Production Note Cornell University Library produced this volume to replace the irreparably deteriorated original. It was scanned using Xerox software and equipment at 600 dots per inch resolution and compressed prior to storage using CCITT Group 4 compression. The digital data were used to create Cornell's replacement volume on paper that meets the ANSI Standard Z39.48-1984. The production of this volume was supported in part by the New York State Program for the Conservation and Preservation of Library Research Materials and the Xerox Corporation. Digital file copyright by Cornell University Library 1993.REPORT OF THE Joint Committee of the Senate and Assembly OF THE STATE OF NEW YORK APPOINTED TO INVESTIGATE THE Finances of New York City TRANSMITTED TO THE LEGISLATURE MARCH 1, 1909 ALBANY J. B. LYON COMPANY, STATE PRINTERS 19P 9 AJoint Committee of the Senate and Assembly OWEN CASSIDY, Chairman EDWIN A. MERRITT, Jr., WARREN I. LEE, Secretary MARTIN SAXE PATRICK H* McCARREN WILLIAM M. BENNETT GEORGE M. PALMER JAMES OLIVER CHARLES A« COLLIN LOUIS BEDELL Vice Chairman CounselState of New York No. 50. IN ASSEMBLY Makch 1, 1909. REPORT OF THE JOINT COMMITTEE OF THE SENATE AND ASSEMBLY OF THE STATE OF NEW YORK, APPOINTED TO INVESTIGATE THE FINANCES OF NEW YORK CITY. To the Senate and Assembly: The Joint Committee of the Senate and Assembly respectfully submits the following report pursuant to the concurrent resolution, passed by the Senate April 22, 1908, and by the Assembly April 23, 1908, by virtue of which the Committee was appointed, and of which the following is a copy: COPY OF RESOLUTION. " Whereas, The funded indebtedness of the City of New: York, after deducting the sinking fund, is now approximately $700,- 000,000, and said city has already begun the construction of the Catskill Aqueduct for procuring an additional water supply, the preliminary estimate of the total cost of which is $162,000,000, and the board of estimate and apportionment has already author-4 Investigation of Finance of New York City. ized the issuance of over $150,000,000 of corporate stock of the said city for other uses by the various departments, which said improvements would run the [funded debt of said city up to an amount exceeding $1,000,000,000J Whereas, There has been submitted to the Legislature for passage a concurrent resolution proposing an amendment of sec- tion ten of article VIII of the Constitution in relation, to the limitation of debts.] “Resolved (if the Assembly concur), That a joint committee of the Senate and Assembly be appointed, consisting of three members of the Senate to be appointed by the Temporary Presi- dent and five members of the Assembly to be appointed by the Speaker of the Assembly, to examine into the finances of the city of New York, into the methods of accounting and bookkeeping in the office of the comptroller and the various departments of said city and also tojexamine into the purpose for which the bonds and corporate stock of said city have been issued and are pro- posed to be issued and the purposes to which the proceeds of the bonds and corporate stock heretofore issued have been applied and also to inquire into the cost of the administration of govern- ment of said city and to inquire into such other financial matters connected with said city government for the purpose of drafting and reporting to the next sesision of the Legislature such law)s relating thereto as said comtmittee may deem proper, together with a recommendation as to the propriety of passing a further amendment to the Constitution in relation thereto] and said com- mittee shall report to the Legislature on or before the first day of February, 1909; and be it " Further Resolved, That said committee is authorized to sit after the adjournment of the Legislature and outside of the city of Albany and is hereby authorized and empowered to subpoena and enforce the attendance of witnesses, including public officers and public employees, and to require the production of books and papers, including any public record or document of the City or State of New York or of any of its offices and departments, to administer oaths, to employ counsel, a stenographer, an expert accountant and such other employees as may be necessary for the purpose of the investigation; and the actual and necessary ex- penses of the committee in carrying out the provisions of this resolution, not to exceed $10,000, shall be paid from the funds' appropriated by the Legislature for the contingent expenses of said Legislature.”Report of Joint Committee. 5 permanent organization. The Committee organized July 14, 1908, by the election of Owen Cassidy, chairman; Edwin A. Merritt, Jr., vice-chairman, and Warren I. Lee, secretary. Charles A. Collin and Louis Eedell were employed .as counsel; J. .A- Shankland, a certified public accountant of Yew York city, as chief accountant, and! George M. Shotwell as official stenographer. A careful analysis of the resolution which authorized the ap- pointment and declared the duties of your Committee, and a full appreciation of the serious conditions which had caused the Legislature to desire a broader basis of information than could well be obtained during the session of the Legislature, impressed your Committee at the outset with the magnitude and importance of the work contemplated. The city’s credit wias as- sailed. The amount of its indebtedness was uncertain. Its oper- ating expenses were rapidly increasing. Its' taxes were increas- ing in like proportion, and its taxpayers were become restive* The city had planned immediate additional expenditures for public improvements aggregating over two hundred and fifty million dollars. Its further borrowing capacity was questioned* The concurrent resolution to amend the Constitution so as to in- crease the borrowing capacity of the city had received its first passage by the Legislature of 1908. Thereupon popular opinion, and legislative judgment called for deliberation and reconsidera- tion, and for clear and definite information as to the exact con- dition of the financial affairs of the city; and your Committee was appointed to assist and advise the Legislature in solving the serious problems raised by the first passage of the concurrent resolution. The member's of your Committee were unanimous from the outset in their determination that the work of the Committee should not be influenced by partisan or personal considerations,Investigation of Finance of Hew York City. ■and that the Committee should devote itself to the investigation of methods rather than men, and to the discovery of facts hearing upon existing evils inherent in present business methods, and pro- viding a remedy therefor, rather than the removal and punish- ment of dishonest or incompetent officials or .employees'. Questions as to the amounts of the present -and proposed in- debtednesis of the city, and of its constitutional debt limit, were, from the nature of the case and by the terms of the resolution, so closely interwoven with questions relating to the general ex- penditures of the different departments of the city government that your committee early determined to make a thorough inves- tigation into city expenditures for the purpose of recommending measures which might increase economy and efficiency in the current administration of the city government, as well as for the purpose of establishing a broad basis for a final recommendation as to whether or not the concurrent resolution amending the Con- stitution, so as to extend the debt limit of the city, should receive its second passage by the present Legislature. So far as practicable, the Committee conducted its investiga- tions in accordance with the tentative plan and scope adopted by the Committee before entering upon its public hearings, of which the following is a Copy: TENTATIVE PLAN AND SCOPE. I. |Analysis of Topics to be Investigated in Kelation to the Administrative Cost of the Present Method of Making Contracts, Issuing Open Market Orders and Collecting Kevenue in the Several Departments^ (a) Bookkeepers and other clerical staff.— The official and clerical staff employed on, and the yearly salary cost of, the preparation of specifications, advertising for bids, letting con- tracts, issuing orders for deliveries of goods, preparing vouchers for payment on contracts and open market orders, keeping bid registers, contract registers and ledgers, open market order reg-Report of Joint Committee. 7 isters and ledgers, invoice registers and bill books, voucher reg- isters and schedules, appropriations, revenue bond fund, and cor- porate stock fund ledgers, in each department. (6) Inspection.— The official, clerical and other staff em- ployed on, and the yearly salary cost of, the inspection of goods received, and the work performed in making repairs in each de- partment, not including work under contract regularly chargeable to corporate stock. (c) Storekeepers.— The official, clerical and other staff em- ployed in, and the yearly salary cost of, keeping stores, including the receiving of supplies and materials in store, and the dis- tribution of supplies and materials from store. (d) Engineers.— The official, professional, clerical and other staff employed in, and the yearly labor cost of, engineering work in each department. (e) Architects.— The official, professional, clerical and other staff employed in, and the yearly labor cost of, architectural work in each department. (/) Establishing and collecting department revenues.— The official, clerical and other staff employed in, and the yearly labor cost of, establishing the revenue receivable charges, and of col- lecting the revenues received in each department. (g) Statistics.— The official, clerical and other staff employed in, and' the yearly labor cost of, keeping operative and other statistics kept by, and of making the statistical reports from each department. II. |analysis of Topics to be Investigated in Relation to Prices Paid by the City for Supplies and Materials, and Preferences and Delays in the Passing and Pay- ment of Claims against the City.^J (a) Prices.— Comparison of prices of similar articles pur- chased by different departments, and comparison of prices paid by the city with market prices generally.8 Investigation of Finance of IsTew York City. (b) Favoritism.—Analysis of the methods of preferment, and study of the administrative machinery favorable to such practice. 1. As to length of time required for approval of claims in each department. 2. As to the quality and quantity of goods received. 8. As to orders under contracts permitting unbalanced bids. 4. As to the audit of claims and the signing and payment of warrants. (c) Specifications.—Analysis of specifications of contracts which render the inspection and audit uncertain and preferment possible. (d) Remedy.— The establishment of a procedure whereby the citv?s interests may be protected, and bills may be paid within such time as to enable the city to avail itself of wholesale prices and trade discounts, which if made possible, would save millions of dollars annually. III. Analysis of Topics to be Investigated with Respect to Payrolls. (a) Inquiry into the present method of reporting and account- ing for labor employed in the several departments of the city. (b) Inquiry into the present method of preparing and certify- ing payrolls. (c) Inquiry into the present method of auditing payrolls. (d) Inquiry into the disbursing of moneys on payrolls. (e) ^Establishment of a method preventing the padding of pay- rolls, the making of unauthorized payrolls, and evasions of ap- propriation and bond fund restrictions^ IY. Analysis of Topics to be Investigated with Respect to the Revenues of the City. fa) Inquiry into the present method of handling taxes and assessments, with special reference to the opportunity given for the successful operation of tax reduction agencies.Report oe Joint Committee. 9 (6) Inquiry into the present method of handling water rev- enues and the opportunities offered for depriving the city of its proper revenues. (c) Inquiry into dock and ferry revenues, with special refer- ence to, dock leases. (d) Inquiry into park revenues, with special reference to special privileges. (e) Inquiry into the present method of handling the license business of the city, with special reference to opportunities fur- nished for the granting of favors by the police and other inspectors. (f) Inquiry into the security deposits and other trust funds received by the city. (g) Inquiry into the receipts from the sales of manufactured articles, old buildings and old materials. (h) The establishment of methods whereby the city may be protected against the diversion of revenue from the treasury and citizens may be protected against preferment in levies and revenue charges. THE CHARTER REVISION COMMISSION. |Your Committee has carried on its work in cordial co-operation with the Charter Revision Commission. Your Committee has received much valuable assistance, especially from Hon. William M. Ivins, chairman of that commission, and from Hon. Herman A. Metz, comptroller of the city, and also a member of the com- mission.^ Officers and employees of the city generally have frankly and fully responded to all the requests of the Committee for informa- tion, and in no case has it been necessary to serve a subpoena to compel the attendance of a city officer before the Committee.10 Investigation of Finance of New York City. THE BUREAU OF MUNICIPAL RESEARCH. This is an association supported by voluntary contributions from the taxpayers of the city, and had already expended large sums of money in its private investigations of the financial affairs of the city. [This bureau placed the results of its investigations freely at the disposal of your Committee, and by the advice and suggestions of its experts, and the services of its accountants, all freely rendered, your Committee has been able to accomplish results which otherwise would have been impossible within the expenditure which your Committee has felt at liberty to incurf) UNCOLLECTED TAXES AND THE ISSUE OF CORPO- RATE STOCK ON ACCOUNT THEREOF. ^Failure to allow a reasonable margin in the budget apjiropria- tion each year over the amount of taxes levied, and failure to collect the entire amount of taxes levied, have brought about a very serious situation in the finances of the city^ Exhibit 115, which was introduced in evidence and is hereto annexed as Appendix A, shows for each year from 1899 to 1907, inclusive, the amount of tax levied, the amount thereof canceled or remitted, the amount of discounts for prompt payment, the amount collected, the percentage of total collection to the total levy, and the amounts placed in subsequent tax levies to provide for deficiencies in collections of previous tax levies. This table shows that^on December 31, 1907, the total amount remaining uncollected from the tax levies of 1899 to 1907, inclu- sive, was $90,545,054.40, and there remained uncollected from the tax levies prior to 1899, $12,289,273.24. During the years 1899 to 1905, inclusive, the amount placed in the tax levies to provide for possible deficiencies in tax collections amounted to $11,719,232.28, while during that period the amount of discounts, remissions and cancellations amounted to $12,477,998.32, whichReport of Joint Committee. 11 jwas $758,766.04 in excess of the amount placed in the tax levies to provide for deficiencies in collections^ In other words, the amounts placed in the tax levies during those years, to provide for deficiencies in collections did not even equal the discounts, cancellations and remissions, and made no provision whatever for failure or inability to collect taxes levied. On October 31, 1908, uncollected taxes due the city, including $9,324,539.64 personal taxes for years prior to 1898 which had been written off as uncollectible, amounted to $84,506,288.13. Of the appropriations properly payable out of these taxes, there remained unexpended on that date a balance of $8,383,913.35, leaving£$76,267,293.70 which had been expended by the city on account of appropriations contained in budgets which ought to have been paid by these uncollected taxes/] £pn October 31, 1908, there was outstanding against these arrears of taxes $40,606,700 of revenue bonds] issued from time to time to procure money with which to pay the appropriations made in the yearly budgets for the running expenses of the city. [That left a balance of $35,660,593.78 which had been expended by the city for current expenses, but neither collected in taxes nor procured by the sale of revenue bonds.^ This situation has arisen in part from the failure to collect personal taxes, the evidence showing conclusively that not over 65 per cent, of such taxes are collectible,-joined with the fact that the budget has nearly equaled the entire tax levy in each year. The situation was further aggravated by the failure to collect special franchise taxes. Exhibit 15, which is hereto annexed as Appendix B, shows the amount of uncollected taxes of all kinds on December 31, 1907, in each borough, and an itemized state- ment of uncollected special franchise taxes, giving the names of the corporations, the years and amounts of taxes unpaid. The total of such special franchise taxes unpaid on December 31, 1907, including the 1907 tax, was $24,521,012.77. The failure to12 Investigation of Finance of New York City. collect these taxes is explained by the comptroller’s office as due to long litigations on the part of the corporations, adjustments for inequality and overvaluations which have been obtained in some cases by court order, and to the delay in holding a sale of real estate in the boroughs of Manhattan and Brooklyn for real estate taxes in arrears. [For the future your Committee recommends that the budget payable from taxation be limited in each year to an amount not greater than the tax rate would produce from 65 per cent, of the personal assessment and from 97 per cent, of the real estate assessment.^ The board of Estimate and Apportionment on September 21, 1906, pursuant to the provisions of chapter 208 of the Laws of 1906, authorized the comptroller to issue $36,000,000 corporate stock to provide for the deficiency on the first day of January, 1905, in the collection of taxes theretofore levied, and deemed by the board to be uncollectible and which had not been provided for in prior tax levies nor by the issuance of corporate stock of the city. Of this $36,000,000 authorization $3,000,000 of corporate stock was issued and sold by the city, leaving $33,000,000 author- ized by the Board of Estimate and Apportionment to be issued, but which has not yet been issued. An examination of the budgets and the tax levies shows that the budgets payable from taxation have been so nearly equal-to the tax levies in each year (as reduced by remissions, cancellations and discounts), that it necessarily follows that the city has procured from other sources the moneys with which to pay that part of the budget appropriations cor- responding to this $33,000,000 of uncollected taxes. [While it rs impossible within any reasonable time to ascertain ■exactly how the city obtained this $33,000,000 which was un- doubtedly spent, an approximately accurate statement of the situ- ation was made by the comptroller’s office from which it appears that on June 30, 1908, there should have been cash to the credit]Report of Joikt Committee. 13 ^of the city of New York amounting approximately to $33,000,000 in eight different classes of funds, but that the money actually was not in these funds. The assessment account for local improve- ments was depleted to the amount of $1,900,000J Trust funds, consisting of various bequests, various intestate estates and various- uncalled-for warrants and salaries, should have had on hand $600,000 which was not there. A special account, including deposits made with the city against contractors’ liability for re- storing and repaving streets and the unliquidated balance of the Brooklyn water fund, should have had $3,800,000 which did not exist. The accounts of the various boroughs were short $1,500,- 000; excise funds were short $5,100,000; general fund balance was short $-650,000 £the account of unexpended proceeds of bonds was short $7,200,000^jthe account of unexpended proceeds of bond account, not allotted, was short $8,250,000. The comptroller’s office was unable within any reasonable time to determine from what funds the remaining $4,000,000 had been taken, making up the total shortages of $33,000,000. Butjthe net result is certain, that for the payment of current running expenses over a long period of years, the city has taken the total amount of $29,000,- 000 from specific funds set apart for other purposes, shifting the resulting deficits from one fund to another, as occasion r If the system had consisted only in postponing sales of corpo- rate stock duly authorized for other purposes until such time as the treasury needed to be replenished, and in the mean time in anticipation of the sale of such corporate stock cash in some made good from the proceeds of subsequent sales of such corporate stock, then no serious objection could be made, as such a course might avoid the unnecessary accumulation of unexpended balances in the banks; but. the amounts diverted from the various funds have not been used for purposes which would in regular course.- specific fund had been used to meet liabilities payable from the proceeds of said corporate stock, and such depleted fund had been14 Investigation of Finance of New Yoke: City. provide any amounts whatsoever to make the deficits good; on the contrary, the amounts diverted from the various funds have been used to pay the running expenses of the city in excess of the actual tax collections. |The $33,000,000 of corporate stock authorized by the Board of Estimate and Apportionment to be hereafter issued, in addition to the $3,000,000 of corporate stock heretofore issued to make up the $36,000,000 of uncollected taxes written off as uncollectible, is merely a method of placing upon taxpayers fifty years hence the burden of paying $36,000,000 expended by the present genera- tion for ordinary and current operating expenses of the city, thereby to that extent decreasing the borrowing capacity of the city for the legitimate purposes of permanent improvements?^ Your Committee recommends that the city be prohibited by law from issuing the said $33,000,000 of corporate stock or any part thereof, and that the amount be made up by distributing over the next ten years the deficiencies in uncollected taxes which should have been included in the tax levies of the past ten years or more. This would compel the city in the year 1910 to include in its tax levy an amount substantially equal to the uncollected taxes for the year 1900, and if this course is consistently pursued for ten years the shortage of $33,000,000 in taxes will be recouped and the amount so collected can be restored to the various funds from which it has been diverted. The law should prevent the issue hereafter of corporate stock to make up the deficiencies in the collection of taxes. ISSUE OF CORPORATE STOCK FOR OTHER THAN PERMANENT IMPROVEMENTS. It appears that during the last few* years the city has issued fifty-year corporate stock to the amount of $1,873,000 for the purchase of horses, blankets, broomfe and similar equipment in the Street Cleaning Department; to the amount of $2,845,364.45 for the operation and maintenance of ferries; to the amount ofReport of Joint Committee. 15 $1,442,922.2,7 for repairs and maintenance of recreation piers (Exhibit 100) ; to the amount of $5,902,375.99 for maintenance and repairs of docks, including salaries of engineers and staff engaged in construction work; and that the cost of repaving and’ resurfacing streets and highways to the amount of mlany millions has also been paid by the issue of fifty-year corporate stock. •If a private corporation conducted its financial operations in this manner, paying .admittedly current expenses by fifty-year bonds, the management would be accused both of folly and dis- honesty. This method relieves the taxpayers of the present gen- eration of the burden which they ought to bear, imposes it upon ftutre generations, and at the same time reduces the borrowing capacity of the city to a point which prevents necessary perma- neilt improvements. To remedy this situation your Committee recommends that no corporate stock be issued except for permanent improvements, and that the Board of Estimate be authorized to determine, upon report of its chief engineer, whether or not any contemplated ex- penditure comes within the proposed prohibition against the issue of corporate stock for other than permanent improvements. BUDGET APPROPRIATION. A compilation prepared and introduced in evidence as Exhibit No. 23 is hereto annexed as Appendix C, showing the budget appropriations for the city of New York for municipal and county purposes from the year 1898 to the year 1909, inclusive. This compilation shows in minute detail the budget appropria- tions for every department of the city government during the years mentioned, and reveals the enormous rapidity of the in- crease in the expenses of the city greatly in excess of the ratio of the increase in population. On January 1, 1898, when Greater New York came into exist- ence, its population, according to the official estimate of the16 Investigation of Finance of New York City. Health Department, was 3,272,418. The same department’s esti- mate of the population on January 1, 1909, is 4,564,792, an increase of 1,292,374, or approximately 89.4 per cent. The budget appropriations for city and county purposes in 1898 (deducting the amount required to be raised for State taxes) was $70,175,896.84; in 1909 the budget appropriations for similar purposes amount to $156,545,148.14, an increase of $86,369,251.30, or approximately 123 per cent. ') ASSESSMENT BONDS. Under section 181 of the charter the comptroller may, when authorized by the Board of Estimate and Apportionment, issue assessment bonds for not exceeding ten years at not over 4 per cent., to furnish money to pay for regulating and paving streets, building sewers or for local improvement or other public work1 in all cases in which the expense thereof is to be paid in whole or in part by assessment on the property benefited. Section 184 of the charter provides that if iat any time the amount in the treasury derived from collection of assessments shall be insufficient to meet such assessment bonds, then the comptroller, when authorized by the Board of Estimate, may issue corf orate stock for an amount sufficient to pay the assess- ment bonds falling due. The moneys derived from assessments are theoretically kept in the “ Fund for Street and Park Openings ” (charter, § 173), or in the fund for “Street Improvements” (charter, § 181), but actually are deposited in the general account of the city, and in fact are sometimes depleted to pay the operating expenses of the city. On June 30, 1908, assessments for local improvements due and unpaid amounted to $25,046,192.40, while the amount of assessment bonds outstanding on that date was $28,370,632.65. On that date there had also been advanced.by the city for localReport of Joint Committee. 17 improvements which had been completed, hut for which no as- sessment list had yet been received from the respective boroughs, $3,018,563.65, and in addition to this sum several millions of dollars had been advanced by the city for assessment work not yet completed at that date. Of assessments for local improvements collected, approximately $1,500,000 had been used by the city to pay the current running expenses of the city instead of applying the collections to the redemption of assessment bonds, as provided in section 181 of the charter. Assessment bonds running for only ten years are sold at a lower premium than corporate stock by 1% per cent, to 2 per cent. The scheme of issuing assessment bonds is a relic of the days when for each particular improvement in a community a par- ticular series of bonds was issued, payable only front the assess^ ments collected on account of that improvement. In reality the the assessment bond's are merely a device by which the city bor- rows money with which to pay for local improvements, for which it is to be reimbursed by the property owners, by collection of the assessments. Ro reason exists why any distinction should be made between assessment bonds and .corporate stock, either in name, duration or amount of interest, because it is certain that the city in the future will need a continually enlarging fund out otf which to pay for local improvements, pending the collection of assessments for such improvements, and such fund could be pro- vided by the sale of corporate stock at a better premium and at lower rate of interest. The Committee therefore recommends that the issue of assess- ment bonds be discontinued and that provision be made for the issue of corporate stock to provide a revolving fund out of which the expenses of local improvements can be met, and which will be continually made good by collections from such assessments.18 Investigation of Finance of New York City. THE DOCK DEPARTMENT, INCLUDING MUNICIPAL FERRIES. Under the Consolidation Act, chapter 410 of the Laws of 1882, section 717, the dock rentals were to he paid into the sinking fund for the redemption of the city debt. The rentals have consistently increased each vear? although not in proportion to the increase in interest charges upon the dock bonds outstanding. January 1, 1898, the dock bonds outstanding were $44,053,000, while on January 1, 1908, they amounted to $79,670,840, of which $10,400,033.19 were chargeable to municipal ferries. In 1898 the Dock Department made a net profit of $723,495.25 over and above all expenses of operation and maintenance and over and above the interest on the clock bonds outstanding. That profit gradually increased until in 1907 it reached $1,121,992.41 from docks, exclusive of ferries. In 1905 the Dock Department by authorization of the Board of Estimate and Apportionment commenced the operation of tthe Staten Island ferry, which had been acquired by the city. This required the purchase of five new ferry boats and the construction of granite and steel terminals in place of the ancient wooden terminals, and this was fol- lowed by the purchase of the Thirty-ninth street ferry, neces- sitating the construction of new terminals for that ferry, so that on December 31, 1907, the total expenditure on account of these two municipal ferries properly chargeable to capital amounted to $7,554,668.74. Notwithstanding the fact that five new boats had been purchased for the Staten Island ferry and put in operation in October, 1905, at an aggregate cost of $2,348,477.93, the re- pairs to these new boats down to October 31, 1908, amounted to $546,351.02. The deficit from the operation, including interest, continually increased until in 1907 the expense of operating the Staten Island ferry, including interest on the bonds issued for itsReport1 of Joint Committee. 