr under contract or not, but In respect
Of Which ueW bonds are to be issued. Is 10 10
duaured In the same manner As above pro
euue producing improvements. ~ hcre!nbe-
forG specified.
In Wall Street rumOr of a hitch in
the city loan negotiations gained wide
currency as soon as it was known that
there was a meeting in the offices OF
J. P. Morgan g. Co. of the Mayor, the
Controller, the President Of the Board
of Aldermen, II. p. Dawson, of the
Morgan firm; Francis l.. Hine, presi-
dent Of the Clearing House Associs-
ton; Albert II. Wiggin, chairman Of
the Clearing House committee, and
Otto H. Kahn, of Kuhn, Loeb & Co.
To some extent the foreign exchange