New-York tribune., 1921-02-05
Hyla1a and
Craig Upset
City Finance
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500 per cent this week, brokers we're
asking buyers to take them on $50
per cent basis. While notes are still
in the hands of banks and brokers in
tending to resell them, the Comp
troller's office declines to sell directly
to individual investors, but on other
| occasions the city is ready to do an
over-the counter business directly with
individuals.
According to Deputy Comptroller
Philpin, he will next be receptive to
such bids on February 10. The Finance
Department has the greatest freedom
in arranging this type of financing.
Back to 1914 System
The scrapping of the "pay-as-you-
go" system brings the city back where
it was in 1914. The plan was initiated
by the Board of Estimate early in the
Mitchell administration by former
Comptroller Prendergast. Following a
condition by a committee headed by
Senator Elon R. Brown, of Watertown,
Senator Brown reported to the Legis-
lature that "this resolution sets forth
sound policy" and he recommended
that it be enacted Into law for the
purpose of effecting economy, restrain
ing new ventures and enabling the city
to have safe margin Of debt incur
ring capacity, which in the judgment
of the authorities at that time was
placed at about $50,000,000.
This recommendation was adopted,
and the city charter was amended ac-
cordingly by the passage of the pay
as-you-go act. The Hylan administra.
tion was hardly in the saddle before
the Mayor and Comptroller began to
work for doing away with the restric-
ton. The Comptroller admits the "pay-
as-you-go system" is scrapped, and as
serts rightly SO. On the plea that new
school buildings were necessary in
order to abolish the part time classes.
etc, and that they could not other
wise Be provided, Comptroller Craig
worked through an amendment Of
Chapter 65s of the Laws of 1918, which
provided for the suspension of the
pay-as-you-go act so as to permit the
city each year to issue $15,000,000
long-term securities, and the exemp-
tion remains effective until one year
after the President by proclamation
fixes the end of the war.
Such proclamation has not yet
been issued While the change was
made ostensibly for the purpose of
erecting new school buildings, the act
nowhere restricts its application to
that purpose. AS soon as the law was
signed Comptroller Craig announced
that "for all practical purposes this
may be regarded as the repeal of the
pay-as-you-go act"
Then the Hylan people at the extraor-
| dinary session of the Legislature last
September got through law per-
mitting the city to issue obligations
absolutely without limit as to total
amount of school buildings and sites.
This bill was passed on Hylan's urgent
plea that in no other way could the
poor children of the city be taken care
of, but does not carry the Endorsement
of the Comptroller, who characterized
Hylan's efforts as "high finance"
Again Mayor Hylan anad others
vent to the Legislature last year
and obtained an exemption from
the pay-as-you-go plan of bonds in
the sum of $6,000,G00 for the
erection of aa municipal building in
Brooklyn. The argument for this was
that the city would save thousands of
dollars in rentals now going to
private interests.
A computation shows that the carry
ing charge to the city on the pro-
posed new Office building will be
100000 year in excess Of the rem
tails proposed to be saved, even if the
rentals were doubled.