19 purchase and construction exceeded the income by $723,208.09, while the expense of operating the Thirty-ninth street ferry, in- cluding interest on the bonds, exceeded the income by $303,- 064.10!, making a net deficit on account of municipal ferries of $1,026,272.19. The operations for the ten months ending October 31, 1908, showed a decrease, in revenue on the Staten Island ferry of 1% per cent., and a decrease in revenue on the Thirty-ninth street ferry of over 27 per cent., while the payroll was materially increased and the interest charges also increased. As the Dock Department is about to open a new line to Staple- ton, Staten Island, and to construct additional terminals for the Thirty-ninth street ferry, the payroll and interest charges will materially increase in the near future without any additional revenue. A tabulated statement of the income and expenses of the Ferry Department and of the interest charges, and a statement of the dock bonds issued and retired during the last ten years, and the earnings, expenses, interest and profits of the Dock Department with a tabulated statement of the number of employees in the Ferry Department is submitted, marked “ Exhibit 102.” The inclusion of the municipal ferries in the Dock Department resulted in 1907 in leaving the Dock Department a net revenue of but $52,381.64 above expenses and interest, for contribution to the sinking fund, when the net revenue from the docks was actually $1,121,922.41. Since the revenues of the docks are pledged to the sinking fund, a serious question arises whether the city has a right to in- clude in the accounts of the Dock Department, the operation of municipal ferries at a loss of over $1,000,000 a year, including interest, with a prospective loss annually of a much greater amount. The result of the present system will shortly make the Dock Department a drain upon general revenues instead of a support for the sinking fund.20 Investigation of Finance of Hew York City. Under the present laws the Dock Department is practically independent in its financial operations from the rest of the city government, paying its own bills from corporate stock, collecting its own revenues, and paying over gross receipts to the sinking fund. Ho good reason exists for this anomaly and your Com- mittee recommends that the financial operations of the Dock De- partment be put under the same control as other city departments* The Dock Department has been permitted to pay its operating expenses with corporate stock. As a result, during the period from October 31, 1905, to December 31, 1907, the gross revenues from ferries, amounting to $1,610,033.62, have been paid into the sinking fund, and thence, as part of the sinking fund sur- plus have gone into the general fund of the city in reduction of taxation, while during that period the Dock Department has used $2,845,363.15 of dock bonds to pay the gross ferry operating expenses. This is equivalent to the issue by the city of 50-year bonds to pay its running expenses. The same course is followed with other dock expenses, such as recreation piers. As a result, the city up to December 3, 1907, had issued $1,112,559.52 of long term bonds to pay for music and other current expenses of these piers. Your Committee recommends that no bonds be permitted to be issued to pay operating or running expenses of any of the Dock Department activities, and to this end, that operating expenses of the ferries, recreation piers and other similar activities be in- cluded in the budget for payment by taxation. CATSKIDL AQUEDUCT. Your Committee examined the members of the commission composing the Board of Water Supply, and their chief engineer, as fully as possible without the employment of technical experts, and from their own testimony, as will appear by an examination of the minutes, a very startling situation of affairs was revealed*Report of Joixt Committee. 21 The Board of Water Supply, created by chapter 724 of the Laws of 1905, was organized in 1905, immediately entered upon the discharge of their duties, employed a chief engineer tand an engineering force, and from time to time consulting engineers and such other force as they deemed necessary. In 190-5, on or about the 9th day of October they completed their first estimate of cost of the Catskill reservoir and the aque- duct appurtenant thereto necessary to convey the water from the county of Ulster, where the reservoir was located, to the city of New York. They prepared complete detail maps showing the line of the proposed aqueduct and submitted same to the Board of Estimate and Apportionment of the city of New York for approval, and the same was by the said board duly approved, and they then, .as provided by law, submitted said maps and plans to the State Water Supply Commission and the same were approved by said Commission, thus completing every detail required by law except the filing of the maps and plans in the county clerk’s office of the counties in which the reservoir and aqueduct were located; and then and thereafter in the year 1907, the board relocated the line of said aqueduct, changing its course so that it ran several miles distant from the line defined by the original plan of the year 1905. The board again submitted the plans and maps to the Board of Estimate and Apportionment and to the said State Commission, both of which approved the same, and subsequently the board filed the maps and plans in the respective county clerks’ offices of the counties through which the aqueduct was to pass. The testimony shows that in 1906 .and in 1907 a certain coterie of men formed a combination of interests under what they termed upon the witness stand “ a gentleman’s agreement,” -not in writing, and purchased in the neighborhood of 3,500 acres of land in Ulster county in the exact locality where said reservoir22 Investigation of Finance of New York City. and aqueduct were so relocated. These men were, with one ex- ception, all residents of the city of New York and unquestionably made this purchase, as shown by the testimony, for no other pur- pose than that of reselling the land to the city of New York at a higher price than the amount paid therefor. The method employed was as follows: Title to these said ■3,500 acres of land was taken in the individual names of several different parties connected with this combination. According to their sworn testimony, no written agreement passed between them showing the community of interest, and each relied upon the good faith of the others to render an 'accounting of the profits that might accrue when the land was disposed of. In no instance did they m.ake a direct sale of the land to the city, but forced the city to begin condemnation proceedings to acquire title thereto, and then raised and urged the question, both in the testimony and upon the appeal from the award that was made for some of the parcels of land so purchased by them, that the lands so sought to be acquired by the city of New York were valuable for reservoir and water-supply purposes, and thereby endeavored to fasten upon the city the burden of paying an excessive price for lands that probably would never have been used by any other municipality or corporation or private interest for other than farming and ordinary purposes, as it had been used in all the years past. Incidentally it seems to have been the practice for some years past upon the part of certain individuals in New York city and vicinity to buy up lands, the condemnation of which was contem- plated by the city, and bv obtaining high awards for the lands so taken, realize a large profit upon their purchase. This Committee does not charge the Board of Water Supply, or any official connected therewith, with having been a party te this combination, but it certainly appears suggestive of a leak of information somewhere as to the actual location of the reservoir and aqueduct when people living in the city of New York couldReport of Joixt Committee. 23 go into the county of Ulster to purchase immense quantities of land in the immediate locality where the reservoir and aqueduct were subsequently relocated. The estimate of the cost of the Catskill reservoir and aqueduct appurtenant thereto is $162,000,000, and yet, after the lapse of nearly four years, the Board of Water Supply or its engineers have not as yet solved the problem, as appears from the testimony of each of them, of carrying the water by means of the aqueduct over or under the Hudson river. Numerous test borings have been made in the Hudson river at the point where it is proposed to cross, without yielding definite information as to the character of the strata of rock underneath the bed of the river to such a degree of certainty that the said board have as yet been able to decide whether or not it is possible to construct a tunnel at this point under the Hudson river, or the approximate cost thereof. They present two other possible solutions of the question, viz., first, the construction of a bridge across the Hudson river; second, the building of a concrete tube laid upon the bed of the river for conveying the water from shore to shore. Notwithstanding the fact that the most important engineering problem connected with this work has not yet been solved, the Board of Water Supply is making contracts for building the reservoir and the aqueduct at other points, and has already expended in engineering work, adver- tising, salaries, etc., up to the 1st day of December, 1908, the sum of $7,000,000, and has entered into contracts involving a further expenditure of thirty odd millions of dollars. A very startling situation seems to be presented, and one which your Committee deems can only be overcome by constitutional amendment, in that certain lands, the title to which is vested in the State and under the Constitution form a portion of the forest preserve, are situated within the boundaries of the reservoir so relocated. It does not seem possible to your Committee that these lands can be in any way taken or occupied or flooded for24 Investigation of Finance of New York City. the purposes of securing a water supply for the city of New York without an amendment to section 7 of article 7 of the Constitution of the State, which now reads as follows: “ Forest Preserve. § 7.— The lands of the State now owned or hereafter acquired, constituting the forest preserve, as now fixed by law, shall be forever kept as wild forest lands. They shall not be leased, sold or exchanged, or be taken by any corporation, public or private, nor shall the timber thereon be sold, removed or de- stroyed.” No effort seems to have been made upon the part of the Board of Water Supply to in any way obviate this condition of affairs. Believing that the city of New York is to a large degree the arbiter of its own public improvements, and has passed upon the question of the construction of this reservoir in the affirmative, we recom- mend that an amendment to the Constitution be adopted permit- ting the city of New York to acquire such lands from the State, either by grant or condemnation. It appears from the testimony that the Board of Water Supply has, in addition to the work undertaken by it in relation to the Catskill reservoir and aqueduct, recommended and urged the es- tablishment of another system of water supply in the county of Suffolk, the cost of which would approximate, according to their estimate, $47,000,000. It appears from the testimony that the present consumption of water in the city of New York is about 360,000,000 gallons per vday and that the daily supply is about 500,000,000' gallons; that the estimated supply of water that would be received by the city from the Catskill reservoir would amount to about 500,000,000 gallons a day; and that the estimated supply that could be obtained from the proposed Suffolk county supply is approximately 250,- 000,000 gallons per day; thus when the contemplated Catskill reservoir and the Suffolk county water supply are completed the city would have a daily capacity of approximately 1,250,000,000 gallons.Report of Joint Committee. 25 In view of the fact that this amount is so much in excess of the immediate necessities of the city, your Committee is inclined to believe that this present generation should not be burdened with the cost of creating such an apparent surplusage of water at this time. Exhibit No. -155, which is a complete report and summary of the financial condition of the Board of Water Supply at the close of business November 30, 1908, contains in detail a statement of the amount of moneys already expended by said Board, the amount of contractual liabilities incurred, and the amount of corporate stock that has been authorized pursuant to chapter 724 of the Laws of 1905. It appears that all expenditures of the Board of Water Supply, including such items as engineers’ fees, salaries, horse hire, auto- mobile hire, police force, etc., are paid from the proceeds of the sale'of corporate stock issued for the term of fifty years. Up to December 1, 190'8, the Board of Estimate and Apportionment had authorized the issuing of $60,202,000 of corporate stock, and out of the proceeds of sales of such corporate stock the Board of Water Supply had expended up to December 1, 1908, the sum of $7,088,- 867.68; their registered contract liabilities on November 30', 1908, amounted to $25,00<2,65'5.67; their estimated liabilities, under special agreements, as of November 30, 1908, amounted to $381,- 226.85; all other liabilities on open orders, etc., as of November 30, 1908, $47,515.83. The Board of Water Supply receive no budget appropriation and their expenses are in no way reflected in such budget or in any of the reports of any of the departments, except their own. They are not limited in any degree to the amount of their expendi- tures for engineers’ and consulting engineers’ fees, clerk hire, etc., and the taxpayer of to-day. is not in any way put upon notice whether or not the said Board is properly conducting its affairs in relation to its expenditures — whether the same are reasonable or not.26 Investigation of Finance of New York City. It appears from said Exhibit No. 155 that the said Board have paid out up to November 30, 1908, for consulting engineers, the sum of $86,410.0'8, this amount being in addition to the regu- lar salaries paid the permanent engineering force, which on No- vember 30, 1908, amount in the aggregate to $1,373,630.66. Your Committee calls especial attention to the enormous cost of advertising attending the acquisition of the lands for the reser- voir and aqueduct. The advertising alone of the notices of appli- cation for the appointment of commissioners will approximate $800,000 for the Catskill reservoir and aqueduct, if the present system he continued. The publication of these notices in the news- papers is under the direction of the corporation counsel, and not the Board of Water Supply, and the custom is to publish these notices daily in two New York newspapers and weekly or semi- weekly in the newspapers in the county in which the property is located. The description of the property is by metes and bounds and is paid for in the New York city newspapers at the rate of forty cents an agate line for each insertion, that being the usual rate for what is termed “ public notices.” The rate for legal no- tices is twelve cents per agate line. No effort seems to have been m'ade upon the part of the corporation counsel to secure the publi- cation of these notices for the legal rate instead of the public notice rate. Your Committee believes that the publication of these notices in New York city papers for thirty-six days is entirely unneces- sary and unwarranted, and, therefore, recommends an amendment to the present law providing that a brief description of the prop- erty shall be sufficient, that the notices of the application for appointment of commissioners be published in the newspapers in the county where the property is located, as is now the custom, and that the notices be published once a week for six weeks only in the City Becord of the city of New York.Report of Joint Committee. 27 Your Committee is of the opinion that great improvements like the Catskill reservoir should not wholly be paid for by the issuance of corporate stock, but that some of the expenses attached to an improvement of this character should be reflected in the yearly budget as a notice to the -taxpayer, and also for the purpose of acting as -a restraining influence upon the board or persons charged with the expenditure of the money. The commissioners of the Board of Water Supply, when asked upon the stand if they had taken into consideration the debt of the city of New York or its ability to pay for the Catskill reservoir and aqueduct and the proposed Suffolk county water supply, stated “that they had not — that they were not charged with pro- tecting or taking notice of the debt limit of the city of New York, but simply with the duty of obtaining a supply of pure and whole- some water as soon as possible.” Notwithstanding corporate stock issued for increasing the water supply does not fall within the constitutional debt limit, your Committee does not feel justified in recommending a discontinu- ance of work, but, as the cost must be reflected in the tax rate, desires to call the attention of the taxpayers of the city to the necessary increase in the tax rate incident to this work. From the testimony it appears that at least seven years will elapse before the Ashokan dam project produces any revenue, and by that time the additional burden of interest and local taxes imposed by this project upon the city will aggregate over $6,000,000, while it will probably be twenty years before the net revenue from this addi- tional water supply is sufficient to cover this interest. CONDEMNATION PROCEEDINGS. Under the provisions of the present Constitution the value of land taken for public use by condemnation must be fixed by a jury or by a commission consisting of three persons appointed by a court of record. In practice, all condemnation proceedings are con-28 Investigation of Finance of New York City. ducted before a commission appointed by a Special Term of the Supreme Court. At the present time over 250 such commissions are engaged in appraising property in the city of New York, other than the commissions now in existence appointed in connection with the condemnation of property to provide an additional supply of water. During the past three years the fees paid the commissioners appointed in connection with the Ashokan dam and aqueduct have aggregated $169,490 in connection with the reports par- tially or wholly completed, without including fees of the numerous commissions which have not yet made any report, but which are actively engaged in their work. During the same period the fees paid commissioners in street and park opening proceedings have aggregated over $384,000, while fees paid in other condemnation proceedings, exclusive of the Dock Department, have aggregated over $300,000. Without taking into 'account a large number of other commis- sions, the annual expense to the city for commissioners’ fees has, therefore, aggregated approximately $300,000. The method of appraising land by commission, and the delays incident, caused either by the desire of the commissioners to increase their fees or to the fact that the number of commissions is too great for prompt action, necessarily results in the payment of interest at 6 per cent, by the city for many years after title is vested and before the amount due the property owner is ascer- tained. Where title is not vested at the time of the appointment of the commission, the delay works great injustice and hardship to the property owners, because interest is running in their favor, and they are not permitted to devote the property to other purposes. The appraisal of property by commission has necessitated the employment of ,a vast army of expert witnesses at high fees. The cost of such experts in the matters other than street opening and other than water supply proceedings, .have amounted in threeReport of Joint Committee. 29 years to $242,013.50, of which $60,188.50 was paid to Samuel Smyth and $52,235 to Charles A. Berrian. The appraisal of land by such a vast number of lay commis- sioners necessarily results, in many instances, in compelling the city to pay exorbitant prices for the land taken. Your Committee is firmly of the opinion that the method of condemnation should be changed by constitutional amendment, applicable throughout -the State at large, if practicable, and in any event applicable to the condemnation of real property situated within the city of Yew York. ADVERTISING. Upon the request of your Committee, the comptroller of the city prepared a statement of the cost of advertising in the city of Yew York from January 1, 1908, to December 31, 1908. A recapitulation of said statement shows that during that period of time the total amount that had been paid was $721,608.54; there were bills unpaid in office of the City Record for advertis- ing during the year 1908 for $29,377.98; there were bills on hand for advertising of the Board of Water Supply, ordered through the Law Department, not vouchered, that were held on the ques- tion of rate, amounting to $68,731.07; making a total of $819,717.59. This statement shows that the rate per agate line for adver- tising varied from; seven cents to $1.25 for each insertion, the newspapers other than those published in the city of Yew York charging from, seven cents to twenty cents per agate line, and those in the city of Yew York charging in most instances forty cents per agate line. The charge of $1.25 per agate line was made by the Christian Herald, a weekly newspaper, and is the only instance where any price greater than fifty cents per agate line was paid. The testimony shows that it has been the custom in the city of Yew York for many years past for the newspapers of the city30 Investigation of Finance of 'New York City. to employ different advertising agencies or individuals to solicit and obtain advertising from the city departments, and that said newisp-apers paid for such service and for the further service of attending to all of the details in relation to the advertisement, such as obtaining the papers from the City Record, making out the necessary affidavits and proof of publication, checking up the different notices to see that the proper number of insertions were made, from 15 to 30 per cent, of the amount received for such advertisement. It appears that almost all of the newspapers in the city have followed this course for a long time past. An ex- amination of the books kept by the supervisor of the City Record, and particularly the book containing the authorizations for the publication of the different public and legal notices, showed that during the past year in nearly two hundred instances the name of one paper had been erased or crossed out (and the name of an- other paper inserted in lieu thereof. These interlineations were in most instances initialed by the secretary to the mayor, as appears from the testimony of the supervisor of the City Record. The comptroller of the city, one of the members of the Board of City Record, whose signature was attached to all of these'author- izations, containing the interlineations, testified upon the stand that those interlineations were made without his knowledge or consent and subsequent to the time that he affixed his signature thereto. One of the advertising agencies that had been for many years caring for the advertising for the different newspapers was the Securities Advertising Agency, 44 Broad street, New! York city, of which W. J. K. Kenny and William George Foster were the principal stockholders, Mr. Kenny being president of the company and Mr. Foster being the general manager. The busi- ness, however, in relation to the newspaper work was conducted in the name of William George Foster for political reasons, as testified to by Mr. Kenny, and a separate set of books kept in his name. Mr. Foster was served with a subpoena duces tecum toReport of Joint Committee. 31 produce his hooks, showing the transactions between either the advertising agency or Mr. Kenny and himself with the news- papers. He produced a large number of books that contained a description of the advertisement, the term for which the adver- tisement was to run, the general details necessary to keep track of the .advertisement and the amount that was to be received by the newspapers. It appears from the testimony that the city paid to the newspapers direct, and that then the newspapers made pay- ment to Kenny and Foster. Mr. Foster testified that he kept the books and was the custodian of all the funds received in the busi- ness from the newspapers, and that the only book that he kept to show the amount of receipts and disbursements was a checkbook in which were entered the deposits, and the purposes for which checks were issued appeared upon the stubs. Mr. Foster was asked to produce that book, which he had failed to bring with him,, and was excused for a time sufficient for him to go to Brook- lyn, where he said the book was, to obtain the same. Upon his return, he stated that on the advice of counsel, he refused to pro- duce the book, but that he would bring the same to the office of counsel for the Committee, and in so far as the records therein contained applied to the advertising business, and not to his per- sonal matters, would show the same to counsel, which, however, he refused to do, but immediately thereafter left Hew York city, and up to the time of the closing of public hearings by your Com- mittee had not returned to the city. An interesting situation seems to have been presented in con- nection with Mr. Foster and his business, in that a man by the name of Robert W. Bligh, employed by Foster, testified on the stand that he was also employed by the city Board of Water, Gas and Electricity as an inspector of pipe, and that he received there- for the sum of $100 per month; that he had been in the employ of that department for over two years, and that during that period of time, he had performed no services except in one in-32 Investigation of Finance of New Yore City. stance. That he was appointed by the commissioner of Gas, Electricity and Water Supply, and that he received his compensa- tion each month from the telephone company. It is within the province of the Legislature or of your Committee to punish Foster for contempt, but it was not thought wise to pursue that course, he having by his own actions justified the assumption that in some way in connection with his dealings with the different departments of the city in relation to advertising, and his ability to secure such advertising, collusion existed. Your Committee recommends the esablishment of a Bureau of Publicity and Statistics charged with the duty of co-ordinating all statistical matters, publishing reports, exercising general control over all city advertising, and publishing the City Record with the end in view of centralizing and economizing the work, and with a view to doing away with a vast amount of wholly unnecessary city advertising. THE PURCHASE OF SUPPLIES AND THE ESTABLISH. MENT OF A CENTRALIZED PURCHASING BUREAU. The city of New York annually expends from twelve to fifteen million dollars in the purchase of supplies for current consump- tion, exclusive of supplies for permanent improvements. With the single exception of the Department of Education, your. Com- mittee found that the methods pursued in the expenditure of this vast sum of money were utterly without system, and in nearly every possible way encouraging negligence, extravagance and waste. Seventy-eight different officials scattered through various departments in various parts of the city are charged with the re- sponsibility of purchasing supplies of the same general nature, and there are . 1,290 receiving stations where supplies are de- livered, exclusive of contract work or the carrying on of repairs to existing buildings. These seventy-eight different officials and their subordinates act utterly without co-ordination or co-operative effort as to prices, quality or quantities of goods purchased. ManyReport of Joint Committee. 33 different officials purchase in small quantities above retail market prices supplies of the same general nature to be delivered in the same general locality. Your Committee employed a force of accountants, in co-opera- tion with the Bureau of Municipal Research, to obtain a thorough and comprehensive comparison of prices paid by the city with current market rates. They found that the accounts, kept by the city, of quantities of supplies purchased and prices paid were so utterly incomplete, inaccurate, and devoid of system, that it would take many months for all the accountants who could work at the books to complete a comparative statement. Accordingly, your Committee concentrated the work of its accountants, in this line, mainly upon that class of supplies coming under the general head of forage. They also made an examination into the question of what are termed “ janitor supplies ” and coal. They found that in the purchase of forage by five departments during the period from January 1, 1907, to June 30, 1908, aggregating $737,668.03, the variations in prices actually paid were so great that had all the purchases been made on the basis of the lowest price paid for each article, the saving to the city would have amounted to ‘ $265,- 486.56. A striking illustration of the great variation in prices was evidenced in two contracts for the delivery of forage signed on the same day by the commissioner of one of the departments. The price for straw for delivery in the borough of Brooklyn was over twenty-one dollars per ton greater than the price for the same article under the same specification for delivery in the boroughs of Manhattan and. The Bronx; and the price for hay for delivery in the borough of Brooklyn was nearly sixteen dollars per ton greater than the price for the same article under the same specifi- cation for delivery in the boroughs of Manhattan and The Bronx. 234 Investigation of Finance of New York City. If all the purchases of coal for the city from January 1, 1907, to June 30, 1908, had been made at the lowest price paid by any of the city departments, the saving to the city would have amounted to approximately $50,000. These figures do not fairly represent the difference between prices paid and the reasonable market prices, because some of the lowest prices were the result of unbalanced bids, placing low prices on larger quantities than the bidder ex- pected to deliver, and putting high prices on the supplies actually to be delivered. But a careful analysis of the large mass of figures furnished by the accountants and put in evidence com- pels the conclusion that, in its purchases of forage, the city pays at least from ten to fifteen per cent, more than market price* The amount of waste thus disclosed was due to the methods pur- sued and the inevitable negligence, waste and extravagance thereby encouraged, apart from any dishonesty or graft which may have existed, and which also are encouraged by the utter lack of sys- tem and organization in the matter of purchasing supplies by the city. All large business enterprises have long since outgrown the primitive purchasing and bookkeeping methods which are still pursued by the city. The evils of these methods are further aggravated by inadequate inspection of supplies delivered, and by needless delays in the preparation of vouchers for payment, so that the city loses to a large extent the advantages of lower wholesale prices and of discounts for prompt payment. Notwith- standing the fact that the city is an enormous purchaser, and is always solvent, it pays larger prices than the ordinary small dealer for the same classes of goods. The extended tabulations of prices paid by the city and of market prices for the same goods, made by the accountants em- ployed by your Committee, together with a vast amount of evi- dence given by officials charged with the responsibility of making purchases, are set out in the evidence in great detail, and fully justify stronger language even than your Committee has herein-Report of Joint Committee. 