Evening star., 1932-06-03
Portsmouth, Va, Thrives
Under City Managership
To the Editor Of The Star:

10 the Eoltor OF Inc star:
In this hectic era of municipal bank
ruptcy, unpaid city employees, property
being sold for taxes and frenzied
finance by city fathers in a market
glutted with municipal bonds, it Is like
sunshine after a storm to hear Frank
C.. Hanrahan, city manager of Ports
mouth, Va, tell of that city's successful
plan whereby the taxpayers literally
borrow money from themselves to pay
their taxes, while the current expenses
OF Portsmouth are met day by day
without the added burden of tax antici-
patton notes, as in the past.
Every evening there is trial balance
sheet placed on Mr.. Hanrahan's desk.
On the date Of our conversation. May
Is, 1882. they had more than $50 900
on deposit with the local banks Typical
thirty-day periods since the system was
authorized by amending the city charter
early this Spring show as high as $780,
600 in taxes collected that are not due
until November, 1882. The system is
simplicity itself
The city pays the taxpayer at the
rate OF per cent per annum for
every weekly, semi-monthly or monthly
payment made on account of his taxes
in exactly the same manner that banks
pay their Christmas club depositors in
terest on their Christmas savings fund.
The accounts are kept in a duplicate
stub-book and the regulations are much
the same as those employed by the
banks for their Christmas clubs.
The amount of taxes owed the city
is predetermined and no contract Is
entered into for more than the taxes
due. This prevents the city from en-
croaching on the banking field. Need
less to say that people in funds, big
corporations and the banks themselves
pay their taxes as far in advance as the
system permits-one year-and in so
doing receive a fiat per cent rebate
on their taxes.
Under this plan it is conservatively
estimated that the city Of Portsmouth
will save $4,000 in interest on tax
anticipation notes, while about $4,000
will be returned to the taxpayers in
earned interest This is equivalent to
reduction in the tax rate of eight
cents per Sl00. The banks are actually
getting money in circulation that was
being boarded at home and they are
glad to pay the city per cent on
their daily balance. which is consistently
kept at a relatively high level.
Another indication of Portsmouth's
the annual publication OF leaflet en-
titled Facts About the City Govern
ment.' This is a brief compilation of
statisticc and bar graphs showing the
people how the money in their budget
is spent together with an outline of
municipal activities. There are no frills
to this information and it Is readily
understood by every interested citizen
One gets the definite impression in
talking to Mr.. Hanrahan Of the effects
Of lifetime Of unselfish public service
which begets sincere desire to see his
tax collection plan become universal
practice. although it holds little pos
sibility Of bringing him any material
reward. There seems to be no reason
why it cannot be applied to the collec-
ton Of all taxes. Federal State and
local. The Postal Savings Bureau could
be employed in the case of taxes owed
the Federal Government.
There is only one thing that can
defeat the plan and that is the abso-
lutte dea-th of money. In that con-
nection If the Congress will follow the
mandates of The Stars spirited editorial
Of May l6 entitled Fight Fire With
Deeds. No. Words" while high finance
quits bowling about the increased cost
of Cove rnment to meet existing stand
ards. the danger OF money shortage
will be materially abated.
ROBERT F. JONES.