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BERNAND J. SHONINGER President of the American Chamber of Commerce in Paris and LAWRENCE V. BENET former President of that organization also attended the meeting, and were presented to the members by President CLAFLIN.

President Claflin in calling the Chamber together, welcomed the members back from their summer vacations, and alluding to the repairs on the building expressed regret that they had not been completed in time for this meeting.

The minutes of the last regular meeting held June 6th, were read and approved.

REPORTS OF STANDING COMMITTEES.

JAMES G. CANNON, Chairman of the Executive Committee reported the following named candidates for membership and recommended their election :

FOR RESIDENT MEMBERS.

Nominated by William L. BENEDICT, AUSTIN B. FLETCHER, Thomas DIMOND,

JAMES 0. Bloss, Otro L. DOMMERICH, Carl F. BOKER, ROBERT J. HILLAS, ANTON A. RAVEN, FRANK E. Law,

EDWARD GRIFFITI, Frank PRESBREY,

Darwin P. KINGSLEY, JOHN J. RIKER,

ANTON A. RAVEN, EDWARD S. SAVAGE, WILLIAM E. PECK, HEDLEY R. WOODWARD, ANTON A. RAVEN,

Seconded by
A. BARTON HEPBURN.
ANDREW MILLS.
THOMAS F. VJETOR.
EDMUND DWIGHT,
EDMUND Dwight.
THOMAS A. BUCKNER.
SERENO S. PRATT.
WILLIAM F. SMITH.
SERENO S, PRATT.

WILLIAM Willis MERRILL and CHARLES T. GWYNNE being appointed tellers, a ballot was taken resulting in the election of these candidates for membership.

ENTERTAINMENT OF FOREIGN DELEGATES.

MR. CANNON on behalf of the same committee presented the following resolutions and moved that they be adopted :

Resolved, That the Chamber of Commerce shall unite with the other commercial organizations of the city, in extending a reception to the foreign delegates to the Fifth International Congress of Chambers of Commerce during their visit in New York, and that a welcome be extended to them in the Chamber on the afternoon of Friday, October 18, 1912 ;

Resolved, That the President shall appoint forty members of the Chamber to serve on a joint Committee of Reception.

The resolutions were unanimously adopted, and the President in accordance with its terms appointed the following members of the Committee of Reception :

EUGENIUS H. OUTERBRIDGE,
AUSTIN B. FLETCHER,
GEORGE E. IDE,
A. BARTON HEPBURN,
WILLIAM A. NASH,
J. PIERPONT MORGAN,
JACOB H. SCHIFF,
PHILIP A. S. FRANKLIN,
OTTO T. BANNARD,
ARTHUR CURTISS JAMES,
WILLIAM D. SLOANE,
A. FOSTER HIGGINS,
JAMES TALCOTT,
John I. WATERBURY,
T. DE WITT CUYLER,
FRANK K. STURGIS,
JAMES G. CANNON,
WELDING RING,
SAMUEL W. FAIRCHILD,
ANTON A. RAVEN,

DARWIN P. KINGSLEY,
WILLIAM H. PORTER,
FRANK A. VANDERLIP,
AUGUSTUS D. JUILLIARD,
CHARLES L, BERNHEIMER,
CLEVELAND H. DODGE.
Isaac N. SELIGMAN,
SAMUEL Sachs,
HENRY R. ICKELHEIMER,
ROBERT A. C. SMITH,
GEORGE GRAY WARD,
McDougall HAWKES,
HERBERT L. SATTERLEE,
HERMAN RIDDER,
THEODORE F. MILLER,
PAUL FAGUET,
GEORGE B. CORTELYOU,
WILLIAM JAY SCHIEFFELIN,
Julio F. SORZANO,
MAURICE L. MUHLEMAN.

THE CITY'S FINANCE DEPARTMENT.

FRANK A. VANDERLIP, Chairman of the Committee on Finance and Currency presented a report of that committee on the progress of the new accounting system in the Finance Department of the City of New York; and said :

MR. VANDERLIP.—The Chamber last January instructed the Committee on Finance and Currency to make an examination into the progress of the installation of the accounting system in the office of the Comptroller of the City of New York. The committee promptly took the matter up and gave very careful consideration to the subject. The importance of it was recognized, and it was felt that a thorough examination, such as was desirable, would require more time than the individual members of the committee could give, and perhaps needed more expert knowledge than some of them had. A sub-committee was appointed which consisted of men representing some of the members on the committee and of expert accountants. MR. HOWARD THOMPSON of the National City Bank, MR. L. C. GEER, of the Corn Exchange Bank, PROF. WILDMAN of the University of New York, and MR. RITCHE and MR. SPENCE of the accounting firm of BARROW, WADE & GUTHRIE, acted as the sub-committee. These gentlemen have been for some months giving very careful attention to the subject. It is a very intricate one, and has required a great deal of time to reach the conclusions that are found in the report of this sub-committee. The committee has carefully considered that report and has adopted it and presents it. You will all find it on the seats here.

REPORT ON THE NEW ACCOUNTING SYSTEM.

To the Chamber of Commerce :

The Committee on Finance and Currency herewith presents the report of the sub-committee appointed by it, in accordance with the terms of the resolution adopted by the Chamber on January 4, 1912, to examine into the progress of the installation of the new accounting system of the City of New York in the interval since the report to the Chamber on the same subject in 1909.