35 before used in condemnation of the methods pursued. A thorough and systematic reorganization of the present demoralized condi- tions should be compelled by appropriate amendments to the city charter. The defects existing and the improvements required are both so evident that it seems unnecessary here to go into full illustrative details. Any competent business man of experience in large enterprises would recognize that a reorganization of present methods is absolutely essential. The supplies of the city are purchased through two classes of agencies: (1) Quasi-central purchasing departments; (2) city departments generally. The quasi-cenitral purchasing departments include the Board of City Record and the officers of the several borough presidents. The Board of City Record receives an appro- priation annually of over $1,000,000 for the purchase of station- ery and miscellaneous office supplies. The budget appropriation for 1909, including arrearages, amounts to $1,203,600. Upon this appropriation, requisitions are made by the several departments, not in any predetermined amount, but in accordance with what are assumed to be the current needs of the departments. The board exercises no control over the amount of the requisitions, and in consequence there has been each year a considerable deficit occa- sioned by contracting liabilities for stationery and office supplies in excess of appropriations granted. The offices of the several borough presidents serve in a measure as central purchasing agencies for those departments which occupy quarters or buildings subject to the control of the borough presidents. Requisitions made upon a borough president for the purchase of supplies by bureaus not under his administrative jurisdiction are honored by him at his discretion; the amount of the requisitions so made by any department is not fixed by any appropriation, but is gov- erned solely by the capacity of the appropriation received by the borough president to answer the demand made upon it. Purchases by the city are made by formal and informal con-36 Investigation of Finance of NewTork City. tract. Formal contracts are entered into after the preparation of proposals and receipt and opening of bids, awards being made to the lowest bidder. Informal contracts are given directly to a vendor with or without the receipt of quotations. Section 419 of the charter prescribes a limit to purchases of the latter class, fixing the amount of any supply that may be purchased on ojien market order at $1,000. Contracts for supplies are based upon estimates of quantities consumed. Considerable inaccuracy of necessary quantities prevails in the preparation of these esti- mates inasmuch as there have not been established throughout the departments records of consumption. Goods purchased are frequently placed in stores where goods of similar character are kept, no distinction being made between goods on hand and such additional purchases. Failure to maintain proper store records based upon physical inventories leads in many instances to purchases of goods in excess of present require- ments, inasmuch as the only guide available in the preparation of estimates is the amount of goods purchased, no records being maintained of goods consumed. A proper prerequisite, therefore, of placing the city on a business basis in matter of pur- chases would be establishing control over stores in order that accurate records of various classes of goods consumed may be secured upon which to base estimates for contracts. In many departments the form of proposal is of such a char- acter as may make it difficult for legitimate traders to bid. Pro- posals frequently cover miscellaneous supplies of a character not traded in by a single trader. Contracts based upon these pro- posals may be let to the lowest bidder for all goods included in them, or to the several lowest bidders on the several classes of supplies bid upon. In consequence a bidder must either rest content with bidding upon a single item or group of items con- tained in the proposal in which he regularly trades, or must risk competition with middlemen in bidding upon goods in which heReport of Joint Committee. 37 does not regularly trade. This practice places the legitimate trader at a disadvantage, and presents a favorable opportunity to the middleman whose only stock in trade is his ability to secure public contracts. Specifications for contracts are frequently so inexactly drawn as to be uncertain in nature and to leave the bidder in doubt as to the character of goods to be delivered by him. Attempt is some- times made to remedy the indefiniteness of the specifications by requiring that goods be submitted according to sample. No pro- vision has been made to protect the integrity of the sample nor to insure conformance therewith. Notwithstanding the fact that several departments may be regular purchasers of the same class of goods no effort has been made to stand aridze specifica- tions for such goods in order that the widest competition may be provided, and supplies most suitable for the purposes for which they are purchased, secured. In the matter of janitor supplies special investigation by this committee showed fifty-eight kinds of soap purchased for scrubbing purposes at as many different prices and throughout the range of supplies used by the cleaning forces in the public buildings, scarcely two departments purchased the same brand or character of supplies. Formal contracts for supplies are let to the lowest bidder. No provision is made for determining whether prices bid are in con- formance with current market price or with the lowest, price currently received by the city for the class of goods in question. The department of finance, through its bureau of audit, has re- cently begun an attempt to check the prices of goods purchased on open market orders against current market prices, but no similar effort has been made with respect to contracts. The experience of one department is no way reflected to the benefit of other depart- ments. The result is that the city may simultaneously pay the highest and lowest prices for the same commodity. Purchases of38 Investigation of Finance of New York City. goods on open market orders are usually made in small quantities and in a manner to compel the payment of an excessive price. No competition is provided and the only protection afforded the city lies in the audit of claims by the department of finance. This audit is based upon an inspection of deliveries made, concerning which the comptroller may or may not receive notice, which is in consequence haphazard and of little effect in protecting the city from extravagance. Linked with the defects in the preparation of proposals and contracts as a source of loss to the city in the purchase of supplies are the failure to inspect goods when delivered and to make prompt payment of claims. These defects are in process of correction by the comptroller in connection with the reorganization of the ac- counting methods elsewhere described. Enlargement of the in- spection division of the finance department’s bureau of audit is under way, as that department now has but nineteen inspectors to keep watch of 1,290 place of delivery. The recent require- ments of the comptroller that notice of all orders issued to vendors be filed with the department of finance, as well as in- voices of deliveries, and that no goods received by the departments be consumed until after inspection, will doubtless do much to prevent loss through short deliveries, noncompliance with specifi- cations, or the charging of excessive price for goods purchased on open market orders. Similarly, the reorganization of the accounts whereby the comptroller is currently advised of all outstanding orders of goods made in pursuance of such orders or contracts, will provide the basis for securing prompt payment of claims. Heretofore the department of finance has not been advised of orders issued by the departments making purchases, nor has it regularly been advised of deliveries of goods, so that it has been impossible to maintain effective control over the payment of claims. Under the system recently adopted, it lies entirely in the hands of the comptroller to compel prompt certification of claimsReport of Joint Committee. 39 by the departments purchasing and to secure immediate audit thereof by the bureau of audit. The mere centralization of the power to purchase supplies in the hands of a central department will not cure the existing de- fects discovered by this Committee in the method now in vogue in the purchase of supplies in the city of New York. While great economies may result by the consolidation of the many purchases of goods now bought at different times and by several departments independently, it is none the less true that very serious dangers attend the concentration of the power to purchase all supplies of the city government in a single department. As a means of pro- tecting the city from the dangers of concentration, and at the same time insuring the best results from the establishment of a central purchasing agency, it may be desirable to provide for cer- tain independent forms of control over the proposed department as follows: 1. There should be established a central agency for the prepara- tion of specifications to be contained in all proposals and contracts. This agency would be vested with responsibility for the standardi- zation of all goods consumed by the city. It would be further re- quired to prepare forms of proposals for bids in accordance with known established trade classifications, in order that such pro- posals may be made attractive to regular traders in specific classes of goods, and prevent confusion of goods of several classes with its resulting advantage to middlemen. This agency might be made subsidiary to the Board of Estimate and Apportionment and be known, as the Bureau of Standards. This practice has already pre- vailed with respect to certain classes of contracts by providing through the Board of Estimate and Apportionment a means of standardizing specifications in order to secure uniformity in the several departments requiring the particular supply. Recently, and during the pendency of the inquiry by your Committee, the40 Investigation of Finance of New York City. Board of Estimate and Apportionment has undertaken the stand- ardization of contracts for the purchase of coal, upon which it is estimated an economy of five hundred thousand dollars per annum will’be effected to the city out of total transactions amounting heretofore to approximately two million dollars. All contracts entered into for supplies by the central purchasing agency should be based upon proposals and specifications approved by the Bureau of Standards. 2. All contracts entered into by any city department or officer thereof are now approved as to legality of form by the corporation counsel. It is proposed, in the event of the establishment of a central purchasing agency, that a special division of the law de- partment be created to pass upon the legality of formal aspects of contracts, in order that this part of the procedure may be trans- acted with the utmost expedition. 3. As a means of preventing payment of prices in excess of the current market price, it is suggested that there be established a bureau to be known as “A Price Current Bureau,” to which all bids .should be referred for checking against current market prices. In the event that amounts bid for supplies are in excess of current market prices, such bids are t> be rejected. In addition, this bureau would serve to check prices charged for goods purchased on .open market order and provide the basis for audit by the Depart- ment of Finance. An agency of this character is now in process of development by the 'Comptroller in connection with the division of Inspection of the Bureau of Audit of the Department of Finance. If properly organized this function might be exercised by the Comptroller as it is a quasi-auditing function. 4. There should be an independent audit of claims in accord- ance with the present practice pursued by the Bureau of Audit in the Department of Finance. 5. There should be central accounting control over the trans- actions of the purchasing department. The character of this con-Report of Joint Committee. 41 trol has been outlined in another section of the report relating to the reorganization of accounts. Inasmuch as a very considerable part of the accounting now performed by the several departments relates to contracts and open market order purchases, in the event of the establishment of the central purchasing agency, such accounts should be centralized in a single office. It is not proposed that appropriations for supplies be made to the central purchasing agency, as is the present practice with respect to the Board of City Record. On the contrary, it is suggested that appropriations for supplies be made as now to the several departments requiring such supplies, and that requisitions upon the purchasing agent be limited to the amount of such appro- priations. This practice will either require that the department head mak- ing the requisition -advise the purchasing agent of the status of the appropriation 'affected by the requisition and purchase, or that a centra] accounting agency provide such advice. Such advice could be provided by a central accounting agency more effectively than by the departments making the requisition. It would be clearly unwise to duplicate the existing records by establishing for the benefit of the purchasing agent an independent accounting office wherein the status of all accounts to which purchases might properly be charged, would be maintained. The comptroller is now required by the charter to report monthly to the several de- partments the status of the appropriation .and fund accounts. He is also required to certify that there are sufficient funds in the account affected for every contract entered into by the city for the purposes of the contract before it becomes a- valid contract. The comptroller, however, had, prior to the installation of the new system of accounts, no means of ascertaining the open market orders outstanding, chargeable against an appropriation, or liabili- ties incurred and unpaid for payroll purposes. In consequence the records of the Department of Finance did not accurately show42 Investigation of Finances of New York City. the status of departmental appropriations. Such advice system- atically rendered would be sufficient for the purposes of the departments as a guide in the making of requisitions. The procedure suggested for the making of purchases through the central purchasing agency is as follows: 1. That all departments receiving appropriations for supplies furnish to the central purchasing department an estimate of the several classes of supplies required by them for the period covered by the appropriation. 2. That the central purchasing department classify and collate the estimates received from the several departments and prepare proposals and specifications for bids, including all supplies of the same class or classes requisitioned by the several departments. 3. That the proposals and specifications for bids prepared by the purchasing agent be referred for approval to the Bureau of Standards as heretofore described. 4. That the proposals and specifications be approved as to legal- ity of form by the corporation counsel, and that such approval have a view not only to the conformance with law, but to clarity in specification, in order to facilitate specific enforcement of the contract. 5. That in so far as possible, proposals for supplies of various classes estimated to be required by the several departments be advertised simultaneously in order to avoid the expense of re- peated advertisement. 6. That bids be submitted in duplicate, one copy to go to the purchasing agent, and one to the Department of Finance. 7. The opening and tabulation of bids by the purchasing agent. 8. Reference of bids by the purchasing agent to the price cur- rent bureau of information as to the justness of price bid. 9. Submission of the tabulation of bids and the tentative award to the comptroller for checking against the duplicate bid received by him, and for verification as to other points involved in the contract.Report of Joint Committee. 43 10. Certification of the contract by the comptroller as to the availability of funds. 11. The execution thereof by the purchasing agent. The contract should be executed in triplicate, one copy for the purchasing agent, one copy given to the contractor, and one copy filed with the comptroller for purposes of audit. It is not suggested that all contracts entered into by the pur- chasing agent for goods required by the several departments pro- vide for the delivery of total amount of the goods contracted for simultaneously, unless such delivery is desired. It is proposed that the practice now in vogue be continued, whereby partial deliveries are made in pursuance of contracts on memorandum orders. On the requisitions of departments, the purchasing agent would issue orders to the contractors for the delivery of goods as desired. Such orders would not become further incumbrances against the funds against which the contracts are charged, but would be in the nature of a liquidation of the contract liability through delivery. In this connection the practice adverted to in the description of the reorganization of accounting methods whereby the comptroller is iadvised of all orders issued and of invoices by the receipt of a copy thereof, in order to provide advice for accounting and inspection purposes, should be continued. It is not proposed that the central purchasing agent shall be provided with a separate inspection staff in order to determine whether goods delivered conformed to terms of contract and orders issued by him. Such inspection would be made prior to the consumption of the goods by the inspection division of the Bureau of Audit, and the city should be further protected by a certification made by the person receiving the goods to the effect that the goods delivered conformed to the description contained in the order and invoice. This procedure is now contemplated and required by the new system of accounts and procedure in process of installation.44 Investigation of Finances of New York City. As to whether or not it would be advantageous to provide a central storehouse as a point of delivery and distribution of goods, is a matter which may best be determined by experience in administering a central purchasing agency. It is unlikely any such storehouse will be required, however, inasmuch as goods cur- rently necessary in the operation of the department may be de- posited in the storehouses under the control of such departments, and periodic deliveries made directly by the contractor. Most of the departments are now equipped with stores to which de- liveries might continue to be made on the order of a central pur- chasing agent. It is believed that the adoption of modern business methods in the purchase of supplies and in the audit of claims, will make it possible for the city to secure the same treatment as is now secured by large corporations in this class of transactions. By making it possible for manufacturers and legitimate traders to deal with the city, and by insuring prompt payment of claims, the city should be placed in a position to demand and receive such discounts as are regularly accorded to the trade, in addition to discounts for cash payment. We desire to acknowledge the courtesy of Mr. W. Y. S. Thome, director of purchases of the Union Pacific Railroad, and allied lines. His testimony points conclusively to the benefits to be de- rived from the standardization of requirements and centraliza- tion of purchases. Mr. Thorne testified before this Committee that in transactions aggregating $50,000,000 per year, the savings effected by the centralization of purchasing under improved methods had amounted to from 15 to 40 per cent, per annum. How great economies can be effected by the city of New York by the adoption of similar methods is a matter of conjecture. But clear it is that much waste would be prevented by a like reform of the existing methods which have not only made much waste possible, but have made its prevention impossible.Report of Joint Committee. 45 REORGANIZATION OF ACCOUNTING METHODS. Essential to establishing the city on a proper business basis, and indispensable to the prevention of waste and the promotion of efficiency in its administration, is a complete reorganization of accounting methods. Prior to 1907 this important aspect of public business received only periodic and unsystematic attention. While the responsibility for prescribing and installing systems of accounts rests upon the comptroller, that office has in the past, by reason of multifold duties and the pressure of many problems at- tending upon the establishment of the greater city, been unable to accord to this work the attention that it deserves. In January, 1907, the comptroller began an installation of a uniform system of departmental accounting, the Departments of Health, Water, Street Cleaning and Bellevue and Allied Hospitals being selected for this purpose. In February, 1908, a definite plan of revision of the accounts of the Department of Finance was decided on by the comptroller, but the installation in the several departments and the Department of Finance could not be simul- taneously undertaken, owing to lack of organization for doing the expert accounting work. In July, 1908, after favorable action by the Board of Estimate and Apportionment and the Municipal and State Civil Service Commission, the present comptroller organized a staff of expert accountants to prosecute the work of systematic revision of ac- counting methods and to install uniform accounts in every de- partment of the city government. There is, therefore, now recog- nized as an integral part of the Department of Finance, a division whose sole function is to devise, install and supervise accounts. It is the expectation of the comptroller that by January 1, 1910, a uniform system of expenditure and revenue accounts will have46 Investigation of Finances of Hew York City. been established throughout the departments of the city govern- ment. Involved in the problem' of reorganizing accounts is the re-- organization of the methods of audit heretofore prevailing in the Department of Finance. In order to centralize in that department control over all revenues and disbursements, there have been established the offices of auditor of disbursements and auditor of receipts, respectively charged with maintaining controlling records over disbursements and receipts. By this means the comptroller, who under the charter is the central auditing and accounting officer of the city government, will be enabled cur- rently to determine the total revenues accrued to the city, and the total liabilities outstanding and contingent. The importarce of providing in the Department of Finance complete information respecting the resources and liabilities of the city cannot be over-emphasized as a means of making possible intelligent administration of the city’s finances. The essential features of the system of accounting for disbursements now in process of installation by the comptroller are :as follows: 1. Establishing in each department of the city government a complete -and permanent record of all transactions upon which disbursements are based, beginning with the requisitions made on the purchasing agent and continuing through to the vouching of claims to the comptroller for payment. 2. Establishing the accounts of the several departments and the accounts of the Department of Finance on the same accounting basis, to the end that the accuracy of the ac- counts of each department may be proved to the con- trolling accounts kept in the central accounting office. 3. Enforcing control over the accuracy of departmental ac- 0 counts, as well as the accounts kept by the chamberlain, by requiring periodical reports and trial balances to beKeport of Joint Committee. 47 rendered, which will -at once show errors or differences to be reconciled. 4. Fixing responsibility, by means of certification, on the sev- eral departments, offices, officials and employees con- cerned in expenditure and disbursement transactions. 5. Providing for prompt and adequate inspection of the De- partment of Finance (after delivery of goods purchased by the several departments. 6. Providing all other information necessary for a paper audit and verification of claims. 7. Establishing a record of service rendered and certificates of compliance with laws, for the audit of payrolls. 8. Establishing control over appropriation, bond funds and special and trust accounts, in order that the exact condi- tion with respect to unincumbered and unexpended bal- ances of each account may be evident at all times. 9. Establishing a record and functional classification of de- partmental expenses of operation and maintenance as a basis for administrative control and for budgetary appro- priations. Keeping separate records of all contracts and liquidation thereof, as distinguished from goods purchased on open market orders. 10. The substitution of modern business methods of adminis- tration for antiquated, time-consuming processes which, together with the new accounting methods, are designed to fix responsibility for all transactions, and so to expe^- dite the audit and payment of claims as to place the city on a trading basis appropriate to the magnitude of its transactions as a purchaser.48 Investigation of Finances of Hew Yoke City. DISBURSEMENT RECORDS AND DOCUMENTS TO BE KEPT IN THE SEVERAL DEPARTMENTS, BUREAUS, ETC. The system of disbursement accounting adopted and now in process of installation in the several city departments compre- hends the following documents and records: 1. Documents. a Duplicate requisitions on the purchasing agent, one copy be- ing retained as a memorandum by the person requisitioning goods; and one copy retained by the purchasing agent plac- ing the order. b Orders in quintuplicate for purchases in the open market or deliveries pursuant to contracts, one copy being re- tained by the purchasing agent, one copy transmitted to vendor or contractor, one copy to the person requisitioning the goods, one copy forwarded to the Bureau of Audit of the Department of Finance for advice to the Division of Inspection, and one copy being transmitted with the voucher and invoice for payment. c Invoices in quadruplicate accompanying all deliveries to stores and on all other completed deliveries, one copy being retained by the person receiving the goods, one copy going to the departmental bookkeeper, one copy to the Inspection Division of the Bureau of Audit, and one accompanying the voucher forwarded for payment. In case invoices do not accompany deliveries, goods are held at the vendor’s risk until the receipt thereof. d Partial delivery slips in duplicate to accompany all partial deliveries of perishable goods and other articles which do not go to stores, these to be brought together on monthly bills to be vouched to the department of finance for audit.Report of Joint Committee. 49 e Daily and weekly time reports from all employees of the city, showing the nature of work done, the number of hours em- ployed thereon and whether a proper charge against con- struction and betterments, or against maintenance and operation, these reports forming a basis for making up' payrolls and certification thereto, and for making a proper segregation of payroll accounts. / Vouchers in duplicate marked with a different letter to indi- cate the character of the fund, whether appropriation, bond, special or trust, to which the claim may be charge- able, a different color being used to indicate the claim vouched is an open market order, contract, payroll or of miscellaneous class. 2. Registers. a Contract register. As contracts are awarded, they are numbered and entered in a contract register. This register provides a com- plete record of contracts awarded and affords a means whereby the reserves for contracts set up against the accounts in appropriation and bond fund ledgers may be checked as to' accuracy. The contract register is totaled and the total amounts are posted- through the General Journal to the General Ledger ac- counts of the same title, which act as controls over the contract reserves. b Register of orders. These registers provide a complete record of each class of orders issued, and afford a means by which the total open market order reserves set up against appropria- tions and fund accounts may be ascertained, also to show the total of orders posted in the Contract Ledger and50 Investigation of Finances of New York City. Claimants’ Ledger. The Order Register being totaled monthly, the totals are posted through the General Jour- nal to accounts of corresponding titles in the General Ledger which carry the controlling totals to which the accuracy of the open market orders against appropria- tions, the orders against contracts and the orders posted to the Claimant’s Ledger, may be proved. c Invoice register. Immediately upon receipt of invoices, they are entered in an invoice register which not only provides a complete record of invoices, but affords a means whereby the ex- pense, stores or construction ledgers may be checked as to accuracy. The invoice register is totaled monthly, and the total amounts representing expenses, stores, con- struction, etc., posted through the General Journal to accounts of corresponding titles in the General Ledger which act as controls over the subsidiary ledgers of the same titles. d Voucher registers. Three classes of Voucher Registers are provided for re- cording separately those drawn in liquidation of con- tracts, open market orders and miscellaneous claims. Each voucher register is totaled monthly and the totals posted through the General Journal to accounts of cor- responding titles in the General Ledger which act as controls over the voucher charges in the Appropriation and Bond Fund Ledgers. 3. Ledgers. The several ledgers installed in the departments include: a Appropriation ledger. There are two forms of appropriation ledger — one to carry salary appropriation accounts and one to carry all. Report of Joixt Committee. 51 other appropriation accounts. As contracts chargeable against appropriations are awarded and entered in the Contract register and Ledger, they are also entered in an Appropriation Ledger as a reserve. Similarly, re- serves are set up for open market orders issued. The difference at any date between the total amount reserved for contracts and open market orders against each ap- propriation (plus payroll and miscellaneous vouchers charged) and the amount of the appropriation, repre- sents the unencumbered balance, while the difference between the latter and the total amount of vouchers charged against each appropriation represents the un- expended balance. This ledger like all the others is totaled monthly and balanced with the controlling ac- count in the General Ledger. b Bond fund ledger. This ledger reflects the same information relative to bond funds as do the above described ledgers for appropria- tions. c Claimants’ ledger. This ledger carries the individual accounts of all dealers from whom goods are purchased in the open market. Full information is set forth regarding orders given each dealer and the deliveries and payments thereon. d Contract ledger. This ledger carries a separate account for each contract and shows full information as to the date, amount and nature thereof, the orders given pursuant thereto, to- gether with deliveries and payments thereon. e Stores ledger. This ledger carries a separate account for each class or kind of articles kept in stores, so that it is possible at any time by reference thereto to ascertain the amount52 Investigation of Finances of Ne.w York City. of each kind of supply on hand. The stores ledgers are to be verified by periodical inventories, and are proved by trial balance and the controlling account in the gen- eral ledger. f Expense ledger. This ledger is designed to determine the exact expense of maintenance and operation for each function and ac- tivity of a department, and to provide a basis for com- parison of operating cost, from year to year, and for the formulation of estimates of future expenses. The ex- pense ledger is controlled through the general ledger ac- count entitled “ Expenses.” g General ledger and general journal. The nature and uses of these books have already been in- dicated above. DISBURSEMENT RECORDS AlND DOCUMENTS TO BE KEPT IN THE DEPARTMENT OF FINANCE. After the drawing, recording and forwarding of a voucher by any department of the Department of Finance, the claim is liqui- dated so far as the former is concerned. In order that the comp- troller may be provided with all information necessary for a proper record and audit of vouchers, the several departments for- ward to the Department of Finance, not only the original docu- ments above described, but also the following schedules and reports: 1 Schedules. a Schedules of invoices registered. The total of each schedule as it arrives in the bookkeep- ing division is posted to a register of the same title showing department, etc., this register being totaled monthly and posted through the general journal to gen- eral ledger controlling accounts.Report of Joint Committee. 53 b Schedules of vouchers. These schedules accompany the vouchers as transmitted and are posted to registers in the bookkeeping division according to classes, etc., which in turn are posted to general ledger controlling accounts. Each voucher schedule is also posted against the proper appropriation or fund account in their respective ledgers. 