Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-11-03
THE BANKINc-JoB COMBINE
ALLIANCE MENAcES THE CITY

The TIme Has Como When the Mayor
Must Force Abandonment Of Safety
Deposit Vault Secrecy In the Con-
duct Of the Sinking Fund
BY GEORGE NON MCCAIN
MAYOR MOORE did courageous thing
INl in declaring his intention to break the
political financial grip in which philadelphia
has been held for years by little coterie OF
! New York and Philadelphia bankers.
The combination iu question, the Stotes-
| bury Morgan interests, has succeeded In
forcing its fingers into every financial pie in
! this city, until today there is scarcely
public service, municipal commission fund
| or loan that has escaped its domination.
As q result, the impression bccapo estab-
| Iishcd that unless its personal representative
was permitted. practically, to dominate tho
city's fiscal affairs, the credit Of tho munlci-
| pality IN the money marts OF the country
| would be ruined.
The ebsurdity Of this claim was publicly
and conclustveIy demonstrated on Friday
| last when the entire amount OF o municipal
| loan for S12, ,659, 500 was awarded 10 another
! New York syndicate OF bankers at the high
est figures paid in recent years, and upon
terms so distinctly advantageous that there
has been no precedent for decades.
Modern systems Of municipal finance
recognize the deslrability of a redemption
clause IN long time loans-the advtsabilty OF
inserting a calable provision In the contract
whereby the securities may be redeemed. II
necessary, nt varying intervals before ma
turity.
The ffty-ycnr bond issue Of last July,
upon the advice of tho Stotcsbury Morgan
financial mentors. contained no such pro-
vision.
The city was thereby bound TO burden
for fifty years without opportunity to re-
linquish it or liqudate the indebtedness be-
fore maturity.
In the loan negotiated on Friday last this
clause was inserted on the insistence of
those who sought to protect the interests OF
the city.
It is apparent that Mayor Moores task
has only begun. As Chief Magistrate Of the
city 1t lies within his power to expose the
manner in which this heretofore dominant
financial interest has identified itself. TO its
own great advantage. not only with the
Of Philadelphia.
The Mayor Is the minority member OF the
Board Of Sinking Fund Commissioners, and
his first effort should be directed to tearing
aside the screen that hides its secrets from
the public The power is in his hands.
The people OF Philadelphia have been sig
naIly unfortunate in their majority sclcc
tions for the Sinking Fund Commission in
Controller Hadcy. an official who will come
up for re election next Tuesday. and in
Commissioner Stotcsbury, the choice Of
Council and the prcsumptiye representative
of the taxpayers.
They are the technical members Of the
board; one an accountant, the other a
banker. They have worked together with
singular unanimity. They have been in
reality the Sinking Fund Commission. De-
csions of the board have been based upon
their suggestions as technicians in finance.
It has already been pointed out that the
law requires that an annual election be held
by Council to fill the position as the peoples
representative occupied by L. 7. Stotesbury,
of the banking firm of Drexel & Co., active
partner OF J. p. Morgan & Co., Of New
York, and financial syndicate manager Of
wide experience.
This law has been disregarded in favor Of
Mr.. Stotcsbury for years. He continues to
| serve without the formality Of an annual
election.
Since the adoption Of the new City Charter
the Sinking Fund Commission has stead
| fastly refused TO recognize or obey certain
| Of its provisions.
Paragraph Of Section Of Article X
of the new City Charter declares:
| Whenever there shall be money in tho
! sinking fund in respect OF a particular debt
| in excess Of the requirements for the pay
| ment during the twelve months next en-
| suing of principal maturing and interest
! due, such excess money shall be applied
| 70 tho purchase and cancellation Of such
| debt; but II at any time It shall be I'M
! practicable or financially dsadvanta geous
| to purchaSe such debt, such excess money
| may be invested temporarily in bonds or
| other evidences Of debt Of the United States
| Of America, OF this Commonwealth or OF
any county, city. borough. township, school
| district or other municipality or incor-
| porated district Of this Commonwealth
More than two years have elapsed sine.
the Charter went into effect, but the sacro-
sanct Sinking Fund Commissioners have re-
fused to recognize this mandate.
1t is municipal body acting in defiance
Of law. It's assumption Of self suficiency
is fit subject for inquiry.
The Mayor as minority member OF tho
board forced a reluctant decision from bi.
fellow members, stotesbury and Hadley, to
open its meetings to the public Not that
the public has benefited appreciabIy as a
result, for the proceedings, in the absence
Of definite knowledge OF the condition of its
books, convey no information whatever.
Apologists for the Stotesbury financial in .
terests declare that there have been M GO
crets or possibilities Of scandal, connected
with the manipulation of the Sinking Fund
| millions.
If 30, then why the mystery and evasion.
, the cryptic and unsatisfactory reports from
} Controller Hadley concerning its proccoJ
ings? Why the necessity for secret sessior.