The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-04-01
CRAIG REQUESTS
ADJUSTMENT OF
CITY CHAMBERLAIN
Comptroller Tells Governor
That BerOlZheimer Caused
Collapse of Loan.
GOLD BRICK RETORT
Bankers Have Different
View of Failure of Short
Time Note Offering.
RATE NOT ATTRACTIVE
Group of Financiers Wanted to
Take Entire Issue Above
6 Per Cent.
RATE NOT ATTRACTIVE


Comptroller Charles L. Craig sent an
appeal yesterday TO Gov. Nathan L.
Miller to abolish the office OF City
Chamberlain, declaring that Chamber
lain Philip Berolzheimer was respon-
sible for the collapse OF the city's
financing facilities and the cause Of
the almost complete failure Of the re-
cent Offering of s47,000,00 in short
term revenue bills. Mr.. Berolzheimer
retaliated by declaring that IL the
Comptroller had listened to him or had
let the Chamberlain handle the matter
he would have more than enough
money before sunset. He also called
upon Corporation Counsel John p.
O'Brien for an opinion as 10 what legal
means were available whereby he
might compel the Comptroller to fol-
low his advice.
Comptroller Craig declared that the
city was unable to get the favorable
consideration OF financial institutions
IL otherwise might enjoy. largely be-
Oadot lllG 1IdIlipti IAN Wousu 'Aol ptl
NIT borrowed funds to remain on de-
post in the lending institutions until
needed by the city. but arbitrarily and
frequently without notice to the Comp
troller transferred the funds TO some
other bank favored by the Chamberlain.
The Comptroller announced last night.
however. that during the day he had
been able to relieve the situa ton some
what by selling SIS. 0,00o more of the
<.tf rtf~ oIA v-sfl LIT.
total of $50 900 900 sold OF the $47. 00o. COB
offered on Wednesday. The Comp
troller said that this would give the
city all the money il needs to meet to-
days obligations and would carry the
municipal government through the
week.
Mr.. Berolzheimer admitted that in dis
tributing city deposits he had favored
certain banks which. he argied. had
been generous in taking city notes,
among them Kuhn, Loeb Co.. the
Public National Bank and the Chase
National Bank. He declared. however.
that the slowness with which the Comp
troller had disposed OF notes in the last
few days was unnecessary and done
solely for the purpose OF impressing the
Legislature that elimination OF the
Chamberlain was essential TO the city.s
finding funds upon which to run the
municipal government
In the ,misssSge which Mr.. Craig sent
TO Cow Miller. he asked not only for the
Immediate passage OF the bin aboiishing
the office of Chamberlain. but for the
passage also of a bill introduced by
Senator Bernard Downing advancing the
tax date for the second half OF the year
from November / to July /. He be-
neves that unless this Is done there Is
some doubt that the city will be able
to borrow the $3.50. 00o. 900 necessary for
the huge city budget. In statement
explaining his reasons for urging the
latter bill Mr.. Craig said
with a budget OF nearly $3.50. o00,-
600 the city of New York, unless the
tax paid in the second half Of the year
is advanced TO July /. VIII be compelled
to go into the money market in midsum-
mer and borrow upward Of 500, goo, 900
TO provide for the current expenses OF
the city and county governments, and
for such purpose TO sell it's tax exempt
securities at rate OF interest that APP
proximates 6 per cent. The effect OF
this IS not only TO impose very heavy
interest charges upon the taxpayers but
OF far greater Importance is the absorb
ton of money that would otherwise be
available for mortgage and rebuilding
purposes
mo one can expect to obtain money
Tor mortgage purposes at anything like
the legal rate OF interest IL the CITY Of
New York is compelled to 70 into the
open market and borrow upward OF
S100,o0o.000. issuing therefor It's tax
exempt securities at approximately the
legal rate. Moreover, the city IL a large
borrower on its short term obligations
FOR pNDandffurag rpn,ffrad ,xn~n,.
nent public improvements. such as sub
ways, docks, water supply public
schools. &C. The moneys required to
meet these expenditures are not raised
by tax but by the sale OF long tern,
bonds. but before the bonds are sold the
cash required to pay for construction
work Is raised by the sale OF short term
notes"
Mr.. Craig explained that for many
years taxes have not been collected un-
I'll several months after the expendi-
lures that they were to meet have act
ually been made by the city. In other
words. the current expenses OF city and
county governments begin on the first
day Of January and II is necessary for
the Comptroller to borrow the money
TO pay them, az the expenditures arc
made from month 10 month In advance
OF the collection OF the taxes.
Banker. Take Different view.
Bankers and others tn the financial
district did not agree yesterday with
the reasons ascribed by either Comp
troller Craig or Chamberlain Berolz-
heimer FOR the failure Of the city's Of
fcring Of short term notes. They de-
ciared that tho failure or the public
offering was due to an arbitrary ruling
mat the short term revenue bills must
command no more than 6 per cent
discount basis.
a strong banking group was being
formed early In the week TO make bid
for the entire offering OF So, 0O0. 900 In
such a way that the varying maturities
could be offered TO the public on $40
or sos discount basis. That meant that
the city would be charged discount
81 around 6A per cent The principal
organizer OF this group sounded out
the city authorities indirectly and WHOM
he found tho arbitrary ruling OF s per
cent. discount. the group idea for bid
for the entire issue was abandoned.
The opinion was expressed in banking
circles, however. that in spite OF the
failure OF the offering and despite the
noatin debt of 500 600. 900, the city
will be able 10 scrape along for a few