2. Monthly Reports, Each month the departments will be required to forward reports to the comptroller, the mayor, the commissioners of accounts and the secretary of the Board of Estimate and Apportionment, showing: a. General ledger balances. b. Condition of appropriations. c. Condition of bond funds. cl. Amount reserved for contracts and open market orders respectively. The records required to be kept in the bookkeeping division of the Department of Finance include: 1. Registers. Among the several registers required to be kept in the book- keeping division and whose titles are in most cases self- explanatory are the following: Registers of budget allow- ances ; stocks and bonds authorized; bonds issued; transfers of appropriations and of bond funds; authorizations cancelled; bids for supplies and bids for construction and betterments; contracts for supplies and contracts for con- struction and betterments; orders; leases; condemnation awards; contracts for purchases of real estate; noncontract claims; actions on contract and on noncontract claims; voucher adjustments and refunds; warrant schedules; warrants cancelled; unclaimed warrants; warrants paid; insurance; judgments, etc. •54 Investigation of Finances of New York City. 2. Ledgers. The ledgers kept in the bookkeeping division include: The general ledger of controlling accounts; appropriation led- gers, bond fund ledgers and special and trus,t fund ledgers carrying accounts with each appropriation, bond fund, and special trust fund and showing as in the case of the de- partment ledgers both the unincumbered and unexpended balances, provision being made to show both the amount of the warrant drawn in payment of the claim as well as the amount vouchered for payment by the departments. The records required to be kept in the Bureau of Audit of the Finance Department include: 1. Registers. a. Register of voucher schedules. After registration of vouchers and voucher schedules . in the bookkeeping division, they are sent to the Bu- reau of Audit, where the schedules are also regis- tered and together with the vouchers and supporting papers are placed on file, thus forming a complete record for audit. b. Register of warrants. After warrants are prepared for signature, they are serially numbered in the Bureau of Audit and the warrants entered on the schedules prepared in sep- tupl'icate and registered. The multiple copies oper- ate to hasten the warrants on their journey from office to office for the purpose of obtaining the official sig- natures required by law and leaving in the hands of each official signing a copy thereof, upon which is a receipt from the person to whom he delivered the remaining schedules and the warrants. After leav- ing the Bureau of Audit, the schedules with warrants and supporting papers are sent to the auditor ofReport of Joint Committee. 55 disbursements, who after final approval of the vouch- ers forwards all but his copy of the schedule to the Comptroller, from him they go to the Mayor, then to the Chamberlain, after which they are returned to the auditor of disbursements, who checks the warrants and papers to his own copy of the schedule, detaches the warrants from the supporting papers and sends them together with one of the two remaining copies of the schedule to the disbursing clerk, while the other schedule and papers are sent to the record- room for filing. 2. Ledgers. The ledger required to be kept in the Bureau of Audit of the Finance Department include: a. Contract ledger — supplies and materials. b. Contract ledger — construction. c. Lease ledger. d. Claimants . ledger — showing the condition of ac- counts with open market order claimants. The essential features of the system of receipt accounts now in process of installation in the Department of Finance by the Comptroller include: 1. Having on file in the office of the auditor of receipts such documents and supporting papers as may be necessary to furnish evidence of accrual accounts to be collected, which documents and papers will lay the foundation for the audit of the returns to the Chamberlain, for an audit of the accounts of the collecting agents and an audit of the departmental accrual records. 2. Having separate registers for each class of documents which set forth the principal facts contained in the documents to pro- vide against the document being lost or destroyed. 3. Having general ledger accounts under the custody of the chief bookkeeper — independent of the auditor of receipts — the56 Investigation of Finances of New York City. ledger being posted from the total amounts shown in the above- described registers and carrying controlling accounts of the various subsidiary and departmental receipt records. 4. Having such subsidiary ledgers under the charge of the auditor of receipts as will enable him or any officer of the city at any time to obtain detailed information with respect to each assets receivable account, the collections made thereon, etc., from which trial balances and reports may be made monthly or more often when required as a means of controlling the accuracy of subsidiary records and of currently reporting the city’s financial condition. 5. The transmission from the several collecting offices and offi- cers of the city such daily, weekly or monthly reports and sched- ules of accruals and other advices as are necessary to make effective the exercise of central control over the accounts and over the integrity of the personnel. The installation of the system of receipt accounts has been completed in the Bureau of Licenses and the Bureau of Markets, and is in process in the Bureau of Water Register, Manhattan, and in the courts. As the documents and controlling devices differ so widely, description is omitted here. BUREAU OF REAL ESTATE. It appears that the maps, books and records pertaining to the real estate holdings of the city of New York are not kept in classi- fied order, so that they may be easily found and examined, and that a full history of the real estate holdings of the city is essen- tial and would result in a very large saving in many directions in the way of utilization of properties belonging to the city that are now either lying idle or returning extremely small considera- tions to the city from the persons occupying them. Your Committee therefore recommends that a Bureau of Real Estate under the general jurisdiction of the Board of Estimate and Apportionment should be established where all maps, booksReport of Joint Committee. 57 and records of the real estate holdings of the city should be kept in classified order, and where the same may be found and exam- ined by any citizen. BOROUGH PRESIDENTS. Many good citizens of sound judgment and large experience believe that there should be a more strongly centralized city govern- ment. They say that the greater city is little more than a con- federation of boroughs, presided over by borough presidents, shar- ing the Mayor’s powers and shirking the Mayor’s responsibilities. They argue that when you divide executive power you must divide accountability and responsibility, and when you divide accounta- bility among many, it is most difficult to lodge complaint against any one. They say that executive power and accountability should go hand in hand. They argue that most unseemly rivalry exists among boroughs, and that the borough president is more anxious for the abnormal development of his borough than for the symmetrical and proportional development of the city as a whole. Your Committee reports in favor of the modification of the present system of borough presidents, without destroying borough autonomy in strictly local matters, but as this subject is now being carefully considered by a commission, this Committee does not think it within its province in this report to suggest specific changes. THE DEBT LIMIT. As a general proposition, 10 per cent, of the assessed valuation of real property has been recognized as a prudent limit to the indebtedness of a municipality, and has even been characterized by the Court of Appeals, as “ the extreme limit of prudence and safety.” The present constitutional limitation upon municipal indebted- ness originated with the amendment taking effect January 1, 1885,58 Investigation of Finances of New York City. as section 10 of article VIII, which limited the indebtedness of a county containing a city of over 100,000 inhabitants, or of such a city, to 10'- per cent, of the assessed valuation of real estate subject to taxation therein, with the proviso, however (as con- strued in GUy of Rochester v. Quirdard, 136 N. Y., 221, and Cahill v. Hogan, 44 Misc., 360, s. c. afPd without opinion, 99 App. Div. 619), that the section should not prevent the issue of bonds to provide for the supply of water, but that water bonds making the total debt exceed 10 per cent, of the assessed valua- tion of real property should not run for a longer term than twenty years, and that on their issuance a sinking fund should be cre- ated for their redemption “ by raising annually a sum w7hich will produce an amount equal to the sum of the principal and interest of said bonds at their maturity.” In the Rochester case above cited, which was decided in 1892, while this provision of the Constitution was still limited to a county containing a city of over 100,000 inhabitants, or to such a city, the court said (136 N. Y. at p. 226) : “ But the larger cities with their greater needs and the pressure of much more numerous non-taxpayers and their swarm of claim- ants on the public treasury, did need restraint, not only as to the purposes of the municipal indebtedness, but as to its amount, and so the restriction in that respect also was imposed; and yet to prevent a greater evil which might result, and open the door to a necessity of the gravest character, it was enacted that even that restraint should not bar the further issue of bonds for a water supply; but since these would add to a debt already crowded to the extreme limit of prudence and safety, it w7as provided that such added debt should run for -a moderate term of credit and be guarded by a sinking fund so as to reduce to the lowest reasonable point the continuance and menace of the debt already too large. The city which availed itself of the exceptional permission could do so only upon the conditions which were attached with a view to making the added debt as little harmful as possible. Of course the line between the smaller and the larger cities, those which did not and those which did call for a limit of permitted debt, had to be drawn somewhat arbitrarily, and was fixed at a population ofRepost of Joint Committee. 59 one hundred thousand inhabitants as the most reasonable test capable of application.” The constitutional amendment of 1885 remained unchanged for precisely ten years. The Constitution of 1894, taking effect January 1, 1895, extended the debt limit provision to all counties and cities, but otherwise made no change in the foregoing pro- visions as to water bonds, except to add that water bonds “ shall be included in ascertaining the power of the city to become other- wise indebted;” but the amendment taking effect January 1, 1905, added, immediately thereafter, the clause “ except that debts incurred by the city of New York after the first day of January 1904, to provide for the supply of water shall not be so included.” The Constitution of this State has never imposed any limitation upon the amount of indebtedness which any county or city may incur for water supply purposes. During the ten years prior to January 1, 1905, this section of the Constitution provided in effect, that if the indebtedness of any county or city, including water supply bonds, should at any time equal or exceed 10 per cent, of the assessed valuation of the real estate subject to taxation therein, then such county or city, while such condition should continue, could nob create any additional debt, for other than water supply purposes, but could issue further bonds for water supply purposes to an unlimited amount, pro- vided such further water supply bonds should not run for a longer term than twenty years and a sinking fund should be cre- ated on issuing such further bonds, as provided by the Constitu- tion. Such is still the effect of this section of the Constitution as to all counties and cities except the city of New York. Since January 1, 1905, the effect of this section of the Con- stitution, as to the city of New York, has been and still is, that if the total indebtedness of the city, including water supply bonds issued on or before January 1, 1904, but excluding water supply60 Investigation of Finances oe New York City. bonds thereafter issued, should at any time equal or exceed 10 per cent, of the assessed valuation of real estate subject to taxa- tion therein, then the city, while such condition continues, cannot become further indebted for other than water supply purposes,, but can issue further water supply bonds to an unlimited amount,, and without reference to the constitutional provision that certain water bonds shall not run for a longer term than twenty years and shall be accompanied by a. sinking fund, such constitutional provisions not being applicable to water bonds issued by the city of New York after January 1, 1901. The terms “ debt,” “indebtedness” and “indebted” as used in this section of the Constitution are broad and unlimited as for instance, “ No county or city shall be allowed to become indebted for any purpose or in any manner; ” “All indebtedness in excess of such limitation shall be absolutely void;” “ No county or city whose present indebtedness exceeds ten per centum of the assessed valuation of its real estate subject to taxation.” Nevertheless, the general scope, purpose and intent of this section of the Constitution justifies the inference that these broad and unlimited terms, as therein used, refer only to contract liabilities of a municipality not included in its annual budget, and for payment of which the city has obtained credit as distinguished from liabilities which the city has agreed to pay in cash on delivery of the property or on rendition of the service or on the receipt by the city of the consideration contracted for. McGrath v. Grout. 171 N. Y. 7, is sufficient authority for say- ing that the indebtedness referred to in this section of the Consti- tution is only such as is created for purposes other than for the maintenance of the political organization of the municipality, and does not include liabilities incurred for current expenses neces- sarily incidental to the administration of the municipal govern- ment and payable from moneys raised annually by taxation through the municipal agencies designated by the Legislature for the purpose.Repoet of Joint Committee. 61 In Walla Walla v. Walla Walla Water Company, 172 U. S. 1, the United States Supreme Court construed the word “ indebted- ness ” in the city charter which enacted “ that the limit of in- debtedness of the city of Walla Walla is hereby fixed at $50,000,” saying (172 U. S. at p. 20): “ The obvious purpose of limitations of this kind in municipal charters is, to prevent the improvident contracting of debts for other than the ordinary current expenses of the municipality. It certainly has no reference to debts incurred for the salaries of municipal officers, members of the fire and police departments, school teachers, or other salaried employees to whom the city necessarily becomes indebted in the ordinary conduct of municipal affairs, and for the discharge of which money is annually raised by taxation.” Weston v. City of Syracuse, 17 1ST. Y. 110, involved the con- struction of the word “ debt ” in a statute providing, that if the common council of Syracuse should, in any year, contract a debt which should remain unpaid for one month after the expiration of the year for want of funds in the treasury to pay it, then the aldermen voting to contract such debt should be individually liable, and the city should not be liable, therefor. The common council contracted for work to be done after the close of the year, pay- ments for which were to be a charge upon the revenue of the next year. The Court of Appeals per Denio, J., all the judges concur- ring (17 1ST. Y. at p . 113), said: “ But the compensation to this contractor was not a debt within the sense of this provision, until the service was performed and the contractor was entitled to be paid. It was, no doubt, an obliga- tion, in some sense, from the time the contract was entered into, but it was not a debt in the popular sense, and certainly not one to which the correlative term payment could with propriety be ap- plied, and it is such debts only which the provision speaks of.” This Syracuse case was distinguished in Smith v. City of New- burgh, 77 Y. Y. 130, but without criticism, and without in any way weakening the force of the reasoning or authority of the Syra-62 Investigation of Finances of New York City. cuse case. Some remarks may be selected from the Rapid Transit cases, 5 App. Div. 290 and 23 App. Div. 472, indicating that the court was disposed to consider that a contract to make payments, in the future, of amounts thereafter to be ascertained, for subways thereafter to be constructed, would create a debt at the time of entering into the original contract, within the meaning of the Constitution. But the court in those cases expressly refrained from deciding that question, and other remarks in the same opinions are entirely consistent with the doctrine laid down by the Court of Appeals in the Syracuse case, above cited (17 N. Y. 110), that the compensation to be paid the contractor is not a debt until the service is performed and the contractor is entitled to be paid. In Bank for Savings v. Grace, the Court of Appeals, referring to this section of the Constitution (102 NT. Y. 313, at p. 318), says: “ The mischief to be prevented was the creation of an excessive debt for local improvements, or public works, or the loaning of municipal credit, so payable that the burden should not fall upon those who contracted the obligations, or on their revenues, but on posterity.” Construing similar language in the Constitution of Pennsyl- vania, the Supreme Court of that State in Addyston Pipe Co. v. Corey, 197 Pa. St. 41, 46 Atl. 1035, says: “ There is no constitutional restriction on municipal expendi- ture, provided it is paid as it goes. What is prohibited is the incurring of debt. If the city has the money on hand or provides at the time, a present means of raising it, otherwise than by loan, it may contract for expenditure without restriction.” Gray, on Limitations of Taxing Powers, 1061, accordingly lays down the broad generalization: “ Constitutional debt limits are intended to make cities and states pay as they go.”63 Report of Joint Committee. Judge Dillon in the course of his discussion of this subject in his work on Municipal Corporations (§§ 130-7),'says: “ Such limitations * * * are based on the wise policy of paying as you go, and ought, therefore, to be construed and ap- plied to secure the end sought.” The foregoing citations represent substantially all of the re- ported cases in this State, which throw any light upon the mean- ing of the terms “ debt,” “ indebtednes ” and “ indebted ” as used in this section of the Constitution. There are other cases in this State construing the words “ debt,” “ indebtedness ” and “ in- debted ” in various statutes, and contracts, which illustrate the wide variations in the meaning which may be given to these words, depending on their context and on the practical effect of applying the words to the actual situations presented. In some of the other States, the courts have, in like manner, limited the meaning of these words in similar constitutional and statutory provisions. In other States, however, particularly in Ulionis and Indiana, similar constitutional provisions have been strictly construed to prohibit incurring any liability whatsoever in excess of the prescribed limit, even though payable during the year when the liability is incurred, and from the proceeds of the current tax levy. In Walla WaMa v. Walla Walla Water Co., 172 IT. S. 1, the Supreme Court of the United States, after referring to the con- flict of authority in the different States, says: “ But we think the weight of authority, as well as of reason, favors the more liberal construction that a municipal corporation may contract for a supply of water or gas or like necessity and may stipulate for the payment of an annual rental for the gas or water furnished each year, notwithstanding the aggregate of its rentals during the life of the contract may exceed the amount of the indebtedness limited by the charter. There is a distinction between a debt and a contract for a future indebtedness to be in- curred, provided the contracting party perform the agreement out of which the debt may arise. There is also a distinction between64 INVESTIGATION OF FINANCES OF Few YORK ClTY. the latter case and one where an absolute debt is created at once, as, by the issue of railway bonds or for the erection of a public improvement,— though such debt be payable in the future by instalments. In the one case the indebtedness is not created until the consideration has been furnished; in the other the debt is created at once, the time of payment being only postponed. In the case under consideration the annual rental did not become an indebtedness within the meaning of the charter until the water appropriate to that year had been furnished. If the company had failed to furnish it, the rental would not have been payable at all, and while the original contract provided for the creation of an indebtedness, it was only upon condition that the company per- formed its own obligations/’ The reasoning above quoted was the basis of the actual decision in the Walla Walla case; and, being the latest discussion of the subject by the Supreme Court of the United States, must be deemed to be the present doctrine of that court, and to overrule, in effect, whatever may appear contrary thereto in the frequently quoted dictum of the same court in Litchfield v. Ballou, 114 IT. S. at pp. 192, 190, as follows: “ The language of the Constitution is that no city, etc., c shall be allowed to become indebted, in any manner or for any purpose to an amount, including existing indebtedness, in the aggregate exceeding five per centum on the value of its taxable property/ It shall not become indebted, shall not incur any pecuniary lia- bility; it shall not do this in any manner, neither by bonds, nor notes, nor by express or implied promises. Yor shall it be done for any purpose, no matter how urgent, how useful, how unani- mous the wish. There stands the existing indebtedness to a given amount in relation to the sources of payment as an impassable obstacle to the creation of any further debt in any manner or for any purpose whatever. If this prohibition is worth anything it is as effectual against the implied as the express promise, and is as binding in a court of chancery as a court of law.” In the Litchfield ease (114 U. S. 190, last above cited), the city of Litchfield had actually borrowed the money for the pur-Report of Joint Committee. 65 pose of constructing a waterworks system by the sale of its bonds, in advance of any contracts for construction, and “ at the time the bonds were issued the city had a pre-existing indebtedness exceeding five per cent, of the assessed value of its taxable prop- erty/’ which was the constitutional debt limit. The remarks of the court above quoted from the Litchfield case (114 U. S. at pp. 192, 193), were made in the course of reasoning toward the conclusion that such city bonds, actually issued for money bor- rowed, constituted an indebtedness within the meaning of the Constitution of Illinois. The actual decisions in the Litchfield and Walla Walla cases were in no way conflicting or inconsistent. In fact, the court, in the Walla Walla case expressly cites the original Litchfield case (Buchanan v. Litchfield, 102 U. S. 278) as authority for the proposition: “ There can be no doubt that if the city proposed to purchase outright, or establish a system of its own, the section would apply though bonds were issued therefor payable in the future.” (172 IT. S. at p. 19.) The Walla Walla case also expressly distinguished Lake County v. Rollins, 130 U. S. 662, so that the Walla Walla case (172 IT. S. 1901, must be deemed to overrule whatever there may be in the Lake County case (130 IT. S. 662), apparently inconsistent with the extended quotation above given from the Walla Walla case. The general principle may be deemed to be established by the courts of this State and by the United States Supreme Court, that the term “ indebtedness ” in this section of the Constitution, is to be construed as including only those liabilities for the pay- ment of which credit has been distinctly given to the city, for a term extending substantially beyond the time of the receipt by the city of the consideration for which the payment is to be made. The amount of the burden which may be imposed, in any one66 INVESTIGATION OE FINANCES OE SEW YoEK ClTY. year, is limited by this section of the Constitution, “ in addition to providing for the principal and interest of existing debt,” to 2 per cent, of the assessed value of real and personal property. The total burden of indebtedness, for other than water supply purposes, which may at any time be piled up to be borne by future taxpayers, is limited to 10 per cent, of the assessed value of real property subject to taxation. As a general principle the indebtedness coming under the 10 per cent, limitation is only such as stands’ on a credit basis and is to be paid by future tax- payers. This general principle is exemplified in certain specific pro- visions of the Constitution as follows: “ This section shall not be construed to prevent the issuing of certificates of indebtedness or revenue bonds issued in anticipation of the collection of taxes for amounts actually contained, or to be contained, in the taxes for the year when such certificates or revenue bonds are issued and payable out of such taxes * * All certificates of indebtedness or revenue bonds issued in antici- pation of the collection of taxes, which are not retired within five years after their date of issue * * * shall be included in ascertaining the power of the city to become otherwise indebted.” |ln all the popular discussions and official statements of the constitutional borrowing capacity of the city of New York, the general principle of construction referred to has been applied, to the extent of excluding from the computation all liabilities of the city provided for in the annual budget and to be paid out of the annual tax levy. Likewise, all tort liabilities of the city, in the nature of claims for alleged negligence and otherwise, whether admitted or disputed, contested or reduced to judgment, have been excluded from the computation for the same general reason, that they are to be paid from current receipts^ promptly on the final determination of the amounts to be paid. But, in applying this same general principle to the liability of the city on contracts for public works to be paid by instal-Report of Joint Committee. 67 ments as the work progresses, with final payment on completion of the work; and to liabilities of the .city for real property, title to which has been acquired by the city during the pendency of a condemnation proceeding, but before the proceeding has been terminated and before the amount of the liability has been ascer- tained —■ the estimated amounts of such contract liabilities and land liabilities have usually been included in the computation of the constitutional debt limit. /These two items of contract liabilities and land liabilities, involving estimated amounts of over $50,000,000, present the most serious questions which have been raised in the discussions of the constitutional debt limit of the city of New York!] If the city enters into a contract for a public work which con- templates that performance by the contractor will require several years, and if the contractor is to be paid by instalments as the work progresses, with final payment on the completion of the contract, then [the obligation of the city is to pay the contractor contemporaneously with the receipt by the city of the consider- ation contracted for, and the contract of the city is, in effect, to pay as it goes/J If the city should fail to pay any instalment as it becomes due, the contractor can recover judgment and collect his judgment, not by levy of execution on city property, but in one of the various other modes provided by law, as by compelling the issue of special revenue bonds to be included in the tax levy of the next succeeding year, or by requiring an additional tax to be levied, or by compelling payment to be made from moneys on hand. Even though the city should make provision for raising the money to pay the instalments, by issuing corporate stock, or otherwise borrowing money from time to time, that does not change the nature of the liability which is, in practical effect, to pay the contractor cash on delivery. But when the city actually borrows the money to pay the contractor by the issue of corporate stock or otherwise, then a debt is created on a credit, instead of68 Investigation of Finances of New York City. a cash, basis, payment of which is so postponed that a future set of taxpayers will be compelled to pay for considerations received by their predecessors. If, however, the contract should provide that the contractor is to he paid in city bonds instead of. cash, or if, by the terms of the contract, payment to the contractor is postponed beyond the completion of the contract for a period so long as to be inconsistent with the proposition that the contract of the city is to pay as it goes; or if on failure to pay an instal- ment the contractor can mandamus the city to issue bonds and pay the contractor from proceeds thereof, then it might well be that the amount which the city agrees to pay under the contract should be treated as a credit liability and classed with obliga- tions issued for money borrowed; but even then the city on making the contract does not incur an absolute liability to pay the total amount, for the city may refuse to allow the contractor to perform his contract, in which case the liability of the city is only the amount of the damages for its breach of the contract, which would not ordinarily exceed the contractor’s prospective profits; or the contractor might entirely fail to perform his con- tract, in which case the contingent liability of the city under the contract would never ripen into a debt. If, on the maturity of liabilities contracted to be paid in the future as work pro- gresses, corporate stock cannot be issued to provide means for payment thereof, because the 10 per cent, limitation would be exceeded; and if, at the same time a judgment recovered therefor by the contractor cannot be paid because the 2 per cent, limi- tation of the annual tax levy would be exceeded, nevertheless the judgment would still remain valid and might take precedence, in the next annual tax levy, over other current expenditures however necessary. {The same reasoning applies with equal force to the liability of the city for real property to wFich it has acquired title in a condemnation proceeding,] before determination of the proceed-Repoet of Joijstt Committee. 