New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-03-29
80 Millions Daily
City Balance Urged
By Berolzheimer
Double Amount of Present
Average Is Needed to
Meet Obligations, Clam
berlain Tells Comptroller

Philip Berolzheimer, City Chamber
lain, in letter to Comptroller Charles
L. Craig regarding the city's bank &C
count. made public yesterday, says it
is necessary under present conditions
that the city maintain an average daily
cash balance of not less than $30,000,
600, twice the amount of the present
average. The letter reads:
II believe it to be my duty to ask
you to give serious consideration to
the present status of the citys bank
account. In my opinion, based upon
long and, may truthfully say, a sue
cessful business experience, the city is
not at the present time handling its
bank account in manner that is con-
ducive to the proper sort Of feeling be-
tween the city as a constant borrower
a2d its bankers
Y'The city, because Of it's needs and
hxanclal structure, must always be
grower, either on short term obliga-
tPns or through the sale of long time
binds. This is a condition which we
II nnot change and which we. as the
cfty's financial officers, must face in
were the financial officers of a great
Industrial corporation. Banking credits
are based primarily upon bank bal
ances and this applies even to munich
pal corporation. The annual turnover
of the city is in the neghborhood of
$600,O00,000, and last year the city
borrowed. in one way or another, S377,-
100000.
"Under these circumstances the city
should maintain in its several active
and reserve repositories an average
daily cash balance Of not less than
S3O,OOO,00O. A private business cor
poration would be expected to carry
lHuch moraS possibly twice as much as
this. The city's balance lately has been
running around S15,000,000, a sum en-
tirely out of proportion to the city's
borrowing demands, while at the pres
ent time the city treasury cash balance
caslons recently it was overdrawn
nearly S1,000,000.
Ihls takes no account. of course, of
sinking fund amounts which may not
lawfully be used for city treasury pur-
poses, nor of outstanding warrants
which although not presented for pay
ment cannot by any stretch of imag-
nation be counted on as q cash re-
serve. Neither does this take into con-
slderation the special accounts for the
payment Of coupon, registered interest.
etc.
therefore, I very respectfully but
most earnestly urge that you at once
proceed to sell sufficient amount of
short term obligations in anticipation
of taxes that will enable the ritv to
pay its just debts promptly and to
maintain an average daily cash balance
IN its several repositories of not less
than S2O,000,000 for the city treasury
account alone
1T is true that the city, like every
one else, must now pay higher rate
OF interest than it has in the past. but
for. the present at least see no indica-
tons OF lessening of the general de-
mand for money all over the country
and all over the world. In my opinion
interest rates on. our short term obli-
cations arc not likely to go much
under what you are now paying. 5.95
per cent, for some time to come.
The citys financial condition is not
healthy one, and its financial struc-
ture is decidedly imperfect, but these
are legacies that have come down to
US from the past and we must do the
best we can with them as we find them
We cannot help the citys credit bv
defying the law of supply and demand
and we have no right to expect the
banking community to help us il we
will not conform to the conditions
which they themselves must respect
and accept"