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which are said to be public nuisances. Many of these, acquired by the failure of the owners to pay their taxes, are said to be encumbered with refuse. An abandoned fire station, which is being gradually dismantled by scrap hunters, has been a subject of official complaint by people in the neighborhood.

In 1910 the Commissioners of the Sinking Fund entrusted to a committee, of which President MITCHELL is chairman, an inquiry into what properties belonging to the city were not being used for city purposes and what properties could be disposed of. The committee made a report which would have resulted in the sale of much unnecessary property had the Commissioners of the Sinking Fund not decided that sales at that time would have been inopportune for the city on account of the falling tendency of the realty market.

STOCK AND BOND DIVISION.

It is only within the last few months that the first steps have been taken to remedy the situation on the Stock and Bond division, to which the sub-committee in 1909 directed attention. This division has charge of the issue and redemption of the obligations of the city, and the payment of interest thereon ; it also has the custody of the securities in the sinking funds and keeps the accounts thereof. As a receiving and paying office it is palpable that it should be separated from the jurisdiction of the Comptroller and it is equally plain that these dual functions should not be under the same division head ; but so long as it remains under the jurisdiction of the Comptroller it should be placed under adequate audit control by utilizing the divisions of the Auditor of Receipts and the Auditor of Disbursements. The plan now under consideration contemplates this, but its elaboration and adoption should be expedited. In this connection it is suggested that the Charter appears to require that moneys loaned to the city on corporate stock be paid direct to the Chamberlain. Sales of corporate stock are made under the direction of the Comptroller. The awards are made by him and the money covering these awards is paid to the chief of the Stock and Bond division, by whom it is immediately turned over to the Chamberlain. While this is a technical point, it is conceivable that in certain contingencies the present practice of payment through the Comptroller's bureau might involve serious complications.

The various revenues of the city pledged to the redemption of the city debt and for the payment of interest thereon, together with the annual installments provided through the budget, are regularly paid over to the Commissioners of the Sinking Fund, but there exists no method by which the correctness of the various funds is currently controlled. We are informed that a test, at one time, of one of the funds revealed an excess over requirements. The amortization figures and inter se operations sbould be regularly proved and concurrent with the establishment of the correctness of the General Ledger balances for the General Account, Corporate Stock and Special and Trust Funds, the correctness of the Sinking Fund should be established. The clerk in charge of the books showing such funds and the investment thereof should furnish a monthly trial balance to the general ledger book-keeper.

SINKING FUND.

The question of a general re-organization of the Sinking Funds for the redemption of the city's debt obligations is beyond the scope of this report. Nevertheless it may not be inappropriate to again direct attention to the extreme desirability of devising, after mature consideration, plans for placing the Sinking Fund upon a modern, scientific basis. Any possibility of strain or embarrassment, foreseen twentyfive or thirty years hence, from the practice of investing sinking fund reserves in long-time issues of corporate stock could be avoided by a timely introduction of a sound principle of amortization. Fortunately, the problem is likely to be rendered easier by the new methods of financing, through the issue of corporate stock notes, revenue bills and ten year paving bonds which are constantly repaid and therefore offer particularly desirable short term investments for the city's sinking funds. The Comptroller last April with a view to a thorough consideration of this great question consulted several eminent bankers but the expert recommended as the most competent in the United States was not then available on account of illness. It is the Comptroller's intention to take the subject up this fall and make some suggestions to the Legislature.

It might be well, perhaps, to call attention to the fact that the provisions of the Rapid Transit law, which appear to require a separate sinking fund for the obligations created under it, bave not been carried out. The matter has been considered in the Department of Finance, however, and the Comptroller has announced his intention of maintaining a clerical segregation of this fund.

CORPORATE STOCK ISSUES

Under the Charter all corporate stock of the City of New York is “redeemable at a period of not more than fifty years from date thereof.” It has been the practice to make all issues of corporate stock redeemable in fifty years, irrespective of the purpose for which stock was issued. Even a cursory examination of the nature of the expenditures from the proceeds of sales of corporate stock issues shows that many of the improvements paid therefrom will have to be renewed several times within fifty years. It is evident that there should be a differentiation in the time of maturity of issues used for improvements where the rate of depreciation is rapid. The depreciation would then be provided for in the annual installments paid into the Sinking Fund and over-capitalization prevented. Where the improvements are permanent in their nature, the redemption of the corporate stock issued therefor in fifty years is a wise and business like method of regulating the city's finances and gives opportunity for carrying out the larger improvement schemes as they are needed. The present Comptroller has made a beginning in this matter. He has adopted the policy of raising the amounts borrowed against uncollectable taxes through annual installments in the succeeding budgets and since January 1, 1912, to issue short term bonds, maturing in ten years, to pay for expenditures made in repaving. We believe this policy is a step in the right direction and that the principle of differentiation could properly be extended to all classes of comparative temporary improvements. It is likewise our opinion that in the future corporate stock should never be issued for deficiencies in taxes, but that they, as well as other deficiencies, should be provided for in the current budget, thus establishing the principle of making the city pay its way as it goes.

EFFECTS OF NEW LEGISLATION.

Legislation within the last three years has resulted in great benefit to the city. The new tax lien law assimilating the sale of delinquent tax liens to mortgage foreclosures which was passed at the suggestion of Ex-Comptroller METZ has worked admirably, enabling the city practically to clear up back taxes on realty, without imposing undue hardships upon delinquent property owners. The city's arrearage plant since has been placed in such shape that the city can make tax searches for $1.50.