69 lugs, and before the amount of the liability is ascertained. When the proceeding is terminated, the property-owner can enter judg- ment for the amount awarded as the value of the property, and payment of the judgment can be enforced at once, so that the liability of the city to pay for the property is, in practical effect, a liability to pay as it goes, until it actually issues corporate stock or other evidence of indebtedness postponing time of pay- ment, and it may well be urged that not until then is the borrow- ing capacity of the city reduced by reason of an increase in the amount borrowed. It may also be urged with much force, that the constitutional limitation in question should, if possible, be so construed as to make the borrowing capacity of the city always ascertainable with reasonable certainty and precision. In actual practice, substan- tially all contracts of the city, as between the city and those contracting with it, are made on a cash basis, except its con- tracts for money borrowed by sales of corporate stock or other city bonds. The precise amount of corporate stock and other bonds, exclusive of water bonds issued since January 1, 1904, and exclusive of revenue bonds of less than five (5) years’ stand- ing, can at any time be computed with substantial certainty, and if that amount is held to include the entire indebtedness of the city within the meaning of the constitutional provision in ques- tion, then the borrowing capacity of the city can be at any time easily determined within a few thousand dollars Whereas, if the estimated amounts of contract liabilities and land liabilities referred to are to be included in the computation, then such estimates must allow for a possible variation of some twenty million dollars ($20,000,000), more or less, from the estimates adopted, and a corresponding. range of uncertainty must exist in the computation of the borrowing capacity of the city. It has been the uniform practice of the Comptroller of the city, in accordance with opinions of the Corporation Counsel70 Investigation oe Finances of New Yokk City. from time to time, to include estimated amounts of contract lia- bilities and land liabilities, estimated at about fifty million dollars ($50,000,000), in his computations of the constitutional borrowing capacity of the city. (The reasons for excluding such contract and land liabilities from the computation are very forcible; but the question must be deemed an open one until finally decided by the Court of Appeals. If that court should finally decide to exclude these liabilities from the computation, then the margin of borrowing capacity which, of necessity, would always be kept open to meet such liabilities, would constitute a standing guaranty that the constitutional debt limit would not at any time be exceeded?^ For practical purposes, in such case, the city authorities would always need to keep the total amount of the corporate stock and city bonds, which are included in the computation, down to a point where ample margin Would always remain for future issues of corporate stock and bonds already authorized to meet engage- ments already entered into; and vice versa the city authorities would always need to keep the authorizations of future issues of corporate stock down to a total amount corresponding to the margin therefor over and above the total stock and bonds in- cluded in the computation and already outstanding; so that for the purposes of the practical administration of the financial affairs of the city, the estimated amount of such necessary margin would always be given the same practical effect as if it were included in the computation for the purpose of ascertaining the borrowing capacity of the city; but in such ease the validity of all city bonds ' issued, or presently to be issued, would always be beyond question by an ample margin. Question has been raised as to whether assessment bonds, so called, should be included in the computation. Such assessment bonds have been issued by the city from time to time to borrow money for immediate payment of the entire expense of a localReport of Joint Committee. 71 improvement, a portion or all of which has been assessed on prop- erty benefited, many of such assessments being payable by instal- ments during a series of years. But the proceeds of such assess- ments are not set apart as a separate fund, in the nature of a sink- ing fund, to redeem the bonds issued to pay the expense of the particular improvement, or of such improvements generally; and, in fact, the proceeds of such assessments when collected, have in many cases, been diverted to entirely ditferent purposes, and ap- parently without violating any law. It is, therefore, clear that such assessment bonds should be included in ascertaining the power of the city to become indebted for other than water supply purposes. This conclusion is entirely consistent with the decision in Kronsbein v. City of Rochester, 76 App. Div. 494, and is con- firmed by the reasoning in that case. Question has been raised as to whether amounts in sinking funds should be deducted in making the computation. The gen- eral proposition is well settled that the principal amount of a sink- ing fund, firmly set apart for the redemption of specific indebted- ness, which is included in the computation, should be deducted. Bank for Savings v. Grace> 102 1ST. Y. 313. Subordinate ques- tions under this general proposition have been raised, (a) as to whether cash so firmly set apart in a sinking fund should be deducted; and (b) as to whether water bonds which have not been included in ascertaining the power of the city to become in- debted for other than water supply purposes, should be deducted. In the statements made by the Comptroller neither of these items has been included in sinking fund deductions. The test for the determination of these questions, as suggested in Bank for Savings v. Grace, 102 N. Y. at page 326, is: What amount would be required to pay the bonds in the sinking fund, and the bonds to be redeemed by the sinking fund, if they should all mature together. In such case, the cash in the sinking fund would be used to pay off the corresponding amount of bonds to72 Investigation of Finances of Hew Yokk City. be redeemed by the sinking fund, and is, therefore, to be deducted from the total amount of bonds redeemable by the sinking fund, for the purpose of ascertaining .the net amount thereof to be in- cluded in the computation for the purpose of ascertaining the borrowing capacity. If the remainder of the bonds to be re- deemed by the sinking fund were paid in cash, then the city bonds held in the sinking fund would be the property of the city abso- lutely, and if already due, would be ipso facto cancelled and be- come waste paper. The amount of new money necessary to pay the bonds to be redeemed by the sinking fund and to pay the city bonds held in the sinking fund, would be the difference between the cash held in the sinking fund and the total amount of debt to be redeemed by the sinking fund. Such difference, therefore, is the net amount of the indebtedness on both sets of bonds. If city bonds, issued for other than water supply purposes, are held in the sinking fund, and the amount thereof has been included in the gross computation for ascertaining the borrowing capacity, then the city bonds held in the sinking fund and the cash held in the sinking fund, should both be deducted from the gross amount of such computation for the purpose of ascertaining the net amount of such computation. If city bonds held in a sinking fund have been issued for water supply purposes since January 1, 1904, and therefore have not been included in the computation, nevertheless such water bonds held in the sinking fund should still be de- ducted, because the sale thereof by the city would yield a cor- responding amount of cash, to reduce the debt redeemable by the sinking fund without increasing the total funded debt to be in- cluded in the computation of the borrowing capacity of the city. The foregoing statements, however, assume that the debt to be redeemed by the sinking fund, in each case, is included in the gross amount of the computation of the borrowing capacity of the city. If, however, in any case, indebtedness to be redeemed by a sinking fund, is exempt from the debt limit computation, asReport of Joint Committee. 73 for instance, where a sinking fund has been created to redeem water supply bonds issued since January 1, 1904, or county bonds, then all city bonds or cash held in such a sinking fund (except water supply bonds issued since January 1, 1904, and except revenue bonds of less than five years’ standing), are to be in- cluded in the net computation, without deduction from any gross previous computation made for the purpose of ascertaining the borrowing capacity of the city. Question has been raised as to whether assessments of special franchises are to be treated as assessments of real estate within the meaning of the Constitution, on the ground that special fran- chises were not known as real property at the time this con- stitutional provision was adopted. In any event, this question would only affect the intangible portion of a special franchise. The tangible portion of a special franchise has always been as- sessed as real estate. It would be impossible to separate that por- tion of an assessment of a special franchise which represents the intangible from that portion of an assessment which represents the tangible portion of the special franchise. The impossibility of making such separation would doubtless be sufficient ground for a refusal by the courts to reject either the whole or any part of the assessed value of a special franchise from the assessment- roll for the purpose of ascertaining the constitutional debt limit. As an original proposition, it is reasonably clear that the; in- tangible portion of a special franchise is and always has been real property apart from all provisions of the tax law. The Ap- pellate Division of the Fourth Department in Kronsbein v. City of Rochester, 76 App. Div. 494, has squarely decided that the assessments of special franchises are assessments of real estate within the meaning of this constitutional provision; and beyond all reasonable question, that doctrine will be adopted by the Court of Appeals if the question should ever be presented to that court. All special revenue bonds are payable out of the tax levy of the74 Investigation of Finances of Hew York City. year subsequent to the year of their issue, and are, therefore, to be included in the computation. No revenue bonds are now in existence which have been out- standing for so long a period as five years from the date of their issue. All revenue bonds are, therefore, to be excluded from the computation. In accordance with the foregoing determinations, the gross computation for the purpose of ascertaining the constitutional borrowing capacity of the city should be made up by including all corporate bonds and other city bonds, including assessment bonds and special revenue bonds, except (a) water supply bonds issued after/January 1, 1904, which are to be excluded; and except (b) revenue bonds which are also to be excluded. From the amount of such gross computations are to be deducted the principal amounts of all sinking funds for the redemption of indebtedness included in the gross computation, including among such deductions all cash and all city bonds for whatsoever pur- pose issued, if held in a sinking fund established for redemption of indebtedness included in the gross computation as aforesaid. The balance remaining after such deduction will represent the net amount of indebtedness to be included in the computation for the purpose of ascertaining the borrowing capacity of the city; unless the estimated amounts of contract and land liabilities should be also included, in which case such estimated amounts should be added to make the net amount of indebtedness to be included in ascertaining the borrowing capacity of the city. Another method of stating the same results is to take first the total outstanding corporate stock and other city bonds outstanding of every name and nature. From such total deduct (a) Water bonds issued since January 1, 1904; (b) Revenue bonds. The balance will be the gross computation of the indebtednessReport of Joint Committee. 75 to be included in ascertaining the borrowing capacity, if contract and land liabilities are not included. From such gross amount are to be deducted sinking funds as aforesaid. The balance will represent the net amount of indebtedness to be included in the computation, if contract and land liabilities are not to be included. If contract and land liabilities are to be included, then they are to be added to the net computation as before. By this latter method three statements of the borrowing ca- pacity of the city as of the three dates, June 30, 1908, October 31, 1908, and January 1, 1909, respectively, are herewith presented as follows:76 Investigation of Finances of New Yoke City. STATEMENT OF THE COMPUTATION OF THE BOR- ROWING CAPACITY OF THE CITY OF NEW YORK AS OF JUNE 30, 1908. Total outstanding corporate stock and bonds for whatsoever purpose issued, including county bonds ...................... $905,260,115 77 Deduct bonds to be excluded from the computation: County bonds ................. $21, 808, 279 64 Water bonds issued after Janu- ary 1, 1904 . ................ 38, 937, 318 26 Revenue bonds................. 119, 279,986 92 . -------------- 180,020,58442 The balance......................................... $725, 239, 530 95 is the amount of stock and bonds, included in the gross computation. Deduct sinking fund holdings, as follows: Bonds in sinking funds ............ $198, 104, 664 02 Cash in sinking funds................ 4, 237, 927 70 Mortgages in sinking funds. ....... 64,680 00 Gross amount of sinking fund holdings.. $202,407,271 72 Deduct bonds held in sinking funds for the redemption of county bonds and of water bonds- issued since January 1,1904 ................................. 6,3*7,228 .18 Net sinking fund deductions....................... 196,050,043 54 The balance. . .'..................................... $529, 189, 487 41 is the total amount of stock and bonds to be included in the net computation. Ten per cent, of assessed value of real estate for 1907. . 624, 048, 060 20 The difference................................................ $94, 858, 572 79 is the borrowing capacity of the city as found by the com- mittee if contract and land liabilities are not to be included. If contract and land liabilities are to be included, add: Contract liabilities .................... $51,108,334 15 Less unallotted proceeds of bonds sold to meet such liabilities.......... 15,923, 744 14 Net contract liabilities .................. $35,184,590 01 Land liabilities .......................... 21,754,382 24 Total (contract and land liabilities.................................. 56, 938, 972 26Repobt of Joint Committee. 77 Borrowing capacity of the city as found by the com- mittee if contract and Land liabilities are to be included. . . . ....................................... $37,919,600 53 The Comptroller’s statement reduces this amount as follows: The. Comptroller did not exclude from the computation revenue bonds issued in anticipation of collection of taxes for years previous to years in which the revenue bonds were issued .................... $24,73*5,210 00 The Comptroller did not exclude from the computation water bonds issued after January 1, 1904, for water supply liability incurred prior to that date............................. 5, 769,044 15 Sinking fund deductions made by the Comptroller were less than were made by the committee by the amount of.. 4,607,877 78 The Comptroller makes borrowing capacity less by the amount of ................................ :...... 35,122, 131 91 than the borrowing capacity as found by the committee. Borrowing capacity of the city as found by the Comp- troller. $2,807,448 6278 Investigation of Finances of New York City. STATEMENT OF THE COMPUTATION OF THE BOR- ROWING CAPACITY OF THE CITY OF NEW YORK AS OF OCTOBER 31, 1908. Total outstanding corporate stock and bonds for whatever purpose issued* including county bonds........ $933, 121, 157 82 Deduct bonds to be excluded from the computation: County bonds ................ $21, 708,279 64 Water bonds issued after January 1, 1904 ................... 40, 600, 098 26 Ke venue bonds .............. 139,578,100 00 ---—----------- 201, 886, 479 80 The balance ...................................... $731,234,677 92 is the amount of stock and bonds included in the gross computation. Deduct sinking fund holdings, as follows: Bonds in sinking funds........... $197,338,563 22 Caish in sinking funds........... 11,942,071 86 Mortgages in sinking funds....... 64,680 00 Gross amount of sinking fund holdings $209, 345, 315 0'8 Deduct bonds held in sinking funds for the redemption of county bonds and of water bonds issued since Jan, 1, 1904................... 6, 944,825 71 Net sinking fund deductions........................... 202,400,489 37 The balance ...................................... $528, 834,188 55 is the total amount of stock and bonds to be included in the net computation. 10 per cent of assessed value of real estate for 1908.. 672,241,578 90 The difference .................................. $143,407,390 35 is the borrowing capacity of the city as found by the Committee if contract and land liabilities are not to be included. If contract and land liabilities are to be included, add: Contract liabilities .................. $45, 416, 523 30 Less unallotted proceeds of bonds sold to meet such liabilities... 2,348,935 83 Net contract liabilities........................ $43,067,587 47 Land liabilities ................................. 18,935,961 76 Total contract and land liabilities............................ Borrowing capacity of the City as found by the Com mittee if contract and land liabilities are to be in eluded............................................................... 62,003,549 23 $81,403,841 12Report op Joint Committee. 79 The Comptroller’s statement reduces this amount as follows: The Comptroller did not exclude from the computation, revenue bonds issued in anticipation of collection of taxes for years previous to yearis in which the revenue bonds were issued.................. $25,952,210 00 The Comptroller did not exclude from the computation water bonds issued after Jan. 1, 1904, for water suipply liability incurred prior to that date. 5,769,044 13 Sinking fund deductions made by the Comptroller were less than were made by the Committee, by the amount of ............................ 11,750,946 41 The Comptroller makes borrowing capacity less by the amount of .......................................... $43,472,200 54 than the borrowing capacity as found by the Committee. Borrowing capacity of the City as found by the Comptroller......................................... $37, 931, 640 5880 Investigation of Finances of Yew Yoke City. STATEMENT OF THE COMPUTATION OF THE BOR- ROWING CAPACITY OF THE CITY OF NEW YORK AS OF JANUARY i, 1909. Total outstanding corporate stoek and bonds for whatso- ever purpose issued, including County bonds... $882,440,584 09 Deduct bonds to be excluded from the computation: County bonds ............... $21, 700, 384 40 Water bonds issued after Jan. 1, 1904 . ................ 44, 625, 098 26 Revenue bonds .............. 74,006, 600' 00 -------------- 140, 332,082 66 The balance ............................................ $742,108,501 43 is the amount of stock and bonds included in the gross computation. Deduct sinking fund holdings, as follows: Bonds in sinking funds. . ....... $210, 421, 340 02 Cash in sinking funds............ 1,534,578 69 Mortgages in sinking funds....... 62,440 00 Gross amount of sinking fund holdings. $212,018, 358 71 Deduct bonds held in sinking funds for the redemption of county bonds and of water bonds issued since Jan. 1, 1904................... 6,944,825 71 Net sinking fund deductions................................ 205,073,533 00 The balance ........................................... $537, 034, 948 43 is the total amount of stock and bonds to be included in the net computation. 10 per cent of assessed value of real estate for 1908.... 672,241,578 90 The difference ................................................ $135,206, 6'30 47 is the borrowing capacity of the city as found by the Committee if contract and land liabilities are not to be included. If contract and land liabilities are to be included, add: Contract liabilities ................... $37,905,863 46 Less unallotted proceeds of bonds sold to meet such liabilities.... 438, 496 19 Net contract liabilities ....................... $37, 467, 367 25 Land liabilities ............................... 20, 228, 252 85 Total contract and land liabilities................................ 57,695, 620 10 Borrowing capacity of the City as found by the Commit- tee if contract and land liabilities are to be included. . $77,511,010 37Report of Joint Committee. 81 The Comptroller’s statement reduces this -amount as fol- lows : The Comptroller did not exclude from the computation, revenue bonds issued in anticipation of collection of taxes for years previous to years in which the revenue bonds were issued .................. $21,765,000 00 The Comptroller did not exclude from the computation water bonds issued after Jan. 1, 1904, for water supply liability incurred prior to that date. 5,769,044 13 Sinking fund deductions made by the Comptroller were less than were made by the Committee, by the amount of. 1,371,018 39 The Comptroller makes borrowing capac- ity less by the amount of.............................. $28,905, 162 52 than the borrowing capacity as found by the Committee. Borrowing capacity of the City as found by the Comptroller ....................................... $48, 605,847 85 [Assuming that contract and land liabilities are to be included in the computation for the purpose of ascertaining, the constitu- tional borrowing capacity of the city, the foregoing tabulations indicate that the city made its closest approximation to its debt limit on June 30, 1908, when its borrowing capacity, as found by the Comptroller, was between two and three million dollars, and as found by your Committee was between thirty-five and forty million dollars/! By November 1, 1908, the borrowing capacity of the city had risen, as found by the Comptroller, to between thirty-five and forty million dollars, and, as found by your Committee, to be- tween eighty and eighty-five million dollars. £bn January 1, 1909, the borrowing capacity of the city, as found by the Comptroller, was between forty-five and fifty million dollars, and, as found by your Committee, was between seventy- five and eighty million dollars^ In all these computations of the borrowing capacity of the city, the Comptroller’s estimates of contract and land liabilities82 Investigation of Finances of Hew York City. are treated as indebtedness within the meaning of the Constitu- tion, and are included in ascertaining the borrowing capacity of the city. Your Committee is entirely satisfied that the debt limit of the city has not been exceeded iat any time, and that all city bonds heretofore issued are unquestionably valid. Your Committee is also well satisfied that the constitutional borrowing capacity of the city allows ample margin for the issue of city bonds from time to time hereafter, sufficient to enable the city to meet its liabilities yet to mature on all contracts heretofore made; and 'allows a still further margin of more than seventy-five million dollars for improvements for which contracts have not yet been entered into. During the year 1909 the borrowing capacity of the city will be increased about twelve million dollars by reason of the increase in the assessed value of real estate, to take effect in July; and will be further increased by the application of tax receipts during the year to the payment of nearly ten million dollors of bonds which have been included in the computation. On the basis, therefore, of the borrowing capacity of the city, as found by the Comptroller, the city authorities may safely count on a margin for borrowing of over seventy million dollars to meet liabilities on new contracts which may be made during the year 1909 for additions, betterments and improvements to the prop- erty of the city, over and above all amounts which the city must borrow to meet its liabilities on contracts already made. jjDn the basis of the borrowing capacity of the city, as found by your Committee, this margin of borrowing capacity for new contracts during 1909 will be from ninety to one hundred million dollars. This margin of borrowing capacity, if wisely conserved and apportioned, should be amply sufficient for future additions, betterments and improvements to the property of the city without any extension of the present constitutional debt limit]Repobt op Joint Committee. 83 SUBWAY CONSTRUCTION. [The proposed amendment to the Constitution was urged last winter chiefly on the ground that subway construction by private capital is impossible under existing statutes^ and that some relief from the constitutional debt limit is necessary to enable the city to build needed subways.^ The enlargement of the borrowing capacity of the city since June 30, 1908, and the further increase to be made during the year 1909, as aforesaid, afford a sufficiently large margin for municipal construction of subways, if the city authorities and the Public Service Commission of the first district shall determine to use such margin of borrowing capacity for that purpose. In the meantime, however,[the Public Service Commission has declared its judgment of the true policy to be that new subways should, for the most part, be built by private capital, and that the present statutes should be amended so that construction by private capital may be possible; that the city should have the power and financial ability to construct subways so as not to be at the mercy of private capital, but that subway construction by the city should be supplemental or incidental to the main sub- ways constructed by private capital, and that the expenditure of from ten to fifteen million dollars annually by the city ought to be sufficient for such subway construction as the city ought to undertake^ if the true policy of subway construction should be pursued. Whether this he the true policy of subway construction or not, [your Committee is satisfied that no immediate emergency exists calling for an extension of the present debt limit, and that as a matter of permanent policy the present constitutional debt limit of the city of New York is the extreme limit of prudence and safety."]84 Investigation of Finances of New York City. It should be borne in mind that the funded debt of the city will be increased largely beyond the 10 per cent, limitation by water bonds issued since January 1, 1904? and hereafter to be issued, the interest on which must be paid in the annual tax levies for .a number of years before such interest can be met by water rents receivable by the city. Even if the debt limit were to be extended, the main proposi- tion of the concurrent resolution passed last winter, that city bonds for improvement should be excluded from the computation for ascertaining the borrowing capacity while such improvements are self-supporting, and should be again included in the compu- tation if such improvements should -at any time fail to be self- supporting, is dangerous and impracticable. By the sudden in- clusion of a large amount of bonds in the computation, the city might find its borrowing capacity exceeded by so large an amount that for a long time it would be unable to issue bonds for further improvements, however necessary. Many of the leading citizens who were most interested in preparing and advocating the resolu- tion for the amendment which received its first passage last winter, have reconsidered their position, and now frankly advise that the proposed amendment to the. Constitution should be rejected. Your committee, therefore, recommends that the Constitution should not be amended in this respect, and that the concurrent resolution passed by the Legislature in 1908 for the amendment of Article YIII, section 10 of the Constitution, by extending the debt limit of the city of New York, should not be again passed. ^Report of Joint Committee. 85 THE FOLLOWING IS A SUMMARY STATEMENT OF THE RECOMMENDATIONS MADE BY YOUR COM- MITTEE. 1-LThe city authorities should he prohibited by law from issu- ing the $33,000,000 of corporate stock not yet issued, but which the Board of Estimate and Apportionment in 1906 authorized to be issued to make up deficiencies in the collection of taxes which the board had written off as uncollectible. Such law should also provide that such $33,000,000 .be distributed over the tax levies of the next ten years, and that such amount, when collected, should be restored to the several funds from which it had been diverted for the purpose of paying current operating expenses of the city.J 2. [The city authorities should be prohibited by law from issu- ing corporate stock for the payment of current operating expenses as distinguished from permanent improvements, with provision for determination by the Board of Estimate and Apportionment in doubtful cases of what constitutes permanent improvements as distinguished from current operating expensesJ The current ex- penses of the Dock Department, in the operation of municipal ferries and recreation piers, should be classed as current operating expenses for the payment of which the issue of corporate stock should be prohibited. 3. The city authorities should be prohibited by law from issu- ing short-term assessment bonds, and be authorized, instead, to issue corporate stock, which can be negotiated on better terms than assessment bonds. 4. [The city should be required by law to establish a bureau for the purchase of supplies^which should be under the general juris- diction of the Board of Estimate and Apportionment, the head of which should be charged, as far as practicable, with the responsi- bility for the purchase of all supplies for the city. 5. ^The law should provide for a reorganization of the account- ing methods of the cityjalong the lines laid down at length in the86 Investigation of Finances of New Yokk City. report, and as now being installed by the Comptroller of the city in the Department of Finance, and the other departments of the city government. 6. The law should provide for the establishment of a bureau of real estate which should be under the general jurisdiction of the Board of Estimate and Apportionment, where all maps, books and records of the real estate holdings of the city should be kept in classified order, and may be found and examined by any citizen. 7. The Constitution should be amended so as to allow the acquisition by the city of that portion of the State Forest Pre- serve located within the boundaries of the Ashokan dam. 8. The Constitution should be amended so as to provide for improved methods of condemnation, applicable throughout the entire State, if practicable, or, if that be not practicable, appli- cable, at least, to the condemnation of real property situated in the city of New York and to the condemnation of real property situ- ated in other counties, to be acquired by the city of New York for the purposes of increasing its water supply. 9. (The Constitution should not be amended so as to extend the present debt limit of the city of New YorkQ SYNOPSIS OF EXHIBITS. Exhibit 1.— Marked for identification. An original voucher numbered 30, on file in the Comptroller’s Office, for a claim amounting to $92.30, from which, upon investigation, $18.54 for excessive charges was deducted and accepted by claimants. Exhibit 2.— Marked for identification. An original voucher numbered 95, on file in the Comptroller’s Office, for a claim amounting to $146.13, from which, upon investigation, $42.64 for excessive charges was deducted and accepted by claimants. Exhibit 3.— Marked for identification. An original voucher numbered 48, on file in the Comptroller’s Office, for a claim amounting to $293.65, from which, upon investigation, $61.74 for excessive charges was deducted and accepted by claimants.Repqrt of Joint Committee. 87 Exhibit 4.— Marked for identification. An original voucher numbered 526, on file in the Comptroller’s Office, for a claim amounting to $69.50, from which, upon investigation, $19.50 for excessive charges was deducted and accepted by claimants. Exhibit 5.— Marked for identification. An original voucher numbered 68, on file in the Comptroller’s Office, for a claim amounting to $75, from which, upon investigation, $11 for ex- cessive charges was deducted and accepted by claimants. Exhibit 6.— Marked for identification. An original voucher numbered 35, on file in the Comptroller’s Office, for a claim amounting to $332.01, from which, upon investigation, $67.47 for excessive charges was deducted and accepted by claimants. Exhibit 7.— Marked for identification. A schedule of claims of H. F. Quinn & Son and Queens Desk Company, aggregating $1,632.50, against the city of New York; adjusted on 75 per cent, basis with claimants. Same read in evidence. Exhibit 8.— Marked for identification. A schedule of claims of the Queens Desk Company, aggregating $1,722, against the city of New York; adjusted on 75 per cent, basis with the claim- ants. Same read in evidence. Exhibit 9.— Marked for identification. A schedule of claims of G. Harms & Son, aggregating $3,265, against the city of New York; adjusted on 60 per cent, basis with the claimants. Same read in evidence. Exhibit 10.