The sub-committee spent several weeks investigating the progress of the reform in the city's accounting methods and its report, setting forth what has been accomplished during the last three years, the practical benefits which have already accrued, the present situation and what remains to be done, will repay most careful consideration and should appeal not only to the Chamber of Commerce and other commercial and civic organizations, but to every individual taxpayer interested in placing the city's affairs upon an honest, efficient, businesslike basis. In many respects, the report is very gratifying and your committee shares the opinion of the sub-committee that the people of New York “have cause to congratulate themselves upon the substantial progress made in the installation of the new accounting system since the examination of 1909.” At the same time the report makes it quite plain that the constructive work has not proceeded as rapidly as had been expected and desired. In justice to those who have been charged with the work, however, it must be said that they have had many obstacles to contend with and that the task has been of great magnitude. The present Comptroller, upon assuming office, decided that an entire re-organization of the Department of Finance should take precedence over the continuation of the work of introducing the new accounting system in the outside departments. This re-organization, undertaken and carried out by Comptroller PRENDERGAST, caused considerable delay. Other delays encountered were largely due to a somewhat incoherent policy inevitable, perhaps, with conflicts of authority persisting and the employment of temporary shifting staffs.

It is unnecessary for your committee to enter into the details of the report, which speaks for itself, and which lead your committee to subscribe fully to the conclusion reached; namely, that the vital thing now is the imperative necessity of insuring the completion of the installation and operation of the new accounting methods before the expiration of the term of the present Comptroller. The sub-committee describes the oppostion to the introduction of business methods in the city's affairs at present as inert and passive but not, therefore, necessarily dead, and an instance is cited which leaves little doubt that, under other circumstances, the influences which profited by the old methods would again become active. Public spirited citizens have contributed much money and civic organizations, like the Bureau of Municipal Research, much labor to aid the accomplishment of the reform. The point has been reached where the city cannot afford to run any risk, however slight it may appear to be, of having the reform fail through a change in the attitude of an administration nor can it view without impatience the prospect of any further unnecessary delay in the completion of the installation of the full accounting machinery from which the city has a right to expect a rich harvest in more efficient operation and administration.

As the report of the sub-committee states : “ As long as the installation is delayed the taxpayer cannot know how far the annual budget increases are justified by the city's growth in population and business. The imperative need of the reform being conceded, the plans for its execution approved, the machinery devised, it is the deliberate opinion of the sub-committee that no expense should be spared promptly and effectively to place the system in complete operation. Economy in expenditure, however commendable, is positive extravagance when it interferes with the realization of a reform fundamentally necessary to the accomplishment of lasting economies and intelligent administration. The experience of every business corporation which has adopted modern accounting methods to control the cost of operation and prevent waste, proves this.

We believe that it is the duty of the Chamber of Commerce and other commercial and civic bodies to join in the demand for immediate measures by the city authorities to make mandatory before January 1, 1914, the completion of the system of accounting records, together with provision for reports that will promptly make available information to devise and determine established standards of efficiency and for bringing to the test of recorded evidence the results obtained in every branch of the government. Concurrently with a definite program to insure the completion of good accounting methods, we are of the opinion that a machine should be created for the effective use of these accounting records as they become available. Good accounting methods serve only a minor purpose if the information they convey is not utilized to the full. It is an axiom in modern business that the systematic study of the statistics of operation furnish business corporations with the best means of testing their efficiency.

The sub-committee points out, as other students of the city's administration have on previous occasions, that the Comptroller is a financial officer of the city, responsible for the fidelity of its accounts and the city's financial policy, but not for the city's operating results. These operating results represent the work of those departments for which the Mayor is responsible, those for which the Borough Presidents are responsible, and the work of the county departments included within the city territory and the courts. There is no one central authority in the city government that is central in the sense that it has absolute control over all the agencies, provisions for which are included in the city budget. The authority most closely approximating such a central power is the Board of Estimate and Apportionment because the preparation and adoption of the budget rests with the Board of Estimate and Apportionment, subject only to such modifying power as may be exercised, under the law, by the Board of Aldermen.

The work done, and the organization effected through the Comptroller, should logically aim at the accomplishment of two definite results: (1.) the exercise of complete accounting and auditing control in the office of the Comptroller over the accounts and reports of every department and office in the city ; (2.) to enable the Mayor and the Board of Estimate and Apportionment to exercise an effective administrative control. In other words, what is now under way and the steps necessary to complete the organization of business methods in the city's affairs should have for its end the placing in the hands of the Mayor and the Board of Estimate and Apportionment the means whereby there may be before them the results of the city's operations as they progress. From the reports of the Comptroller, the executive officers of the city and the public would have all the facts necessary to determine the fidelity of the city's transactions and the wisdom of the city's financial policy.

Any program by the Comptroller for completing the installation of the city's new accounting system should anticipate the prompt settlement of the conflicts, pointed out in the report, which still exist between the Department of Finance and several of the outside departments. The language of the charter and special laws (see exhibit D) apparently gives the Comptroller clear authority to prescribe bookkeeping methods for, and secure audit control of, every department, bureau and office in the consolidated city, but if there is further resistance anywhere mandamus proceedings, promptly instituted, could decide the legal issues. Where authority was found to be lacking the legislature, doubtless, would be ready to remedy quickly a situation which blocked effective audit control by the city's central financial officers over departments or offices supported by taxes or bond sales of the municipality.

When completely installed, we believe the suggestion mentioned

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