Evening star., 1935-01-01
CITIES FINANCES
IN BETTER SHAPE
New Methods Of Raising
Revenues Give Cheer to
1885 Outlook.
BY JOHN A. CRONE.

special DlSpaLcA 10 Inc oLaI'
NEW YORK, January 1.-while
flags fly and bands play. thousands
Of newly elected municipal and State
officials were sworn into Office today.
They face, most of them, books much
more generally written in black ink
than did their predecessors a year or
two ago.
The business side Of many of the
l82,659 governmental units in the 48
States is in better shape today than
year ago, thanks to strict economies.
rising tax collections, new sources of
taxes, better tax collection methods,
and many mergers Of overlapping
units.
Taxpayers, however, will not relax
their watchfulness over public treas
uries, for the very improved condition
Of these may make some new officials
eager to start on a spending spree.
From all parts of the country comes
word of the necessity Of caring for the
unemployed, accompanied by the sug-
gestion that taxes, because of relief.
should be increased. Nevertheless
many governmental units that have
power to levy taxes or incur debts
have reduced tax rates or piled up a
surplus which will be used to pay for
relief.
The cost OF food. clothing and shell
ter in 1885 will depend in no small
degree on the taxes these businesses
have to pay. The consumer, whether
he believes it or not, is the real tax
payer, even though he may not own
property or pay an income tax.
Trend Toward Cash Basis.
One of the most significant develop.
ments on the business side of munich
pal government in 1884 was the trend
toward cash basis This is an oper-
ating method whereby revenue is ac-
tually collected before it is spent. One
of the first large cities to adopt such
business Ike policy was Newark. N.
j. In New York State, Yonkers led
the list. Cities that go on a cash
basis refrain from borrowing money
for current operations.
Another significant trend is that Of
hiring independent auditors to exam
inc a municipalities books. With
l27,l08 distinct school districts, 3,053
counties, 1886 incorporated commun-
tiles. 20,262 towns and townships and
more than 5000 miscellaneous types
Of local government there has been
no united movement to introduce uni
form accounting practices or uniform
tax collecting methods. And yet it is
conceded that taxpayers, who share
the benefits of good government and
pay the penalties of poor government,
should be completely informed about
their financial affairs as the stock
holders in corporation.
Independent audits and periodic
examinations of all financial trans
actions are now beings sponsored by
progressive municipal and State OFF,
cials. who see in them not only a
check on carelessness and wrong do
ing but positive aid in setting up the
most efficient methods of modern ac-
counting.
Many Refunding Programs.
A special committee of the Invest
ment Bankers Association has made
a long study of counterfeiting and
forgery of municipal bonds. 1t said:
Recently there have been declared
operative number of very compre-
hensive refunding programs involving
large amounts of bonds, and there will
undoubtedly be more to follow. This
is going to result in the near future
in the preparation of a great quantity
Of municipal refunding bonds. In
view of the opportunities which will
be present for fraudulent duplication
as result of careless handling or of
eventual counterfeiting of poorly pre-
pared instruments, it is hoped and
urged that bondholders' committees or
any others having jurisdiction over the
preparation of these bonds will make
thorough study Of the various factors
covered in this report"