— Marked for identification. A schedule of claims of H. F. Quinn & Son and the Queens Desk Company, aggregat- ing $3,819.48, against the city of New York; adjusted on 75 per cent, basis with the claimants. Same read in evidence. Exhibit 11.— Marked for identification. A schedule of claims of H. E. Quinn & Son, aggregating $2,962.65, against the city of New York; adjusted on 75 per cent, basis with the claimants. Same read in evidence. Exhibit 12.— Marked for identification. A schedule of claims88 Investigation of Finances of Hew York-City. of H. F. Quinn & Son and the Queens Desk Company, aggregat- ing $334.24, against the city of Hew York; adjusted on 75 per cent, basis with the claimants. Same read in evidence. Exhibit 13.— Marked for identification. A schedule of claims of II. F. Quinn & Son, aggregating $389.10, against the city of Hew York; adjusted on 75 per cent, basis with the claimants. Same read in evidence. Exhibit 14.— Marked for identification. A schedule of claims of PI. F. Quinn & Son, aggregating $2,962.05, against the city of Hew York; adjusted on 75 per cent, basis with the claimants. Same read in evidence. Exhibit 15.— Marked for identification. Contains a statement in detail of the amount of uncollected taxes on real estate, per- sonal property, real estate of corporations and special franchise taxes from 1898 and prior, up to and including the 31st day of December, 1907, both in .detail and recapitulation; includes de- tailed statement as to boroughs, and also an itemized statement of all of the uncollected special franchise taxes as of the date December 31, 1907, with the names of the corporations owing such special franchise taxes, the year of the levy and the several amounts due in the respective years, and the total amount due from each special corporation on the 1st day of January, 1908. Exhibit 16.— Marked for identification. Statement of all taxes uncollected as of the date of Hovember 28, 1908, of the levies from 1899 to and including 1908. Details appear in the minutes. Exhibit 17.— Marked for identification. An exhibit that shows the total amount of assessments uncollected at the close of each year, from 1899 to 1907, inclusive; details read in the evidence. Exhibit 18.— Marked for identification. A statement showing the operation of the account known as the “ Street Improvement Fund,” for work contracted for after January 1, 1898, cash ac-Report of Joint Committee. 89 count as of December 31, 1907, as reflected on the Comptroller’s general ledgers. Exhibit 19.—(By mistake of the stenographer no exhibit as- signed this number.) Exhibit 20.— Marked for identification. A recapitulation of the amount paid for forage in the various boroughs for the year 1907; marked in evidence and read in the minutes. Exhibit 21.— Marked for identification. . Printed forms of requisitions formerly used by the Police Department. Exhibit 22.— Marked for identification. Printed froms of requisitions now used by the Police Department. Exhibit 23.—Marked for identification. A statement of bud- get appropriations for the city of Hew York for departmental and county purposes for the years 1898 to 1909, inclusive, with a com- plete analysis of the same. Exhibit 24.— Marked for identification. A letter dated Feb- ruary 1, 1908, from Comptroller Metz to Hon. William M. Ben- nett, the substance of which is set forth in the minutes. Exhibit 26.— Marked for identification. Voucher Ho. 1699, Requisition Ho. 649, 1908, for certain supplies; full description contained in the minutes. Exhibit 27.— Marked for identification. Original forage con- tract for the borough of the Bronx, Street Cleaning Department, for the quarter beginning October 1st and ending December 31, 1908. Details embodied in the minutes. Exhibit 28.— Marked for identification. Original forage con- tract for the borough of the Brorix, Street Cleaning Department, for the quarter beginning October 1st and ending December 31, 1908. Details embodied in the evidence. Exhibit 29.— Marked for identification. Original forage con- tract for the borough of Brooklyn, Street Cleaning Department, for the quarter beginning October 1st and ending December 31, 1908. Details embodied in the evidence.90 Investigation of Finances of Hew York City. Exhibit 30.— Marked for identification. Original requisition of th§ Street Cleaning Department for forage used in 1908. Voucher Ho. 373, Requisition Ho. 72. Details embodied in the minutes. Exhibit 31.— Marked for identification. Specifications for coal in the Street Cleaning Department for heating purposes dur- ing the year 1908. Details embodied in the minutes. Exhibit 32.— Marked for identification. Original contract for coal used in the Street Cleaning Department of the borough of Brooklyn during the year 1908. Details embodied in the minutes. Exhibit 33.— Marked for identification. Original contract for coal used in the Department of Charities of the borough of Brook- lyn from December 5, 1907, to December 5, 1908. Details em- bodied in the minutes. Exhibit 34.— Marked for identification. Contract for coal with J. P. Schmaedke for delivery in the borough of Brooklyn. Details embodied in the minutes. Exhibit 35.— Marked for identification. Original contract, dated December 26, 1907, of the Department of Charities, for coal delivered at Blackwell’s and Randall’s Islands for one year. Details embodied in the minutes. Exhibit 36.— Marked for identification. Original contract, dated April 15, 1908, of the Department of Charities, for coal delivered at Farm Colony. Details embodied in the minutes. Exhibit 37.— Marked for identification. Original contract, dated December 5, 1907, of the Department of Charities, for coal with Howard S. Bowns. Details embodied in the minutes. Exhibit 38.— Marked for identification. Original bid of William Farrar & Son for coal, Department of Charities. Con- tract awarded to Mr. Bowns, being the lowest bidder. Details embodied in the minutes. Exhibit 39.— Marked for identification. Original contract^ dated January 2, 1908, Department of Charities, with Levy, forReport of Joint Committee. 91 furnishing and delivering forage, borough of Brooklyn. Details embodied in the minutes. Exhibit 40.— Marked for identification. Original contract, dated January 2, 1908, Department of Charities, with Eidt & Weyand, for furnishing and delivering forage, boroughs of Man- hattan from January 1, 1907, to June 30, 1908. Exhibits 41 to 48, inclusive.-— Marked for identification. Copies of specifications in use by the Union Pacific Railroad Company, and its allied lines, furnished by Mr. W. Y. S. Thorne as illustrative of the methods employed by said railroad company in making its purchases, and include specifications for numerous articles. Exhibit 49.— Marked for identification. Printed copy of the Official Proceedings of the New York Railroad Club meeting, held Eebruary 21, 1908, including an article by Mr. W. Y. S. Thorne upon the question of the purchase of railroad supplies. Exhibit 50.— Marked for identification. A summary of amounts paid for forage in all departments in the borough of Man- hattan from January 1, 1907, toi June 30, 1908. Exhibit 51.—-Marked for identification. A summary of amounts paid for forage in all departments in the borough of The Bronx from January 1, 1907, to June 30, 1908, Exhibit 52.— Marked for identification. A summary of amounts paid for forage in all departments of the borough of Richmond from January 1, 1907, to June 30, 1908. Exhibit 53.— Marked for identification. A summary of amounts paid for forage in all departments of the borough of Brooklyn from January 1, 1907, to June 30, 1908. Exhibit 54.—-Marked for identification. A summary of amounts paid for forage in all departments of the borough of Queens from January 1, 1907, to June 30, 1908. Exhibits 55 and 56.—{The stenographer omitted to mark ex- hibits with either of these numbers.)92 Investigation of Finances of Hew York City. Exhibit 57.— Marked in evidence. A summary of the forage purchased by the city of Hew York by contract from January 1, 1907, to June 30, 1908, in all departments and all boroughs, show- ing the quantity in pounds, the lowest unit price per hundred weight, total cost of lowest unit price, total amount paid by the city and the excess amount paid by the city over the lowest con- tract price in each borough. Exhibit 58.—Marked for identification. Recapitulation of forage purchased by the city of Hew York by contract from Jan- uary 1, 1907, to June 30, 1908; oats Ho. 1, white clipped, show- ing lowest unit price per hundred weight, quantity furnished, total cost at lowest unit price, excess paid by the city, the range of unit price and the market price. Exhibits 59 to 71, inclusive.— Marked for identification. Re- capitulations of forage purchased by the city of Hew York by con- tract from January 1,* 1907, to June 30, 1908, showing the pur- chase by each borough, the lowest unit price per hundred weight, quantity furnished, total cost paid by the city, the excess of amount paid. The details completely set forth in the minutes. Exhibits 72 to 85, inclusive.— Marked for identification. Statements and summaries of forage purchased by contract from January 1, 1907, to June 30, 1908, by the Street Cleaning De- partment, Police Department and Fire Department, arranged by boroughs, and showing the year and quarter, date of contract, number of contract, name of contractor, brand or quality of hay or oats purchased, the quantity furnished in pounds, price per hundred weight paid by the city, the actual amount of money paid by the city, the cost of unit price over lowest contract price and the excess over lowest contract price. Details set forth in the minutes. Exhibit 86.— Marked in evidence. A statement of the esti- mated margin of the borrowing capacity of the city of Hew York, Hovember 1, 1908, under the constitutional 10 per cent, debtReport of Joint Committee. 93 limitation, as calculated by the Comptroller pursuant to the instructions of the Corporation Counsel. Exhibit 8*7.— Marked for identification. A summary of the bond accounts of the city of New York on November 1, 190-8, Department of Finance, being a complete and detailed recapitula- tion of bonds “ authorized,” amounts “ issued ” and proceeds al- lotted and balance of bonds “ authorized ” and “ issued, but pro- ceeds not allotted ” as to the corporate stock, special revenue bonds; also showing amount due on contract liability in excess of cash balances. Exhibit 88.— Marked for identification. Trial balance state- ment of the bonded debt of the city of New York at the close of business October 31, 1908. Exhibit 89.— Marked in evidence. A table showing the in- crease in the budget of 190-8 over 1898, as compared with increase in population. Exhibit 90.— Marked for identification. Printed letter of Mr. Edgar J. Levey to Senator Saxe, in relation to the debt limit of the city of New York. Exhibits 91 to 95, inclusive.— Samples of forage taken by Mr. Henry B. Winters as expert for the committee from the different departments of the city, which samples are now in the custody of the Department of the Assistant Commissioner of Agriculture in the city of New York. Exhibit 96.—-Marked for identification. Statement of over- charges deducted by the Financial Department on open market orders from claims of those furnishing supplies to the city, which deductions were accepted by the claimants. Exhibit 97.— Marked for identification. Statement of num- ber of claims upon contract where deductions from the amount claimed were made by the Department of Finance and accepted by the claimants. Exhibit 98.—‘Marked for identification. Statement showing94 Investigation of Finances of Hew Yoke: City. architects’ fees paid in the years 1907 and 1908 by the Comp- troller, the details of which are contained in the testimony. Exhibit 99.— Marked for identification. Statement showing amount of corporate stock of the city of Hew York and issued each year from 1871 to 1906, inclusive, for acquisition of land for docks and ferries. Exhibit 100.— Marked for identification. Statement of revenue and expenditures in the Department of Docks and Fer- ries from May, 1870, to December 31, 1907. Exhibit 101.— Marked for identification. Present salary list of the Department of Docks and Ferries. Exhibit 10i2.— Marked for identification. Statement of revenue received from the Staten Island Ferry during the years 1906 and 1907. Exhibit 103.—• Marked for identification. Statement of the Bureau of Street Openings in relation to numerous proceedings for opening and widening streets in the city of Hew York, giving the title of the proceeding; the value of the property as sworn to by property owners’ witnesses; the amount of the award, exclu- sive of interest; the amount of assessments for benefit; taxed costs of commissioners’ fees, and expenses of the Bureau of Street Openings and a column showing the difference between the testi- mony of the witnesses and the award. In no instance was the award as high as the sworn testimony of witness for property owners. Exhibit 104.—'Marked for identification. A newspaper copy of the opinion of Mr. Justice Leventritt in the matter of the Jerome Avenue Extension. Exhibit 105.— Marked for identification. A statement pre- pared by the Bureau of Street Openings, Law Department, show- ing the fees paid to expert appraisers from January 1, 1907, to December 15, 1908. Exhibit 106.— Marked for identification. Bureau of Street Openings. Report on Manhattan and Bronx proceedings.Report of Joixt Committee. 95 Exhibit 107.— Marked for identification. Bureau of Street Openings. Report on Brooklyn proceedings. Exhibit 108.— Marked for identification. Bureau of Street Openings. Memorandum as to the matter of acquiring title to Jerome avenue. Exhibit 109.— Marked for identification. Statement of dis- bursements of Bureau of Street Openings from January 1, 1905, to December 15, 1908, details of which are contained in the evidence. Exhibit 110.— Marked for identification. Bureau of Street Openings. Detailed statement of payments from January 1, 1908, to December 15, 1908. This Exhibit, TsTo. 110, is set forth in Exhibit Wo. 185, together with further information in relation to proceedings by said Bureau, so that reference to Exhibit 185 will show all that is contained in this Exhibit. Exhibit 111.— Marked for identification. A report on the Department of Finance showing the amount of compensation paid by the city for expert witnesses’ fees in condemnation proceedings. Exhibit 112.— Marked for identification. Report of the De- partment of Finance in relation to the Bronx Park extension. Exhibit 113.— Marked for identification. Report of the De- partment of Finance on High Bridge Park extension. Exhibit 114.—-Marked for identification. Copy of report ad- dressed to Hon. Geo. B. McClellan, Mayor, signed by Herman A. Metz, Comptroller, giving in detail the cost of condemnation pro- ceedings of the Board of Water Supply. Exhibit 114-a.— Marked for identification. Statement as to the tax levy of 1907, including statistical table showing un- collected taxes as of date December 31, 19*07. Exhibit 115.— Marked for identification. Table of tax levies and collections thereon each year from 1899 to 1907, inclusive. Exhibit 116.— Marked for identification. Statement in rela- tion to tax levy of 1906, showing collections up to December 31, 1907.96 Investigation of Finances of New Yoke: City. Exhibit 117.—Marked for identification. Report on pending condemnation proceedings, with a recapitulation. Exhibit 118.— Marked for identification. Original bill of goods of the Department of Correction. Exhibit 119.— Marked for identification. Statement of bids re' ceived by the Department of Correction, December 17, 1908, for forage. Exhibit 120.— Marked for identification. Statement of bids received by the Department of Correction, December 17, 1908, for coal. Exhibits 121, 122, 123, 124 and 125.-—Marked for identifica- tion. Original contracts for forage and coal of the Depart- ment of Correction, and after being so marked were returned to the proper officer of the Department. Exhibit 12'6.— Marked for identification. Department of Cor- rection. Estimate of expense for 1908. Exhibit 127.— Marked for identification. Department of Cor- rection. Estimate of expense for 1909. Exhibit 128.— Marked for identification. Requisition blank. Department of Correction. Exhibit 129.— Marked for identification. Original papers with relation to bill for drinking water, returned to comptroller’s office. Exhibit 180.— Marked for identification. A summary of the bonded indebtedness of the city of New York on October 31, 1908, including revenue bonds, this Exhibit being substituted in place of Exhibit 88. Exhibit 131.— Marked for identification. Statement of claims filed against the city of New York aggregating $62,345,312.69 for personal injuries, prevailing rate of wages, salaries, etc. Exhibits 132 and 133.—-Marked for identification. Original estimates of contractor, Thomas Dwyer; returned to him. Exhibit 184.— Marked for identification. Deductions made asReport of Joint Committee. 97 recommended by the Engineer’s Bureau, Department of Finance, during the years 1907 and 1908. ; Details contained in the evi- dence. Exhibit 135.— Marked for identification. Annual statement of transactions in the Bureau of the City Paymaster for the year 1908. Exhibit 135-a.—Marked for identification. Cost of government of the city of New York, with an analysis of the budget for the year 1909. Exhibit 136.— Marked for identification. History of street im- provement fund for the years 1898 to 1907, showing present re- sources and liabilities of the fund. Exhibit 137.—'Marked for identification. Printed reports of the comptroller showing the results of an examination into the matter of privileges, permits and leases. Exhibit 138.— Marked for identification. Printed report of .comptroller dated December 6, 1907, relating to the city’s indebt- edness. Exhibit 139.— Marked for identification. Table showing the amounts of corporate stock and assessment bonds authorized during the ten years January 1, 1898, to December 31, 1907, inclusive, together with the total amounts of said bonds issued during each of said years, (a) Showing the amounts authorized during each year. (b) The amounts of said authorizations that have been is- sued, and the years of their issue, also showing the amount of cor- porate stock of the former city of New York authorized prior to January 1,1898. Exhibit 140.— Marked for identification. Statement of bonds authorized, but not issued at December 31, 1897, and the amounts thereof subsequently issued during each of the ten consecutive years and the amounts still unissued at December 31, 1907, also principal of the funded debt of the city of New York comprehend- ing corporate stock and assessment bonds for the period of ten 498 Investigation of Finances of Hew Yoke: City. years from January 1, 1898, to December 31, 1907, also other tables in relation to the issue of bonds from December 31, 1897, to December 31, 1907, showing total amounts authorized, total amounts unissued, total amounts issued and the total amounts both authorized and issued. Exhibit 141.— Marked for identification. Comparative state- ment of the corporate stock and assessment bonds fully authorized, amounts issued, etc., by the city of Hew York from January 1. 1898, to December 31, 1907. Exhibits 142 and 143.—Marked for identification. Statement showing the apportionment of the cost of government in the bud- get for 1908 among the boroughs of the city, said statement in- cluding the specific items for the various counties and boroughs in- cluded therein—where the appropriations are specific—together with an apportionment upon the basis of the population of the several boroughs for these items which are appropriated for the consolidated city at large. Exhibit 144.—Marked for identification. List showing the total amounts paid by the city of Hew York for advertising from January 1, 1898, to December 31, 1908, and also the amounts of bills incurred for advertising during the year that were unpaid on January 4, 1909. Exhibit 145.—‘Marked for identification. Statement giving the comparisons of the tax levies on real estate in the borough of Brooklyn for the years 1897 to 1908, inclusive, also gives a state- ment of the tax rate in each year during the period mentioned. Exhibit 146.— Marked for identification. A table containing a comparison of real estate taxes on property of some prominent Brooklyn citizens and the amount of taxes paid thereon for the years 1897 and 1908. Exhibit 147.— Marked for identification,— city of Hew York—Board of Water Supply — Ashokan reservoir — General plan — April 4, 1908.Report , of Joint Committee. 99 Exhibit 148.—Marked for identification, city of New York—> Board of Water Supply — Ashokan reservoir — Locality map — Contract No. 3, June 20', 1907. Exhibit 149.— Marked for identification. Map profile of the Board of Water Supply of the city of New York, dated October 9, 1905, showing sources of and manner of obtaining an addi- tional supply of water. Exhibit 150.— Marked for identification. Map of the Board of Water Supply of the City of New York showing the modification of line of the Catskill aqueduct, dated June 25, 1907. Exhibit 151.— Marked for identification. Map prepared by the Board of Water Supply, dated September 18, 1907, for sub- mission to the Board of Estimate and Apportionment of Northern aqueduct, section No. 3, showing real estate in the towns of Olive and Marbletown, county of Ulster, New York, to be acquired by the city of New York for construction of the Catskill aqueduct and appurtenances. Exhibit 152.—-Marked for identification. Map prepared by the Board of Water Supply September 18, 1907, for submission to the Board of Estimate and Apportionment, Northern Aqueduct Department, section No. 4, showing real estate situated in the towns of Marbletown, New Paltz and Gardiner, county of Ulster, New York, to be acquired by the city of New York for the con- struction of Catskill aqueduct and appurtenances. Exhibit 153.— Marked for identification. Map prepared by the Board of Water Supply dated October 2, 1907, for submission to the Board of Estimate and Apportionment, Northern Aqueduct Department, section No. 5, showing real estate situated in the towns of Gardiner, Plattekill and Shawangunk, to be acquired by the city of New York for the construction of Catskill aqueduct and appurtenances. Exhibit 154.— Marked for identification. Printed notice signed by the Board of Water Supply which, according to the testi-100 Investigation of Finances of New York City. moiiy, was posted in the counties through which the aqueduct passes, advising owners of properties that the Board of Water Supply desired to purchase the lands direct instead of being obliged to condemn the same. Exhibit 155.— Marked for identification. Detailed statement of the Board of Water Supply showing the financial condition at the close of business at November 30, 1908, and fully setting forth all of the expenditures made by said Board from the time of its in- ception to December 1, 1908, including distribution of the amount of corporate stock issued, and statement as to expenditures of the administration, Police Bureau, Engineering Bureau on account of surveys; Engineering Bureau on account of permanent construc- tion ; registered and estimated liabilities as of the date November 30, 1908. Exhibit 156.— Marked for identification and read in the evi- dence, showing the resolutions adopted by the Board of Estimate and Apportionment on the date thereof authorizing the issue of corporate stock for the purposes of the construction of the Catskill reservoir and aqueduct, showing a total issue up to June 26, 1908, of $60,202,000. Exhibit 156-a.— Marked for identification. Showing the total collections and revenues of the Department of Water Supply, Gas and Electricity, for the years 190*6, 1907 and 1908. Exhibit 157.— Marked for identification. The history of the tax levy from October 5, 1908, to December 31, 1908, showing the levy, the collections and cancellations thereon, together with other classifications and distributions. Exhibit 158.-—Marked for identification. Statements for the years 1908, 1904, 1905, 1906 and 1907 of condemnation proceed- ings confirmed other than those for street and park openings and for the improvement of the water supply, showing the improve- ment, the awards and the expenses attending the condemnation. Exhibit 159.— Marked for identification. Statement of amountReport' of Joint Committee. 101 paid to expert witnesses employed on behalf of the city of New York in condemnation proceedings other than those for street and park openings and the improvement of the water supply for the years 190*5, 1906, 1907 and 1908. Exhibit 160.— Marked for identification. Statements of amounts paid to commissioners in 190*5 in condemnation proceed- ings other than those for street and park openings and for the im- provement of the water supply. Exhibit 161.— Marked for identification. Statements of amounts paid to commissioners in 1906 and 1907 in condemnation proceedings other than those for street and park openings and for the improvement of the water supply. Exhibit 162.— Statements of amounts paid to commissioners in 1908 in condemnation proceedings other than those for street and park openings and for the improvement of the water supply. Exhibit 163.— Marked for identification. Statement showing the estimated gross liability of the city of New York at Novem- ber 1, 1908, a. m. Exhibit 161.— Marked for identification. Statement m refer- ence to the cost of advertising for the year 1908, showing the total amount paid to December 31, 1908 — $721,608.54; bills unpaid in office of City Record—$29,377.96; bills on hand — advertis- ing Board of Water Supply — ordered through the Law Depart- ment— held up on question of rate — $68,731.07, making a total of $819,717.59. Exhibit 165.— Marked for identification. Report and financial statement of the Board of Water Supply of the City of New York showing the expenditures for the period beginning June 9, 1905, and ending December 31, 1908, classified by departments, divi- sions of work, etc., being a complete and detailed history of the expenditures of said Board since its inception. Exhibit 166.— Marked for identification. Statement of ad- vertising rates.102 Investigation of Finances of New. York City. Exhibit 167.— Marked for identification. Official book of City Record containing special resolutions, advertising, etc,, from Octo- ber 1, 1907, to Jtine 7, 1908, returned to the supervisor of the City Record. Exhibits 168, 169 and 170.— Marked for identification. Sum- maries of statements of testimony of witnesses for claimants and for the city and the awards of Commissioners of Appraisal in relation to the Catskill reservoir, the Northern Aqueduct Depart- ment and the Southern Aqueduct Department, Exhibit 169-a.— Marked for identification. Letter of Mr. Wm. N. Davenport, secretary of the Metropolitan Water and Sewerage Board, Boston, Mass., dated June 15, 1909, addressed to Mr. Louis Bedell. Exhibit 170-a.-—Marked for identification. Original book showing the amount of business procured by Mr. Wm. G. Foster for city newspapers in relation to publication of advertisements for the city, returned to Mr. Foster. Exhibits 1.71, 172, 173 and 174.— Marked for identification. Similar books endorsed “ Contracts and Check Wm. G. Foster,” and marked books Nos. 30, 31, 32 and 33, all being returned to Mr. Foster. Exhibit 175.— Statement of the amount annually received dur- ing the past five years by the sinking fund and available for in- vestment in the bonded debt of the city. This exhibit offered in evidence and received and printed in the minutes. Exhibit 176.— Marked and received in evidence, and copied in the minutes. Statement of the amount of installments raised for the redemption of corporate stock to provide for the supply of water issued since January 1, 1904, and the estimated accumula- tions thereof, held in the Water Sinking Fund of the City of New York on November 1, 1908, amounting to $712,412.11, and esti- mated amount held on November 1, 1908, in the sinking fund for the redemption of the city debt, No. 1, which may be appliedReport of Joint Committee. 103 to the redemption of the consolidated stock of the county of New York at maturity in the years 1917 to 1921, inclusive, if approved by the commissioners of the sinking fund. Exhibit 177.— Marked for identification. Showing authoriza- tions of the supervisor of the Board of City Record to advertise in the city newspapers on behalf of the city. Original record book. Exhibit 177-a.— Marked for identification. Analysis of bids furnished by contractors to the various departments in all bor- oughs, for forage for the years 1906, 1907 and 1908. Exhibit 178.— Marked for identification. Copies of bids of various contractors furnished to heads of all departments in all boroughs of the city to furnish forage for the years 1906, 1907 and 1908. Exhibit 179.— Marked for identification. Statement showing a summary of deliveries of coal under contract on open market orders for the Fire Department, boroughs of Manhattan, Bronx, and Richmond, Department of Correction, Department of Educa- tion by boroughs and the borough president of Manhattan, from January 1, 1907, to June 30, 1908. Exhibit 180.— Marked for identification. Tabulation showing analysis of all expenditures of the Department of Correction for the year 1907, including those made under appropriations; rev- enues derived from the sale of revenue bonds and revenues derived from the sale of corporate stock, as appears- from the records of the Finance Department. Exhibit 181.— Marked for identification. Tabulation showing all contracts for forage, with the names of the contractors, from January 1, 1907, to June 30, 1908, inclusive, for all departments in all boroughs. Exhibit 182.— Marked for identification. Report to counsel by Mr. Shankland, the Committee’s accountant, showing an an- alysis of an examination, conducted under his instruction, of the104 Investigation oe Finances oe Hew York: City. forage purchased by the various city departments in all five boroughs for the period from January 1, 1907, to June 30, 1908. Exhibit 183.— Marked for identification. A statement pre- pared by the Bureau of Street Openeings for all of the boroughs in relation to all awards made in the year 1908, this being a sub- stitution for the original thereof introduced in evidence, to which was added upon the margin of the recapitulation the awards, ex- clusive of interest. This statement contains the title of all pro- ceedings of the Bureau of Street Openings, commissioners’ fees, expenses of the Bureau, total amount paid, the date of taxation and the amount of awards, exclusive of interest. Exhibit 184.— Marked for identification. Statement of reports of commissioners in condemnation proceedings in relation to funds for street and park openings since January 1, 1908, containing the title of the proceedings; when the title to the property vested; the date of the confirmation of the award; the amount of the award; the taxed costs; the total amount paid; the assessment on the property benefited, and assessments and charges on the city. Exhibit 185.— Marked for identification. Statement prepared under the direction of Mr. Frank W. Smith, of the Finance De- partment, pursuant to instructions of the committee, showing the estimated revenues of the sinking funds during the years 1909 to 1918, inclusive, in excess of requirements for the payment of their obligations maturing during that period, and available for investment. Exhibit 186.— Marked for identification. Report prepared by Mr. F. W. Smith, being a statement of the amount of bonds and stock of the city of Hew York outstanding December 31, 1908, exclusive of revenue bonds, which will mature during the years 1909 to 1918, inclusive. This detail is printed in the minutes. Exhibit 187.— Marked for identification and printed in the minutes. Statement submitted by Frank W. Smith, pursuant to the direction of the Committee, of approximate cash balances andReport of Joint Committee. 10-5 those on the hooks of the city of New York, as of date June 30, 1908. Exhibit 188.— Marked for identification and printed in the evidence. Debt statement of the city of New York, as of January 31, 1909. Exhibit 199.