The law for the semi-annual collection of taxes, which went into effect this spring has resulted in the collection of over $76,000,000 against $104,877,544.25 last November when the entire levy was due. The spring collection included about $15,000,000 paid in anticipation of the second half of this year's levy and about $4,000,000 of personal taxes. The Comptroller's opinion that the introduction of semi-annual collections would tend to reduce arrearages is thus justified. The spring collection will almost cut in half the city's revenue bond borrowing, which estimated on a 4 per cent. basis, would effect an annual saving of about $1,500,000 in interest. The increased cost of collection semi-annually is stated by the Department of Finance to be less than $50,000. The anticipatory payment of the first balf of the semiannual taxes, as in London and some other foreign cities where the half-yearly rates are levied in advance, would be a logical sequel of this law and still further reduce the necessity of revenue bond borrowing in anticipation of the collection of taxes.

FINANCING THE CITY.

Reforms in the methods of financing the city have also resulted in economies. Supplementary to the policy of a single annual sale of corporate stock, which gives bankers and brokers ample opportunity to market the city's securities without the constant fear of the demoralizing effect of new sales as formerly, a law was passed on the recommendation of the Comptroller authorizing the issue of “ Corporate Stock Notes ” in anticipation of sales. This was to prevent the accumulation of big balances with loss of interest. At the same time, this method enables the city to await favorable market conditions for an issue of corporate stock. Through the inauguration of the definite policy of funding the amounts borrowed against uncollectable taxes through annual installments to be raised by taxation the amount of temporary borrowing is further reduced. The interest charges fell from $5,205,739 in 1909 to $3,763,041 in 1911 with an estimate of $2,300,000 for 1912 due to the semi-annual tax collections. The floating debt of the city July 11, 1912 was $40,714,022.24 against approximately $115,000,000 for the corresponding date last year.

The new form of issue of revenue warrants has enabled the Department of Finance to borrow money temporarily abroad upon occasions at a lower rate than it could have obtained here. In 1911 approximately $38,500,000 was thus borrowed abroad at an average rate of 2.95 per cent. The authority possessed by the Department of Finance, under new legislation, to issue corporate stock in foreign markets, while not made use of this year, on account of the state of the money market, doubtless will enable the city in the future to float a portion of its obligations abroad, thereby giving them a wider market and placing the city in a position to secure better terms when the conditions of the American money market are adverse.

USES OF CITY'S CASH. While the practice of carrying all the moneys of the city, from whatever source derived, in a common fund—that is money from the tax levy, the sale of corporate stock, revenue bonds, trust funds, assessments, excise taxes, etc., and paying it out as necessary to retire revenue bonds, meet current expenses and contract obligations as they become due, etc., has undoubtedly been advantageous in the saving of interest charges, it is only successfully continued because all the funds are not simultaneously required for their respective purposes. When the status of all these funds is currently proved out, the Board of Estimate and Apportionment will be in possession of all information as to accrued indebtedness on account of uncollectable taxes, etc., and be in a position to provide intelligently in the regular budgets instead of borrowing from the future to pay current expenses. Of this indebtedness for uncollectable taxes, for which the Board of Estimate and Apportionment in 1906 authorized the issue of $36,000,000 corporate stock, only $18,000,000 has been issued,-$3,000,000 under the last administration and $15,000,000 under the present administration, Comptroller PRENDERGAST, after consultation with bankers, having decided at the inception of his term that he would adopt the policy of paying off this indebtedness at the rate of $5,000,000 a year.

EXPEDITION OF PAYMENT OF THE CITY'S BILLS. Delay in the payment of the city's bills, which has been the cause of much complaint in the past, leading to the openly expressed suspicion

that dealers were being discriminated against and favoritism shown, has been reduced in the Department of Finance from an average of about three weeks to ten days. In the old days, invoices, vouchers, warrants and checks travelled independently and without control through the bureaus. Now the Auditor of Disbursements keeps a record of every voucher from the time it reaches the Department of Finance and responsibility for any delay is immediately located. Vouchers are taken up in rotation and no.preference given, except in special cases where the reasons therefor are a matter of record. There is no longer cause for complaint in the Department of Finance. But the delays persist in the departments, where bills are held a month and often much longer; indeed the records show cases where they have been held six months. Many of the city's creditors think that as soon as an item is charged to the city the Comptroller's office knows all about it and should make an immediate payment, when as a matter of fact, the Comptroller's office does not come into the transaction at all until the receipt of the invoice, duly certified, from the department which has incurred the expenditure. We believe the control could be carried to the seat of the trouble if the officers of the outside departments, concurrently with the transmission of vouchers to the Department of Finance, were required to state the length of time such vouchers were retained in their offices before transmission for payment. Any department at fault could then be taken to task upon receipt of this information by the auditing department. Moreover, the knowledge that the Finance Department was keeping a record of each invoice held up would have a salient effect upon the outside departments.

REDUCTION OF LAND LIABILITY. Expedition of the work of the Bureau of Awards for Land Liability by the present Comptroller resulted last year in the payment of claims amounting to $28,365,196 against an average of about $10,000,000 per annum previously, thereby effecting a saving of 6 per cent. upon about $18,000,000 deferred obligations, or over $1,000,000 for the year. Notwithstanding this showing on June 30, 1912, the estimated land liability was $22,943,914.28 and of this vast sum $5,236,741.57 or 22.8 per cent. was for interest upon awards. This is due to the laggard method in which the condemnation proceedings are conducted. The fault apparently does not attach to the Comptroller's office. When the Comptroller receives from the Corporation Counsel a certificate that a certain award has been approved by the Supreme Court he transmits it to the Board of Estimate and Apportionment with a request for an authorization of corporate stock to discharge the award. In no case during Comptroller PRENDERGAST's term has the Board of Estimate and Apportionment delayed action upon such requests and through the Comptroller's power to issue corporate stock notes these awards are disposed of as quickly as authorizations for their liquidation are received. Yet there is great waste somewhere and this waste constitutes a heavy financial burden, upon the city as shown by the

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