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March 12, 191O
RECORD AND GUIDE
533
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Communications should be addressed tO '
C. W. SWEET
Published EVerg Saturdap
By THE RECORD AND GUIDE CO.
President, CLINTQi^l W. SWEET Treasurer, F, W. DODGE
Vice-Pres. Sc Genl. Mgr., H. W. DESMOND Secretary, F. T. MILLER
Noa. 11 to 15 East 24tli Street, New York City
(Telepbone, Madison Square. 4430 to 4433.)
"Entered at the Post Office at New York, N. Y.. lis scond-elass matter."
Copyriglitecl. 1910, by Tlie Record Se Guide Co.
Vol, LXXXV.
MARCH 12, 1910.
Xo, 2191.
IT cannot be said that the Comptroller's report upon the
financial condition of the city makes altogether pleasant
reading. There is nothing new in the announcement that
the city has been issuing revenue bonds against uncollect¬
ible taxes; but the enormous aggregate involved by this
vicious method of financing—amounting as it does to almost
$50,000,000—is enough to disconcert the most loyal be¬
liever in the essential security of New York municipal obli¬
gations. The only consolation is that the mere exposure .
of such methods should be sufficient to prevent their repe¬
tition. There is every chance that during the next few
years the Comptroller and the Board of Estimate will co¬
operate to place the whole municipal financial system upon
a sound basis—one, which will conform to the most approved
methods of accounting, and which will in its published
form give the taxpayer and the stockholder real and full
information as to the actual financial condition of the city.
But the bill for past errors still remains to be paid, and
it will be a heavy one. The Comptroller proposes to wipe out
about $10,000,000 of this illicit borrowing by means of mis¬
cellaneous existing credits on the city's books, and to pay
the rest ofE by the issue of about $5,000,000 worth of
permanent obligations every year. This method of settling
the account will doubtless be most acceptable to taxpayers,
but it can hardly be considered an example of thoroughly
sound financing. The plain fact is that of late years the
city has borrowed a great many million dollars to pay run¬
ning expenses, and that the taxpayers have profited to that
extent, because of these vicious methods. It is now pro-
tposed to fund four-fifths of this sum and make it a
charge upon the future credit of the city. Doubtless it is
necessary that the cost should be measurably distributed in
this way; but surely it would not be unreasonable to appro¬
priate a couple of million dollars every year out of revenue
for the purpose of lessening the ultimate burden. Living
taxpayers have profited by this borrowing against uncollect¬
ible taxes, and they should be made to pay a larger propor¬
tion of the bill. The amount of such an item in each yearly
budget would naturally depend upon its effect upon the
current tax rate; but if the city has any margin at all, that
margin should assuredly be used to pay as much as possible
of the costs of the vicious financial methods of the past.
AS AN offset to the enormous liability which the city has
incurred in order to pay running expenses, the Comp¬
troller has made one promise of the utmost importajiee. He
anticipates that ahout 112,000,000 can he saved out of the
budget for the current fiscal year. If this anticipation proves
to be true, it should do a great deal to improve the credit
of the city and to quiet the appreheusions of the taxpayers.
By far the most discouraging aspect of the city's finances
has been the steady enormous and apparently irresistible
increase in the yearly budget. During a period in which
the assessed valuation of real estate has been growing with
unprecedented rapidity the city's expenditures have increased
still more rapidly, and if this tendency had continued un¬
checked, a day was fast approacliing when the burden in
taxation would be equivalent to the confiscation of real
estate values. Until recently a taxpayer might well have
dispaired of the establishment of any effectual check. Hon¬
est and well-meaning men had served as Mayor and Comp¬
troller for eight years, but they had done absolutely noth¬
ing in the direction of economy. The taxpayer realized
that there was an enormous amount of waste—that the city
was paying for a great deal of labor and material which it
did not receive. But it seemed impossible to arouse any
interest among responsible officials in the elimination of this
extravagance. Not until the present administration came into
power were any means adopted to cut out the waste; and it
is not too much to say that the future financial stability of
New York depends in a large measure upon the succbss of
these measures. If they are as successful as the Comptroller
anticipates—^that is, if $12,000,000 can be saved out of the
current budget—the administration will have rendered to
the city the greatest benefit in its power. Whenever the
actual expenditures of New York can be economized so that
the city will receive somewhere near five dollars' worth for
every five dollars it spends, there need he no apprehension
about the future financial condition of New York. Real
estate can and will bear with ease all the burdens imposed
upon it by the most radical and expensive projects of civil
and social amelioration, provided only the money is econom¬
ically spent. The Record and Guide sincerely trusts conse¬
quently that the Comptroller has not overestimated the sav¬
ing which can be made in the current budget, and it believes
that if so large a sum can be saved out of existing appro¬
priations, still greater economies may be expected as soon
as the city's' methods of buying materials and services can
be thoroughly reorganized.
THE promise is made that the contract for the Broadway-
Lexington avenue subway will he let before June 1,
und, doubtless, many hundreds of thousands of New York¬
ers will be delighted at the news. The Broadway-Lexington
avenue route, whatever its defects, will assuredly meet the
most serious existing deficiency in the rapid transit system
of Manhattan. But the Public Service Commission should
understand that public opinion will not be satisfied witli the
letting of this contract. It has been apparent for some time
that no reason for any further delay existed in respect to
this particular transit improvement and at the present time
the interest in it of a great many New Yorkers will consist
in their desire to get it out of the way, so that the road will
be cleared for additional subways. Ever since the Public
Service Commission took office the Broadway-Lexington ave¬
nue route has blocked the path of far more useful and eom-
pi'ehensive plans of subway extension. No arguments have
availed to shake the commission in their allegiance to this
subway, and it has long been evident that protests were
merely a waste of time. Nothing in the way of well
balanced transit development was possible, uutil after this
route had been disposed of. The really interesting question
has been of late, will the city officials be able subsequently to
reach an agreement with the Interborough Company? Will
the letting of the contract for the Broadway-Lexington ave¬
nue route be followed by extensions up Madison and down
Seventh avenues? Whether that question will be answered
in the affirmative still remains wholly doubtful. There are
intimations in the newspapers of amicable interviews be¬
tween the redoubtable Mr. Shonts and his equally belligerent
adversary, the head of the Public Service Commission, There
are even rumors that the representatives of a large banking
house, interested in subway construction, has had an encour¬
aging interview with the Mayor. But these reports must
not be taken too seriously. Many times have we heard their
like before and yet they proved in the end to signify noth¬
ing. Until proved to the contrary, it must be considered as
axiomatic that President Shonts and Chairman Willcox are
hostile in temperament, and will disagree with each other
until the crack o' doom. We expect nothing from them.
Our hopes are concentrated in Mayor Gaynor. Perhaps he
can find a way to permit the extension of the existing sub¬
way on terms fair both to the city and the Interborough
Company.
THE final stage in the reconstruction of the Grand Central
Station is approaching. During the current year the
existing waiting-room will be demolished and the improve¬
ments in Forty-second street and Depew place actually be¬
gun. These improvements will not only give the New York
.Central a terminal of wholly unrivaled area and capacity,
but they will be of considerable general benefit to the city
of New York. The greatest single benefit will result from
the opening up of a new thoroughfare. Under the plan of
the company roadways connecting lower and upper Park
avenue will swing around both sides of .the station and
traffic will be able to move freely along the whole length