— Marked for identification. The testimony in the proceedings brought by Jefferson M. Levy and David Meyer against Geo. B. McClellan, as mayor, et al., constituting the Board of Estimate and Apportionment of.the city of New York, before Hon. Benjamin F. Tracy, referee. Exhibit 190.— Marked for identification. Plaintiff’s Exhibit AA in the proceedings before Hon. Benj. F. Tracy, referee. Exhibit 191.— Marked for identification. Plaintiff’s Exhibit A in the proceedings before Hon. Benj. E. Tracy, referee. Exhibit 192.— Marked for identification. Plaintiff’s Exhibit B in the proceedings before Hon. Benj. F. Tracy, referee. Exhibit 193.— Marked for identification. Plaintiff’s Exhibit C in the proceedings before Hon. Benj. F. Tracy, referee. Exhibit 194.— Marked for identification. Plaintiff’s Exhibit E in the proceedings before Hon. Benj. F. Tracy, referee. Exhibit 195.— Marked for identification. Plaintiff’s Exhibit F in the proceedings before Hon. Benj. F. Tracy, referee. Exhibit 196.— Marked for identification. Plaintiff’s Exhibit I in the proceedings before Hon. Benj. F. Tracy, referee. Exhibit 197.— Marked for identification. Plaintiff’s Exhibit J in the proceedings before Hon. Benj. F. Tracy, referee. Exhibit 198.— Marked for identification. t Plaintiff’s Exhibit K in the proceedings before Hon. Benj. F. Tracy, referee. Exhibit 199.— Marked for identification. Plaintiff’s Exhibit L in the proceedings before Hon. Benj. F. Tracy, referee. Exhibit 200.— Marked for identification. Plaintiff’s Exhibit M in the proceedings before Hon. Benj. F. Tracy, referee. Exhibit 201.— Marked for identification. Plaintiff’s Exhibit N in the proceedings before Hon. Benj. F. Tracy, referee.106 Investigation of Finances of New Yoke City. Exhibit 202.— Marked for identification. Plaintiff’s Exhibit O in the proceedings before Hon. Benj. F. Tracy, referee. All of which is respectfully submitted. Dated, March 1, 1909. OWEN CASSIDY. EDWIN A. MERRITT, Jr. I concur in the foregoing report, excepting that part relating to the pending constitutional amendment, as to which I submit a separate memorandum. MARTIN SAXE. I agree with the foregoing report, except wherein it recom- mends the defeat of the resolution to amend the Constitution so as to permit the issuance of city bonds for rapid transit purposes^ which bonds shall not be included in debt limit. P. H. McCARREN. By Mr. Palmer: I agree to the report, except that portion thereof from which an inference may be drawn that the Board of Water Supply may have been lax in giving information in any way as to the final location of the aqueduct; also as to any criticism for a change made by said Board of Water Supply in the line of the aqueduct* GEORGE M. PALMER, JAMES OLIVER, I concur in the foregoing report, except in so far as I set forth different views in a separate memorandum submitted herewith. WM. M. BENNETT. I concur in the foregoing report, except that I favor the repas- sage of the pending resolution affecting the debt limit, as to which I have submitted a separate memorandum. WARREN I. LEE.Report- of Joint Committee. 107 MR. SAXE’S MEMORANDUM ON PENDING CONSTITU- TIONAL AMENDMENT EXTENDING THE DEBT LIMIT. The people of the city of New York have by referendum com- mitted _ the city to a further rapid transit development, the im- perative necessity for which is the reason for the present pending constitutional amendment extending the debt limit. The great cry against any extension of the debt limit is that it will tend to place an unfair burden, upon posterity. It is most probable that posterity will be better able to bear some financial burdens far easier than the social ones we are handing down. Those social conditions which result in making State and local government increasingly expensive, because of the cost of the cor- rective and punitive forces necessary to check the consequences of such conditions, can be largely attributable to the congested cen- ters of population. Compact masses of anything breed unde- sirable fruition much more rapidly than segregated particles. In other words, to lighten the burdens of posterity, we must strive more earnestly than ever to spread out our population. The cor- rect policy is, first, to furnish greater transportation facilities, and then proceed to break up the centers of congestion, for which the reasons for proximity to labor will no longer exist. To my mind, this problem is a vital factor in considering the question of the debt limit of the city of New York. In a great metropolis, the proper place for rapid transit is under ground, so that ordinary surface transit is not hindered or impeded by rapidly moving transportation methods and vice versa. Therefore, financial facilities should be afforded for the develop- ment of a system of substreets to provide arteries for quick trans- portation all over the city ; and the people have decided that this substreet development should be as much a municipal matter as that of surface streets. Let the public treasury build the sub-108 Investigation of Finances of New Yoke: City. streets and then let private capital compete for the franchise rights therein. In its final analysis the financial ability of a municipality is the capitalization of the value of its taxable property at the rate of taxation that its taxable property will stand, without seriously affecting its assessable value. Just as the earning power of a large corporation is a main factor in the consideration of its ability to borrow money for its business. The main practical objection to extending the debt limit is that it involves the probability of an increased tax rate. There can be no question as to the production of sufficient taxes to take care, in addition to the ordinary expenses of government, of a still larger debt service for the payment of principal and interest on the city debt; but the burden may become a too severe one for the tax- payer, in which event the assessed value of property is bound to be affected. As to the expenses of government other than the debt ^service, the taxpayer is protected in the Constitution by a 2 per cent, limitation upon the assessed valuation of taxable property in any one year. To say there is protection to the taxpayer in ex- tending the debt limit, by excluding only the indebtedness in- curred for self-supporting public improvements, is a fallacy, be- cause in any event the interest and amortization charges must, be met and the taxpayer is the surety for the obligation. There should be some protection to the taxpayer in respect to the debt service as there is in respect to the other expenses of gov- ernment. This protection can be furnished under the pending constitutional amendment, which provides, “ The Legislature shall prescribe the method by which, and the terms and conditions under which, the amount of any debt to be so excluded shall be de- termined, and no such debt shall be excluded except in accordance with the determination so prescribed.” Hence, after the adoption of the pending constitutional amend- ment, under the foregoing provision thereof, the LegislatureReport of Joint Committee. 109 should enact a law prescribing a method by which the amount of any debt to be excluded shall be determined and further provide among “ the terms and conditions ” that when the total existing indebtedness, including the excluded debt, reaches a certain figure, say 14 per cent, of the assessed valuation of real estate, then such total indebtedness may only be increased at the rate of say one- half of one per cent, of the assessed valuation of real estate in any one year. Such a method gradually extending the debt limit would insure the taxpayer against a sudden rise of the tax rate on the one hand, and, on the other, would provide funds for the development of the substreet system by sections, and afford means for the con- struction of a complete system of substreets in the near future. ' Subject to such legislation, I therefore favor the passage of the pending constitutional amendment. MARTIN SAXE. SEPARATE MEMORANDUM OF WILLIAM M. BENNETT. To the Semite and Assembly of the State of New Yorjc: As a member of the Legislative Committee appointed to investi- gate the finances of New York city, I submit the following report and recommendations in addition to the main report of the Com- mittee : By the resolution under which we were appointed we were di- rected to examine into the following matters: 1. The5finances of New York city. 2. The methods of accounting and bookkeeping in the office of the comptroller and the various departments of said city. 3. Into the purposes for which the bonds and corporate stock of said city have been issued, and are proposed to be issued and the purposes to which the proceeds of the bonds and corporate stock heretofore issued have been applied. 4. Into such other financial matters connected with said city110 Investigation of Finances of New Yoke City. government for the purpose of drafting and reporting to the next session of the Legislature such laws relating thereto as said com- mittee may deem proper. 5. The propriety of passing the proposed Constitutional amend- ment increasing the debt limit of the city. On certain of the matters investigated by your Committee I re- port as follows: A. The legal construction of the terms of the present Constitu- tional debt limit. I dissent from so much of the main report as intimates that the term “ debt ” in the Constitution means only funded or bonded debt. The wording of the Constitutional provision is that “ no county or city shall be allowed to become indebted for any purpose or in any manner, to an amount, which including existing indebted^ ness, shall exceed ten per centum of the assessed valuation of the real estate of such county or city subject to taxation.” It may be true that a contract made by the city for the building of a bridge, or subway, casts on the city no present “ debt,” but nevertheless, the making of such a contract is always preceded by a resolution of the Board of Estimate and Apportionment author- izing the issuance of the necessary corporate stock to pay for such bridge or subway, and upon completion of the bridge or subway the contract liability of the city ripens into a debt, to pay which the said corporate stock is issued. It therefore seems to me that the method followed by the comp- troller in including the city’s contract and land liability among such debts is based upon the proper construction of the terms of the Constitution. I deem this discussion, however, as not necessary, in view of the fact that the construction of the terms of the Constitution is within the province of the court and not of the Legislature.Report of Joint Committee. Ill B. Further, extension of the debt limit is unwise. Since the building of the present subway in New York city, there has arisen an insistent and wise demand on the part of the citizens for more subways running to other outlying portions of the city. The comptroller, however, last year apparently took the position that the city has no further funds with which to build subways, at least it seems to be admitted and was so stated before your Com- mittee by Comptroller Metz that he instigated the court proceed- ings whereby the letting of the contract for the building of the Fourth avenue subway in Brooklyn was enjoined. In view of this situation, Comptroller Metz, in his report in December, 1907, suggested and advocated the passage of a consti- tutional amendment further enlarging the debt limit, and the amendment proposed and advocated by him was passed last year by both houses. few days after Mr. Metz’s annual report came out, Mayor McClellan, in his annual message to the Board of Aldermen sub- mitted, on January 8, 1908, took the opposite ground, saying with regard to this constitutional amendment proposed by Mr. Metz: “ From a practical standpoint it may be found dangerous and ill advised, in tempting the city into enterprises which in the end would result in shaking its financial stability. The comptroller now has apparently receded from his former opinion, but in view of this conflict of opinion between the mayor and the comptroller it seems well to look at the actual facts. Mr. Metz in testifying before your Committee on December 10th, submitted a tabulated statement showing that the total net debt of the city looked at from the standpoint of the Constitutional debt limit was on November 1, 1908, $636,158,874.15. In ascertaining, however, what the actual debt of the city is, that is the amount which the city would have to pay if it stopped busi-112 Investigation of Finances of Hew York City. ness on that day, we must add in the following items, which are already exempt from the constitutional debt limit: Revenue bonds issued in 1907 and 1908 then outstanding.............................. $94,539,776 92 County bonds................................... 21,808,279 64 Water bonds issued subsequent to January 1, 1904 ....................................... 33,168,254 13 Total................................. . $149,517,310 69 Adding these two items together we have the actual indebted- ness of Hew York city, $785,675,184.84. In addition, the city has already entered upon the construction of and let contracts for the construction of parts of the Catskill aqueduct project. The preliminary estimate of the expense of. this project is $164,000,000. In addition, the Board of Estimate and Apportionment and the Board of Aldermen have authorized the issuance of corporate stock to the amount of $195,000,000, for various departmental purposes other than subways. In addition the Board of Aldermen last summer authorized the issuance of corporate stock to the extent of $49,000,000 to provide a water supply from Suffolk county. In addition it seems to be generally admitted that the incidental damages arising from the construction of the subways in Brooklyn and of the Catskill aqueduct project and other similar projects now under way or contemplated, will amount to somewhere be- tween $100,000,000 and $250,000,000. [if we add these various sums together and then add them to the actual debt of the city, we see that if Hew York city did nothing further than to carry out the matters already authorized, it would have an indebtedness of between $1,250,000,000 and $1,500,000,000. The debt of the nation is only $900,000,000/^Report of Joint Committee. 113 And if those plans are carried out and the necessary bonds and corporate stock are issued, then the amount which will have to be raised in the annual tax levy to take care of the interest and sink- ing funds alone will approximate $100/000,000'. With this situation staring us in the face, the question naturally arises what will the city do when it is built up solidly from Totten- ville to Flushing and from Far Rockaway to Yonkers ? The city will then have problems of a magnitude that is now not dreamt of, -and if the city then has a debt of $1,2*50,000,000, or more, as it undoubtedly will have if the present pace keeps up for ten years, what are the people of the next thirty or forty years going to do in order to raise money and carry out their improvements ? I have always been of the opinion that the same economic laws apply to a city that apply to any private business corporation or to an individual. An individual who is a spendthrift must come to proverty. So that city which is extravagant must eventually come to a period of enforced poverty in which the then living generation pays up for the extravagances of the past generation. It seems to me therefore that it is incumbent on us of this day to stop and get our bearings, and if we find that we can take care of our present needs without increasing the debt limit we should do so and leave any such increase to the future generations. Judge Brewer, of the United -States Supreme Court, in a speech at Cooper Union on February 23, 1908, sounded a timely note of warning when he stated : “ But I am one who still holds to the belief that a national debt is not a national blessing. We hear on all sides talk of the great trusts and their menace to our public life, but the greatest trust in the country to-day is our trust in our ability to pay our debts in the future. “ I do not rejoice in the spectacle of this nation covered with municipal bonds. The single city of Hew York owes $421,- 000,000. (As a matter of fact it is over $800,000,000.) “ Then there is the flood of railroad bonds. Ho wonder we have the greatest railroad system in the world. The country is.114 Investigation of Finances of New York City. flooded with railroad bonds. The reckless issuance of these bonds has not only burdened the future, but has lessened the sense of moral responsibility of the present. There is a universal casting of the burden on those who are to come after us. Such creation of indebtedness can only cast a burden upon posterity and obtain for us the things which must be paid for by the toil and bounty of those who can receive little or no benefit from the debt that they have to bear. This is an injustice. The benefits from these things are available in our day. Should not each generation be called upon to bear its proportionate part of the public burden and pay for what it receives ? But debt paying in our day has become a forgotten duty ” If therefore it can be shown that the city at present is effi- ciently and economically administered, has sufficient borrowing capacity to provide for all its improvements needed, it must follow that this amendment should not be passed. In that regard we find the situation to be as follows: It was admitted by the comp- troller before your committee, that on January 1, 1909, the city still had a borrowing capacity of $50,000,000. In addition the city should have each year the following amounts to spend: The annual increase in the debt margin based upon 10 per cent, of the annual increase in the assessed valuation of realty as per the report of the mayor’s advisory commission on page 7......... $32,897,880 The amount appropriated to the sinking fund, thereby reducing the debt and increasing the bor- rowing capacity (this will increase each year) . . 20,000,000 Total....................................... $52,897,880 jThe annual increase in assessed valuation this year was small, but the mayor testified that when the effects of the panic were gone, the normal increase would undoubtedlyhe resumedJ . It should be borne in mind that the bonds for water supply areReport of Joint Committee. 115 exempt from the constitutional debt limit and take care of them- selves. The city therefore has an annual increment to its bor- rowing capacity of over $50,000,000 a year, iavailable for per- manent improvements other than water supply. In the next ten years therefore the city ought to have a borrowing capacity of $560,000,000. Mr. Bassett, one of the Public Service Commissioners in the First Department, testified before your committee that between $75,000,000 and $175,000,000 spent on subways in the next five years, and about $10,000,000 a year thereafter would provide the city with the needed subways. It is submitted, therefore, that if the city officials will do their duty the city in this new borrowing capacity of $5601,000,000> has all that is necessary for the providing of subways and other per- manent improvements in the next ten years. If in addition to that we contemplate the possibilities of saving in the city administration, we are appalled by the amount that the city still has to spend without increasing the debt limit. Mr. [Cleveland, the head of the Bureau of Municipal Research, testified before our committee that under the charter the comptroller has the power to inaugurate a central accounting agency and that that would save in administrative expense alone, $1,000,000 a year. He also testified that a central purchasing agency would save about $4,000,000 a year in the purchase of supplies. Mr. Metz and other city officials are quoted as saying that'from 25 per cent, to 50 per cent, of the payroll is useless! and it is admitted that no time sheets are annexed to the payrolls and that there are no checks on the payrolls. The payroll of New York city for 1900 is $80,- 000,000. jj[n addition the Bureau of Municipal Research reported to Comptroller Metz in March as follows: “ Nobody knows how many millions of the present city debt are for work that should have been charged to current expenses, it be- ing possible to conceal extravagance by charging payrolls to the116 Investigation of Finances of New York City. [city debt instead of to budget appropriations. In the Department of Parks, Manhattan and Richmond, it has been a matter of course when the maintenance funds run low to charge up labor squads to corporate stock.’Q The Street Cleaning Department has been spending about $350,- 000 a year out of the proceeds of fifty-year corporate stock to pur- chase such temporary supplies as bicycles, harness, blankets, etc. About $4,000,000' a year is spent out of the proceeds of fifty-year stock for repaving, which ought to be paid for by a five- or ten-year bond. And jthe Dock Department has been paying for the music on the recreation piers and the $1,000,000 annual deficit on the operation of municipal ferries out of the proceeds of fifty-year cor- porate stock/J In this way, many millions of dollars have been diverted to temporary purposes from the fund which the law had created for the purpose of providing the city’s permanent improvements. therefore, we add together the waste in the accounting de- partments, the waste in the purchase of supplies, the waste in the payrolls and the amounts diverted from the proceeds of fifty-year corporate stock to pay running expenses, we would probably have a total running up somewhere between $25,000,000 and $50,000-,- 000 a year^ and if we add that to the $50,000,000 annual incre- ment in the city’s borrowing capacity, we have an annual sum more than ample to provide for all the possible permanent im- provements that the city will need, bearing in mind, of course, that the question of water supply takes care of itself, bonds for that purpose being exempt from the constitutional debt limit. fin my opinion, the interests of the city will be best promoted by keeping the debt limit where it is until the discomforts caused to the citizens have awakened them to a realizing sense of the way in which the city officials have been and still are throwing away for temporary purposes the money which should have gone into the needed permanent improvements^Repoet of Joixt Committee. 117 (7. The accounting and bookkeeping methods of the city. [The testimony given before your Committee showed that a great deal of the waste of the city’s money is due to the lack of a proper system of bookkeeping^ The methods in vogue are archaic. The comptroller has no check on the various departments. Few rec- ords are kept of stock on hand. The result is that purchases are often made, not on the basis of the supplies on hand, but on the basis of the amount purchased the year before. During one year a certain department purchased enough of a particular class of supplies to last ten years, and during the next year they ordered the same amount, which gave them a quantity sufficient to last twenty years. Many thousands of school books were reported as stored away in closets and forgotten. It was testified that many of the departments kept no record of valuable supplies on hand even though they amounted to many thousands of dollars; and that there were literally hundreds of places in the city where goods are stored and absolutely no record kept of the stock. The comptroller in passing the payrolls amounting to about $80,- 000,000 has practically no evidence before him when the authori- zation for payment is made and the audit resolves itself into a mere mathematical check of the payroll and a viseing of the title of the account against which the payroll is drawn. Payrolls might be padded to the extent of several million dollars a year without the fact being discovered by the comptroller’s office. [One chief trouble is the lack of time sheets by which the depart- ment can know how much and where the employees have worked.jl Nobody knows how many millions of the present city debt are for work that should have been charged to current expenses, it be- ing possible to conceal extravagance by charging payrolls to the city debt instead of to budget appropriations. Taxpayers have not realized either the necessity for retrenchment or the practical steps to be taken. Numerous instances might be given, notably in118 Investigation of Finances of New York City. the Department of Parks and in various boroughs. In the De- partment of Parks, Manhattan and Richmond, it has been a matter of course when maintenance funds ran low to charge up labor squads to corporate stock. The accounting and auditing responsibility of the comptroller has been left practically without official attention and without central supervision; each bureau acts with little or no regard to the other; each bureau and division is jealous of its own preroga- tives ; there can be no team work if there is no unifying force. Claims aggregating millions may lie in the Bureau of Audit un- known to the general bookkeeper, or to the comptroller or his deputies until after the warrants are drawn; There is lack of uniformity in the methods of audit within the various departments whose accounting methods might be made uniform by the comptroller. Consequently, the comptroller is not sure what words or titles may mean when claims are presented to him for payment. The public can never tell the relative needs of departments. Department employees having charge of the preparation and for- warding of claims may levy contributions for payment. Many business houses refuse to seek city business because of this “ disagreeable feature.” Various reforms have provided check after check requiring a separate clerical or official act. In- stead of adding protection these checks have increased delay and placed each person who makes a check in a position to hold a claim and to accept or to demand compensation for forwarding it. With- out proper administrative control, the more machinery that is added the more lubrication is required by persons dealing with the city. Thus instead of acting under direction from above too frequently employees act upon pressure from without. Little or no attempt is made by the Bureau of Audit by in- spection to prevent collusion in the preparation of payrolls; labor may be improperly charged to appropriation and fund accounts.Repor'f of Joint Committee. 119 The red tape required to secure the proper signatures for war- rant and draft delays payment unnecessarily, entails unnecessary cost, and would make it physically impossible, under the present system, to keep departmental accounts so as to tell the truth clearly about the use of money. With the methods now used in the Department of Finance, no comptroller, however efficient and honest, could tell where un- necessary men are employed and unnecessary millions expended by the city of New York. Bookkeeping methods are both cumber- some and ineffective. Records do not show liabilities due to open market order or to condemnation or damage proceedings. The system now in force of auditing claims and payrolls 1. Affords a continuing inducement to peculation by employees and to collusion with the city’s debtors and creditors. 2. Causes unnecessary delay, which 3. May make the passing of claims and payrolls the subject of competitive bidding among claimants, and 4. Keeps the city on an unfavorable trading basis, compelling • it to pay higher prices than private firms who settle their bills promptly. The present system of revenue accounts fails to show: 1. Whether the amount returned is the amount actually col- lected. 2. Whether the amount actually collected is the amount which should have been collected under contracts or grants of privilege. 3. Whether the contracts or grants of privilege are properly made and properly recorded in the department making them. A great many, if not most, of the defects and evils just specified have been discovered and pointed out by the Bureau of Municipal Research. Their report setting them forth was given to the pub- lic by Comptroller Metz, with his express approval and corrobora- tion, and the above statements must therefore be taken to be true.* Some of the reforms suggested by them have been adopted by the present comptroller.120 Investigation of Finances of New York City. The Bureau of Municipal Research, is however, supported by voluntary contributions and has no power, other than that of any private citizen, to glean information from the books and records of the city. It seems incredible that in a matter as important as that of the reform of the city’s bookkeeping, the comptroller should be com- pelled to go to outsiders for suggestions as to the necessary changes, and that those suggestions should have to be given as a matter of charity, and that the excellent body which makes the suggestion should be dependent on the whim or pleasure of the particular incumbent of the office to be investigated for its oppor- tunity to examine the city’s records. It therefore seems highly important that some body should be created by law, with the duty and the power to investigate this matter and suggest and enforce a proper method of bookkeeping and accounting in all departments of the. city. . D. Conclusion. Your Committee was oppointed chiefly because of the passage last year of the proposed Constitutional amendment increasing the debt limit. The avowed object of that amendment was to procure money for subways. It is submitted that there is a simpler and better plan and one which requires no increase in the debt limit. Stop graft and waste. Stop borrowing money to pay running ex- penses. Equalize assessments and use the borrowing capacity thus acquired, together with the $50,000,000 of present borrowing capacity and the annual increase of $50,000,000 in starting sub- ways. Make the tax rate honestly express the city’s running ex- penses, so that the people may know what their government is costing them. Four years of this policy will give the city its needed subways, will save the city’s credit, and bring taxes down again, though for the first two years they would undoubtedly rise.Report of Joint Committee. 121 E. Recommendations. I therefore recommend: 1. That there be no increase in the debt limit and that the pending constitutional amendment for that purpose be defeated. 2. That the charter of New York city be amended so as to ab- solutely prohibit the use of the proceeds of corporate stock for any temporary purpose, such as music on recreation piers, annual de- ficit on ferries, day labor, running expenses, or for any purpose other than for a permanent improvement. 3. That it be made a crime for any official to knowingly appro- priate for temporary purposes any funds allotted to him out of the proceeds of corporate stock. 4. That it be made a crime for any official or head of a depart- ment to knowingly exceed his budgetary allowance without the prior consent of the Board of Estimate and Apportionment. 5. That the method of accounting and bookkeeping in the comptroller’s office and in the various offices and departments in New York city be changed so as to give the comptroller a check on the expenditures in all offices and departments, and so as to remedy the other defects and evils hereinbefore pointed out. 6. That a law be passed by this Legislature for the formation of a commission with power to devise and install a system of ac- counting and bookkeeping in the various offices and departments of ISTew York city, the life of said commission, however, to be limited to a term of five years. All of which is respectfully submitted this 1st day of March, 1909. WM. M. BENNETT.122 Investigation of Finances of New York City. MEMORANDUM OF WARREN I. LEE. I concur in the report of the Committee, except that I favor the passage in its present form of the pending concurrent resolution providing for the exclusion from the debt limit computation of bonds to be used for the construction of docks and subways, as to which resolution I respectfully submit the following memo- randum : One of the arguments which is made against the enlargement of the debt limit is, that if the amendment now pending before the Legislature is not passed, public clamor for rapid transit improve- ments will compel the city administration, by rigid economy in other directions, to save money with which to provide for these improvements. The answer to this argument is found in the experience under the present administration. During the period of this administra- tion there has been a greater, more intelligent and more concen- trated agitation for rapid transit improvements than ever before. Yet out of a total issue of corporate stock amounting to $298,- 945,094.84, only $19,440,825.18 has been issued for rapid transit purposes, and to $16,051,222.38 of this the city was committed by vote of the Board of Estimate and Apportionment taken under the previous administration. The only rapid transit improve- ments to which the city has been committed by the present admin- istration is $3,389,602.80 for the Brooklyn loop lines in Manhat- tan. Even as the time approaches when the present administra- tion must account to the people in an election, rapid transit improvements are not being hastened. If the next administration is not honestly desirous of promoting economy, no public clamor for subways can have more effect than it has had under an administration whose term of office is about to expire. If the next administration is sincerely desirous of promotingReport of Joint Committee. 