Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-06-14
BOND CANCELI|vC
BLOW TO MAYOR
Smith Concern Stands to
Lose by Annulment of
City Contracts
SURETY FOR BIG JOBS
Executive, in Official Capacity,
Approves "War Measure
That Hits Private Revenue

Mayor Smith. in his dual capacity o.
chief executive and principal stockholdei
of the bonding concern doing two-third,
Of the city work. stands to lose Iarg,
private revenue by reason OF the admin
| istrations determination to annul al
large existing contracts.
The Mayor. under the bill that viii
| come up before the Finance Committed
| next Tuesday. is placed in the position
Of settling with contractors who on TAX.
Ing over city work had as their surety
for its faithful performance the National
Surety Company of which the Thomas
3. Smith Company Is local agent In
the case of two contracts totalinR $7,-
100000 the bonding concerns were un-
able to take over the surety. but in others
the Mayors concern will be let out of
responsibility and at the same time let
out of premiums.
During the first two years of his Ad-
ministration Mayor Smiths company
was eagerly sought by municipal con-
tractors and its city business was greatly
increased. Because Of the size of the
contracts entered into during that period
premiums ran into figures previously un.
heard of. Under the new plan there will
De no more monster municipal undertake
ings TO bond and present contracts will
De annulled. The one big future piece
or business in sight Ia the bonding of
the company that ultimately receives the
contract fo- the construction of the
Frankford Elevated
Mayor Approves Annulment
The annulment Of contracts has
Mayor Smiths approval as war
measure" The bill awaiting action
places the authority to annul in the
hands of the Mayor. city solicitor, and
the head of the department in which
the contract lies. The plan provides
Tor fair treatment for all contractors.
and settlements will be agreed upon
after the amount of work done. mate.
rials ordered and possible losses are es-
timated by the contractor and the three
officials
The officials are authorized Ito adjust
all claims for damages by reason of the
annulment and return of contracts" The
measure is one of the broadest and most
sweeping ever introduced in Councils and
gives the administration the power to
make financial settlements with city con.
tractors on the basis of their possible
losses.
Present plans call for the passage of
the bill by both branches Of Councils
next Thursday. In order that there may
be no question of a majority every or.
ganization member of Councils will be
ordered to be in his seat in time to grant
the necessary power to Mayor Smith and
his directors.
Big Contracts Affected
At the present time the Department
OF Public Works has outstanding con-
tracts for the construction of bridges,
sewers. highway improvements. a sewage
disposal plant and many other kinds of
city work. Contractors are eager to
get out from under contracts which they
cannot live up to by reason of their
inability to get either materials or labor,
and all but the most necessary of the
existing contracts will be cast into the
discard for financial consideration.
The Department Of Health and Char
tiles has number of permanent i'm
provement contracts which the holders,
1t is said. are anxious to abandon on a
satisfactory settlement with the city.
Other departments are in the same boat,
as It is getting more difficult for the
city to obtain priority orders from the
Government for materials that are need
ed for war purposes
Naturally the largest contracts to be
abandoned are those held by the De-
partment of Transit. and originally 1t
was intended only to give the Mayor
power to annul these contracts, which
total approximately $l0,00O,000. At a
recent conference, however. 1t was de-
cided that work be stopped on most
undertakings and the Mayor in
now to be given that power. The meas
ure will be fought by a number OF in
dependent members of Council who be-
lieve its provisions are too far-reachinK.