123 economy, it will be encouraged by being able to make use of this debt limit amendment to meet the immediate demand for rapid transit improvements. Conversely, it will be discouraged (if the amendment is defeated), by having turned over to it a financially impaired city, with a pressing necessity for retrenchment and a virtual impossibility of meeting with public funds the demand for immediate rapid transit relief/ The clamor for subways will most likely (if the 'amendment is defeated) result in turning over the transit situation to private capital under ruinous terms. The agitation which will compel economy is an agitation for economy and against extravagance, not a demand for subways. The safeguards which are provided for in the concurrent resolu- tion appear to me to be so ample as to prevent harm to the financial condition of the city if the resolution is repassed. No bond is to be excluded from the debt limit computation until it has been demonstrated that out of the property for which it has been issued the city is receiving current net revenue sufficient to pay the interest and annual installment into a sinking fund of sufficient size so that the sinking fund will retire the bond at maturity. iSTo bond is to be excluded from the debt limit computation until such a sinking fund has actually been established and maintained. The additional borrowing capacity secured by the exclusion from the debt limit computation of bonds heretofore issued shall be used for no other purposes than those for which the bonds were issued in the first instance. The bonds thus to be excluded from the debt limit computation are rapid transit and dock bonds, and amount according to the comptroller’s estimate, to about $125,000,000. Since the demand for rapid transit improvements is so much greater than the demand for dock improvements this means that the first $125,000,000 of additional borrowing capacity will be practically all used for rapid transit improvements.124 Investigation oe Finances of New York City. The amendment is not self-operative, and the method by which it shall be determined whether the bonds comply with the provis- ions entitling them to exclusion from the debt limit computation must be fixed by law. This makes it necessary for the Legislature to pass and the Governor to approve a law, before any bonds can be excluded from the debt limit, I am specially inclined to favor this resolution because it will, I believe, if passed make available funds for the building of sub- ways, of which the borough of Brooklyn is sorely in need. WARREN I. LEE.APPENDICES 125Report of Joint Committee, 127 rjgsh0 IS-g-S'fe-l ll i §> §* J £ §•1 o »g° JfS e 5S5 ^ a ^ ^ e S5 £ J* rfS „ *8 W3 ^ pff ! .1 05 15 O Co 05 O 15 ja co 05 I- <» a I1&2S *C| e~ ■ § 11 ^ ■f ff t si F •+* 2 to co 05 e-« g S |l § § f"s ■§ .1^ ?> i § j*§ | 555 S 5> g-S =0 d* § ^o* ^ 15 ~ — O' Q ss^lj 8 . rO 3 1 - 05 « ?*5 O ^ *5 rO ^ *8 X hH P £ P P* P-i <1 O $: bi o ^ >■ 0) o -- 00 2 i ^3 ri , I §> & I -2 « e ' T j ® ^ S g §| 1 ^ | e I ^ ^5 co a O' s. 05 2° £*5? •s r'i a.5 SVg - sew .* ^-S 2 ^ 11 I* ^ ~ S | ^ IO CO Ipss s n 555 *- : »$ -8 05 If - 05 g 2 ^ e C) f ®»l“|!'So ■fe-wS *0^ •!■**• o ^ t* ■ I "2 ^ I ‘-S ^ • 1 §,2 - •5 "^ ° a ^ st a ^ • § i Is !§ * ; ° e O0 05 £. e 2 o Js ® 2Q © C'S 05^J * to 8 £ o-S jg S g w§ 181? o*w 5T® W « ©,£3 SaZgg^Sg ^ . ® TO ^ ° .TO 05 A • jgl’iSai Ph «o-2 c o >>op i 12 a _j Oct 05 S ©71 sl§bS“3a 7JXc3>>'+J-^+»* •3 a “ g-c Z& hs§ '°S8g. © >3 a . ti © fl'ga wj-S p hS°1Sii I © M-S lilies §7, >3 SlJSiaTf gs|-5?&a ^ » >* > O < lx Cl Ol CO rfl 05 05 i—I ■7H O IO O IO 0O 1C CO 05 O l> 05 (N O^NiOnoOO Tf CO >-H CO lO »C NNtDNOOiOH OCi-ItHOOO©©© lO 00 lO 00 lO Cl Cl C5 00 C5 00 1> 00 1> 00 »>©U0 iO©rH aoito a io ,. i>ooo coo • Cl © C0 © CO O d lOOC >-H OOO lOOOOrHOOCO lOCO© TM tw-r-t Tt-II01>»000 T^io^TtiiOiOiOiO'7< ddWOOOONCDH _ Tl^|>d©iOi-i©COX '^'^©OOOO'rHCOO© dd©d©oo>-tdoo THdCOCOOOCO-^OOO N^oiooooaH- © d 00 © tP © H O05~rH00i-H00O~iOI> 00COTt©©©© 11 > © o > >H © - 050H(NM^>OON 0500000000 CO 05 05 05 05 05 05 05 05 cd a PH © •m © p a ° 3 S.o lO 05 C3 H CO 05 05 N05^(NOM1000 COOOO^^^C5HO - 05 • 2 9A® *9© Uli-Il A Q.S « lOO'tfCOt^GOCO'tfO ■«tf'C0t>00C0OiOO l> CO 00 H O CO 00 rH lioifi ^ O p <15 c3 io oo go oo 05 o co.oo s-d c3 o + H 3 ^ X u i> 5 c3 s 00 ft&^*0 © © rr, -2 5-1 * © g03 ci ft rps ft CO 05 1H GO 1C-1> OQ i-H rHHcOOMOO © Q IC 05rHcOCOOOcO'-HCOCO 00 05 lO CO 1-0 I> CO I> COt-UO»OOOCOCOO(M O t-i CO t> 00 ri l> 1> l> I0^j>t>c000050qo0 fe-g^AA § Ph © ° ° © SO K* ■25°3> el°| £ >> c3 t> < ft © r lO^-^ HON 05 CO cO 001>0500t-i _ 55 t> CO CO 1-1 to 00 0 CO 05 ^ *OlM 00I> © m X • J—i C-5 OH aj ' , coO -H ^ o 05 Ss^Sf ■3 3*1-3 o-ft n-»-i o >eo 9 . © © Isllfi (MOCO(NOOOO _0(N 05^10tH 05C0OI>t>»0 i>t^i>ooO'-i xtf 10 05©05»0A •** tH0500000'-HOOt-I_ NOOONOIOHIOOO O^0005CNt>C0C0C0 oo co i> oo o co 05 05 t- CO-^l>O5C0’-t'^lOC00 001>I> >* > w o P3 H pH 050T-ic<)eo'^lOcoi> 0500000000 GO 05 05 05 05 05 05 05 05 C—These balances are subject to such adjustment as may be due to over and double payments, etc.RECAPITULATION — Re Tax Levies of 1899 to 1907, Inclusive. Repost op Joint Committee. 129 1Cl> l>»O00 CO J>1> >5 ,'P • * . xn Jo O . © r» cs . v» Sillia j&S Tl'd o. c3 M+a o o gO *M 'rt s a .*38 3 03 "IQ ©05 Acs fiO O xn xn% H K* c3 03 03|_J taje ph ga 02 O 2 02 xn si £ O 03 03 TdOj ° o ° A O 05 O fn.p © rH't! ^ - © 03 © 03 O Xfl b*j 03 ®J -P3 Pi !?0^ c3 2.2 2§g« 05 fn S <13 oo oca ® a bp &ogw.S co a.5 a o oO'g S'g $ ‘fcg'Sfl-Ss 5g 02 02 m '1-1 o o o ° * © 5'5*43+3-^ b‘£ o k15oooC5;o . g 03 03 03 p © 03 « M ajocpjpo qi—ICC c3 k_ i-i >s f* £5SSi 03 2 tSftg tf W ffl 3 w O w ft o Eh ►* tf ◄ . =sg Oo tfiz; PRM &o 02 g- A A O O A o o.2 •N3 M 05 P< 05—, 2a a^ a oo 0 05 is op sasss <1<1<1<3<1 c3 c3 c3 c3 +3+a+3^3+a o o o o o HHHHH a <1 o H o go ag° *§05, O’-1 Eh i A A < >* rt ◄ £ .a p 02 •go o |a 2 ►^V o PJ 03 xn «6h1 ^ o*S o xnxn “ a a ot .2.2 o c3 o r3 03 03 O O HEh130 Investigation of Finances of Few. Yobk City. § ^ 9 O o go ^ § g« ■g 6 ^ rO £2 o 3* e ** I § 8-S S rH C! ^ a JS ° s QQ £ O £ H, Vi fi H W CD p m « O £ft £ g o o a o o 3 £ g m e a §.2 O 02 o w .2*3 « ^ § <5 +^T2 o a H e8 3 > 3 O 0.0 O ce •r< 02 ft a Sa’S.S “■a g l§S®?sg I § 8a S §■§ m §§ S ■£'!?'» ” d O g O ^ d tf < s »* 05 GO IO COMCO MO^h MON 05 00 rH-^oc 1-HOO COMO H(M05 03 - ~ -U50 iocooo oo oo co MOO 05 M>CD ^ OQ 05 M CO HOOH 003 CO00 D^3 03 t)i 05-^05 iO lO i—I 03 CO 03 CO l>HH MOO lO CD 1-100 03 lO Tf 00 00 03 03 CO 00 00 M CO WNN^HiCN i> 03 05 ifj i—t O t»r £ * 1905. $1,035,584 15 233,753 54 448,848 71 140,937 63 55,431 39 $1,914,555 42 $3,730,819 03 204,860 02 823,175 11 90,795 46 51,167 83 ■>* oo o o o> 6# $23,801 84 16,057 23 22,111 51 6,578 34 3,976 48 $72,525 401 $2,376,703 97 135,002 69 291,458 80 56,220 83 19,878 13 $2,879,264 42 1904. $776,435 26 158,109 48 280,850 29 108,667 40 45,730 18 $1,369,792 61| $3,239,208 94 179,512 66 815,385 71 71,156 98 56,276 74 $4,361,541 031 $15,399 59 1,354 45 19,791 41 5,810 04 2,054 68 $44,410 17| $1,980,523 49 98,661 26 213,271 72 52,095 40 17,391 82 $2,361,943 69 *8061 $493,195 25 98,378 67 190,499 09 84,490 61 17,518 97 $884,082 59 $2,808,030 17 140,799 49 817,926 23 61,388 22 53,828 01 $3,881,972 12 $8,781 50 1,052 41 5,753 79 3,120 56 1,419 27 $20,127 531 $1,745,693 04 81,653 50 207,387 60 48,318 13 16,590 78 $2,099,643 05 1902. 1 . $264,637 23 86,586 27 90,238 12 105,768 98 22,241 68 $569,472 281 $2,909,890 77 193,279 06 941,606 78 101,720 66 100,896 21 $4,247,393 48 $9,042 48 1,622 04 5,947 82 3,676 79 1,763 47 $22,052 60 $2,349,843 17 114,017 69 349,478 97 75,442 59 28,697 27 $2,917,479 69 1901. $176,332 43 143,066 05 127,074 10 101,384 93 19,835 10 $567,692 611 $2,911,677 84 166,898 71 1,052,497 39 126,127 50 156,784 43 $4,413,985 87 $2,150 35 1,623 25 5,826 07 3,688 07 8 23 $13,295 97 $1,817,609 18 67,394 97 344,050 64 92,758 02 38,874 73 3 t- 8 3 *0061 $150,160 41 39,661 89 157,946 61 96,283 61 18,553 02 $462,605 54 $1,991,097 99 128,350 24 390,243 31 69,073 69 78,287 96 $2,657,053 19 $2,395 99 1,567 75 9,752 69 3,412 48 $17,128 91 $675,933 14 16,320 55 224,489 12 32,296 95 33,591 73 $982,631 49 os § $166,036 07 38,936 85 74,980 33 226,504 78 17,777 87 $524,235 90 $3,734,350 02 106,964 61 430,597 07 88,015 60 38,357 18 $4,398,284 48 • • C* © 00 HrHO5lO(MQ0N t"- © © © T- Tt 05 Tt t-05 eo © t>7 © i—I CO 00 T- OO ,-1 i-l05 05Tt© © 00 051> © CO t- inm i>Tco »05 00 -i©©eoo5 05 3 feS;. 22 — _t-o 3839 P- 05 i-H 05 CO 05 05 CO CO Tt ©Tt©i—lTtOO©©QO 50 © CO 50 Tt 50 CO CO © © OO © © © Pr05CO©©P-05Tt05 00 05 © ©00©©Tt00Tti-l © 05 05 Is* © ©Tf«t :88'$ © © 050COCPMNOO© © 05 Tt © Tt Tt © © © OOCOINNNdOHOO ©O5TtC0©TtO5 COTj(Tt(Ni-l(MOO 05 i—1 © CO -*1 i—1 TtCOOO©OOTtP-©©Tt ©00P-OC0©C0©05t~ Tt © P- i-t ©Tt i-l HHO CO 05 05 00 ass i^jg* *o X e3 ^05TtTt 05 05 OI P— r—( CO *o OO © CO © H ^ 1-1 ©Tt © CO P-7 05 05 © ®N 50 Tt~5a©c»oOTt~i-7co©p7' OOP-© t-105 OO Tt CO ©CO ■ © CO c •05NC J'$S 5NN 0505©©0000©©00 C0rH®O®O®MO ©©©TtTt©t-OJ© tr CO 00 CO © ©OOTtCO© 05t^r-l ©Tt COt-HOOt^-^COCOCOCoo t>r co 0 co eo -oo cost* OOCO©TtOOOO©l>-© ©COOCONHO®® 05 Tt CO t-h 00 05 CO t- ©tr-©O5 00 O5rHt~Oq0O COTtTt©© Tt ©CO ■ O CO ■ O CO :.tJ4 • cop* .•© ®iCTH(MNr-lO®M05 C0W5 05CqONN00(N05 05 05 OO 501>* Tt 50 QO 05 CO 0*0 05 «HW i-N t—COpO • OTt i .CO ©05 • 50 © • CO CO 05 ' • 50 05 • 00 Tt • tH CO ; • t> ©t--00i- 05 05 CO l- ©5050 00CO -i-l iH iH ®.N ® -05 Tt O0©Tt 05 -OO © Tt co o OHlOO ©t-t-OI C5~ co” CO 50 CO Tt tr Tt 00 05 0 Tt COP-T- T CO •C0i-lC0TtO5Tt©G0 •©©O0©©©Tt© ONiHCO© CO Tt i+l OO CO ■00 CO © © P— OO © © i-H © •—1 ©©©COi—!05©©©Tt © COI 001 © •TtTt00©O500 00© • i—i io © © i-i -t © Tt • P— H rt H © 05 © © l^i-lTtCO© ©NrHNriH ©©_©_©rt it © © OO © i—1 © 00 © © © ©i-HP-Tt©QOTt©COCO ©©©p«»p—©©CO©© a 05_ ©< o X (3 Eh • © 05 P- CO Tt i—1 OO •e^©co ©©05© 05 1-H t>To5 05 © iHHCOrtlO 05” © co 5f5 co Tj7l>. 05 ^ co ©©Tt 1—t Tt 05 50 1—1 Tt © i-l CO ©© © Tt ©-TtOO © CO © 05 00 05 © Ttl © CO Ttl P- CO © © © © GO © CO • 05 © t'- © OO ©1^- i-l © ■ O 05 © Tt © CO© • © TilTH ■ •CO© •©© © 00 © 0?P- 05 GO Tt © 05 -Hi © © © OO © 05 05 © © 001>* © © Ttl Ttl © ©©!>.<35tT. -rHHCOOO ©©i-H©© • © i—l © CO 05 CO 05 tJI • CO CO rH 05 00 ^ CO • 00 © © ■ *>H OO •NN GO tP 05~ r*7©5C© © HNCOO i-H CO l—l l>r*OO500i-7 CO 1—1 CO CO 05 !>• 05 1-1 Tti~ O 50 © © ’©I>7,_7o5~ ©00 05 • 1-ltT.Ttl T-l 05 °°* S * : • © •8 Tt<® rtrJ(N ©i-|Tt05Tt ©05©C0© Tt © © 05 ©Tt HOtO 00 05 © (NH ©OOtr.CO© -tr© ONNHiJI -00 00 I>-05 00 05 00 -tH© TtCOCOCO© • 05 CO 05 © © © CO © © © 1—1 © ■ t2© © © * CO © Tt © OO •©©©T-l© ©Tt© 05 05 © •05 -CO© • •© -CO© • • CO • p- co 00©©© eo 00 © 1-1 co (NNONN GO © © CO Tt ©1-1 CO CO© © © © •©©00©© • © OQ OO 05 CO 00S© • CO • © co • • 1-1 • 051— • !- © CO 50 Tt CO OQ 05 Tt © OO • coco • © © © 05 HHC5^ • 1-1 -oooo • i °. ©i-l © CO 50 © Tt «&© 1-1 •CO© 05* • r-T © © i-7 • 05 05 ©©© •CO ’00© j • 50 © CO 05 525 1 SI m oi put 9 .«] Oi ■ jz; O •“;> • S "»jO yiililiSi S.'S g s I’g § e?Ssp .. 4 §*|;SJ;§j§! Ph PW^Eh^S Metropolitan Street Ry. CoBorough of Manhattan.—(Continued.) 134 Investigation of Finances of New York City.Report op Joint Committee. 135 $©«©•<* OO' SS3ffiSSSSj558S38£S3g33i8S35S §j;S§33® Oit^ tiOOOOOTtosoo Si ■« oo oo too® ia -**< ia nnnoBorough of the Bronx. Itemized Statement of Uncollected Special Franchise Taxes as at December 31, 1907. 136 Investigation of Finances of New York City. H 05C0N05 N 00 1—1 05 ■^OHCO tOiO 00 ©i>oo NCON CO WHCO CO C00505 CO COiON CO CO lO NNiH TH 05 -Ttl (NiO 1>T* CO'tf O5»ooo Tf^l> Mo5 eh" N CO CO^ CO ^ 05 CO 10 ©C0I> O^r-t 0*0 00 b- COIN coco CO t> 05 COOOtJH 00 C01-1 Orti «§> CC CO 001>N coco r*> cS C3 .2| Jjfl 05 pr "H) c3 - ’-tf c3 ° °*r -£d..~ - - X3P • o3Q o S3 ^ b>.u ftO -Qj rvfe « o£a5 O O1^ 0-rt.H-Pri a3 cj • b|riu^ e8 3hw « rt £ :535§^„3|«-3S'g|>-!| O O 05Report of Joint Committee. *137 1—fOi CO 05 1> 05 00 00 00 1000 r-l CO 05 OlONOH OtHCOCO TjtOCOi-H HICNO HO© SWfH^ja e3 ©-feJ-jy- © S§ H ^PnO© ■© © *3 mH® o £3 o'* *3*:g.2Itemized Statement of Uncollected Special Franchise Taxes, as at December 31, 1907. 138 Investigation of Finances of Few Yoke City. ip-prr if 'W' OOlOCOlHlOCOC O5Tto •l>»C0C0t>.O«0l0i-t •OffiNOOMiHWO • NCOJNN 1 00 CO •CO • 05 CO .1005 ■■>—ltOtN-05 • •rH -COCO -t>- t-4 »CO i-H § . •to -TflTtl -1—It* • CO 05 • • -00 • • • 05 ■ • -to • •no -r— • ”*• • • !>• Ttn to 1—1 05 COt— •ooo-^ ^ co •COOq oq •to • 0-1 CO • Oq CO • • ; • oq • to • ! .'22 ' -#oooco»ocia OCICQOOOHiON COMfHNNt-I^OO •TtH © .1 • O O ..' ;N- t-CO •©r* •] • oq^ • < • co oo •; to to OOCO -00 CO T-l • CO N- CO -N • • oo oq • co oo • • t— N- "^O • • i—i co oq • • -oococo • ' *£2 • • N- oq • coco • oq • • •CO • • • 7—i • 1—1 N- *1—4 • -OO -00 00 - 00 • '0 • • -OCOtJI • ; • • •, • • • 00 0 05 05 N- • - • "tOOOCO • • • co co to • • t2© • • to cqto • • 00 co I 32 I • to • i in. : :g oq j oq • -oq • • -toco . . • T-l CO • to o • • i-i oq • • -1-HCOOO . . • • • 051—4 00 • • • : : :gg • • • oo o • • • CD to • • -cooq • i-l CO • • coo • • t-co • • "t-^-CO • • I } i is ! > i i i i • • • oq oq" • • • 1—1 Tt< ; oq | i i Y i i Report of Joint Committee, 139 W«5HU5«5(MIMg®3»^ascOM«NMffiOHOS«iOiOC<|©N(NNNOa ^ —------3 S £h Jr " ^ ^ ^ 01 -0 ~ ° ^ ^ ^ ~ • ~ h so i-r a> to c HWN cdeii-H co 10 ■*n 10 'NiN^NMNNOOOt' 00 tHOO y-i ^^^^^-SflQC5Mo£l£lMf> P3 pi 'O o go 4m* i&il •- = S3 aj g ^l^a^a Fiji's a140 Investigation of Finances of New York City m fc W W P a o M 3. P'- o « o fflRepoet op Joint Committee. 141 eaiftt^toas-^coi-io* wj5cq.if5iO00 rt< csjoo oo® w5rt^oo »OS00 HHNN® co~£h*" CsT • • • ^ CO N- • • • 1—1 T-l CO ’S3 CO o £S3 :; • • ’oNH • • • i—1 OS CO • • -®N :£ "^CO -1 r*© oot>> • • • (NN tCrfT * u 0 1 • • -oocooo ; ; ^(NO • co oo •os © CO lO ON OS N* *o • • • © CO rH • ’ •o>SCQ • r5 Jo UOOS eOrh iCN N rH a | ; ; oi co* UOIN-C© eg co (M . Too OOWOXSOb OS 00 00 CO i—l Tj os oo os os e^rjTooi>oo f Ja^ ^ : T° 133 :'3t3 :il .•S’S.iBSisif-Ss :oi.8 •8| 1 £ ® S oh3 ■Si IIReport of Joint Committee, 143 0* © 00 t>- © © © © OI © '© to © to tH (N eo Ol to 1—1 eo -1 vO © CO rt< > 03 00 © 00 lO 1> t- © CO U) 00 CO © S S3 S3 £2 S* s" 52 $ « p p? w {* oo co © M CO Tf lO © © © © * Changed to “The Board of Aldermen and City Clerk.1Budget Appropriations for City of New York for Departmental and County Purposes 1898-1909.—(Cont’d.) 144 Investigation’ of Finances of New York City. o {ic'd +3.S J . SUXJ “ « ©-H (XI d 3 bed* u 43 ft o3 o^J d «= P 5 ft Sg 4) P S# S3 © 13 s a e3 d © ©ftfc Wim 2 ©S a COO "Hoo (ON OH toco 05 CO coco oo co 00 05 0 5 rig ct> ft S3 oJ CD n OO © PI O ci © ^* PI rh © 4- 4-^- 4- 4- 4- 4- 4» 00 O o 50 00 00 00 00 00 © o 4* 00 o © PI oo CO oo CO oo © © © «o PI 00 00 00 00 00 00 © © 00 00 T“l © © © © © 00 rJH CO 1—1 l—1 l> 00 oo © © © 05 o oo oo Os © © © OS os os Tt< 4j< © © m i> 1> pi pi ©* ©* © bT © * * # * 4t< 00 © b- 00 N. 00 OO 4* © © © t> © © © o 00 00 00 oo 00 eo © 00 © © © © © © © © © © © •d H-P Ci III Wofi T3 d cd & 1 I •g,d d OJD CD 22-2 2 gqJEL D M M M 00 00 00 PI gla §2° o Si «&5 o PI © © © © © © © © 00 4* 4* 00 00 © © © © .© oo 4* © © PI © rH iH rH © © CO 00 tH 00 rH pi PI PI © b- © o © © rH iH rH TH © © © 00 iH © * * * * N b. 00 © 00 © © rH rH PI* pi pi ci ci 6 00 05 o 05 05 o O 00 GO 05 C5 w m m . _ * _ oooooooo 5 05 05 05 05 05 05 ?.© r-» r-i_i—I rH rH146 Investigation of Finances of New Yoke City, a 6 o © © rH J> © 00 «c § ! HC. £ £ © Co £ a 1 • ^ Co - © 0 l •g 1 HO © ©i PQ liS-a R wi’g Sfi5 ft ' a£. a? I .4) O ® SA = |Mq? o3 oc^j ft,*-* (11 Li *71 •fljd a oj pi e a c8,d lag eS JS "< e3 c3 PM '-a •’S 1^0 S’gpq t> oo ©T oo ] so . oo a a* © cq cq cq cq © © CO © cq cq CO © © © © b- © tH cq 00 © ,_i ©" © cq ©~ 1> © ■ t“4 cq © Tt< © © © © © cq tH © © © © © © © i> 00 ©^ i—i © © © © © © © .© © © © T*< 00 © © © © © © © © © © © ]> 00 '00 00 , .Cq Cq ml II fis. S 03 % s §! OOP as 03 03 pi a & o3 O 03 Pi £ 03 § Q o ?.Z3 =3 S.2.2 S2SS ft. O 03 o iO o CO 00 Oi c * c 1 00 00 00 00 © © © © rr 1 © c > rH rH rH rH © © © 03 00 VO C 1 1—1 r-i © © © © i— 1 © © © © © © rH © © .© © i CO CO CO CO CO 00 00 00 c 1 vo CO rH TH © © rH © rH 1 VO vo 00 CO © vo rH rH tN. 00 1 C » c > © © rH 03 CO 00 03 rH i-H 1-H rH 1—1 03 03 c > c > © © O' © © © © © o c > c > c I vo VO © © o_ © © iO VO vo vo 03 03 © o nT © © cc > IN . IN IN VO VO 00 © rH lO C 1 t>i • © © CO CO © © i-H 05 rH 1 03 00 1-H i-i rH rH © © lO C > © vo 00 © © © © © 1> 1> !"■ IN ■ O' 0- IN IN GO © © iH In In 03 © © © © © © © In 03 © 00 GO 00 © 00 rH o rH © VO 00 00 rH © 03 h- 03 VO 00 rH 00 CO © 03 t> © © rH rH In 03 o VO m VO VO CO © In © i-H 03 03 00rH©rHrHrHt>. 22 3 58 go 53 (n i> go" r»^OiOy|>ooi>Tj< ^©00 00*^00©©© 03 03 03 03 .ft rH t-f ^-4 fssj 1388! pfp^ a §00 ft S o .a OS 03 * -*-■H-C<»g 147Budget Appropriations for City of New York for Departmental and County Purposes 1898—1909.—(Cont’d.) 148 Investigation of Finances of Hew York City. * Department abolished. Duties given to borough presidents.Budget Appropriations for City of New York for Departmental and County. Purposes 1898-1909.—(Cont’d.) Report of Joint Committee. 140 >o 0 o ogg» fill fig S ® h b © m.-SJh 0>O © 5 W5 lO iO 03 £ 03 •M& . 03 O O bo tx © 0 (M o . © 5Si *e r sc. © CQ CD ■ c d .2.2 *o ’j» *3 a? > 525 O c3 jj, wi§ So 1° d ° >>£; 55 d rs aj , •b ° m c ® •d^-° S c<3 S o3 O 3 W * v.zi ”6 El oo °8 nd ■s« si O O o pH <5 K »0 lO lO 1C lO ic lo to (N CO CO 05 (M CO CO CO CO CO 05 GO 05 CO CO CO oc ^ 05 05 05 to to to to >o to rji co co co co co CO CO CO CO CO CO CO CO os «5 00 CC co CO co CO cq cq r-‘ rH tH 7-H rH 7-1 7-1 7-4 cq cq co o © o o o o o o o o © o o o o o o o o o o o © o o o o o o © ■ o o o o o o o o o o lO lO o o o o o o 1> 1> cq os rh 00 cq" cq' OS tH co- OS OS OS TJ4 cc «5 • CD CO lO co co co 00 00 00 05 cq lO r—1 T—1 T—1 1—1 7-1 7-1 7-1 rH cq co • cq os osos ■ »o »o 1C »o IO »o oo op os OS OS OS 1 3 ^AOS +J+JO Visg T3T3 o 0)01° 'O'O . O 0-£ 151Budget Appropriations for City of New York for Departmental and County Purposes 1898-1909.—(Concl’cL) 15& Investigation of Finances oe New York City. c8 ft 0*0 **5 O CJ •3 >4 11 5* .2 © . i-l © © 00 rH © © CO © 00 00 r>- © O © © CO © © © © © © © • CO rH © r_l rH 1-1 . rH CM . rH © CM CO CO CM © 00 O © CO CM CO © rH © © ©~ l> © N CO 00*“ Oi rH o' © O CM © l> © © © rH © 00 lO © CM CM cm © 1> 0 05 T—1 o~ r“t 00" rH rH rH © rlT © ©" © © r-C rH 00 CO © 00 CO © iH Cl 00 CO © l> © © 00 © CO CO rH CO © 00 © CM CO rH © © rH © © 1—1 00 © © © © 00 CO 00 00 © rH CO © rH © 1> © © © © © rH ■ © .—1 © 1> rH © © © 00 © l> CM rH rH 00 rH © rH CO CO © © CM CM © rH © 00 00 i> 00 © © O © rH CM CO ©.. ++ ++ rH 1—i ++ ++ ++ ++ © © © © 00 00 rH © rH 10 O © CO CM rH CO © © rH © 2 © rH CO CO ..................... ....................... o * • • * i r i i r i ©...................... o.................... rH .* I I ! ! ! I I ! ! .......... *.................fc= ~© o.............. o ’ I I I I ! ! ! ! ! ©...................... ©.................... ©................... cm................... m...................... _*____________ 00 05 O h m' CO rH »o CO 00 ©©©©OOOOO'OO CO X05050 05. 000050 -a p ,Q .2 ’C Pi 5* £ +* 00 ■f • > o .O d*>..« g*g Boo cn^o ti ©I? 6-Soo c3 O ^ >»06 06.. £}_© -b-Jt© a> o-r . O'* *°1 ss»a ce-Sgg erf H 7< no o «2 •rm O • CD i | fe«€£«. s|2|§“S .go.cJSo - g&I^Sg “"SsSS'S sSfe-S -3 £<2.2 OjlT'd ■J3 c3 K c3,Q 3 £5 §£ 8 M'§ « ® JilSoSSiS 'S^ifo P o a> * -J—Budget Appropriations for City of New York for County Purposes 1898—1909. Repoet of Joint Committee. 153154 Investigation of Finances of New York City. a o O Oi O ds tH I 00 o GO CO CO co I "SO £ O o © 1 N $ CO fe; O "to • o CO S 0 ' ^ 'S 1 so < o CO oo b- 00 50 t-H 00 CO 00 o 05 © 05 ■ 00 CO -tf 00 -© 50 tH 00 rtf CO 50 rtf o CO r-4 co rtf 50 H- 00 b~ 05 00 rH 92 CO l> CO i-H rtf o cO rtf rtf CO 05 05 CO rtf 05 00 rH 1—< 00 CO 00 Is rtf CO 05 CO O 05 rtf rtf t> Ttf CO 50 co CD CO is is co i> 00 05 o rH 50 00 1—1 o co o o co o Is 50 rH 00 50 o CM o o rtf CM o CM CM CO co o Is cc o 05 CD CM CO rtf o 50 CO CO. 1-1 CO is 1-1 00 CO 50 CO 1—1 05 rtf CO b- b~ o 00 50 $ CO 05 o rtf 05 Is o t-H o 05 50 50 rtf 50 CO I> > o 7-1 tH CM TH CM CO 50 50 CO tH 1-1 t-H t-H T_l T“H 05 O o o 50 © o o o o rtf CD 50 o o Is CM 05 o o o o CO 1> • rtf Is 05 00 ,-H »o 05 05 b- o CO cc 1 CO Is CM o 00 co oo CO r- 00 CO 05 CM 50 Is IS rtf 1—1 CO 05 00 CO CO 50 CO »o is »o CM CM co 1 CM t- rH 05 CM co 50 05 IS rtf CO c i CM w o ll c3 ft ♦“•a g*a 0 o 03 rQ s° >» . 53 M 3 O o£ £ o i'flN • O »-• 03 --t-3 3 O W ® ,o 3 -g - ss|§ 03 “3 e !3 8§ S 3a ~ &. If m O O o ti C W 00 00 ^ tH rH 00 . Tt< tH 1 '■‘S ct) 52 *5 * Q *+o rO <50 O ? O fe. 73 fcs 0Q 3 §s |£i ?: *E 02 4-» o-a C6 4-3 4-3 GQ O .... "500 00 35. McKim, Mead & White......................... 64,311 33 36. Millard & MacLean............................ 18,366 67 37. Meyers, Charles B............................... 941 57 38. Parsons, Wm. Barclay. ......... . . ...... 500 00 39. Post, Geo. B. & Sons. .................... 21,067 87 40. Parfitt, Walter E. . ....................... 28,742 41 41. Pilcher & Tachau............................. 6,552 56 42. Parish & Schroeder. ....................... 12,051 06 43. Robinson & Knust.......................... 5,020 27 44. Ren wick, Aspinwall & Tucker................ . 2,192 24 45. Smith, Chas. H................................... 339 35 46. Smith, Westervelt & Austin. .................. 1,653 94 47. Scopes & Feustman............................... 114 64 48. Short, R. Thomas . .......................... 1,191 76 49. Trowbridge & Livingston.............. 48,112 50 50. Tubby, William B. . ...................... 500 00 51. Volz, Charles . .................... 14,257 93 52. Van Pelt, John V. ........................ 4,784 97 53. Warren & Wetniore.......................... . 18,869 45 54. Walker & Morris ............................. 16,676 08 55. Werner, Charles . . . .......................... 216 00 56. Werner & Windolph.............................. 8,097 42 $720,942 42EXHIBIT NO. 109. Disbursements. Bureau of Street Openings. Report of Joint Committee. CO ©05 1> t> t> (MO CO 0500 »OON tH CO 05 05 o ^ 05 CO •'t’-I CO oo O ci r !p= O^CO 00 05 05 MMtO (MOO CO 05 oco 05 to tO CO M 05 ooo 00 TF 05 CO CO oo co 05 05 CO CO COM 000 051> CO CO M oo Tt00 05 00 05 00 \ I>©tOCO ^io^ocoto TP OOtO to CO 05 rH OrHH o «& • M 05 • M CO •to 00 tOTti-^ co oo to h o co co to o co 050^00NOO to CO CO to .2 fi 53 & g g §* I o . a; to ^ i£ © 5R ac o .2 o flC.2 f-< Oh 05 OQ ft-*^ liiniii -§>3 Jg S' 2 « 00 _ oa'® ■igsgs^s ®’®o §2%^ o3 _ u O § * °8“5P*-S o’C 2 o t« g 3 ft -t cd o 2 CO >,03 > c ^ a; o t>T3 £? C 05 02 O !-§§ g^ ^ g ^ co.g'cl &-|rP ftU c3 < ^®2 . ci'-S ft ” ££■§£3 :S-S §j.S © ° 02 © PhoqPSS 168164 Investigation of Finances of Few York City. EXHIBIT XO. 109 —(Continued). 1908. From November Pay-Roll. v Aggregate salary. r22 assistants........................ $64,600 00 28 clerks.......... . ................ 20,460 00 4 messengers............................. 4,200 00 9 stenographers ....................... 10,350 00 1 telephone operator....................... 750 00 15 computers ............................. 23,000 00 7 draughtsmen........................... 11,100 00 Average salary. $2,931 81 1,087 85 1,050 00 1,127 77 750 00 1,533 33 1,585 71 •86 This statement has been brought up to December 15, 1908. EXHIBIT HO. 131. Claims Outstanding June 30, 1908. i. Prevailing rate of wages................................. 12. Personal injuries....................................... -3. Miscellaneous claims as follows: Salaries ... ........................ $10, 260,127 33 Damages for alleged breach of contract. 14, 393, 751 69 Damages to real and personal prop- erty ................................ 9, 099, 558 03 Extra work under contract............ 185,647 38 Recovery of assessments.............. 831, 481 65 Damages for illegal occupation of real estate........................ 759, 890 00 Money due under chapter 722 of the charter............................ 26, 358 91 Rents, etc.............................. 29,610 57 Ejectment and eviction from premises. 62, 497 00 "Taxes paid in error................. 8,618 18 Deposited with treasurer, Kings county. 7 5, 000 00 Merchandise furnished ............... 23, 8 §3 41 Failure to award contract............ 25, 000 00 Infringement of rights............... 27, 000 00 Recovery on general improvement cer- tificate, L. I. City, issue of 1875-7... 1, 208 00 Money for certificate given by village of New Brighton for value received.. 7,820 00 To set aside settlement made by public administrator...................... 1,500 46 Certificate issued by Flushing Avenue Improvement Company, L. I. City.. . 11, 500 00 4. Actions for alleged illegal suspension of employees $4,231,064 35 20,499,312 85 35,830,438 61 1,784, 496 88 $62, 345,312 69Report of Joint Committee. 165 EXHIBIT No. 135. Annual Statement of Transactions in Bureau of the City Pay- master During 1908. Department of Finance, New York, December 28, 1908- Hon. Herman A. Metz, Comptroller: Sir.— I have the honor to report to you the following business transactions in this bureau during the year 1908, or more cor- rectly, between the general balancing date of December 23, 190T* and December 21, 1908, viz.: Amount received from comptroller and paid out by 721,961 checks........................ $67,066,022 61 Amount received from comptroller and paid out by cash................•................. 14,242,046 4(> Total.................................. $81,308,069 0T These payments were made as follows: 1908. Paid by check. Paid in cash. Total payments^ January $5,390,335 05 $940,061 71 $6,330,396 78 February 5,444,931 38 979,101 69 6,424,033 OT March 5,553,747 79 1,196,521 57 6,750,269 36- Apr 1 May 5,627,079 19 1,026,737 40 6,653,816 59* 5,471,039 80 1,133,104 71 6,604 144 51 June 5,625,264 59 1,344,302 89 6,969,567 48- July 7,130,050 89 1,392,730 33 8,522,781 22* August 4,031,955 79 1,144,221 29 5,176,177 08- September 5,517,117 68 1,116,274 56 6,633,392 24 October.. 5,588,149 48 1 1,231,529 71 6,819,679 1» November 5,888,625 40 1,320,911 68 7,209,537 08 December 5,797,725 57 1,416,548 92 7,214,274 49> Total $67,066,022 61 $14,242,046 46 $81,308,069 OX The cost of administration in paying out these amounts has been for salaries of paymaster, deputy paymaster, clerks, messengers and watchmen ................................... $85,693 75 And for railroad fares, carfares, ferriages, car- riage hire, postage, money orders, etc. (for December, estimated) .................. 4,233 36 Making a total of $89,927.11, or about one-tenth of 1 per cent, of the amount paid out...... $89,927 11 I hereby certify that the foregoing statement is correct and true.. (Signed) J. II. TIMMERMAN, City Paymaster*EXHIBIT Ho. 157. 'able Eetax Levy of 1908. Glassification According to Boroughs. 166 Investigation of Finances of New York City. 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CO o3 2 u , •do 2-05 ft© 0+3 ® ® ^ « gcc ©u-d! © Sffl^oOg®^ H®ft —w ” ® o 0 • P&O co . •- gp ©TJ^ S do ^ M Sf|g ®^o d o'g Sm 1 feT'S •SS •*■» d c|pftO— ^ s_00 ft^ 2c3_g^PO>o O®00. 0^.0-2 _S 2-d^s ® p ^ ftcoOH ce g 3 2 * * . 00 © p dS’SS*-®53S4" g S pg§|3 goo P O © -d — — t» rti p3d: — 3£ bC © Cd M §£^“-S.So-S§Sgi£I o®.2 °a g c^TS'C >a ®" ~ d^^PaSa dJ ® ®Q ^ G p. .c^3 goo §^5 g3od3 ^ ^^hE® d ® ^|i |olS|S°||^^£ § H c3 ^ o ^^00*^cl"C'cS'»Q/-v © ^ bfl >— P’S^th «8 M.-SO M p d d Pd e3 ®®g .dwco m d-go2 o 0,0 ©w. gjxPS^'S fed'Sd^^pgg & §3. 3S SalSw-SSSA B168 Investigation of Finances of New Yoke: City. EXHIBIT No. 168. Southern Aqueduct Department. Summary statement of testimony of witnesses for claimants and for city and the awards of commissioners of Appraisal. The testimony of the claimant’s witnesses is the lowest value sworn to by them, and the testimony of the city’s witnesses is the highest sworn to by them. The awards are all the awards that have been made to date and include awards not yet reported to this office and not yet confirmed. See. Claimant. City. Award. 1 $104,715 00 $57,982 00 $65,600 00 1 .. 99,500 00 34,900 00 72,455 00 1 85,500 00 32,800 00 61,890 00 1 ....... 78,600 00 10,000 00 46,000 00 2 .. 110,150 00 31,150 00 57,175 00 2 23,150 00 5,225 00 13,395 00 2 95,180 00 18,925 00 59,575 00 3 ..... 54,230 00 33,550 00 45,700 00 3 ..... 31,645 00 7,035 00 17,Q50 00 4 47,745 00 18,605 00 22,895 00 4 27,800 00 16,035 00 19,660 OO 5 42,450 00 21,750 00 32,400 00 6 92,985 00 34,275 00 65,249 00 $894,650 00 $322,232 00 $579,044 00 Dated December 31, 1908. EXHIBIT No. 169. Reservoir Department. Summary statement of testimony of witnesses for claimants and for city and the awards of commissioners of Appraisal. The testimony of the claimant’s witnesses is the lowest value sworn to by them, and the testimony of the city’s witnesses is the highest sworn to by them. The awards are all the awards that have been made to date and include awards not yet reported to this office and not yet confirmed. Sec. Claimant. City. Award. 1 ................ $91,001 55 $40,766 55 $50,063 97' 1 ................ 126,990 00 31,451 50 38,459 05 2................ 228,674 10 106,384 10 105,250 00 2 ............... 334,540 00 3,949 20 6,450 00Report of Joint Committee. 16£ Sec. Claimant City. Award. 3 $100,444 00 $44,431 50 $50,600 00 3 . 114,456 45 62,490 07 71,251 34 4 57,712 50 39,432 86 47,906 00 4 255,218 00 101,282 37 142,071 OO 5 45,195 47 29,558 47 39,263 40 5 .. 59,948 90 33,225 02 47,067 81 6 36,534 39 19,986 49 23,975 00 6 85 30,669 42 40,725 00 6 ...... . ,. . 42,249 24 22,425 15 30,985' 00 7 92,358 32 45,238 54 59,443 54 7 - 95,202 00 38,396 00 57,805 00 8 183,968 50 111,949 38 126,310 00 9 313,490 23 168,573 65 200,672 50 $2,237,886 50 $930,210 27 $1,138,298 65 Dated December 30, 1908. EXHIBIT No. 170. Northern Aqueduct Department. Summary statement of testimony of witnesses for claimants and for city and the awards of commissioners of Appraisal. The testimony of the claimant’s witnesses is the lowest value sworn to by them, and the testimony of the city’s witnesses is the highest sworn to by them. The awards are all the awards that have been made to date and include awards not yet reported to this office and not yet confirmed. Sec. Claimant. City. Award. 1 $49,163 00 $18,098 62 $26,254 00 1 ...;.. 50,547 00 19,168 00 24,175 00 1 47,100 00 5,758 80 13,682 00 1 47,653 00 19,142 00 26,144 00 1 ....... 185,846 00 15,762 75 41,425 00 2 21,929 65 8,650 00 13,950 00 2 113,851 50 23,985 00 29,400 00 2 ........ 43,876 00 12,703 00 26,626 00 2 52,649 00 11,125 00 24,095 00 3 51,293 00 19,600 00 20,830 00 $563,908 15 $153,993 17 $246,580 00 Dated December 30, 1908. 170 Investigation op Finances op New Yoek City. EXHIBIT No. 185. Estimated revenue of the sinking funds during the years 1909 to 1918, inclusive, in excess of requirements for the payment of their obligations maturing during that period, and available for investment, providing that new issues of bonds made by the city are limited to the amount of old issues maturing during said period and the said excess of sinking fund revenue. 1909........................................ $11,000,000 1910 ................................i-----5,000,000 1911 .......................................... 8,000,000 1912 .............. ............ ........... . . . 8,000,000 1913 .................. ....................... 7,000,000 1911 ---------------------................... 4,500,000 1915 _________________ ____________________________________ 1916 ........... ............................ 2,000,000 ....... ............................... . 5,500,000 1918 ........................................500,000.EXHIBIT Ho. 186. 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